another boring saturday morning, so i dedicated the whole morning to read yet another not so boring biography. This morning my chosen person is the great Warren Buffett. See, he is ranked the third richest person in the world by Forbes in April 2007. I was so loving the fact that this billionaire in fact is an Academia. I hated it when people say that education is not so important since the richest and second richest person in the world (the infamous Gates and Dell) are college drop-outs.
The ultimate facts that intrigues me to learn more about Buffet is "In June 2006, he made a commitment to give away his fortune to charity, with 83% of it going to the Bill and Melinda Gates Foundation.The donation amounts to approximately $30 billion. Buffett's donation is said to be the largest in U.S. history. At the time of the announcement the donation was enough to more than double the size of the foundation"
Warren Buffett had shown his potential in business and mathematics since he was very young in age, as he could easily doing complex mathematical computations in his head. (now, i love this) He was also known as a book worm and had started working very early. In fact, He began working at his father's brokerage at the age of 11. Moreover, at that same year made his first stock purchase, buying shares for $38.25 each. He sold them when the price reached $40, only to see them rocket to $200 a few years later. This taught him the importance of investing in good companies for the long term. (I am a firm believer that all billionaires are book worms and had started working their ways up to the top while the peers of the same age as them were still busy wasting time by having fun)
This boy is beyond smart, he is a genius. He acquired his first property at the age of 14. He spent $1,200 to buy 40 acres of farmland which he then rented to tenant farmers. When he was 16, Buffett and a friend spent $25 to purchase a used pinball machine which they placed in a barber shop. Within months, they owned three machines in different locations. (Oh my goodnes, when i was 16 all that i ever wanted to purchase were cosmopolitan magazines and LV bags. Yes, which explains why he could acquire a gas station by the time he's 22 and i am still a pekerja rodi at JN)
Anyhow, here are some inspiring ilmu that i learn from him;
- investing tips, also known as Buffett approach:
Generals: undervalued securities that possess margin of safety and meet expected return-to-risk characteristics
Arbitrages: company events that are not related to broader market changes, such as mergers, acquisitions, liquidation, etc.
Controls: build sizable holdings, ally with other shareholders or employ proxies to effect changes in companies - On inheriting wealth for his children; "His children will not inherit a significant proportion of his wealth. These actions are consistent with statements he has made in the past indicating his opposition to the transfer of great fortunes from one generation to the next. Buffett once commented, "I want to give my kids enough so that they could feel that they could do anything, but not so much that they could do nothing"
- Choose your friends wisely: "Buffett is an avid player of the card game bridge. He has said that he spends 12 hours a week playing bridge. He often plays with Bill Gates"
- philosophy on money:
"I personally think that society is responsible for a very significant percentage of what I've earned. If you stick me down in the middle of Bangladesh or Peru or someplace, you find out how much this talent is going to produce in the wrong kind of soil... I work in a market system that happens to reward what I do very well - disproportionately well. Mike Tyson too. If you can knock a guy out in 10 seconds and earn $10 million for it, this world will pay a lot for that. If you can bat .360, this world will pay a lot for that. If you're a marvelous teacher, this world won't pay a lot for it. If you are a terrific nurse, this world will not pay a lot for it. Now, am I going to try to come up with some comparable worth system that somehow (re)distributes that? No, I don't think you can do that. But I do think that when you're treated enormously well by this market system, where in effect the market system showers the ability to buy goods and services on you because of some peculiar talent - maybe your adenoids are a certain way, so you can sing and everybody will pay you enormous sums to be on television or whatever -I think society has a big claim on that." (Lowe 1997:164-165)
"I don't have a problem with guilt about money. The way I see it is that my money represents an enormous number of claim checks on society. It's like I have these little pieces of paper that I can turn into consumption. If I wanted to, I could hire 10,000 people to do nothing but paint my picture every day for the rest of my life. And the GNP would go up. But the utility of the product would be zilch, and I would be keeping those 10,000 people from doing AIDS research, or teaching, or nursing. I don't do that though. I don't use very many of those claim checks. There's nothing material I want very much. And I'm going to give virtually all of those claim checks to charity when my wife and I die." (Lowe 1997:165-166)
So, all has been said and done. The billion dollar Buffett who enjoys T-bone rare steak and plays ukulele is without a doubt an inspiration and a living legend whose footsteps have earned him a place in the wall of fame in the history of mankind.
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