WARREN BUFFET:THE "ORACLE OF OMAHA"

He ranks among the wealthiest men on planet earth, according to Forbes.com, so why not share his biography so that we can get inspired!

Warren Buffett, the man who we've all
come to know as the " Oracle of
Omaha ," was born in Omaha ,
Nebraska. His dad was a man named
Howard Buffett . Howard was a
stockbroker and United States
Representative . Warren 's mom was
named Leila Buffett . The young Buffett
began working at his father' s
brokerage at the age of 11 . It was
around this time that he made his first
stock purchase. Warren bought shares
of a company called Cities Services for
$38 each. He later sold the shares of
Cities Services stock when the price
reached approximately $ 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 . At the age of 14 he
spent $ 1, 200 he had saved up from
two paper routes to buy 40 acres of
farmland which he then rented to
tenant farmers.

The Wharton School at the University
of Pennsylvania was where Warren
Buffett initially went to school.
However, he later transferred to the
University of Nebraska. There he
began his interest in investing after
reading Benjamin Graham 's The
Intelligent Investor . He obtained a
Master' s degree in economics in 1951
at Columbia Business School , studying
under Benjamin Graham , alongside
other future value investors including
Walter Schloss and Irving Kahn .

This is something few people realize,
but another important influence on
Warren 's investment philosophy was
the well known investor and writer
Philip Fisher. Odds are you might
never have even heard of him. Well,
after Warren earned the only A+
Benjamin Graham ever handed out to
a student in his securities analysis
class, Buffett wanted to work at
Graham-Newman but was initially
turned down. ( Can you imagine that?!)
Warren instead went to work at his
father's brokerage firm as a
representative until Graham offered
him a position in 1954. Warren Buffett
returned to Omaha two years later,
when Graham retired .

Buffett established Buffett Associates,
Ltd. , his first investment partnership,
in 1956. It was financed by $ 100 from
Buffett, the general partner, and
$105 , 000 from seven limited partners
consisting of Buffett' s family and
friends. Buffett created several
additional partnerships which were
later consolidated as Buffett
Partnership Limited . He ran the
partnerships out of his bedroom,
adhering closely to Graham' s
investment approach and
compensation structure. These
investments made in excess of 30%
compounded annually between 1956
to 1969 , in a market where 7 % to 11%
was the norm . Buffett employed a
three- pronged 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 and
acquisitions, liquidation, etc .

CONTROLS : build sizeable holdings , ally with other shareholders or employ
proxies to affect changes in
companies.

In 1962 Buffett Partnerships began
purchasing shares of Berkshire
Hathaway, a large manufacturing
company in the declining textile
industry that was selling below its
working capital . Buffett would
eventually dissolve all his partnerships
to focus on running Berkshire
Hathaway. At the time, Charlie
Munger, Berkshire' s current Vice
Chairman, remarked that purchasing
the company was a mistake, due to
the failure of the textile industry .
Berkshire, however , became one of
the largest holding companies in the
world, as Buffett redirected the
company 's excess cash to acquire
private businesses and stocks of
public companies . At the core of his
strategy were insurance companies ,
due to the large cash reserves (" float")
they must keep on hand to pay out
future claims. Essentially , the insurer
does not own the float, but may invest
it and keep any proceeds.

Under the influence of his friend and
business partner Charlie Munger,
Buffett's investment approach moved
away from a strict adherence to
Graham's principles, and he began to
focus on high-quality businesses with
enduring competitive advantages. He
described such advantages as a
"moat " that kept rivals at a safe
distance, as opposed to commodity
businesses , which sell
undifferentiated products and face
direct competition. A classic example
of a wide -moat company is Coca- Cola,
because consumers are willing to pay
more for a Coke than for a generic
beverage with a similar taste . On the
other hand , salt is considered a
commodity product because
consumers generally have no
preferences for one brand of salt over
another.

Investment in wide -moat businesses
has become a hallmark of Berkshire
Hathaway, particularly when buying
whole companies rather than public
stocks. As a result, it now owns a large
number of businesses which are
dominant players in their respective
industries, specialize in various niche
markets, or possess other unique
characteristics to separate them from
their competitors .

My hope is that you got inspired by the great investor's biography.

Source: www.warrenbuffettbiography.net/

IT'S ALL IN THE MIND

A business executive was deep in debt
and could see no way out .

Creditors were closing in on him.
Suppliers were demanding payment.
He sat on the park bench , head in
hands, wondering if anything could
save his company from bankruptcy.

Suddenly an old man appeared
before him. “I can see that something
is troubling you,” he said . After
listening to the executive’ s woes , the
old man said, “I believe I can help
you.”

He asked the man his name, wrote out
a check, and pushed it into his hand
saying, “ Take this money. Meet me
here exactly one year from today, and
you can pay me back at that time .”

Then he turned and disappeared as
quickly as he had come .

The business executive saw in his
hand a check for $ 500 ,000 , signed by
John D . Rockefeller , then one of the
richest men in the world!

“ I can erase my money worries in an
instant !” he realized. But instead , the
executive decided to put the
uncashed check in his safe. Just
knowing it was there might give him
the strength to work out a way to save
his business , he thought.

With renewed optimism , he
negotiated better deals and extended
terms of payment. He closed several
big sales . Within a few months, he was
out of debt and making money once
again .

Exactly one year later, he returned to
the park with the uncashed check. At
the agreed -upon time, the old man
appeared. But just as the executive
was about to hand back the check and
share his success story, a nurse came
running up and grabbed the old man.

“ I’m so glad I caught him!” she cried .
“ I hope he hasn ’t been bothering you.
He ’s always escaping from the rest
home and telling people he ’s John D .
Rockefeller .”

And she led the old man away by the
arm.

The astonished executive just stood
there , stunned.
All year long he’ d been wheeling and
dealing , buying and selling, convinced
he had half a million dollars behind
him. Suddenly, he realized that it
wasn ’t the money , real or imagined ,
that had turned his life around.
It was just his newfound self -
confidence that gave him the security
and power to achieve anything he
went after .

Or was it the security in his mind that
gave him the confidence .

Its all in the mind …

MOTIVATIONAL STORY: ROAR OF THE LION

I recently came through a short story on fear. We are all faced with fear at one point or another but how we react towards fear differs. Below is the story:

THE ROAR OF THE LION
Lions love to eat gazelle meat ;
however, it is very difficult for them to
catch gazelles because they run so
fast . Instead, a group of young lions
herd the gazelles away from them .
The gazelles easily outrun the lions
and head off in the direction the lions
have chosen , which is unknowingly
towards a deep grassy area where a
group of older lions are hiding.
The older lions are too old and tired
to be part of the chase; many are
missing teeth , and would never be
able to catch their own meat . When
the gazelles are driven within close
range of the older lions, they jump up
and ROAR loudly.
Immediately, the gazelles, responding
to their perceived fear of imminent
death, turn and run in the opposite
direction , right into the mouths of the
young lions .
"The moral is that running from your
fears and not facing them can often
lead you into real danger and worse
outcomes. In day - to-day life , the lions
lying in wait may not be life
threatening, but they are often false
fears.
Running away may mean we remain
stuck and unhappy for a long time or
until we face and move through our
fear."

MOTIVATIONAL STORIES:FROG IN A MILK PAIL

A frog was hopping around a
farmyard , when it decided to
investigate the barn. Being somewhat
careless , and maybe a little too
curious, he ended up falling into a pail
half- filled with fresh milk .
As he swam about attempting to reach
the top of the pail , he found that the
sides of the pail were too high and
steep to reach. He tried to stretch his
back legs to push off the bottom of
the pail but found it too deep . But
this frog was determined not to give
up , and he continued to struggle.
He kicked and squirmed and kicked
and squirmed, until at last, all his
churning about in the milk had turned
the milk into a big hunk of butter. The
butter was now solid enough for him
to climb onto and get out of the pail !

The Moral of The Story ? "NEVER GIVE UP !"

INSPIRATIONAL STORY:HENRY FORD

HENRY FORD:

Some consider him an icon of the self -
made man. Some accuse him of being
a liar and a traitor. His revolutionary
innovative concept, called after him
“ Fordism” , helped to increase the
economic prosperity of the United
States in the 1940 s to 1960 s. He was
also responsible for the creation of
the Ford Foundation – one of the
world’ s richest philanthropic
organizations .
During his life he was known as a
man , who in spite of his wealth
continued to care for the common
man . But also as a person , who was
responsible for publishing nearly a
hundred anti- Semitic articles in his
newspaper the Dearborn
Independent.
There is no single opinion of Henry
Ford . One thing however that can be
confidently said about him is that he
was a great man, who was not afraid
to dream BIG and go after his dream…

Poor Student and Poor Farmer
Henry Ford was born on July 30, 1863
on a farm near Dearborn. When Ford
was 12 years old his mother died
during childbirth, leaving him and his
5 siblings in the care of their father.
Until the age of 15 Ford attended
school , even though he strongly
disliked it. He never learned to spell or
read well and wrote only using the
simplest sentences.
His lack of interest in his studies was
compensated by his fascination for
machinery and mechanical objects . He
repaired his first watch at the age of
13 and soon neighbors and friends
started to bring him their broken
watches to fix .
Since his early childhood Ford knew
that farm life was not for him and as
soon as he got the chance he headed
to Detroit to become an apprentice . In
1882 , Henry finished his
apprenticeship and was qualified to
work as a machinist.
This did not appeal to his father at all.
He offered Ford a bargain – forty
acres of timberland in exchange for
the promise that he gave up
machinery . Ford accepted the
proposal , and used the land to build
a small house , sawmill and a first-class
machinist’ s workshop ( to the great
disappointment of his dad) .
During this time Ford also met and
then married Clara Bryant.
In 1891 he finally found a job at
Edison Illuminating Company and
moved with his wife back to Detroit . In
1896 , at age 32, Henry Ford completed
his first successful horseless carriage,
which he called the Quadricycle.
“ Failure is simply the opportunity
to begin again, this time more
intelligently . ”
Ford proved this quote to be true with
his own life. His first two automobile
companies failed miserably. The first
time his investors withdrew after Ford
spent $86 ,000 without producing a
car that could be sold. The second
time he failed even though a car was
ready.
Desperately trying to attract publicity
for his projects, Henry started building
and driving his own race cars.
However , the average person did not
need a race car . They needed
something reliable .
Ford refused to give up and by 1903
convinced twelve people to invest a
total of $ 28, 000 in another motor
company . In the same year the
company sold its first Model A car for
$ 850 . Ford’s business finally took off .
By 1907 the Ford Motor Company
profits exceeded $1 ,100 , 000 .

Rich and famous…
In 1908, Henry Ford designed the
Model T car that was supposed to
appeal to the masses . It was light,
strong , fast and came only in one
color – black . The car became so
popular that it was selling faster than
Ford could produce them . He started
to look for ways to speed up the
manufacturing process .
It took him almost 4 years , but in 1913
he added the first motorized assembly
line in the plant . It cut construction
time and lowered the cost of each car ,
making them affordable to every
family.
Henry Ford was now officially not only
rich, but also famous. If his
manufacturing methods were
revolutionary for most people, his
work philosophy came as a shock! He
paid his workers almost twice as much
as other auto companies did . His
reasoning was simple – greater pay
will make the worker happier and,
therefore, faster on the job and they
would be more likely to stay with
company longer, leading to less
down- time training new workers .
For his work policy Ford was called “ a
traitor to his class ” by other
industrialists and professionals.
He did not care !
In 1925 Ford was producing 10,000
cars every 24 hours, gaining 60
percent of America’ s total car market .

Million Dollar Mistake and
Personal Struggles
Ford was an inflexible man and he
continued to insist on producing only
the Model T , even though public
tastes began to shift. When he finally
realized his mistake, Ford Motor
Company had already lost its
dominant position to the General
Motors ( GM ) company . In 1927 the
Chevrolet had officially become the
best -selling car.
Slowly the friction between Henry
Ford and his only child Edsel Ford
began to grow . Edsel did not support
his father’ s method of running the
company , and Henry Ford did not
trust his son to run it by himself. In
1938 Henry Ford suffered a stroke , but
came back to run the company . In
1941 he had another stroke. Only two
years later Edsel died from stomach
cancer at the age of 49 . Ford ’s
grandson, Henry Ford II , took over
the company after the war.

Henry Ford passed away on April 7 ,
1947 .

MOTIVATIONAL STORY-THE GREATEST SALESWOMAN

I recently came across an interesting motivational story and decided to share it:

The greatest saleswoman in the world
today doesn't mind if you call her a
girl. That's because Markita Andrews
has generated more than eighty
thousand dollars selling Girl Scout
cookies since she was seven years old.
Going door-to-door after school, the
painfully shy Markita transformed
herself into a cookie-selling dynamo
when she discovered, at age 13, the
secret of selling.
It starts with desire. Burning, white-
hot desire.
For Markita and her mother, who
worked as a waitress in New York after
her husband left them when Markita
was eight years old, their dream was
to travel the globe. "I'll work hard to
make enough money to send you to
college," her mother said one day.
"You'll go to college and when you
graduate, you'll make enough money
to take you and me around the world.
Okay?"
So at age 13 when Markita read in her
Girl Scout magazine that the Scout
who sold the most cookies would win
an all-expenses-paid trip for two
around the world, she decided to sell
all the Girl Scout cookies she could -
more Girl Scout cookies than anyone
in the world, ever.
But desire alone is not enough. To
make her dream come true, Markita
knew she needed a plan.
"Always wear your right outfit, your
professional garb," her aunt advised.
"When you are doing business, dress
like you are doing business. Wear
your Girl Scout uniform. When you go
up to people in their tenement
buildings at 4:30 or 6:30 and especially
on Friday night, ask for a big order.
Always smile, whether they buy or not,
always be nice. And don't ask them to
buy your cookies; ask them to invest."
Lots of other Scouts may have wanted
that trip around the world. Lots of
other Scouts may have had a plan.
But only Markita went off in her
uniform each day after school, ready
to ask - and keep asking - folks to
invest in her dream. "Hi, I have a
dream. I'm earning a trip around the
world for me and my mom by
merchandising Girl Scout cookies,"
she'd say at the door. "Would you like
to invest in one dozen or two dozen
boxes of cookies?"
Markita, the greatest saleswoman sold
3,526 boxes of Girl Scout cookies that
year and won her trip around the
world. Since then, she has sold more
than 42,000 boxes of Girl Scout
cookies, spoken at sales conventions
across the country, starred in a Disney
movie about her adventure and has
co-authored the best seller, How to
Sell More Cookies, Condos, Cadillacs,
Computers ... And Everything Else.
Markita is no smarter and no more
extroverted than thousands of other
people, young and old, with dreams
of their own. The difference is Markita,
the greatest saleswoman had
discovered the secret of selling: Ask,
Ask, Ask! Many people fail before they
even begin because they fail to ask for
what they want. The fear of rejection
leads many of us to reject ourselves
and our dreams long before anyone
else ever has the chance - no matter
what we're selling.
And everyone is selling something.
"You're selling yourself everyday - in
school, to your boss, to new people
you meet," said Markita at 14. "My
mother is a waitress: she sells the
daily special. Mayors and presidents
trying to get votes are selling... I see
selling everywhere I look. Selling is
part of the whole world."
It takes courage to ask for what you
want. Courage is not the absence of
fear. It's doing what it takes despite
one's fear. And, as Markita has
discovered, the more you ask, the
easier (and more fun) it gets.
Once, on live TV, the producer
decided to give Markita her toughest
selling challenge. Markita was asked to
sell Girl Scout cookies to another
guest on the show. "Would you like to
invest in one dozen or two dozen
boxes of Girl Scout cookies?" she
asked.
"Girl Scout cookies? I don't buy any
Girl Scout cookies!" he replied. "I'm a
Federal Penitentiary warden. I put
2,000 rapists, robbers, criminals,
muggers and child abusers to bed
every night."
Unruffled, Markita quickly countered,
"Mister, if you take some of these
cookies. maybe you won't be so mean
and angry and evil. And, Mister, I think
it would be a good idea for you to
take some of these cookies back for
every one of your 2,000 prisoners,
too."
Markita, the greatest saleswoman
asked. The Warden wrote a check.

Source:www.inspiring-quotes-and-stories.com/greatest-saleswoman.html

LEARN AND EARN

Chuan and Jing joined a wholesale
company together just after
graduation. Both worked very hard.
After several years, the boss
promoted Jing to sales executive but
Chuan remained a sales rep. One day
Chuan could not take it anymore,
tender resignation to the boss and
complained the boss did not value
hard working staff, but only promoted
those who flattered him.
The boss knew that Chuan worked
very hard for the years, but in order to
help Chuan realize the difference
between him and Jing, the boss asked
Chuan to do the following. Go and
find out anyone selling water melon in
the market? Chuan returned and said
yes. The boss asked how much per
kg? Chuan went back to the market to
ask and returned to inform boss the
$12 per kg.
Boss told Chuan, I will ask Jing the
same question? Jing went, returned
and said, boss, only one person
selling water melon. $12 per kg, $100
for 10 kg, he has inventory of 340
melons. On the table 58 melons, every
melon weighs about 15 kg, bought
from the South two days ago, they are
fresh and red, good quality.
Chuan was very impressed and
realized the difference between
himself and Jing. He decided not to
resign but to learn from Jing.
My dear friends, a more successful
person is more observant, think more
and understand in depth. For the
same matter, a more successful
person sees several years ahead,
while you see only tomorrow. The
difference between a year and a day
is 365 times, how could you win?
Think! how far have you seen ahead
in your life? How thoughtful in depth
are you?

Source: http://academictips.org/blogs/learn-and-earn/