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Inside the mind of an investor: Warren Buffett

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Warren Buffett is one of the most respected figures in the world of finance. With a net worth exceeding $129 billion as of 2024 (Forbes), he proved his investment philosophy and strategy are the best.

Since his young age, Buffett expressed a strong interest in business and investment. He made his first stock purchase by the age of 11. He started his academic journey in the University of Nebraska before moving to Columbia Business School and being inspired by Benjamin Graham.

Berkshire Hathaway became the capital of Buffett’s empire around 1965. Under his leadership, the company became a diversified multinational holding conglomerate. Berkshire Hathaway’s portfolio includes investments in successful companies like Apple, Coca-Cola, American Express, and more.

What about his investment philosophy?

Warren Buffett’s investment philosophy is focused on value investing, a strategy he admired and adopted from Benjamin Graham. This approach consists of buying undervalued companies with strong potential and holding them for the long term.

Warren Buffett took into consideration several aspects before investing in a company. He used to identify undervalued stocks with interesting growth potential, but only stocks that are way below their intrinsic value. A strategy that requires patience and long-term thinking, as most of those companies are not able to grow fast in a short-term horizon. His famous quote “Our favorite holding period is forever” is proof that his main strategy is a long-term investment.

Moreover, he only invested in companies with competent and ethical management teams. He considers that management teams must align with shareholders’ interests.

Let’s talk about his achievements.

Among his many achievements, we can mention the extraordinary performance that Berkshire Hathaway had under his leadership. Since 1965, the company’s compounded annual gain was 19.8%, which is double the annual gain of the S&P 500, including dividends.

His current net worth stands at approximately $129 billion, making him one of the wealthiest individuals worldwide.

Beyond his financial achievements, Buffett gained an excellent reputation regarding his commitment to philanthropy. 18 years ago, he pledged to donate 99% of his fortune to charitable causes, especially through the Bill and Melinda Gates Foundation. He believes that wealth is most useful when it’s used to improve society and support those in need.

From a young boy with a passion for numbers to one of the most interesting and influential investors around the world, Warren Buffett is a demonstration of the power of discipline and financial principles.

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