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1936 – Age 6
I started selling Juicy Fruit chewing gum packs. When asked
for 1 piece, i would not sell as i thought i may be left with
4 pieces i could not sell. I made 2 cents profit per pack. I
would also purchase Coca-Cola six packs for 25 cents from his
grandfather’s grocery store – I and Son. I would sell each
Coke for 5 cents. Profit of 5 cents per pack.
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1941 – Age 11
At 11 years old, i buy my first stock – 6 shares of Cities
Service (now known as CITGO – an Oil company) at $38 per
share. I bought 3 for myself and 3 for my sister Doris. That
is all the money i had at that time. Practiced little to no
diversification at a young age which i continued to do
throughout my investment career. The stock price fell to $27
but soon went to $40. I sold the stock at $40, but, the stock
shot up to $202 in the next few years. I later cited this
experience as an early lesson in patience in investing.
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1943 – Age 13
I file my first tax return and deducts my bike as a work
expense for $35.
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1945 – Age 15
I make $175 a month selling Washington Post newspapers and
saves $1200 to buy a 40 acre farmland in Omaha, Nebraska.
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1947 – Age 17
Join my friend Donald Danly to start a company called Wilson
Coin Operated Machines. The business buys a pinball machine at
a cost of $25 and places it in a nearby barber shop. Wilson
Coin makes $50 per week for Me and Donald. I do tax returns
for myself and Wilson Coin. In next few months they own 3
machines and a year later sells it for $1200.
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1949 to 1954 – Age 19 to 24
I saving reaches $9800. I join Columbia University and learns
from Benjamin Graham. I were willing to work for Benjamin
Graham, even for free, but was not offered a job. I returned
to Omaha, purchased a Texaco station, but did not go well. I
were also working as an investment salesman for Buffett-Falk &
Company, at his father’s brokerage firm. In 1954, Benjamin
Graham called me again and offered me a job for $12,000 a
year. During this period, I were able to also work closely
with Walter Schloss.
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1956 – Age 26
Graham decides to retire and fold my business. My saving have
grown from $9,800 to $140,000. I returned to Omaha and on May
1, created Buffett Associates Ltd. Seven family members and
friends invest a total of $105k. I invested only $100k.
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1957 – Age 27
Created more partnerships and was managing a total of 5
partnerships, all from my home.
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1958 – Age 28
After 3 years, I doubled the partner’s money.
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1959 – Age 29
I were introduced to Charlie Munger by my friend Edwin Davis
at a dinner. Charlie Munger later becomes the Vice Chairman of
Berkshire Hathaway.
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1961 – Age 31
I am running seven partnerships by 1961; Buffett Associates,
Buffett Fund, Dacee, Emdee, Glenoff, Mo-Buff, and Underwood.
The partnerships are worth a few million and Buffett made my
first million dollar investment in Dempster – a windmill
manufacturing company. Sanborn Map Company accounted for 35%
of the partnerships’ assets. I explained to the partners that
in 1958 Sanborn was selling at $45 per share when the value of
its investment portfolio itself was at $65 per share which
meant that it was undervalued by $20 per share with a map
business coming in for nothing. I reveal that i earned a spot
on the board of Sanborn.
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1962 – Age 32
I go to New York to meet my old acquaintances to include more
partners and raise capital. I collect a few hundreds of
thousand dollars. My partnerships is worth $7.2 million. I
then merges all partnerships into one and rename it as Buffett
Partnerships Ltd. Munger introduces Buffett to Harry Bottle,
CEO of Dempster, who cut costs, laid off workers, and turned
around Dempster to generate cash. At this time, i notice
Berkshire Hathaway selling for $8 a share and starts buying
aggressively.
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1963 – Age 33
I sell Dempster for a $2.3 million gain, 3x times the invested
amount. I aggressively purchase Berkshire paying $14.86 per
share while the company had working capital of $19 per share.
This did not include the value of fixed assets. My partnership
become a single largest shareholder of Berkshire Hathaway.
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1964 – Age 34
American Express is victim to the salad oil scandal and shares
fall to $35. I saw the value and bought 5% of the company.
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1965 – Age 35
Invest $4 million in Walt Disney after a meeting with Walt
Disney himself which is almost 5% of the company. I take full
control of Berkshire Hathaway and names Ken Chase to be the
CEO.
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1966 – Age 36
I close the partnership to new money. I write in my letter
that “unless it appears that circumstances have changed (under
some conditions added capital would improve results) or unless
new partners can bring some asset to the partnership other
than simply capital, I intend to admit no additional partners
to BPL.” Invest in Hochschild, Kohn which was a department
store in Baltimore. My personal investment in the partnership
is now approximately $6.8 million.
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1967 – Age 37
My Partnership now owns 59.5% of Berkshire Hathaway. Berkshire
Hathaway pays a 10 cent dividend. This is the first and only
dividend it has paid ever. The Partnership is worth $65
million. My personal investment is $10 million. Itell my
partners that in the current raging bull market he is unable
to find good investments. I also briefly considered leaving
investing to pursue other interests. American Express hits
$180, making a $20 million profit on $13 million investment.
Berkshire Hathaway acquires National Indemnity Insurance for
$8.6 million. Berkshire acquires National Fire and Marine
Insurance Company.
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1968 – Age 38
Partnership is worth $104 million.
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1969 – Age 39
Berkshire acquires Sun Newspapers (Publishing), Rockford Bank
(Banking), Illinois National Bank (Banking) and Blacker
Printing Company (Publishing). I decide to close the
partnership and liquidate the assets to the partners. From
1957-1969 My Partnership returns were 29.5%. I have three
recommendations to partners. Consider joining Bill Ruane’s
Sequoia Fund Take the cash Take shares in Berkshire Hathaway
that i now controls My personal stake is now worth $25
million.
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1970 – Age 40
My Partnership is completely dissolved and divested of its
assets.
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1972 – Age 42
Through Blue Chips Stamp Company, Berkshire buys See’s Candies
(Chocolates) and Wesco Financial Corp (Financial Services).
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1973 – Age 43
Berkshire starts buying stocks in the Washington Post company
(Publishing). I becomesclose friends with Katharine Graham who
controlled the company and its flagship newspaper and becomes
a member of the board of directors.
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1974 – Age 44
Due to falling stock prices, the value of Berkshire Hathaway
portfolio begins to fall. My personal network falls by more
than 50%.
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1975 – Age 45
Merge Berkshire and Diversified – the firm controlled by
Munger. Munger gets 2% stock of Berkshire and becomes its vice
chairman.
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1976 – Age 46
Berkshire invests $4 million in GEICO (Insurance) when its
stock price was just above $2. Icontinually invests in GEICO
until 1996, when Berkshire acquires the company. Berkshire’s
subsidiary, National Fire and Marine Insurance Company,
acquires Central Fire & Casualty Company, and Cypress
Insurance Company.
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1977 – Age 47
Berkshire invests in the Buffalo Evening News (Publishing) for
$32.5 million. I also invests in Interpublic (Advertising) and
Ogilvy & Mather (Advertising), Kaiser Industries (Metals and
Mining), and Knight-Rider (Publishing).
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1978 – Age 48
Berkshire invests in SAFECO (Insurance), ABC Broadcasting (TV
Network).
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1979 – Age 49
Berkshire is trading at $290 per share. My personal net worth
is now approximately $100 million and receives a $50k annual
salary. Berkshire starts to buy shares in General Foods
(Foods), Handy & Harman (Metals and Mining), Affiliated
Publications (Publishing), Media General (Publishing), FW
Woolworth (Retail), Amerada Hess (Oil), Precision Steel
Warehouse (Materials and Construction).
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1980 – Age 50
Berkshire buys stock in RJ Reynolds (Tobacco), ALCOA (Metals
and Mining), Pinkerton (Professional Services),
Cleveland-Cliffs Iron (Metals and Mining), National Detroit
(Banking), Times Mirror (Publishing), National Student
Marketing (Financial Services).
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1981 – Age 51
Berkshire buys Arcata (Forest products/Paper), and GATX
(machinery).
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1982 – Age 52
Buffalo Evening News is the only local newspaper of Buffalo
and its name is changed to Buffalo News. The newspaper earns
$19 million in its first year without competition. By the late
eighties, the Buffalo News is earning $40 million a year.
Berkshire invests in Time (Publishing), Crum & Forster
(Insurance).
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1983 – Age 53
Berkshire merges with Blue Chip Stamps which was a majority
owned subsidiary of Berkshire. Berkshire Hathaway purchases
Nebraska Furniture Mart (Furniture) for $60 million. Berkshire
portfolio is worth $1.3 billion. Begins with a stock price of
$775 and ends the year at $1310. My personal net worth has
ballooned to $620 million and he makes the Forbes millionaire
list for the first time.
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1984 – Age 54
Berkshire buys $139 million of Washington Public Power Supply
System Bonds, invests in Exxon (Oil) and Northwest Industries
(Diversified).
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1985 – Age 55
I shut down Berkshire Hathaway’s textile business. I help
merge ABC TV Network and Capital Cities (Communications). I am
forced to leave the board of Washington Post, as the
legislation prohibited him from sitting on the boards of both
Capital Cities and Washington Post. Berkshire purchases Scott
and Fetzer who boast products like Kirby vacuums and World
Book Encyclopedia. Also buys Fecheimer Brothers (Uniform
company) and Beatrice (Food).
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1986 – Age 56
Berkshire acquires Fechheimer Brothers Company and invested in
Lear Seagler (Aerospace) Berkshire’s stock price soars above
the $3,000 mark.
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1987 – Age 57
The stock market crashes in October and Berkshire loses 25% of
its value. The stock prices goes from $4,200 to $3,100 and
Buffett’s wealth falls by $320 million. Berkshire buys 12% of
Salomon Brothers (Investment Bank).
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1988 – Age 58
I start buying Coca-Cola (Beverages) and eventually gains a 7%
stake in the company for $1.2 billion. Berkshire buys Freddie
Mac (Financial Services).
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1989 – Age 59
Berkshire acquires Borsheim’s (Jewelry) from the Friedman
Family. Berkshire’s stock price rises from $4,800 to $8,000
per share. Berkshire buys Gillette (Toiletries) and Buffett’s
personal fortune rises to $3.8 billion.
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1990 – Age 60
Berkshire buys 10% of Wells Fargo (Banking).
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1991 – Age 61
Berkshire acquires H. H. Brown (Footwear) and starts buying
M&T Bank (Banking). I serve as the CEO of Solomon Brothers
following the firm’s treasury bond trading scandal. Berkshire
invests in Guinness (Beverages).
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1992 – Age 62
Berkshire acquires Central States Indemnity Company
(Insurance) of Omaha and Buffett continues to serve as interim
Chairman at Solomon Brothers. Berkshire becomes the largest
shareholder of General Dynamics (Aerospace). Berkshire’s stock
shoots past the $10,000 mark.
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1993 – Age 63
Berkshire acquires Dextor (Footwear) which turns out to be a
bad investment.
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1994 – Age 64
My Way by Robert G. Hagstrom Jr. is published and becomes a
bestseller. Berkshire invests in McDonald’s (Restaurants),
Gannett (Publishing) and PNC Bank (Banking).
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1995 – Age 65
Berkshire acquires Helzberg’s Diamond Shops (Jewelry) and R.
C. Willey (Home Furnishings). Berkshire Hathaway’s annual
meeting is so well attended that it is held in Omaha’s Holiday
Convention Center for the first time. Berkshire stock crosses
$25,000 per share.
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1996 – Age 66
Berkshire acquires the remaining stake in GEICO to become 100%
owned subsidiary. Berkshire acquires Flight Safety
International (provider of professional aviation training).
Wesco Financial, a subsidiary of Berkshire, acquires Kansas
Bankers Surety Co (Insurance).
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1997 – Age 67
Berkshire acquires Star Furniture (Furniture) and
International Dairy Queen (Fast Food restaurants), and also
invests in Travelers (Insurance). I invested 2% of his
investment portfolio in silver. I make a huge investment in US
Airways (Airlines) which turns out to be a bad investment
decision.
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1998 – Age 68
Berkshire acquires General Re (Re-insurance) and Executive
Jet, later renamed to NetJets (Private Aviation).
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1999 – Age 69
Berkshire acquires Jordan’s Furniture Company, a Massachusetts
based furniture powerhouse. Also buys parts of MidAmerican
Energy Holdings Company, a utility company.
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2000 – Age 70
I am still going strong. Berkshire acquires a long list of
companies. Ben Bridge (Jewelry) CORT, the leading national
provider of rental furniture, accessories and related services
in the growing “rent-to-rent” furniture rental industry.
Justin Industries including Acme Building Brands. Shaw
Industries, the world’s largest manufacturer of tufted
broadloom carpets. Benjamin Moore, a leading manufacturer and
retailer of premium paints, stains and industrial coatings
that was founded in 1883. Buffett is named the top money
manager of the 20th century in a survey by the Carson Group,
ahead of Peter Lynch and John Templeton.
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2001 – Age 71
The acquisitions and purchases continue to increase. Berkshire
acquires Johns Manville Corp (building products), MiTek, a
provider of steel connector products, design engineering
software and ancillary services for the global building
components market. Berkshire goes on to acquire XTRA
Corporation (transport containers), H&R Block (Financial
Services) and Moody’s Corporation (Financial Services).
Insurance claims from the 9/11 terrorist attack total $2.28
billion. I apologize to my shareholders for failing to foresee
the risk and properly price insurance coverage.
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2002 – Age 72
Berkshire acquire Larson-Juhl, a custom picture frame maker,
Fruit of the Loom (textile), Albecca (picture framing), Garan
(apparel), CTB (farming equipment) and The Pampered Chef
(kitchenware). Berkshire and other investment groups buy $500
million in bonds issued by Level 3 Communications, the former
Omaha fiber network company. I enter a deal where $11 billion
worth of forward contracts is delivered in US dollars against
other currencies. By April 2006, his total gain on these
contracts is over $2 billion.
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2003 – Age 73
Berkshire acquires McLane (wholesale distributor), Clayton
Homes (housing) and Burlington Industries, one of the world’s
most diversified marketers and manufacturers of soft goods for
apparel and interior furnishings.
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2004 – Age 74
Bill Gates is elected as a director for Berkshire Hathaway.
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2005 – Age 75
Berkshire acquires Medical Protective Company (Medical
malpractice carrier) and Forest River (leisure vehicles).
Despite insurance business losses of about $2.5 billion caused
by Hurricane Katrina, Berkshire records a gain of $5.6
billion. Berkshire’s subsidiary, Shaw Industries, buys stock
in Honeywell International. Berkshire joins the fun by buying
Procter and Gamble (Consumer Goods) and Anheuser-Busch (Food
and Beverage). Berkshire stock crosses $90,000 per share.
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2006 – Age 76
I announce in June that he will give away more than 80%, or
about $37 billion, of my $44 billion fortune to five
foundations in annual gifts of stock, starting July 2006. The
largest contribution will go to the Bill and Melinda Gates
Foundation. Berkshire stock crosses $100,000 per share. The
list of acquisitions and stock purchases continue. Business
Wire (media distributor) Russell Corporation (athletic
apparel) 80% of the Iscar Metalworking Companies (IMC) in a
transaction that valued IMC at US$5 billion. Applied
Underwriters (insurance) TTI Inc (electronic components
distributor) Southern Energy Homes (utility) Brooke Sports
(athletic apparel).
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2007 – Age 77
In a letter to shareholders, i announce that he is looking for
a young successor or perhaps successors to run Berkshire. I
had previously selected Lou Simpson, who manages the
investment via GEICO, to fill that role. However, Simpson is
only six years younger than Buffett. The companies bought that
year include Boat America Corporation, which owns Seaworthy
Insurance Company and controls the Boat Owners Association of
the United States. Leading jewelry manufacturers Bel-Oro
International and Aurafin LLC, which merges into Richline
Group. 60% of Marmon Holdings (holding company that owns
companies producing electrical components). SE Homes (home
construction) BoatUS (Boat America Corporation is the main
supplier of towing, insurance and other services to the
nonprofit boater’s association)
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2008 – Age 78
Berkshire buys out Marmon Holdings and Coachmen Industries
becomes a part of Forest River (leisure vehicles). Berkshire
buys $4.4b in bonds from Mars Inc (food and beverage). Makes
$680m in profit off the investment.
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2009 – Age 79
Berkshire’s subsidiary, Shaw Industries, acquires Sportexe (a
leading synthetic turf company). Berkshire acquires Cavalier
Homes (home building company). A $5 billion “paper” loss on
investments and derivatives triggers a first-quarter loss for
Berkshire. It is the biggest loss since the 9/11 terrorist
attack. But earnings rebound later in the year.
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2010 – Age 80
Berkshire buys out railroad company Burlington Northern for
$44 billion. As a result of the acquisition, Berkshire enters
the S&P 500, replacing Burlington Northern Santa Fe. Berkshire
subsidiary, McLane Company, acquires Kahn Ventures. Berkshire
invests in Munich Re (Insurance).
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2011 – Age 81
Berkshire acquires Lubrizol (Speciality Chemicals).
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2012 – Age 82
Be acquires Omaha World-Herald (Publishing) and invests in IBM
(Technology).
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2013 – Age 83
Berkshire acquires a 50% stake in H. J. Heinz Company (Food
and Beverage).
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2014 and Beyond
As Berkshire continues to accumulate more cash, it’s capital
spending will increase and you will no doubt see big deals
occur going forward. I have one of the most illustrious
investing careers the world has ever seen.
The story is not over yet.