Joseph Taglieri - Warren Buffett: A Biography

If you picture the life and home of one of the world's richest, most powerful men with fifteen bedrooms and a room devoted to swimming in gold (a la Scrooge McDuck) youll be shocked with self-made billionaire Warren Buffett. The 81-year-old man lives a modest life in same the three-bedroom home he bought in Dundee, Nebraska in 1958 with his late wife Susan. Never one for extravagance, Buffett always preferred a low key life, both at home and at work, and earlier in his life, at school. His high school year book photo was captioned likes math, future stock broker and couldn't have been a better predictor. After college and apprenticeships, Buffett became an investment icon. His flagship investment, Berkshire Hathaway, has become an industry leader for how to choose stocks that have longevity, similar to Buffett himself. Buffett has made significant contributions to the way investments were made on Wall Street by deciding early on to look at the company structure and not just the balance sheets. His unique perspective and insight has earned him the much deserved title Oracal of Omaha.

Buffett has always been a philanthropist. In college he belonged to the fraternity Alpha Sigma Phi, like his father before him, whose core mission is, Silence, purity, charity, honor, and patriotism. During the 1980s, Buffett's company, Berkshire Hathaway, devised a plan to allow shareholders to allocate funds to their particular charities. Although immensely popular, the program came to a halt after members of a subsidiary, The Pampered Chef, felt they were discriminated against because of the donations Buffett made to pro-choice groups.

In 2006 Buffett shocked the world when he announced that he would be leaving the majority of his vast fortune to the Bill and Melinda Gates foundation and not to his family members. Buffett, Gates, and Facebook CEO Mark Zuckerberg, infamously signed the Gates-Buffett Giving Pledge that stated each pledged at least half of their earnings to charities.

Also in 2006, Buffet became enraged when his youngest son's adopted daughter, Nicole, appeared in a documentary called The One Percent, about growing up in households with money, produced by heir to the Johnson and Johnson fortune, Jamie Johnson. He wrote the 28 year-old Nicole and said, "I have not emotionally or legally adopted you as a grandchild, nor have the rest of my family adopted you as a niece or a cousin, effectively removing her from his family unit.

Buffett, however, is not free of controversy in his business life either. His first bump with regulators was in 1973 over the perceived notion that he and long time business partner Charlie Munger caused a takeover failure of Wesco Financial. The Security Exchange Commission (SEC) investigated the stock buy up of Wesco shares by the firm Blue Chip, which Buffett owned a majority stake in, and determined that they had sufficient evidence to bring charges of stock price manipulation. Blue Chip neither denied nor confirmed the allegations but settled for $115,000 which was paid out to Wesco shareholders who might have been slighted by their actions.

In 1977, after Buffett acquired the Buffalo Evening News, one of two major newspapers in the area, he was at the defensive end of an anti-trust lawsuit. By changing when the paper was printed from Saturday mornings to Saturday evenings, and introducing a Sunday edition, the Buffalo Courier- Express filed the suit, but failed to prove the anti-trust allegations. The Courier alleged that by offering discounts for added additions that the Evening news was going to undercut the Couriers offers and put it out of business, then raise rates. Judges found that Buffett's implementation of the new printing schedule and discounts during the transition were not meant to put the Courier out of business, it was simply a man doing good business.However, the judge did agree with Buffetts rival publication that giving away five Sunday issues as Buffett proposed was a bit unreasonable, especially during the Thanksgiving season, and restricted him to just two, all to be allocated during the weekends before the holiday. After that papers were to be sold at comparable prices to those of the Courier and then let the consumers pick a winner. The Buffalo Evening News Sunday Edition circulation averaged 170,000 papers sold by February of 1978.

In the 90s, Buffett once again found himself immersed in a scandal. In the mid-80s Buffett had come to the rescue of a failing Wall Street firm, Salomon Brothers. After investing heavily in what appeared to be a sound firm the company disclosed a $70 million dollar bad debt write off and the value of the firm plummeted. Buffett lost a significant portion of his $700 million investment and the stock market crash of '87 started. In 1991 it was revealed that one trader had over-traded treasury bonds according to Treasury rules. This was only discovered when one of the individuals whom the broker was trading under attempted to bid on bonds and was notified that he was over his limit. This launched an investigation that destroyed the upper management and confidence in the company as a whole. To shield his investment and others who held stock Buffett stepped in and took over control of the firm. He discovered massive debt and corrected the fiscal mismanagement of the company. It sold in 1997 for $9 billion to Travelers and Buffett made $1.7 billion.

Currently, Buffett has taken his business knowledge to Capitol Hill. As an adviser to the Obama administration, he has lobbied Congress for new tax rules on the wealthiest Americans. The Buffett Rule consists of a minimum tax of 30% on those making over $1 million dollars. Republican Senators filibustered the bill initiative made by the Obama administration. Buffett, who has consistently held the belief that with hard work and determination anyone can make it and people shouldnt expect to be handed their fortunes, told a Senate panel that they should also keep the inheritance tax to prevent elitist dominance. Critics questioned his ulterior motives, pointing out that Berkshire Hathaway, Buffetts flagship company, offers insurance products that protect holders against such taxes. Buffett proposed that the only way to get real change in the lives of all Americans was to provide tax credits to the lowest income earners and keep the inheritance taxes, not so his company could sell insurances, but because the gap between the super rich and the middle class had grown too vast.

Buffett was born on August 30, 1930 in Omaha, Nebraska to Howard and Lelia Buffett. He was the couples middle child and only son. Howard Buffett was the son of grocery store owners, but after he was unable to get a job in the family business, he started his own brokerage firm. While Howard ran his investment business he also served on the Omaha Board of Education for four years and then ran for the US House of Representatives. He was elected and relocated the family to Washington, DC. There, Warren attended public schools and graduated from Woodrow Wilson High in 1947, five years later. He was only seventeen years old.

Buffett's natural talent and ability for business were evident from a very young age. At six, Buffett was already concocting ways to make money. He would go door to door selling candy, sodas, and other items he bought at his grandfathers grocery store, pocketing the profit.

Young Warren could also be found working at his father's brokerage firm, chalking up stock prices on a large board. Many people knew of Buffett's unique talent for adding up large columns of numbers without the help of pencil, paper, or calculators . At ten he visited the New York Stock Exchange, and by age 11 Buffett bought his first shares of stock, three each for him and his sister Doris, of Cities Service Preferred, later known as CITGO Oil.