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The World Money Fair is an international bourse of coins. A bourse is where dealers, collectors and the public buy, sell and trade coins.

In 1970 Albert M. Beck founded the "Organisation of European Coin-Bourses", "Organisation Europäischer Münzen-Börsen" (OEMB) in Munich. He nurtured an idea of building up a stronger market for the collecting of coins.

Two years later the first international bourse of coins took place in Basel. Over the years it was developed into the "World Money Fair". Today more than 40 nations are members of this organisation. In 2006, the bourse moved to Berlin. During the first convention in the German capital, the German Secretary of State Karl Diller presented the new German 2 Euro Coin. It shows the Holstentor of Lübeck.

The most recent World Money Fair, the 40th edition, was held in January 2011 in Berlin at the Estrel Convention Center. The guest of honour at the 40th edition was The Polish state mint.

Links[link]

• The World Money Fair's Official Website

This money or currency-related article is a stub. You can help Wikipedia by expanding it. v t e

Warren Buffett
Buffett speaking to students from the University of Kansas School of Business, May 6, 2005
Born	Warren Edward Buffett (1930-08-30) August 30, 1930 (age 81) Omaha, Nebraska, U.S.
Nationality	American
Alma mater	University of Pennsylvania University of Nebraska–Lincoln Columbia University
Occupation	Chairman & CEO of Berkshire Hathaway
Years active	1951–present
Salary	US$100,000[1]
Net worth	US$ 44 billion (2012)[2]
Religion	None (Agnostic [3])
Spouse	Susan Thompson Buffett (1952–2004) Astrid Menks (2006–present)[4]
Children	Susan Alice Buffett Howard Graham Buffett Peter Andrew Buffett
Signature

Warren Edward Buffett (/ˈbʌfɨt/; born August 30, 1930) is an American business magnate, investor, and philanthropist. He is widely considered the most successful investor of the 20th century. He is the primary shareholder, chairman and CEO of Berkshire Hathaway.^[5] He is consistently ranked among the world's wealthiest people. He was ranked as the world's wealthiest person in 2008^[6] and is the third wealthiest person in the world as of 2011.^[7] In 2012, American magazine Time named Buffett one of the most influential people in the world.^[8]

Buffett is called the "Wizard of Omaha", "Oracle of Omaha"^[9], or the "Sage of Omaha"^[10] and is noted for his adherence to the value investing philosophy and for his personal frugality despite his immense wealth.^[11] Buffett is also a notable philanthropist, having pledged to give away 99 percent^[12] of his fortune to philanthropic causes, primarily via the Gates Foundation. On April 11, 2012, he was diagnosed with prostate cancer.^[13]

Early life[link]

Buffett was born in 1930 in Omaha, Nebraska, the second of three children and only son of U.S. Representative Howard Buffett,^[14] a fierce critic of the interventionist New Deal domestic and foreign policy, and his wife Leila (née Stahl). Buffett began his education at Rose Hill Elementary School in Omaha. In 1942, his father was elected to the first of four terms in the United States Congress, and after moving with his family to Washington, D.C., Warren finished elementary school, attended Alice Deal Junior High School, and graduated from Woodrow Wilson High School in 1947, where his senior yearbook picture reads: "likes math; a future stock broker."^[15]

Even as a child, Buffett displayed an interest in making and saving money. He went door to door selling chewing gum, Coca-Cola, or weekly magazines. For a while, he worked in his grandfather's grocery store. While still in high school he was successful in making money by delivering newspapers, selling golfballs and stamps, and detailing cars, among other means. Filing his first income tax return in 1944, Buffett took a $35 deduction for the use of his bicycle and watch on his paper route.^[16] In 1945, in his sophomore year of high school, Buffett and a friend spent $25 to purchase a used pinball machine, which they placed in the local barber shop. Within months, they owned several machines in different barber shops.

Buffett's interest in the stock market and investing also dated to his childhood, to the days he spent in the customers' lounge of a regional stock brokerage near the office of his father's own brokerage company. On a trip to New York City at the age of ten, he made a point to visit the New York Stock Exchange. At the age of 11, he bought three shares of Cities Service Preferred for himself, and three for his sister.^[17][18] While in high school he invested in a business owned by his father and bought a farm worked by a tenant farmer. By the time he finished college, Buffett had accumulated more than $90,000 in savings measured in 2009 dollars.

Buffett entered college as a freshman in 1947 at the Wharton Business School of the University of Pennsylvania and studied there for two years from 1947 to 1949. In the year 1950, when he entered his junior year, he transferred to the University of Nebraska–Lincoln where at the age of nineteen, he graduated with a Bachelor of Science in business administration. After the completion of his undergraduate studies, Buffett enrolled at Columbia Business School after learning that Benjamin Graham (author of "The Intelligent Investor" – one of his favorite books on investing) and David Dodd, two well-known securities analysts, taught there. He earned a Master of Science in economics from Columbia in 1951. Buffett also attended the New York Institute of Finance. In Buffett's own words:

Business career[link]

Warren Buffett was employed from 1951–54 at Buffett-Falk & Co., Omaha as an investment salesman, from 1954–1956 at Graham-Newman Corp., New York as a securities analyst, from 1956–1969 at Buffett Partnership, Ltd., Omaha as a general partner and from 1970 – Present at Berkshire Hathaway Inc, Omaha as its Chairman, CEO.

In 1950, at the age of 20, Buffett had made and saved $9,800 (over $120,000 inflation-adjusted). In April 1952, Buffett discovered Graham was on the board of GEICO insurance. Taking a train to Washington, D.C. on a Saturday, he knocked on the door of GEICO's headquarters until a janitor allowed him in. There he met Lorimer Davidson, Geico's Vice President, and the two discussed the insurance business for hours. Davidson would eventually become Buffett's life-long friend and a lasting influence^[21] and later recall that he found Buffett to be an "extraordinary man" after only fifteen minutes. Buffett graduated from Columbia and wanted to work on Wall Street, however, both his father and Ben Graham urged him not to. He offered to work for Graham for free, but Graham refused.^[22]

Buffett returned to Omaha and worked as a stockbroker while taking a Dale Carnegie public speaking course.^[23] Using what he learned, he felt confident enough to teach an "Investment Principles" night class at the University of Nebraska-Omaha. The average age of his students was more than twice his own. During this time he also purchased a Sinclair Texaco gas station as a side investment. However, this did not turn out to be a successful business venture.

In 1952^[24] Buffett married Susan Thompson at Dundee Presbyterian Church and the next year they had their first child, Susan Alice Buffett. In 1954, Buffett accepted a job at Benjamin Graham's partnership. His starting salary was $12,000 a year (approximately $105,000 adjusted to 2012 dollars). There he worked closely with Walter Schloss. Graham was a tough man to work for. He was adamant that stocks provide a wide margin of safety after weighting the trade-off between their price and their intrinsic value. The argument made sense to Buffett but he questioned whether the criteria were too stringent and caused the company to miss out on big winners that had more qualitative values.^{[citation needed]} That same year the Buffetts had their second child, Howard Graham Buffett. In 1956, Benjamin Graham retired and closed his partnership. At this time Buffett's personal savings were over $174,000 ($1.2 million inflation adjusted to 2009 dollars) and he started Buffett Partnership Ltd., an investment partnership in Omaha.

Buffett's home in Omaha

In 1957, Buffett had three partnerships operating the entire year. He purchased a five-bedroom stucco house in Omaha, where he still lives, for $31,500. In 1958 the Buffett's third child, Peter Andrew Buffett, was born. Buffett operated five partnerships the entire year. In 1959, the company grew to six partnerships operating the entire year and Buffett was introduced to Charlie Munger. By 1960, Buffett had seven partnerships operating: Buffett Associates, Buffett Fund, Dacee, Emdee, Glenoff, Mo-Buff and Underwood. He asked one of his partners, a doctor, to find ten other doctors willing to invest $10,000 each in his partnership. Eventually eleven agreed, and Buffett pooled their money with a mere $100 original investment of his own. In 1961, Buffett revealed that Sanborn Map Company accounted for 35% of the partnership's assets. He explained that in 1958 Sanborn stock sold at only $45 per share when the value of the Sanborn investment portfolio was $65 per share. This meant that buyers valued Sanborn stock at "minus $20" per share and were unwilling to pay more than 70 cents on the dollar for an investment portfolio with a map business thrown in for nothing. This earned him a spot on the board of Sanborn.

As a millionaire[link]

In 1962, Buffett became a millionaire because of his partnerships, which in January 1962 had an excess of $7,178,500, of which over $1,025,000 belonged to Buffett. Buffett merged all partnerships into one partnership. Buffett invested in and eventually took control of a textile manufacturing firm, Berkshire Hathaway. Buffett's partnerships began purchasing shares at $7.60 per share. In 1965, when Buffett's partnerships began purchasing Berkshire aggressively, they paid $14.86 per share while the company had working capital of $19 per share. This did not include the value of fixed assets (factory and equipment). Buffett took control of Berkshire Hathaway at the board meeting and named a new president, Ken Chace, to run the company. In 1966, Buffett closed the partnership to new money. Buffett wrote in his letter: "... 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."

In a second letter, Buffett announced his first investment in a private business — Hochschild, Kohn and Co, a privately owned Baltimore department store. In 1967, Berkshire paid out its first and only dividend of 10 cents. In 1969, following his most successful year, Buffett liquidated the partnership and transferred their assets to his partners. Among the assets paid out were shares of Berkshire Hathaway. In 1970, as chairman of Berkshire Hathaway, Buffett began writing his now-famous annual letters to shareholders. However, he lived solely on his salary of $50,000 per year, and his outside investment income. In 1979, Berkshire began the year trading at $775 per share, and ended at $1,310. Buffett's net worth reached $620 million, placing him on the Forbes 400 for the first time.

In 1973, Berkshire began to acquire stock in the Washington Post Company. Buffett became close friends with Katharine Graham, who controlled the company and its flagship newspaper, and became a member of its board of directors. In 1974, the SEC opened a formal investigation into Warren Buffett and Berkshire's acquisition of WESCO, due to possible conflict of interest. No charges were brought. In 1977, Berkshire indirectly purchased the Buffalo Evening News for $32.5 million. Antitrust charges started, instigated by its rival, the Buffalo Courier-Express. Both papers lost money, until the Courier-Express folded in 1982.

In 1979, Berkshire began to acquire stock in ABC. Capital Cities announced $3.5 billion purchase of ABC on March 18, 1985 surprised the media industry, as ABC was four times bigger than Capital Cities at the time. Berkshire Hathaway chairman Warren Buffett helped finance the deal in return for a 25% stake in the combined company.^[25] The newly merged company, known as Capital Cities/ABC (or CapCities/ABC), was forced to sell off some stations due to FCC ownership rules. Also, the two companies owned several radio stations in the same markets.^[26]

In 1987, Berkshire Hathaway purchased a 12% stake in Salomon Inc., making it the largest shareholder and Buffett the director. In 1990, a scandal involving John Gutfreund (former CEO of Salomon Brothers) surfaced. A rogue trader, Paul Mozer, was submitting bids in excess of what was allowed by the Treasury rules. When this was discovered and brought to the attention of Gutfreund, he did not immediately suspend the rogue trader. Gutfreund left the company in August 1991.^[27] Buffett became Chairman of Salomon until the crisis passed; on September 4, 1991, he testified before Congress.^[28] In 1988, Buffett began buying stock in Coca-Cola Company, eventually purchasing up to 7% of the company for $1.02 billion. It would turn out to be one of Berkshire's most lucrative investments, and one which it still holds.

As a billionaire[link]

Buffett became a billionaire on paper when Berkshire Hathaway began selling class A shares on May 29, 1990, when the market closed at $7,175 a share.^[29] In 1998, in an unusual move, he acquired General Re (Gen Re) for stock. In 2002, Buffett became involved with Maurice R. Greenberg at AIG, with General Re providing reinsurance. On March 15, 2005, AIG's board forced Greenberg to resign from his post as Chairman and CEO under the shadow of criticism from Eliot Spitzer, former attorney general of the state of New York. On February 9, 2006, AIG and the New York State Attorney General's office agreed to a settlement in which AIG would pay a fine of $1.6 billion.^[30] In 2010, the federal government settled with Berkshire Hathaway for $92 million in return for the firm avoiding prosecution in an AIG fraud scheme, and undergoing 'corporate governance concessions'.^[31]

In 2002, Buffett entered in $11 billion worth of forward contracts to deliver U.S. dollars against other currencies. By April 2006, his total gain on these contracts was over $2 billion. In 2006, Buffett announced in June that he gradually would give away 85% of his Berkshire holdings to five foundations in annual gifts of stock, starting in July 2006. The largest contribution would go to the Bill and Melinda Gates Foundation.^[32] In 2007, in a letter to shareholders, Buffett announced that he was looking for a younger successor, or perhaps successors, to run his investment business.^[33] Buffett had previously selected Lou Simpson, who runs investments at Geico, to fill that role. However, Simpson is only six years younger than Buffett.

Late 2000s recession[link]

Buffett ran into criticism^[34] during the subprime crisis of 2007–2008, part of the late 2000s recession, that he had allocated capital too early resulting in suboptimal deals. "Buy American. I am." he wrote for an opinion piece published recently in the New York Times.^[35] Buffett has called the 2007–present downturn in the financial sector "poetic justice".^[36] Buffett's Berkshire Hathaway suffered a 77% drop in earnings during Q3 2008 and several of his recent deals appear to be running into large mark-to-market losses.^[37]

Berkshire Hathaway acquired 10% perpetual preferred stock of Goldman Sachs.^[38] Some of Buffett's Index put options (European exercise at expiry only) that he wrote (sold) are currently running around $6.73 billion mark-to-market losses.^[39] The scale of the potential loss prompted the SEC to demand that Berkshire produce, "a more robust disclosure" of factors used to value the contracts.^[39] Buffett also helped Dow Chemical pay for its $18.8 billion takeover of Rohm & Haas. He thus became the single largest shareholder in the enlarged group with his Berkshire Hathaway, which provided $3 billion, underlining his instrumental role during the current crisis in debt and equity markets.^[40]

In 2008, Buffett became the richest man in the world, with a total net worth estimated at $62 billion^[41] by Forbes and at $58 billion^[42] by Yahoo, dethroning Bill Gates, who had been number one on the Forbes list for 13 consecutive years.^[43] In 2009, Gates regained the position of number one on the Forbes list, with Buffett second. Their values have dropped to $40 billion and $37 billion, respectively, Buffett having lost $25 billion in 12 months during 2008/2009, according to Forbes.^[44]

In October 2008, the media reported that Warren Buffett had agreed to buy General Electric (GE) preferred stock.^[45] The operation included extra special incentives: he received an option to buy 3 billion GE at $22.25 in the next five years, and also received a 10% dividend (callable within three years). In February 2009, Buffett sold some of the Procter & Gamble Co, and Johnson & Johnson shares from his portfolio.^[46]

In addition to suggestions of mistiming, questions have been raised as to the wisdom in keeping some of Berkshire's major holdings, including The Coca-Cola Company (NYSE:KO) which in 1998 peaked at $86. Buffett discussed the difficulties of knowing when to sell in the company's 2004 annual report:

That may seem easy to do when one looks through an always-clean, rear-view mirror. Unfortunately, however, it's the windshield through which investors must peer, and that glass is invariably fogged.^[47]

In March 2009, Buffett stated in a cable television interview that the economy had "fallen off a cliff... Not only has the economy slowed down a lot, but people have really changed their habits like I haven't seen". Additionally, Buffett fears we may revisit a 1970s level of inflation, which led to a painful stagflation that lasted many years.^[48][49]

In 2009, Warren Buffett invested $2.6 billion as a part of Swiss Re's raising equity capital.^[50][51] Berkshire Hathaway already owns a 3% stake, with rights to own more than 20%.^[52] In 2009, Warren Buffett acquired Burlington Northern Santa Fe Corp. for $34 billion in cash and stock. Alice Schroeder, author of Snowball, stated that a reason for the purchase was to diversify Berkshire Hathaway from the financial industry.^[53] Measured by market capitalization in the Financial Times Global 500 Berkshire Hathaway as of June 2009 was the eighteenth largest corporation on earth.^[54]

In 2009, Buffett divested his failed investment in ConocoPhillips, saying to his Berkshire investors,

I bought a large amount of ConocoPhillips stock when oil and gas prices were near their peak. I in no way anticipated the dramatic fall in energy prices that occurred in the last half of the year. I still believe the odds are good that oil sells far higher in the future than the current $40–$50 price. But so far I have been dead wrong. Even if prices should rise, moreover, the terrible timing of my purchase has cost Berkshire several billion dollars.^[55]

The merger with the Burlington Northern Santa Fe Railway (BNSF) closed upon BNSF shareholder approval in 1Q2010. This deal is valued at approximately $34 billion and reflects an increase of a previously existing stake of about 22%.

In June 2010, Buffett defended the credit rating agencies for their role in the US financial crisis, claiming that:

Very, very few people could appreciate the bubble. That's the nature of bubbles – they're mass delusions.^[56]

On March 18, 2011, Goldman Sachs acquired Federal Reserve approval to buy back Berkshire's preferred stock in Goldman. Buffet has been reluctant to give up the stock which averaged $1.4 million in dividends a day,^[57] stating:^[58]

I'm going to be the Osama bin Laden of capitalism. I'm on my way to an unknown destination in Asia where I'm going to look for a cave. If the U.S. Armed forces can't find Osama bin Laden in 10 years, let Goldman Sachs try to find me.^[59]

In November 2011, it was announced that over the course of the last 8 months, Warren Buffett had bought 64 million shares of International Business Machine Corp (IBM) stock, worth around $11 billion. This unanticipated investment raised his stake in the company to around 5.5 percent—the largest stake in IBM alongside that of State Street Global Advisors. Buffett had said on numerous prior occasions that he would not invest in technology because he did not fully understand it, so the move came as a surprise to many investors and observers. During the interview in which he revealed the investment to the public, Buffet stated that he was impressed by the company's ability to retain corporate clients and said, "I don't know of any large company that really has been as specific on what they intend to do and how they intend to do it as IBM."^[60]

In May 2012, it was announced that Warren Buffett had acquired Media General, owner of 63 newspapers in the south-eastern United States.^[61] It was the second news print purchase made by Buffett in one year.^[62]

Personal life[link]

Buffett married Susan Buffett (née Thompson) in 1952. They had three children, Susie, Howard and Peter. The couple began living separately in 1977, although they remained married until her death in July 2004. Their daughter, Susie, lives in Omaha and does charitable work through the Susan A. Buffett Foundation and is a national board member of Girls, Inc. In 2006, on his seventy-sixth birthday, Warren married his longtime companion, Astrid Menks, who was then 60 years old. She had lived with him since his wife's departure to San Francisco in 1977.^[63] It was Susan Buffett who arranged for the two to meet before she left Omaha to pursue her singing career. All three were close and Christmas cards to friends were signed "Warren, Susie and Astrid".^[64] Susan Buffett briefly discussed this relationship in an interview on the Charlie Rose Show shortly before her death, in a rare glimpse into Buffett's personal life.^[65]

Warren Buffett disowned his son Peter's adopted daughter, Nicole, in 2006 after she participated in the Jamie Johnson documentary, The One Percent. Although his first wife had referred to Nicole as one of her "adored grandchildren",^[66] Buffett wrote her a letter stating, "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." He signed the letter "Warren."^[67][68][69]

His 2006 annual salary was about $100,000, which is small compared to senior executive remuneration in comparable companies.^[70] In 2007 and 2008, he earned a total compensation of $175,000, which included a base salary of just $100,000.^[71][72] He lives in the same house in the central Dundee neighborhood of Omaha that he bought in 1958 for $31,500, today valued at around $700,000 (although he also owns a $4 million house in Laguna Beach, California).^[73] In 1989 after having spent nearly 6.7 million dollars of Berkshire's funds on a private jet, Buffett sheepishly named it "The Indefensible". This act was a break from his past condemnation of extravagant purchases by other CEOs and his history of using more public transportation.^[74]

Buffett is an avid player of bridge, which he plays with fellow fan Gates.^[76] He spends 12 hours a week playing the game.^[77] In 2006, he sponsored a bridge match for the Buffett Cup. Modeled on the Ryder Cup in golf, held immediately before it, and in the same city, a team of twelve bridge players from the United States took on twelve Europeans in the event. He is a dedicated, lifelong follower of Nebraska football, and attends as many games as his schedule permits. He supported the hire of Bo Pelini following the 2007 season stating, "It was getting kind of desperate around here".^[78] He watched the 2009 game against Oklahoma from the Nebraska sideline after being named an honorary assistant coach.^[79]

Warren Buffett worked with Christopher Webber on an animated series with chief Andy Heyward, of DiC Entertainment, and then A Squared Entertainment. The series features Buffett and Munger, and teaches children healthy financial habits for life.^[80][81] Buffett was raised Presbyterian but has since described himself as agnostic.^[82] In December 2006 it was reported that Buffett does not carry a cell phone, does not have a computer at his desk, and drives his own automobile,^[83] a Cadillac DTS.^[84] Buffett wears tailor-made suits from the Chinese label Trands; earlier he wore Ermenegildo Zegna.^[85]

Health[link]

On 11 April 2012, Buffett was diagnosed with stage I prostate cancer during a routine test.^[86] He announced he would begin two months of daily radiation treatment from mid-July; however, in a letter to shareholders, Buffett said he felt "great - as if I were in my normal excellent health - and my energy level is 100 percent".

Lineage[link]

Buffett's DNA report revealed that his paternal ancestors hail from northern Scandinavia, while his maternal ancestors hail from Iberia (present-day Spain^[87]) or Estonia.^[88] It's been also reported that Warren is not related to Jimmy Buffett despite the similar surname.^[87]

Recognition[link]

In 1999, Buffett was named the top money manager of the Twentieth Century in a survey by the Carson Group, ahead of Peter Lynch and John Templeton.^[89] In 2007, he was listed among Time's 100 Most Influential People in the world.^[90] In 2011, President Barack Obama awarded him the Presidential Medal of Freedom.^[91] Most recently, Buffett, along with Bill Gates, was named the most influential global thinker in Foreign Policy's 2010 report.^[92]

Politics[link]

Buffett and President Obama at the Oval Office, July 14, 2010

In addition to other political contributions over the years, Buffett has formally endorsed and made campaign contributions to Barack Obama's presidential campaign. On July 2, 2008, Buffett attended a $28,500 per plate fundraiser for Obama's campaign in Chicago hosted by Obama's National Finance Chair, Penny Pritzker and her husband, as well as Obama advisor Valerie Jarrett.^[93] Buffett backed Obama for president, and intimated that John McCain's views on social justice were so far from his own that McCain would need a "lobotomy" for Buffett to change his endorsement.^[94] During the second 2008 U.S. presidential debate, candidates John McCain and Barack Obama, after being asked first by presidential debate mediator Tom Brokaw, both mentioned Buffett as a possible future Secretary of the Treasury.^[95] Later, in the third and final presidential debate, Obama mentioned Buffett as a potential economic advisor.^[96] Buffett was also finance advisor to California Republican Governor Arnold Schwarzenegger during his 2003 election campaign.^[97]

Writings[link]

Warren Buffett's writings include his annual reports and various articles. Buffett is recognized by communicators^[98] as a great story-teller, as evidenced by his annual letters to shareholders. He warned about the pernicious effects of inflation:^[99]

The arithmetic makes it plain that inflation is a far more devastating tax than anything that has been enacted by our legislatures. The inflation tax has a fantastic ability to simply consume capital. It makes no difference to a widow with her savings in a 5 percent passbook account whether she pays 100 percent income tax on her interest income during a period of zero inflation, or pays no income taxes during years of 5 percent inflation.

—Buffett, Fortune (1977)

In his article The Superinvestors of Graham-and-Doddsville, Buffett rebutted the academic Efficient-market hypothesis, that beating the S&P 500 was "pure chance", by highlighting the results achieved by a number of students of the Graham and Dodd value investing school of thought. In addition to himself, Buffett named Walter J. Schloss, Tom Knapp, Ed Anderson (Tweedy, Brown Inc.), Bill Ruane (Sequoia Fund, Inc.), Charles Munger (Buffett's own business partner at Berkshire), Rick Guerin (Pacific Partners, Ltd.), and Stan Perlmeter (Perlmeter Investments).^[100] In his November 1999 Fortune article, he warned of investors' unrealistic expectations:^[101]

Let me summarize what I've been saying about the stock market: I think it's very hard to come up with a persuasive case that equities will over the next 17 years perform anything like—anything like—they've performed in the past 17. If I had to pick the most probable return, from appreciation and dividends combined, that investors in aggregate—repeat, aggregate—would earn in a world of constant interest rates, 2% inflation, and those ever hurtful frictional costs, it would be 6%!

—Buffett, Fortune (1999)

Style[link]

Buffett's speeches are known for mixing business discussions with humor. Each year, Buffett presides over Berkshire Hathaway's annual shareholder meeting in the Qwest Center in Omaha, Nebraska, an event drawing over 20,000 visitors from both United States and abroad, giving it the nickname "Woodstock of Capitalism".^[102] Berkshire's annual reports and letters to shareholders, prepared by Buffett, frequently receive coverage by the financial media. Buffett's writings are known for containing quotations from sources as ranging between the Bible and Mae West,^[103] as well as advice in a Midwestern folk style, and numerous jokes.

Wealth[link]

In 2008 he was ranked by Forbes as the richest person in the world with an estimated net worth of approximately US$62 billion.^[104] In 2009, after donating billions of dollars to charity, Buffett was ranked as the second richest man in the United States with a net worth of US$37 billion^[105][106] with only Bill Gates ranked higher than Buffett. His net worth is up to $47 billion in the past 12 months.^[107]

Philanthropy[link]

The following quotation from 1988 highlights Warren Buffett's thoughts on his wealth and why he long planned to re-allocate it:

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 GDP 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)

From a NY Times article: "I don't believe in dynastic wealth", Warren Buffett said, calling those who grow up in wealthy circumstances "members of the lucky sperm club".^[108] Buffett has written several times of his belief that, in a market economy, the rich earn outsized rewards for their talents:

A market economy creates some lopsided payoffs to participants. The right endowment of vocal chords, anatomical structure, physical strength, or mental powers can produce enormous piles of claim checks (stocks, bonds, and other forms of capital) on future national output. Proper selection of ancestors similarly can result in lifetime supplies of such tickets upon birth. If zero real investment returns diverted a bit greater portion of the national output from such stockholders to equally worthy and hardworking citizens lacking jackpot-producing talents, it would seem unlikely to pose such an insult to an equitable world as to risk Divine Intervention.^[109]

His children will not inherit a significant proportion of his wealth. This is consistent with statements he has made in the past indicating his opposition to the transfer of great fortunes from one generation to the next.^[110] Buffett once commented, "I want to give my kids just enough so that they would feel that they could do anything, but not so much that they would feel like doing nothing".^[111]

In June 2006, he announced a plan to give away his fortune to charity, with 83% of it going to the Bill & Melinda Gates Foundation.^[112] He pledged about the equivalent of 10 million Berkshire Hathaway Class B shares to the Bill & Melinda Gates Foundation (worth approximately US$30.7 billion as of June 23, 2006),^[113] making it the largest charitable donation in history, and Buffett one of the leaders of philanthrocapitalism.^[114] The foundation will receive 5% of the total donation on an annualised basis each July, beginning in 2006. (Significantly, however, the pledge is conditional upon the foundation's giving away each year, beginning in 2009, an amount that is at least equal to the value of the entire previous year's gift from Buffett, in addition to 5% of the foundation's net assets.) Buffett also will join the board of directors of the Gates Foundation, although he does not plan to be actively involved in the foundation's investments.^[115][116]

This is a significant shift from previous statements Buffett has made, having stated that most of his fortune would pass to his Buffett Foundation.^[117] The bulk of the estate of his wife, valued at $2.6 billion, went to that foundation when she died in 2004.^[118] He also pledged $50-million to the Nuclear Threat Initiative, in Washington, where he has served as an adviser since 2002.^[119]

In 2006, he auctioned his 2001 Lincoln Town Car^[120] on eBay to raise money for Girls, Inc.^[121] In 2007, he auctioned a luncheon with himself that raised a final bid of $650,100 for the Glide Foundation which was won by Mohnish Pabrai and Guy Spier.^[122] On June 27, 2008, Zhao Danyang, a general manager at Pure Heart China Growth Investment Fund, won the 2008 5-day online "Power Lunch with Warren Buffett" charity auction with a bid of $2,110,100. Auction proceeds benefit the San Francisco Glide Foundation.^[123][124] The following year, executives from Toronto-based Salida Capital paid US$1.68 million to dine with Buffett.^[125]

In a letter to Fortune Magazine's website in 2010 Buffett remarked:

My luck was accentuated by my living in a market system that sometimes produces distorted results, though overall it serves our country well... I've worked in an economy that rewards someone who saves the lives of others on a battlefield with a medal, rewards a great teacher with thank-you notes from parents, but rewards those who can detect the mispricing of securities with sums reaching into the billions. In short, fate's distribution of long straws is wildly capricious. ^[126]

This statement was made as part of a joint proposal with Bill Gates to encourage other wealthy individuals to pool some of their fortunes for charitable purposes.

Bill Gates's wife Melinda urged people to learn a lesson from the philanthropic efforts of the family that sold its home and gave away half of its value, as detailed in The Power of Half.^[127][128] On December 9, 2010, Buffett, Bill Gates, and Facebook CEO Mark Zuckerberg, signed a promise they called the "Gates-Buffett Giving Pledge", in which they promised to donate to charity at least half of their wealth over time, and invited others among the wealthy to donate 50% or more of their wealth to charity.^[129][130]

Public positions[link]

Health care[link]

Buffett has described the health care reform under President Barack Obama as insufficient to deal with the costs of health care in the US, though he supports its aim of expanding health insurance coverage.^[131] Buffett compared health care costs to a tapeworm, saying that they compromise US economic competitiveness by increasing manufacturing costs.^[131] Buffett thinks health care costs should head towards 13 to 14% of GDP.^[132] (Under the PPACA, the CMS actuary has projected health care costs will reach almost 20% of GDP by 2020.)^[133] Buffett said "if you want the very best, I mean if you want to spend a million dollars to prolong your life 3 months in a coma or something" then the US is probably the best, but that other countries spend much less and receive much more in health care value (visits, hospital beds, doctors and nurses per capita).^[134] Buffett faults the incentives in the US medical industry, that payers reimburse doctors for procedures (fee-for-service) leading to unnecessary care (overutilization), instead of paying for results.^[135] Buffett has cited Atul Gawande's 2009 article in the New Yorker^[136] as being a useful study in the problems of US health care, with its documentation of unwarranted variation in Medicare expenditures between McAllen, Texas and El Paso, Texas.^[135] Buffett also brought up the problem of lobbying by the medical industry, saying that they are very focused on maintaining their income.^[137]

Taxes[link]

Buffett stated that he only paid 19% of his income for 2006 ($48.1 million) in total federal taxes (due to their being from dividends & capital gains), while his employees paid 33% of theirs, despite making much less money.^[138] “How can this be fair?” Buffett asked, regarding how little he pays in taxes compared to his employees. "How can this be right?" He also added:

"There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning."^[139][140]

Buffett favors the inheritance tax, saying that repealing it would be like "choosing the 2020 Olympic team by picking the eldest sons of the gold-medal winners in the 2000 Olympics".^[141] In 2007, Buffett testified before the Senate and urged them to preserve the estate tax so as to avoid a plutocracy.^[142] Some critics have argued that Buffett (through Berkshire Hathaway) has a personal interest in the continuation of the estate tax, since Berkshire Hathaway has benefited from the estate tax in past business dealings and had developed and marketed insurance policies to protect policy holders against future estate tax payments.^[143] Buffett believes government should not be in the business of gambling, or legalizing casinos, calling it a tax on ignorance.^[144]

Trade deficit[link]

Buffett views the United States' expanding trade deficit as a trend that will devalue the US dollar and US assets. He believes that the US dollar will lose value in the long run, as a result of putting a larger portion of ownership of US assets in the hands of foreigners. In his letter to shareholders in March 2005, Warren Buffett predicted that in another ten years' time the net ownership of the U.S. by outsiders would amount to $11 trillion.

Americans ... would chafe at the idea of perpetually paying tribute to their creditors and owners abroad. A country that is now aspiring to an 'ownership society' will not find happiness in – and I'll use hyperbole here for emphasis – a 'sharecropping society’.

Author Ann Pettifor has adopted the image in her writings and has stated: "He is right. And so the thing we must fear most now, is not just the collapse of banks and investment funds, or of the international financial architecture, but of a 'sharecropper society, angry at its downfall".^[145]

Dollar and gold[link]

The trade deficit induced Buffett to enter the foreign currency market for the first time in 2002. However, he substantially reduced his stake in 2005 as changing interest rates increased the costs of holding currency contracts. Buffett continues to be bearish on the dollar, and says he is looking to acquire companies which derive a substantial portion of their revenues from outside the United States. Buffett emphasized the non-productive aspect of a gold standard for the USD in 1998 at Harvard:

It gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.

In 1977 Buffett was also quoted as saying about stocks, gold, farmland, and inflation:

Stocks are probably still the best of all the poor alternatives in an era of inflation – at least they are if you buy in at appropriate prices.^[146]

Investing in China[link]

Buffett invested in PetroChina Company Limited and in a rare move, posted a commentary^[147] on Berkshire Hathaway's website stating why he would not divest from the company despite calls from some activists to do so, due to its connection with the Sudanese civil war that caused Harvard to divest from the company in 2005. He did, however, sell this stake soon afterwards, sparing him the billions of dollars he would have lost had he held on to the company in the midst of the steep drop in oil prices beginning in the summer of 2008.

In October 2008, Buffett invested in new energy automobile business by paying $230 million for 10% of BYD Company (SEHK: 1211), which runs a subsidiary of electric automobile manufacturer BYD Auto. In less than one year, the investment has reaped him over 500% return of profit.^[148]

Tobacco[link]

During the RJR Nabisco, Inc. hostile takeover fight in 1987, Buffett was quoted as telling John Gutfreund:^[149]

I'll tell you why I like the cigarette business. It costs a penny to make. Sell it for a dollar. It's addictive. And there's fantastic brand loyalty.

—Buffett, quoted in Barbarians at the Gate: The Fall of RJR Nabisco

Speaking at Berkshire Hathaway Inc.'s 1994 annual meeting, Buffett said investments in tobacco are:^[150]

fraught with questions that relate to societal attitudes and those of the present administration. I would not like to have a significant percentage of my net worth invested in tobacco businesses. The economy of the business may be fine, but that doesn't mean it has a bright future.

—Buffett, Berkshire Hathaway annual meeting (1994)

Coal[link]

In 2007, Buffett's PacifiCorp, a subsidiary of his MidAmerican Energy Company, canceled six proposed coal-fired power plants. These included Utah's Intermountain Power Project Unit 3, Jim Bridger Unit 5, and four proposed plants previously included in PacifiCorp's Integrated Resource Plan. The cancellations came in the wake of pressure from regulators and citizen groups, including a petition drive organized by Salt Lake City commercial real estate broker Alexander Lofft and directed at Buffett personally. The 1,600 petitioners, who described themselves in a letter to Buffett as "a collection of citizens, business owners and managers, service professionals, public servants, and organization representatives ... your friends and new customers here in Utah," explained that, in their view, any further expansion of coal generation in Utah would "compromise our health, obscure our viewsheds, shrink and contaminate our watersheds, and thin out our most beloved snow pack," concluding that "our attractiveness as a place to live and work is also threatened, and so is our economic competitiveness as a major metro area and a state, compromising our recent gains in income and property values".^[151]

Renewable energy[link]

In December 2011, Buffett's MidAmerican Energy Holdings agreed to buy a $2 billion solar energy project under development in California and a 49 percent stake in a $1.8 billion plant in Arizona. He already owns wind farms and these are his first forays into solar power.^[152]

Expensing of stock options[link]

He has been a strong proponent of stock option expensing on the Income Statement. At the 2004 annual meeting, he lambasted a bill before the United States Congress that would consider only some company-issued stock options compensation as an expense, likening the bill to one that was almost passed by the Indiana House of Representatives to change the value of Pi from 3.14159 to 3.2 through legislative fiat.^[153]

When a company gives something of value to its employees in return for their services, it is clearly a compensation expense. And if expenses don't belong in the earnings statement, where in the world do they belong?^[154]

Klamath river[link]

American Indian tribes and salmon fishermen sought to win support from Warren Buffett for a proposal to remove four hydroelectric dams from the Klamath River. He had David Sokol respond that the FERC would decide the question.^[155][156]

Google and Facebook[link]

In May of 2012, Buffett said he avoids buying stock in new social media companies like Facebook and Google because is it hard to estimate future value. He also stated that initial public offering (IPO) of stock are almost always bad investments. Investors should be looking to companies that will have good value in ten years.^[157]

Books about Buffett[link]

Numerous books have been written about Warren Buffett and his investment strategies. In October 2008, USA Today reported that there were at least 47 books in print with Buffett's name in the title. The article quoted the CEO of Borders Books, George Jones, as saying that the only other living persons named in as many book titles were U.S. presidents, major world political figures, and the Dalai Lama.^[158] Buffett said that his own personal favorite is a collection of his essays called The Essays of Warren Buffett,^[159] which he described as "a coherent rearrangement of ideas from my annual report letters" as edited by Larry Cunningham.^[158]

Some best-selling, or otherwise notable, books about Buffett:

• Roger Lowenstein, Buffett, Making of an American Capitalist
• Robert Hagstrom, The Warren Buffett Way.^[158][160]
• Alice Schroeder, The Snowball: Warren Buffett and the Business of Life.^[161] (Written with Buffett's cooperation.)^[162]
• Mary Buffett and David Clark, Buffettology^[163] and four subsequent books. (Combined sales of more than 1.5 million copies.)^[158]
• Janet Lowe, Warren Buffett Speaks: Wit and Wisdom from the World's Greatest Investor.^[164]
• John Train, The Midas Touch: The Strategies That Have Made Warren Buffett 'America's Preeminent Investor'.^[165]
• Andrew Kilpatrick, Of Permanent Value: The Story of Warren Buffett.^[166] (The longest of the books about Buffett, with 330 chapters, 1,874 pages and 1,400 photos, weighing 10.2 pounds.)^[158]
• Robert P. Miles (2004). Warren Buffett wealth: principles and practical methods used by the world's greatest investor. John Wiley and Sons. ISBN 978-0-471-46511-9. http://books.google.com/?id=OOZWykmT-KUC&pg=PA26&lpg=PA26&dq=buffett+city+services+preferred#v=onepage&q&f=false. 
• John P. Reese, "The Guru Investor: How to Beat the Market Using History's Best Investment Strategies".^[167] (Includes step-by-step stock-picking method based on Buffett's approach)
• Janet M. Tavakoli, Dear Mr. Buffett: what an investor learns 1,269 miles from Wall Street, John Wiley and Sons, 2008, ISBN 978-0-470-40678-6^[168]

Bibliography[link]

• The Essays of Warren Buffett : Lessons for Corporate America, Warren Buffett and Lawrence A. Cunningham, The Cunningham Group; revised edition (April 11, 2001), ISBN 978-0-9664461-1-1
• The Essays of Warren Buffett: Lessons for Corporate America, Second Edition, Warren E. Buffett and Lawrence A. Cunningham, The Cunningham Group; 2nd edition (April 14, 2008), ISBN 978-0-9664461-2-8

See also[link]

• Forbes list of billionaires
• Iscar

References[link]

External links[link]

Wikiquote has a collection of quotations related to: Warren Buffett

Wikimedia Commons has media related to: Warren Buffett

• Berkshire Hathaway official website
• Latest Holdings In Berkshire Hathaway Portfolio, Dynamically Updated
• Buffett Partnership Letters
• Berkshire Hathaway SEC 13F Filings
• Appearances on C-SPAN
• Warren Buffett on Charlie Rose
• Warren Buffett collected news and commentary at The New York Times
• Warren Buffett collected news and commentary at The Guardian
• Works by or about Warren Buffett in libraries (WorldCat catalog)
• Stempel, Jonathan (February 12, 2008). "FACTBOX: Warren Buffett at a glance". Reuters. http://www.reuters.com/article/idUSN1223441620080212. 

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Mitt Romney
70th Governor of Massachusetts
In office January 2, 2003 – January 4, 2007
Lieutenant	Kerry Healey
Preceded by	Jane Swift (Acting)
Succeeded by	Deval Patrick
Personal details
Born	Willard Mitt Romney (1947-03-12) March 12, 1947 (age 65) Detroit, Michigan, U.S.
Political party	Republican
Spouse(s)	Ann Romney (m. 1969) «start: (1969)»"Marriage: Ann Romney to Mitt Romney" Location: (linkback:http://en-wiki.pop.wn.com/index.php/Mitt_Romney)
Children	Taggart (b. 1970) Matthew (b. 1971) Joshua (b. 1975) Benjamin (b. 1978) Craig (b. 1981)
Residence	Belmont, Massachusetts Wolfeboro, New Hampshire San Diego, California
Alma mater	Brigham Young University (BA) Harvard University (MBA, JD)
Religion	The Church of Jesus Christ of Latter-day Saints (Mormon)
Positions	Co-founder, Bain Capital (1984–1999) CEO, Bain & Company (1991–1992) CEO, 2002 Winter Olympics Organizing Committee (1999–2002)
Signature
Website	MittRomney.com

	This article is part of a series about Mitt Romney	Mitt Romney
2012 Presidential campaign 2008 Presidential campaign Governor of Massachusetts, 2003–2007 1994 U.S. Senate election Political positions · Electoral history Public image

Willard Mitt Romney (born March 12, 1947) is an American businessman and the presumptive nominee of the Republican Party for President of the United States in the 2012 election. He was the 70th Governor of Massachusetts (2003–07).

The son of Lenore and George W. Romney (Governor of Michigan, 1963–69), he was raised in Bloomfield Hills, Michigan. In 1966, after one year at Stanford University, he left the United States to spend thirty months in France as a Mormon missionary. In 1969, he married Ann Davies, and the couple had five children together. In 1971, he earned a Bachelor of Arts degree in English from Brigham Young University and, in 1975, a joint Juris Doctor and Master of Business Administration from Harvard University as a Baker Scholar. He entered the management consulting industry, which in 1977, led to a position at Bain & Company. Later serving as Chief Executive Officer, he helped bring the company out of financial crisis. In 1984, he co-founded the spin-off Bain Capital, a private equity investment firm that became highly profitable and one of the largest such firms in the nation. His net worth is estimated at $190–250 million, wealth that has helped fund his political campaigns. Active in The Church of Jesus Christ of Latter-day Saints, he served as Ward Bishop and later Stake President in his area near Boston. He ran as the Republican candidate in the 1994 U.S. Senate election in Massachusetts, losing to long-time incumbent Ted Kennedy. In 1999, he was hired as President and CEO of the Salt Lake Organizing Committee for the 2002 Winter Olympics and Paralympics; and he helped turn the fiscally troubled games into a success.

He was elected Governor of Massachusetts in 2002 but did not seek re-election in 2006. During his term he presided over a series of spending cuts and increases in fees that eliminated a projected $1.5 billion deficit. He also signed into law the Massachusetts health care reform legislation, the first of its kind in the nation, which provided near-universal health insurance access via state-level subsidies and individual mandates.

Romney ran for the Republican nomination in the 2008 U.S. presidential election, winning several primaries and caucuses but losing the nomination to John McCain. In the following years, he gave speeches and raised campaign funds on behalf of his fellow Republicans. In June 2011, he announced that he would seek the 2012 Republican presidential nomination; as of May 2012, he has won enough caucuses and primaries to become the party's presumptive nominee.

Early life and education[link]

Heritage and youth[link]

Willard Mitt Romney^[1] was born at Harper Hospital in Detroit, Michigan,^[2] the youngest child of George W. Romney, a self-made man who by 1948 had become an automobile executive, and Lenore Romney (née LaFount), an aspiring actress turned homemaker.^[3][4][5] His mother was a native of Logan, Utah, and his father was born in a Mormon colony in Chihuahua, Mexico, to American parents.^[6][7] He is of primarily English descent, and also has more distant Scottish and German ancestry.^[8][9][10] He is a fifth-generation member of The Church of Jesus Christ of Latter-day Saints (LDS Church).^[11][12] A great-great-grandfather, Miles Romney, converted to the faith in its first decade, and another great-great-grandfather, Parley P. Pratt, was an early leader in the church during the same time.^[13]

He was preceded in birth by three siblings: Margo Lynn, Jane LaFount, and G. Scott. Mitt followed after a gap of nearly six years. He was named after family friend, hotel magnate J. Willard Marriott, and his father's cousin Milton "Mitt" Romney, a former quarterback for the Chicago Bears.^{[14][nb 1]} In 1953, the family moved from Detroit to the affluent suburb of Bloomfield Hills.^[16] In 1954, his father became the chairmen and CEO of American Motors, a company he helped avoid bankruptcy, and return to profitability.^[16] By the time Mitt was twelve, his father had become a nationally known figure in print and on television,^[17] and Mitt idolized him.^[18]

Mitt Romney began attending Cranbrook School in the seventh grade.

He attended public elementary schools^[15] until the seventh grade, when he began commuting to Cranbrook School in Bloomfield Hills, a traditional private boys' preparatory school where he was one of only a few Mormons and where many students came from backgrounds even more privileged than he.^[19][20] He was not particularly athletic and at first did not excel academically.^[18] During his sophomore year he participated in the 1962 campaign in which his father was elected Governor of Michigan.^{[nb 2]} When his parents moved to the state capitol as part of George Romney taking office, Mitt took up residence at Cranbrook's Stevens Hall.^[19] George Romney was re-elected twice; Mitt worked for him as an intern in the governor's office, and was present at the 1964 Republican National Convention when his moderate father battled conservative party nominee Barry Goldwater over issues of civil rights and ideological extremism.^[18][22] During these years, Romney had a steady set of chores and summer jobs, including working as a security guard at a Chrysler plant.^[23]

At Cranbrook he was a manager for the ice hockey team and a member of the pep squad,^[19] and during his final year joined the cross country running team.^[15] He belonged to eleven school organizations and school clubs, and started the Blue Key Club boosters group.^[19] During his final year at Cranbook, Romney improved academically, but was still not a star pupil.^[18][20] He won an award for those "whose contributions to school life are often not fully recognized through already existing channels".^[20] Romney was involved in many pranks.^{[nb 3]}

In March of his senior year, he began dating Ann Davies, two years his younger, whom he had first met in elementary school; she attended the private Kingswood School, the sister school to Cranbrook.^[27][20] The two informally agreed to marriage around the time of his June 1965 graduation.^[18]

University, France mission, marriage and children: 1965–1975[link]

Romney attended Stanford University for a year,^{[18][nb 4]} where he worked as a night security guard in order to pay for trips home to see Ann.^[28] Although the campus was becoming radicalized with the beginnings of 1960s social and political movements, he kept a well-groomed appearance and participated in pre-Big Game actions designed to protect the Stanford Axe.^[18] In May 1966, he was part of a counter-protest against a group staging a sit-in in the university administration building in opposition to draft status tests.^[18][29]

In July 1966, he left for a thirty-month stay in France as a Mormon missionary,^[18][31] a traditional rite of passage that his father and many other relatives had volunteered for.^{[nb 5]} He arrived in Le Havre with ideas about how to change and promote the French Mission, while facing physical and economic deprivation in their cramped quarters.^[33][13] Rules against drinking, smoking, and dating were strictly enforced.^[13] Most individual Mormon missionaries do not gain many converts,^[35] and Romney was no exception:^[33] he later estimated ten to twenty for his entire mission.^[36] The nominally Catholic but secular, wine-loving French people were especially resistant to a religion that prohibits alcohol.^[18][13][30] He became demoralized, and later recalled it as the only time when "most of what I was trying to do was rejected."^[33] In Nantes, he suffered a bruised jaw while defending two female missionaries who were being bothered by a group of local rugby players.^[13] He continued to work hard; having grown up in Michigan rather than the more insular Utah world, Romney was better able to interact with the French than other missionaries.^[37][13] He was promoted to zone leader in Bordeaux in early 1968, then in the spring of that year became assistant to the mission president in Paris, the highest position for a missionary.^[33][13][38] In the Mission Home in Paris he enjoyed palace-like accommodations.^[38] Romney's support for the U.S. role in the Vietnam War was only reinforced when the French greeted him with hostility over the matter and he debated them in return.^[13][33] He witnessed the May 1968 general strike and student uprisings and was upset by the breakdown in social order.^[39]

In June 1968, an automobile he was driving in southern France was hit by another vehicle, seriously injuring him and killing one of his passengers, the wife of the mission president.^{[nb 6]} Romney, who was not at fault in the accident,^{[nb 6]} became co-acting president of a mission demoralized and disorganized by the May civil disturbances and by the car accident.^[37] He rallied and motivated the others and they met an ambitious goal of 200 baptisms for the year, the most for the mission in a decade.^[37] By the end of his stint in December 1968, he was overseeing the work of 175 fellow members.^[33][40] Romney developed a lifelong affection for France and its people, and speaks French.^[42] The experience in the country instilled in him a belief that life is fragile and that he needed seriousness of purpose.^[18][37][13] It also represented a crucible, after having been an indifferent Mormon growing up: "On a mission, your faith in Jesus Christ either evaporates or it becomes much deeper ... For me it became much deeper."^[33]

While he was away, Ann Davies had converted to the Mormon faith, guided by George Romney, and had begun attending Brigham Young University (BYU).^[18] Mitt was nervous that she had been wooed by others while he was away, and she had indeed started dating popular campus figure Kim S. Cameron and had sent Romney in France a "Dear John letter", greatly upsetting him; he wrote to her to in an attempt to win her back.^[43][15] At their first meeting following Romney's return they reconnected, and decided to get married immediately but agreed to wait three months to appease their parents.^[44] At Ann's request, Romney began attending Brigham Young too, in February 1969.^{[43][nb 4]} The couple were married on March 21, 1969, in a civil ceremony at Ann's family's home in Bloomfield Hills that was presided over by a church elder.^[46][47][48] The following day, the couple flew to Utah for a wedding ceremony at the Salt Lake Temple.^[46][47]

While Mitt attended Harvard, his father George W. Romney (pictured here with Richard M. Nixon) served as United States Secretary of Housing and Urban Development.

Romney had missed much of the tumultuous American anti-Vietnam War movement while away, and was surprised to learn that his father had turned against the effort during his unsuccessful 1968 presidential campaign.^[33] Regarding the military draft, Romney had initially received a student deferment, then, like most Mormon missionaries, a ministerial deferment while in France, and then a student deferment.^[33][49] When those ran out, his high number in the December 1969 draft lottery (300) ensured he would not be selected.^[33][49][50]

At culturally conservative BYU, he remained isolated from much of the upheaval of the era, and did not join in protests against the war, or the LDS Church's policy at the time of denying full membership to blacks.^[24][33][43] He became president of, and an innovative fundraiser for, the all-male Cougar Club booster organization and showed a new-found discipline in his studies.^[33][43] In his senior year, he took leave to work as driver and advance man for his mother Lenore Romney's eventually unsuccessful 1970 campaign for U.S. Senator from Michigan.^[24][46] He earned a Bachelor of Arts in English with highest honors in 1971,^[43] and gave commencement addresses to both the College of Humanities and to the whole of BYU.^{[nb 7]}

The Romneys' first son, Taggart, was born in 1970^[46] while they were undergraduates at Brigham Young^[52] and living in a basement apartment.^[33][43] Ann subsequently gave birth to Matt (1971), Josh (1975), Ben (1978), and Craig (1981).^[46] Her work as a homemaker would enable her husband to pursue his career.^[53]

Romney still wanted to pursue a business path, but his father, by now serving in President Richard Nixon's cabinet as U.S. Secretary of Housing and Urban Development, advised him that a law degree would be valuable to his career.^[54][55] Thus he became one of only fifteen students to enroll at the recently created joint Juris Doctor/Master of Business Administration four-year program coordinated between Harvard Law School and Harvard Business School.^[56] Fellow students considered him guilelessly optimistic, noting his solid work ethic and buttoned-down demeanor and appearance.^[56][57] He readily adapted to the business school's pragmatic, data-driven case study method of teaching, participated in class well, and led a study group whom he pushed to get all A's.^[55] He had a different social experience from most of his classmates, since he lived in a Belmont, Massachusetts, house with Ann and two children.^[46][55] He was non-ideological and did not involve himself in the political or social issues of the day.^[46][55] He graduated in 1975 cum laude from the law school, in the top third of that class, and was named a Baker Scholar for graduating in the top five percent of his business school class.^[51][56]

Business career[link]

Management consulting[link]

Romney was recruited by several firms and chose to remain in Massachusetts to work for Boston Consulting Group (BCG), reasoning that working as a management consultant to a variety of companies would better prepare him for a future position as a chief executive.^{[54][58][nb 8]} He was part of a 1970s wave of top graduates who chose to go into consulting rather than join a major company directly.^[60] His legal and business education proved useful in his job^[54] while he applied BCG principles such as the growth-share matrix.^[61] He was viewed as having a bright future there.^[54][62]

In 1977, he was hired away by Bain & Company, a management consulting firm in Boston that had been formed a few years earlier by Bill Bain and other former BCG employees.^[61][54][63] Bain would later say of the thirty-year-old Romney, "He had the appearance of confidence of a guy who was maybe ten years older."^[64] With Bain & Company, Romney learned what writers and business analysts have dubbed the "Bain way",^[54][63][65] which consisted of immersing the firm in each client's business,^[54][64] and not just issuing recommendations but staying with the company until changes were put into place.^[61][63][66] Romney became a vice president of the firm in 1978,^[15] and worked with clients such as the Monsanto Company, Outboard Marine Corporation, Burlington Industries, and Corning Incorporated.^[58] Within a few years, he was one of Bain & Company's best consultants and was sought after by clients over more senior partners.^[54][67]

Private equity[link]

Romney was restless for a company of his own to run, and in 1983, Bill Bain offered him the chance to head a new venture that would buy into companies, have them benefit from Bain techniques, and then reap higher rewards than consulting fees.^[54][61] He initially refrained from accepting the offer, and Bain re-arranged the terms in a complicated partnership structure so that there was no financial or professional risk to Romney.^[54][64][68] Thus, in 1984, Romney left Bain & Company to co-found the spin-off private equity investment firm, Bain Capital.^[66] In the face of skepticism from potential investors, Bain and Romney spent a year raising the $37 million in funds needed to start the new operation, which had fewer than ten employees.^[58][64][69] As general partner of the new firm, Romney spent little money on costs such as office appearance, and saw weak spots in so many potential deals that by 1986, few had been done.^[54] At first, Bain Capital focused on venture capital opportunities.^[54] Their first big success was a 1986 investment to help start Staples Inc., after founder Thomas G. Stemberg convinced Romney of the market size for office supplies and Romney convinced others; Bain Capital eventually reaped a nearly sevenfold return on its investment, and Romney sat on the Staples board of directors for over a decade.^[54][69][70]

Romney soon switched Bain Capital's focus from startups to the relatively new business of leveraged buyouts: buying existing firms with money mostly borrowed against their assets, partnering with existing management to apply the "Bain way" to their operations (rather than the hostile takeovers practiced in other leverage buyout scenarios), and selling them off in a few years.^[54][64] Existing CEOs were offered large equity stakes in the process, owing to Bain Capital's belief in the emerging agency theory that CEOs should be bound to maximizing shareholder value rather than other goals.^[70] Bain Capital lost most of its money in many of its early leveraged buyouts, but then started finding deals that made large returns.^[54] The firm invested in or acquired Accuride, Brookstone, Domino's Pizza, Sealy Corporation, Sports Authority, and Artisan Entertainment, as well as lesser-known companies in the industrial and medical sectors.^[54][64][71] He ran Bain Capital for fourteen years, during which time the firm's average annual internal rate of return on realized investments was 113 percent.^[58] Much of this profit was earned from a relatively small number of deals; Bain Capital's overall success–to–failure ratio was about even.^{[nb 9]}

Less an entrepreneur than an executive running an investment operation,^[67][72] Romney was skilled at presenting and selling the deals the company made.^[68] The firm initially gave a cut of its profits to Bain & Company, but Romney persuaded Bain to give that up.^[68] Within Bain Capital, Romney spread profits from deals widely within the firm to keep people motivated, often keeping less than ten percent for himself.^[73] Viewed as a fair manager, he received considerable loyalty from the firm's members.^[70] Romney's wary instincts were still in force at times, and he was generally data-driven and averse to risk.^[54][70] He wanted to drop a Bain Capital hedge fund that initially lost money, but other partners prevailed and it eventually gained billions.^[54] He also personally opted out of the Artisan Entertainment deal, not wanting to profit from a studio that produced R-rated films.^[54] Romney was on the board of directors of Damon Corporation, a medical testing company later found guilty of defrauding the government; Bain Capital tripled its investment before selling off the company, and the fraud was discovered by the new owners (Romney was never implicated).^[54] In some cases, Romney had little involvement with a company once acquired.^[69]

Bain Capital's leveraged buyouts sometimes led to layoffs, either soon after acquisition or later after the firm had left.^[61][68][69] How jobs added compared to those lost due to these investments and buyouts is unknown, due to a lack of records and Bain Capital's penchant for privacy on behalf of itself and its investors.^[74][75][76] In any case, maximizing the value of acquired companies and the return to Bain's investors, not job creation, was the firm's fundamental goal, as it was for most private equity operations.^[69][77] Bain Capital's acquisition of Ampad exemplified a deal where it profited handsomely from early payments and management fees, even though the subject company itself ended up going into bankruptcy.^[54][70][77] Dade Behring was another case where Bain Capital received an eightfold return on its investment, but the company itself was saddled with debt and laid off over a thousand employees before Bain Capital exited (the company subsequently went into bankruptcy, with more layoffs, before recovering and prospering).^[74] Bain was among the private equity firms that took the most fees in such cases.^[64][70]

In 1990, Romney was asked to return to Bain & Company, which was facing financial collapse.^[66] He was announced as its new CEO in January 1991^[78][79] but drew only a symbolic salary of one dollar.^[66] He managed an effort to restructure the firm's employee stock-ownership plan, real-estate deals and bank loans, while rallying the firm's thousand employees, imposing a new governing structure that included Bain and the other founding partners giving up control, and increasing fiscal transparency.^[54][58][66] Within about a year, he had led Bain & Company through a turnaround and returned the firm to profitability without further layoffs or partner defections.^[58] He turned Bain & Company over to new leadership and returned to Bain Capital in December 1992.^[54][79][80]

Romney took a leave of absence from Bain Capital in February 1999 to serve as the President and CEO of the 2002 Salt Lake City Olympic Games Organizing Committee.^[54][81] By that time, Bain Capital was on its way to being one of the top private equity firms in the nation,^[68] having increased its number of partners from 5 to 18, with 115 employees overall, and $4 billion under its management.^[64][69] Bain Capital's approach of applying consulting expertise to the companies it invested in became widely copied within the private equity industry.^[25][69] Economist Steven Kaplan would later say, "[Romney] came up with a model that was very successful and very innovative and that now everybody uses."^[70]

Personal wealth[link]

In August 2001, Romney announced that he would not return to Bain Capital.^[81] He transferred his ownership to other partners and negotiated an agreement that allowed him to receive a passive profit share as a retired partner in some Bain Capital entities, including buyout and investment funds.^[73][82] Because the private equity business continued to thrive, this deal brought him millions of dollars in annual income.^[73] As a result of his business career, by 2007, Romney and his wife had a net worth of between $190 and $250 million, most of it held in blind trusts since 2003.^[82] In 2012, it was estimated that he had amassed twice the net worth of the last eight presidents combined,^[83] and would rank among the four richest in American history if elected.^[83][84]

An additional blind trust existed in the name of the Romneys' children and grandchildren that was valued at between $70 and $100 million as of 2007.^[85] The couple's net worth remained in the same range as of 2011, and was still held in blind trusts.^[86] In 2010, Romney and his wife received $21.7 million in income, almost all of it from investments, of which about $3 million went to federal income taxes (a rate of 13.9 percent, based upon the beneficial rate accorded investment income by the U.S. tax code) and almost $3 million to charity, including $1.5 million to the LDS Church.^[87] Romney has always tithed to the church, including stock from Bain Capital holdings.^[13][88][89] In 2010, the Romney family's Tyler Charitable Foundation gave out about $650,000, with some of it going to organizations that fight specific diseases such as cystic fibrosis and multiple sclerosis.^[90]

Local LDS Church leadership[link]

During his years in business, Romney also served in the local lay clergy (consisting of all Mormon men over the age of 12).^[13] Around 1977, he became a counselor to the president of the Boston Stake.^[91] He later served as bishop of the ward (leader of the congregation) at Belmont, Massachusetts, from 1981 to 1986, acting as the ecclesiastical and administrative head of his congregation.^[92][93] As such, in addition to home teaching, he also formulated Sunday services and classes using LDS scriptures to guide the congregation.^[94] He forged bonds with other religious institutions in the area when the Belmont meetinghouse was destroyed by a fire of suspicious origins in 1984; the congregation rotated its meetings to other houses of worship while it was rebuilt.^[88][93]

From 1986 to 1994, he presided over the Boston Stake, which included more than a dozen wards in eastern Massachusetts with about 4,000 church members altogether.^[67][94][95] He organized a team to handle financial and management issues, sought to counter anti-Mormon sentiments, and tried to solve social problems among poor Southeast Asian converts.^[88][93] An unpaid position, his local church leadership often took 30 or more hours a week of his time,^[94] and he became known for his tireless energy in the role.^[67] He generally refrained from overnight business travel owing to his church responsibilities.^[94]

He took a hands-on role in general matters, helping in maintenance efforts in- and outside homes, visiting the sick, and counseling troubled or burdened church members.^[92][93][94] A number of local church members later credited him with turning their lives around or helping them through difficult times.^[88][93][94] Some others were rankled by his leadership style and desired a more consensus-based approach.^[93] Romney tried to balance the conservative dogma insisted upon by the church leadership in Utah with the desire of some Massachusetts members to have a more flexible application of doctrine.^[67] He agreed with some modest requests from the liberal women's group Exponent II for changes in the way the church dealt with women, but clashed with women whom he felt were departing too much from doctrine.^[67] In particular, he counseled women not to have abortions except in the rare cases allowed by LDS doctrine, and also in accordance with doctrine, encouraged prospective mothers who were not in successful marriages to give up children for adoption.^[67] Romney later said that the years spent as an LDS minister gave him direct exposure to people struggling in economically difficult circumstances, and empathy for those going through problematic family situations.^[96]

1994 U.S. senatorial campaign[link]

By 1993, Romney had been thinking about entering politics, partly based upon Ann's urging and partly to follow in his father's footsteps.^[46] He decided to challenge incumbent Democratic U.S. Senator Ted Kennedy, who was seeking re-election for the sixth time. Kennedy was potentially vulnerable that year – in part because of the unpopularity of the Democratic Congress as a whole, and in part because this was Kennedy's first election since the William Kennedy Smith trial in Florida, in which Kennedy had suffered some negative public relations regarding his character.^[97][98][99] Romney changed his affiliation from Independent to Republican in October 1993 and formally announced his candidacy in February 1994.^[46] He took a leave of absence from Bain Capital in November 1993, and stepped down from his church leadership role during 1994, due to the campaign.^[100][94]

Radio personality Janet Jeghelian took an early lead in polls among candidates for the Republican nomination for the Senate seat, but Romney proved the most effective fundraiser.^[101][102] He won 68 percent of the vote at the May 1994 Massachusetts Republican Party convention; businessman John Lakian finished a distant second and Jeghelian was eliminated.^[103] Romney defeated Lakian in the September 1994 primary with over 80 percent of the vote.^[15][104]

In the general election, Kennedy faced the first serious re-election challenger of his career in the young, telegenic, and well-funded Romney.^[97] Romney ran as a fresh face, as a businessperson who stated he had created ten thousand jobs, and as a Washington outsider with a solid family image and moderate stances on social issues.^[97][105] When Kennedy tried to tie Romney's policies to those of Ronald Reagan and George H. W. Bush, Romney responded, "Look, I was an independent during the time of Reagan-Bush. I'm not trying to take us back to Reagan-Bush."^[106] Romney stated: "Ultimately, this is a campaign about change."^[107] After two decades out of public view, his father George re-emerged during the campaign.^[108][109]

Romney's campaign was effective in portraying Kennedy as soft on crime, but had trouble establishing its own positions in a consistent manner.^[110] By mid-September 1994, polls showed the race to be approximately even.^{[97][111][112]} Kennedy responded with a series of attack ads, which focused on Romney's seemingly shifting political views on issues such as abortion and on the treatment of workers at the Ampad plant owned by Romney's Bain Capital.^{[97][113][114]} The latter was effective in blunting Romney's momentum.^[70] Kennedy and Romney held a widely watched late October debate without a clear winner, but by then, Kennedy had pulled ahead in polls and stayed ahead afterward.^[115] Romney spent $3 million of his own money in the race and more than $7 million overall.^{[116][nb 10]} In the November general election, despite a disastrous showing for Democrats overall, Kennedy won the election with 58 percent of the vote to Romney's 41 percent,^[54] the smallest margin in Kennedy's eight re-election campaigns for the Senate.^[119]

2002 Winter Olympics[link]

Romney, president and CEO of the Salt Lake Organizing Committee for the 2002 Winter Olympics, speaking before a curling match

Romney returned to Bain Capital the day after the election, but the loss had a lasting effect; he told his brother, "I never want to run for something again unless I can win."^[46][120] When his father died in 1995, Mitt donated his inheritance to BYU's George W. Romney Institute of Public Management and joined the board and was vice-chair of the Points of Light Foundation (which had incorporated his father's National Volunteer Center).^[45][81] His mother died in 1998. Romney felt restless as the decade neared a close; the goal of simply making more money was losing its appeal to him.^[46][120] He no longer had a church leadership position, although he still taught Sunday School.^[92] During the long and controversial approval and construction process for the $30 million Mormon temple in Belmont, he feared that as a political figure who had opposed Kennedy, he would become a focal point for opposition to the structure.^[93] He thus kept to a limited, behind-the-scenes role in attempts to ease tensions between the church and local residents, but locals nonetheless sometimes referred to it as "Mitt's Temple".^[88][92][93]

Ann Romney was diagnosed with multiple sclerosis in 1998; Mitt described watching her fail a series of neurological tests as the worst day of his life.^[46] After two years of severe difficulties with the disease, she found while living in Park City, Utah (where the couple had built a vacation home) a mixture of mainstream, alternative, and equestrian therapies that gave her a lifestyle mostly without limitations.^[53] When the offer came for him to take over the troubled 2002 Winter Olympics and Paralympics, to be held in Salt Lake City in Utah, she urged him to take it, and eager for a new challenge, he did.^[120][121] On February 11, 1999, Romney was hired as the president and CEO of the Salt Lake Organizing Committee for the Olympic and Paralympic Winter Games of 2002.^[122]

Before Romney came on, the event was running $379 million short of its revenue benchmarks.^[122] Plans were being made to scale back the Games to compensate for the fiscal crisis, and there were fears the Games might be moved away entirely.^[123] The Games had also been damaged by allegations of bribery involving top officials, including prior Salt Lake Olympic Committee president and CEO Frank Joklik. Joklik and committee vice president Dave Johnson were forced to resign.^[124] Romney was chosen by Utah figures looking for someone with expertise in business and law and with connections to the state and the LDS Church.^[125] The appointment faced some initial criticism from non-Mormons, and fears from Mormons, that it represented cronyism or gave the Games too Mormon an image.^[30]

Romney ran the planning for the Games like a business.^[126] He revamped the organization's leadership and policies, reduced budgets, and boosted fundraising, alleviated the concerns corporate sponsors and recruited many new ones.^[120][125] He appealed to Utah's citizenry with a message of optimism that helped restore confidence in the effort.^[120][126] He worked to ensure the safety of the Games following the September 11, 2001 terrorist attacks by coordinating a $300 million security budget.^[121] Overall, he oversaw a $1.32 billion budget, 700 employees, and 26,000 volunteers.^[122] The federal government provided between approximately $400 million^{[125][127][128]} and $600 million^[126][129] of that budget, much of it a result of Romney's having aggressively lobbied Congress and federal agencies.^{[129][130][131]} It would prove to be a record level of federal funding for the staging of a U.S. Olympics, a fact Romney would cite as a selling point during his campaign for the Massachusetts governorship.^[128][130] An additional federal $1.1 billion was spent on indirect support in the form of highway and transit projects.^[132]

Romney emerged as the public face of the Olympic effort, appearing in photographs, news stories and Olympics pins.^[120] Robert H. Garff, the chair of the organizing committee, later said that "It was obvious that he had an agenda larger than just the Olympics,"^[120] and that Romney wanted to use the Olympics to propel himself into the national spotlight and a political career.^[125][133] Garff believed the initial budget shortfall was not as bad as Romney portrayed, given there were still three years to reorganize.^[125] Utah Senator Bob Bennett said that much of the needed federal money was already in place and an analysis by The Boston Globe stated that the committee already had nearly $1 billion in committed revenues.^[125] Olympics critic Steve Pace, who led Utahns for Responsible Public Spending, thought Romney exaggerated the initial fiscal state in order to lay the groundwork for a well-publicized rescue.^[133] Kenneth Bullock, another board member of the organizing committee and also head of the Utah League of Cities and Towns, often clashed with Romney at the time, and later said that Romney deserved some credit for the turnaround but not as much as he claimed:^[120] Bullock said: "He tried very hard to build an image of himself as a savior, the great white hope. He was very good at characterizing and castigating people and putting himself on a pedestal."^[125]