Munger
—  city  —
Munger Location of Munger in Bihar and India
Coordinates	25°22′52″N 86°27′54″E / 25.381°N 86.465°E / 25.381; 86.465Coordinates: 25°22′52″N 86°27′54″E / 25.381°N 86.465°E / 25.381; 86.465
Country	India
State	Bihar
District(s)	Munger
Population	213,101 (2011[update])
Time zone	IST (UTC+05:30)
Area • Elevation	• 43 metres (141 ft)
Codes • Pincode • 811201 • Telephone • ++91-6344 • Vehicle • BR08-
Website	Munger.bih.nic.in

Munger (Hindi: मुंगेर) (Urdu: مگیر )town is the headquarters of Munger district, in the Indian state of Bihar. Historically, Munger is known for its manufacturing of iron articles such as firearms and swords. One of the major institutions in Munger is Bihar School of Yoga. It is one of the foremost learning center in the world for Yoga and frequented by people all over the globe. Munger is situated on the banks of the Ganges and known for its pleasant bathing ghats.

History[link]

It has been identified with Mod-Giri a place mentioned in the Mahabharata was the kingdom of Raja Karna.However the first historical account of the district appears in the Travels of HIUEN TSIANG,a famous Chinese traveller.Munger came again into Prominence in 1762 when Kasim Ali Khan made it his capital instead of Murshidbad in Bengal.

Manufacturing Gun at Munger is more than 200 years old story.During the First World War period the Munger gun manufacturers came in to the prominence and production of cartridge gun was developed. Munger was perhaps the only city in India where guns manufacturers took shape of a cottage industry and become a popular profession.During Indo-China War of 1962 the defense ministry was in need of 410 bore Muscat which was prepared by Munger Gun Factory.

This section requires expansion.

See:Karna See: Munger Fort

Demographics[link]

As per 2011 census, Munger Municipal Corporation had a total population of 213,101, out of which 113,173 were males and 99,928 were females. It had a sex ratio of 883. The population below 5 years was 29,260. The literacy rate of the 7+ population was 81.83 per cent.^[1]

Places of interest[link]

• Munger Fort,covers an area of around 222 acres,annexed by the Khiljis, Tughlaqs, Lodis, Nawabs of Bengal, Mughals and British
• Bihar School of Yoga,
• Sita Kund, a hot water continuous spring
• Kastaharni Ghat,beautiful bank of The Ganga
• Tomb of Pir Shah Nufa,Sufi saint from Persia who was sent to Munger by Khwaja Moinuddin Chishti of Ajmer in 1177
• Bhimbandh Wildlife Sanctuary, covers an area of around 682 km² consist of a hot water spring, sambar, chital, nilgai, wild boar, tiger and panther.
• Pirpahar, tomb on hill near bank of Ganga

Transport[link]

Railway : Nearest railway station is Jamalpur on Sahibganj Loop (Kiul Junction-Khana Junction) line on Howrah-Delhi route. It is 8 km from Munger city and well connect with major cities in India with good frequency of express and passenger trains.

Airport : Munger has a small airport with no commercial service and used only for VIP movements. Nearest domestic airport with commercial service is Patna airport around 180 km away. Patna is served by all major airlines. Nearest international airport is Netaji Subhash Chandra Bose International Airport in Kolkata.

Road : Munger is connected with NH-80 and various state highways.

Munger Ganga Bridge is under construction.

Education[link]

Munger has many good schools, colleges and Institution.

• Schools - New Era Public School, 1st Notre Dame Academy School in India was founded in Jamalpur,Munger Bihar in 1950, Saraswati Vidya Mandir, DAV Public School, St. Xavier's School,Eastern Railway High School Jamalpur, Kendriya Vidyalaya, Little Angels School, S.K.D. Memorial Public School,Arya Bal Shanti Niketan Junior Branch Maulsiritalle Munger and Senior Branch Munger - Jamalpur Road Jamalpur. The oldest school in the district is the Zila School (formerly Government English School) which was founded in 1854. There are two girls' schools, Baijnath Girls School and Balmiki Rajniti Balika Vidyalaya, Madhopur, in Munger town. Govt school like Model High School, etc.

• Colleges - R.D. & D.J. College, Balmiki Rajniti Mahila Mahavidyalaya, J.R.S. College are institutes for higher education. R.D. & D.J. College is one of the oldest and renowned College in the Bihar and Eastern India Zone. The alumni of these institutes are now working all over world and have brought laurels to the district.

Tourism[link]

The biggest tourist attraction in Munger is Bihar School of Yoga, attended by people from various countries.

People from various nearby place come to various Ganges ghats on religious occasions. The city also see huge crowd during Durga Puja festival.

Kastaharni Ghat is one of various bathing ghats on the Ganges and religiously the most significant. This is one of the few places where the Ganges meanders and flows in the northern direction (Uttarvahini Ganges). Because of this it is considered very auspicious by Hindu believers.

Chandika Asthan is one of the sixty-four shakti peeths spread across India and is situated on the north-east corner of Munger. It sees a huge crowd of devotees all round the year and specially during Navratras.

Munger has one of the oldest railway manufacturing units and also the ITC Tobacco factory.

Earlier spelled Monghyr and now Munger it has a rich and glorious past and stories abound. Madarsa Rahmania is the largest Islamic School in the state.

Bhimbandh and Kharagpur Lake are great picnic spot. It has a stream of hot water coming from the mountains nearby and one stream of cold water also, both the streams merge here only and then are later joined in ganges river.

Famous personalities[link]

• Krishna Sinha, First CM of Bihar, freedom fighter and a Gandhian.
• Vishal Kumar
• Swami Niranjanananda Saraswati
• Swami Satyananda Saraswati
• Ramdhari Singh Dinkar, National Poet.
• Pooja Misrra, VJ & Model

References[link]

External links[link]

• Munger District-Official Website
• Munger District Photos
• Posts from District Magistrate Munger
• Munger District on Facebook

 This article incorporates text from a publication now in the public domain: Chisholm, Hugh, ed. (1911). Encyclopædia Britannica (11th ed.). Cambridge University Press. 

Charlie Munger
Munger at Berkshire Hathaway's 2010 shareholder meeting
Born	(1924-01-01) January 1, 1924 (age 88) Omaha, Nebraska
Occupation	Vice-Chairman of Berkshire Hathaway Corporation Chairman of Wesco Financial Corporation Chairman of Daily Journal Corporation
Salary	$100,000 USD
Net worth	$1 billion USD [1]

Charles Thomas Munger (born January 1, 1924, in Omaha, Nebraska) is an American business magnate, lawyer, investor, and philanthropist. He is Vice-Chairman of Berkshire Hathaway Corporation, the diversified investment corporation chaired by Warren Buffett; in that capacity, Buffett describes Munger as "my partner." Munger served as chairman of Wesco Financial Corporation from 1984 through 2011 (Wesco was approximately 80%-owned by Berkshire-Hathaway during that time). He is also the chairman of the Daily Journal Corporation, based in Los Angeles, California, and a director of Costco Wholesale Corporation.

Biography[link]

Like Buffett, Munger is a native of Omaha, Nebraska. After studies in mathematics at the University of Michigan, and service in the U.S. Army Air Corps as a meteorologist, trained at Caltech, he entered Harvard Law School, where he was a member of the Harvard Legal Aid Bureau, without an undergraduate degree. Graduating in 1948 with a Juris Doctor magna cum laude, he founded and worked as a real estate attorney at Munger, Tolles & Olson LLP until 1965. He then gave up the practice of law to concentrate on managing investments. He partnered with Otis Booth in real estate development. He partnered with Jack Wheeler to form Wheeler, Munger, and Company, an investment firm with a seat on the Pacific Coast Stock Exchange. He wound up Wheeler, Munger in 1976 after losses of 31% in 1973 and 1974.^[2]

Although Munger is better known for his association with Warren Buffett, he ran an investment partnership of his own from 1962 to 1975. According to Buffett's essay, "The Superinvestors of Graham-and-Doddsville," published in 1984, Munger's investment partnership generated compound annual returns of 19.8% during the 1962–75 period compared to a 5.0% annual appreciation rate for the Dow.

Munger was previously also the chairman of Wesco Financial Corporation, now a wholly owned subsidiary of Berkshire Hathaway. It began as a savings and loan association, but eventually grew to control Precision Steel Corp., CORT Furniture Leasing, Kansas Bankers Surety Company, and other ventures. Wesco Financial also held a concentrated equity portfolio of over $1.5 billion dollars in companies such as Coca-Cola, Wells Fargo, Procter & Gamble, Kraft Foods, US Bancorp, and Goldman Sachs. Munger believes that holding a concentrated number of stocks, that he knows extremely well, will in the long term produce superior returns. Wesco is based in Pasadena, California, Munger's adopted hometown. Pasadena was also the site of the company's annual shareholders' meeting, which were typically held on the Wednesday or Thursday after the more famous Berkshire Hathaway annual meeting. Munger's meetings were nearly as legendary in the investment community as those he co-hosts with Buffett in Omaha. Such meetings were often perfunctory, but Munger interacted with the other Wesco shareholders at considerable length, sometimes speculating about what his hero Benjamin Franklin would do in a given situation.^[3] Meeting notes are taken and posted on the internet.^[4]

Buffett has often publicly stated that he regards Munger as his partner. Indeed, Munger owns enough Berkshire Hathaway stock to be a bona fide billionaire in his own right. However, Munger is hardly a carbon copy of Buffett: Munger is known to be a Republican, whereas Buffett has generally supported Democrats. Buffett devotes his time almost exclusively to his business, while Munger, who does not involve himself in the day-to-day operations of Berkshire, is a generalist for whom investment is only one of a broad range of interests.

Philanthropy[link]

Munger Graduate Residence at Stanford University

Munger is a major benefactor of the University of Michigan. In 2007, Munger made a $3 million gift to the University of Michigan Law School for lighting improvements in Hutchins Hall and the William W. Cook Legal Research Building, including the noted Reading Room. In 2011, Munger made another gift to the Law School, contributing $20 million for renovations to the Lawyers Club housing complex, which will cover the majority of the $39 million cost. The renovated portion of the Lawyers Club will be renamed the Charles T. Munger Residences in the Lawyers Club in his honor.^[5][6][7][8] On December 28, 2011, Munger donated 10 shares of Berkshire Hathaway Class A stock (currently valued at $115,900 per share, or $1.2 million total) to the University of Michigan.^[9]

In addition to the University of Michigan, Munger and his wife Nancy B. Munger have been major benefactors of Stanford University. Nancy Munger was an alumna of Stanford, and Charlie Munger's daughter from a previous marriage, Wendy Munger was also an alumna (A.B. 1972) is currently a member of the board. In 2004, the Mungers donated 500 shares of Berkshire Hathaway Class A stock, then valued at $43.5 million, to Stanford to build a graduate student housing complex.^[10][11] The Munger Graduate Residence opened in late 2009 and is now houses 600 law and graduate students.^[12] The Mungers also gave a major gift to Stanford's Green Library to fund the restoration of the Bing Wing as well as the construction of a rotunda on the library's second floor, and endowed the Munger Chair in Nancy and Charles Munger Professorship of Business at Stanford Law School.^[13][14]

In 1997, the Mungers donated $1.8 million to the Marlborough School in Los Angeles, of which Nancy Munger was an alumna.^[13] The couple also donated to the Polytechnic School in Pasadena and the Los Angeles YMCA.^[15]

Munger has been a trustee of the Harvard-Westlake School in Los Angeles for more than 40 years, and previously served as chair of the board of trustees. His five sons and stepsons as well as at least one grandson graduated from the prep school. In 2009, Munger donated eight shares of Berkshire Hathaway Class A stock, worth nearly $800,000, to Harvard-Westlake.^[16][13] In 2006, Munger donated 100 shares of Berkshire Hathaway Class A stock, then valued at $9.2 million, to the school toward a building campaign at Harvard-Westlake's middle school campus. The Mungers had previously made a gift to build the $13 million Munger Science Center at the high school campus, a two-story classroom and laboratory building which opened in 1995 and has been described as "a science teacher's dream."^[17][18] The design of the Science Center was substantially influenced by Munger.^[13]

Business philosophy[link]

In multiple speeches, and in the book Poor Charlie's Almanack, Munger has introduced the concept of "Elementary, Worldly Wisdom" as it relates to business and finance. Munger's worldly wisdom consists of a set of mental models framed as a latticework to help solve critical business problems.^[19] According to Munger, only 80 or 90 important models will carry about 90% of the freight in making you a worldly-wise person.

He believes that incentives explain why people behave the way they do.

Munger's words of wisdom include those that profess high ethical standards. In the 2009 Wesco Financial Corporation annual meeting he said, "Good businesses are ethical businesses. A business model that relies on trickery is doomed to fail."^[20]

In a 2010 speech to University of Michigan students Munger commented that "...I think it is very dangerous to assume that what people did to save the whole banking system was wrong...I think we come to a place where we, where everybody, has to suck it in and gulp." ^[21] The last part of the sentence refers to Munger's belief that United States citizens will collectively face a less opulent economic environment in the coming years.

Lollapalooza Effect[link]

Munger uses the term "Lollapalooza Effect" for multiple biases, tendencies or mental models acting at the same time in the same direction. With the Lollapalooza effect, itself a mental model, the result is often extreme, due to the confluence of the mental models, biases or tendencies acting together. During a talk at Harvard in 1995, Munger mentions Tupperware parties and open outcry auctions, which turn the human brain into "mush". In the Tupperware party, you have reciprocation and social proof. (The hostess gave the party and the tendency is to reciprocate; other people are buying, which is the social proof.) In the open outcry auction, there is social proof of others bidding, commitment to buying the item, and deprivation super-reaction syndrome, i.e. sense of loss. The latter is an individual's sense of loss of what he believe should be or is his. These biases often occur at either conscious or subconscious level, and in both microeconomic and macroeconomic scale.^[22]

Family[link]

From his first marriage, Charles Munger has two children: Wendy Munger, a former corporate lawyer and trustee of Stanford University,^[23] and Molly Munger, a civil rights attorney and funder of a ballot initiative to raise taxes on Californians for public education.^[24] From his marriage with Nancy Barry, Munger has four children - physicist and Republican activist Charles T. Munger,^[25] Emilie Munger Ogden, Barry A. Munger, and Philip R. Munger, and two stepchildren - William Harold Borthwick and David Borthwick.^[26] Nancy Munger died in 2010.^[27]

References[link]

Books[link]

• Lowe, Janet (2000) Damn Right! Behind the scenes with Berkshire Hathaway billionaire Charlie Munger, John Wiley & Sons (ISBN 0-471-24473-2)
• Kaufman, Peter (2005 and 2006 for the second edition) "Poor Charlie's Almanack: The Wit and Wisdom of Charles T. Munger" http://www.poorcharliesalmanack.com/
• Bevelin, Peter (2007) Seeking Wisdom: From Darwin to Munger (ISBN 1-57864-428-3)
• Labitan, Bud (2008) The Four Filters Invention of Warren Buffett and Charlie Munger, Acalmix (ISBN 978-0-615-24129-6)

Regulatory filings[link]

• SEC.gov - Wesco Financial Corp (WSC) - EDGAR Filings (CIK: 0000105729) the EDGAR database
• SEC.gov - Charles T. Munger - EDGAR Filings (CIK: 0001078511) the EDGAR database

External links[link]

• Latest Holdings in Berkshire Hathaway Portfolio, Dynamic
• Charlie Munger - Treasure Trove
• Charlie Munger - A Compilation
• Speech at USC, May 2007
• Audio: Standard Causes of Human Misjudgment
• Charlie Munger Link Collection
• Munger Speeches & Writings
• Munger's Speech on Mental Models
• "In the Money" (2001 Harvard Law Bulletin article)
• Munger's Worldly Wisdom (1994 USC Business School)
• Charlie Munger's Lollapalooza Effect and This Credit Fiasco (2008)
• Munger Says 'Thank God' U.S. Opted for Bailouts Over Handouts (Bloomberg article) (2010)
• Charlie Munger Quotes

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Michael Munger (L-NC)
Born	(1958-09-23) September 23, 1958 (age 53) Gotha, Florida
Residence	Raleigh, North Carolina
Citizenship	American
Nationality	United States
Fields	Political science Economics
Institutions	Duke University Dartmouth College University of Texas at Austin UNC-Chapel Hill
Alma mater	Davidson College Washington University in St. Louis

Michael Curtis Munger (born September 23, 1958)^[1] is an economist and a former chair of the political science department at Duke University, where he continues to teach political science, public policy, and economics. He is a prolific writer, and his book Analyzing Policy: Choices, Conflicts, and Practices is now a standard work in the field of policy analysis. In 2008 he was the Libertarian candidate for Governor of North Carolina.

Munger earned a B.A. in economics at Davidson College (1980), an M.A. in economics at Washington University in St. Louis (1982), and a Ph.D. in economics at Washington University (1984). He is a past president of the Public Choice Society. He has been published in the American Political Science Review, the American Journal of Political Science, and the Journal of Politics and has had books published with the Cambridge University Press and the University of Michigan Press. Since March 2012 he has been a member of the Board of Visitors of Ralston College.^[2] He also serves as an Adjunct Scholar at the Cato Institute^[3] and as a member of the Academic Council of the Jack Miller Center.^[4]

Career[link]

Munger has worked as a staff economist for the Federal Trade Commission and taught at Dartmouth College, the University of Texas at Austin, and UNC-Chapel Hill before becoming a political science professor at Duke University in 1997. In 2000, he became the head of Duke's political science department.^[5] His research centers around elections and campaign finance.^[6]

At Duke, Munger says he works "across the aisles- there aren't a lot of other Libertarians there."^[7]

Three scholars, Melvin Hinich, Douglass North, and Barry Weingast, were reported to be heavily influential to Munger.^[8]

Gubernatorial campaign[link]

Munger, feeling that North Carolina voters needed an alternative to the two party duopoly, ran as a Libertarian candidate for Governor of North Carolina in 2008. Early in the year, Munger said that Democratic gubernatorial challenger Bev Perdue was a "Stepford Wife" and the Republican nominees were "circus clowns."^[6] Prior to May 2008, the North Carolina Libertarian Party and Munger gathered 100,000 signatures of voters in order to qualify to appear on North Carolina's ballot. They, along with the Green Party, sued the state unsuccessfully over the ballot access rules. Munger appeared as an expert witness in other cases on behalf of the Green Party and the ACLU.^[6]

Munger appeared as one of two keynote speakers at the national Libertarian convention in Denver in May 2008.^[6] He later made history as the first third-party candidate to participate in a live, televised gubernatorial debate in North Carolina.^[6]

The progressive Independent Weekly said of Munger: "Were there no substantive differences between the major-party candidates, we'd be recommending a protest vote for Libertarian Party candidate Michael C. Munger, based on the elements of his platform that make him the self-proclaimed 'liberal in the race.'"^[7]

On election day Munger received 121,585 votes for 2.85% of the total vote.

Following the election, Nick Gillespie of Reason magazine wrote: "I humbly submit that Duke University political science professor Michael Munger, who ran a strong bid as an Libertarian Party candidate for governor in North Carolina, set his eyes toward an even bigger and remote target in 2012, that stationary Death Star known as the White House."^[9]

Political positions[link]

Munger has made education a centerpiece of his gubernatorial campaign, saying that allowing more charter schools is the first thing he would do: "Rich people have choices now. I want everyone to have a choice."^[10] He would give $1,500 education vouchers to low-income students in the poorest 40 counties of North Carolina; since most would stay in public school, this would have the effect of increasing aid to poor schools.^[7]

Munger has taken more socially liberal positions on many issues than the Democratic candidate for governor, Bev Perdue. "One reason I haven't been allowed in all the debates is that I'm taking votes from the Democrats. Sixty percent of my supporters are voting for Obama. I'll talk about gay marriage, and Perdue isn't, or doesn't want to."^[5] While Democratic candidate Perdue has taken a hard line on illegal immigration similar to that of Republican Pat McCrory, Munger has a position more aligned with Barack Obama.^[11]

Munger is against the death penalty and believes children of illegal immigrants should be allowed into University of North Carolina System schools and community colleges.^[7] He believes that the government should do what it can to prevent illegal immigrants from entering the country, but once they are here, they should be treated fairly and given access to education or an "apartheid" will result "with fertile pickings for gang recruitment and exploitation by unscrupulous employers."^[7] He believes that more rural roads should be built rather than "urban highways."^[7]

Munger wants to decrease the size of government and lower taxes.^[7] He opposes the North Carolina Education Lottery and would make income taxes more progressive while cutting regressive taxes.^[7]

See also[link]

• North Carolina gubernatorial election, 2008
• List of economists

References[link]

External links[link]

• Weigel, David (2008-10-27) The Third Man, Reason
• News & Observer: Professor seeks ballot spot
• Munger Campaign website
• Munger's Academic Website (Duke University)
• Short Essay by Michael Munger in Imagineer magazine on the 2008 housing collapse.

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]