From 5 Cents to $82 billion: As Warren Buffett turns 90, here’s look back at 80 years of wealth creation

Six-year-old Buffett started by selling chewing gum packs when he was six. He also bought six packs of Coca Cola from his grandfather’s grocery store for 25 cents and sold each of them for 5 cents to pocket five cents in profit.

From 5 Cents to $82 billion: As Warren Buffett turns 90, here’s look back at 80 years of wealth creation

Son of a US Congressman Howard Buffett and born in 1930, Warren Buffett is among the most revered investors of all times in the corporate world. Among the wealthiest people on Earth with a fortune estimated at $82.4 billion as per Forbes, Buffett was nicknamed as Oracle of Omaha because of his selection of investments and success over time. He is the longest-serving CEO in S&P 500 being at the helm of Berkshire Hathaway for 50 years. As he turned 90 on Sunday, here’s a chronology of publicly reported events and developments in his life so far, from selling chewing gums at 6 to becoming the demigod for investors and beyond, that made him The Warren Buffett.

1936 – Six-year-old Buffett started selling chewing gum packs and also bought six packs of Coca Cola from his grandfather’s grocery store for 25 cents and sold each of them for 5 cents to pocket five cents in profit.

1941 – At age 11, he had $120. He and his sister Doris each bought three shares of Cities Service (now known as Citgo Petroleum Corporation based in Oklahoma), each for $38.25. Buffett sold his shares when the share price increased to $40. However, the stock then went up to $202 that taught him the valuable lesson of patience in stock investing.

1943 – Began delivering newspapers for the Washington Post at 13. He was earning $175 per week. Buffett filed his first tax return and claimed his bike as a $35 tax deduction.

1947 – Along with a friend, Buffett started Wilson’s Coin-Operated Machine Company wherein he bought pinball machines for $25 and placed them in barber shops that earned him $50 per week. Before graduating from high school, he sold the company for $1,200. By now he had already earned $5000 delivering newspapers.

1949 – At 19, his savings had already swelled to $9,800. Studying at the University of Nebraska, he read The Intelligent Investor by Benjamin Graham that shaped his investment philosophy.

1951 – Discovers Graham is on the board of the auto insurance company GEICO and spends 65 per cent of his $20,000 savings to buy its stock.

1954 – Graham called him to offer a job at his investment firm the Graham-Newman Corporation. Buffett starting salary was $12,000 per annum.

1956 – 26-year-old Buffett starts his own investment firm Buffett Associates with his savings growing to more than $140,000. Seven of his family members and friends contributed $105k while his share was only $100.

1959 – Buffett met Charlie Munger at a dinner who is currently the Vice-Chairman of Berkshire Hathaway.

1961 – By 31, Buffett was already running seven partnerships — Buffett Fund, Dacee, Buffett Associates, Mo-Buff, Underwood, Emdee, and Glenoff. He made his first million-dollar investment in a windmill manufacturing company – Dempster.

1962 – He merged all his partnerships into one company called Buffett Partnerships. During the same year, Buffett noticed a textile manufacturing firm named Berkshire Hathaway selling for $8 per share and started buying its stock.

1963 – Buffett sold Dempster for a 3x gain over the amount he invested. Buffett Partnerships became the largest shareholder of Berkshire Hathaway.

1965 – Buffett, now 35, invested $4 million in Walt Disney Co. for around 5 per cent of the company. He took full control of Berkshire Hathaway and named Ken Chase as its new CEO.

1969 – A year after Buffett Partnerships earned over $40 million and increased its total value to $140 million, Buffett decided to close it. At 39 years of age, his personal stake in Berkshire Hathaway was worth $25 million.

1970 – Buffett started writing an annual letter to shareholders of Berkshire Hathaway and became its Chairman. The company made $45,000 from textile operations, and $4.7 million in insurance, banking, and investments.

1975 — Buffett merged Berkshire Hathaway and Diversified – a company controlled by Munger. The latter got 2 per cent stock of Berkshire and became its Vice-Chairman.

1983 – Berkshire Hathaway’s portfolio was now worth $1.3 billion. 53-year-old Buffett’s net worth grew to $620 million and debut on the Forbes’ millionaire list.

1988: Buffett started purchasing stock in Coca-Cola and ended up acquiring 7 per cent of the company for $1.02 billion.

1989 – Buffett, 59 now, had a net worth of $3.8 billion. Became director at Coca Cola.

1994 – A book on business and investment principles practised by Buffett called The Warren Buffett Way written by Robert G. Hagstrom, Peter Lynch, and Kenneth Fisher was published. Acquired and invested in multiple businesses for next multiple years including McDonald’s, Gannett, PNC Bank, Helzberg’s Diamond Shops, R.C Willey, Flight Safety International, Kansas Bankers Surety Co, Star Furniture, International Dairy Queen, Travelers, US Airways, General Re, Jordan’s Furniture Company, Ben Bridge and many more.

2006 – Served Coca Cola as director till 2006. Announced donating his entire fortune to charitable causes and committed 85 per cent of his wealth to the Bill and Melinda Gates Foundation.

2010 – At 80, Buffett’s Berkshire Hathaway acquired railroad company Burlington Northern for $44 billion. Consequently, the company entered the S&P 500.

2013: Along with private equity firm 3G Capital, Buffett bought H. J. Heinz for $28 billion. He also acquired Duracell and Kraft Foods Group in the following two years.

2017 – Buffett increased his investment in Apple and also became the largest shareholder of Bank of America owning around 700 million shares. A year later JPMorgan Chase and Bank of New York Mellon were also part of Berkshire Hathaway’s portfolio.

2020 – Despite the fall in demand for the oil and gas, Buffett bet on it during the Covid-19 pandemic. As he poured almost $10 billion to buy gas pipeline assets and related debt. In his letter to shareholders, Buffett said that the culture at Berkshire Hathaway will live on beyond himself and Munger. According to the letter, after Buffett’s death, a certain number of A shares every year will be converted to B shares and then will be distributed to different foundations.

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First published on: 30-08-2020 at 16:26 IST