4 Key Events in Warren Buffett's Investing Life

Photo: Coca-Cola

A career as eventful as Warren Buffett's has many highlights. Books have been written about the legendary Berkshire Hathaway (NYSE: BRK-A  ) (NYSE: BRK-B  ) chairman and CEO's numerous successes. So it's tough to pick out only a few bright spots over the course of an investing life that spans several decades.

Regardless, in honor of the four days until the company's annual meeting in Omaha, I've chosen a quartet of particular distinction highlighting the man's sharp instinct for grabbing the perfect opportunity to open a stock position... and for knowing how to spend his money wisely, in more ways than one.

1956 -- Partnering up
After graduating with a Master of Science from Columbia, starting a family, and working for his mentor (and legendary investment guru) Benjamin Graham, the young financier was ready to brave the market on his own. He started three partnerships using around $105,000 in investor money, which included a $700 contribution from himself.

It was as head of Buffett Partnership that he began writing annual letters to his partners, a practice he has continued ever since as the guiding light of Berkshire Hathaway.

Warren did well during the initial phase of his career. When Buffett Partnership was liquidated in 1969, its namesake's $700 buy-in had swelled to around $20 million.

1963 -- Salad days
It was one of the biggest corporate scandals of the 1960s, and it nearly destroyed the reputation of a famous company. American Express (NYSE: AXP  ) was hoodwinked by a firm in New Jersey that obtained millions of dollars in loans collateralized by the inventory of its salad oil, the amount of which was grossly exaggerated. AmEx's loans to the firm amounted to over $175 million, thus its shares were slammed hard when the scandal broke.

Buffett, that old master of value investing, realized that AmEx's business was sound and that it would recover from the incident. He eventually placed nearly $1.3 billion on the company based on his instinct. Today, AmEx is one of Berkshire Hathaway's "big four" positions, with an ownership stake of over 14% of the company as of the end of 2013.

And the value of that stake? A cool $13.8 billion.

1988 -- A fizzy investment
Most investors would steer clear of a stock that's risen by nearly 20% annually for half a decade. But Warren is not most investors. Such was the situation with Coca-Cola  (NYSE: KO  ) shares in the late 1980s. Few would have pegged Coke as a growth stock after such a run.

One of the great strengths of Buffett as an investor is that he instinctively casts for the long-term. He realized that on a historical basis, the price was low (the company had struggled in the 1970s), and Coke was a solid, consistent business spitting out a growing dividend.http://www.cnbc.com/id/19851070 http://www.dailywealth.com/1029/warren-buffetts-investment-in-coca-cola 

To say that he was right is an understatement. All told, he plowed just under $1.3 billion into the soft drink maker; as of the end of last year Berkshire Hathaway's stake was worth more than ten times that, at $16.5 billion.

2010 -- Money well spent
One aspect of Buffett's work as a financier that doesn't get as much press as the investment activity is his philanthropy. Over the years, he's put plenty of time, effort, and of course money into charitable causes. This effort reached a new high in 2010 when, with fellow big charity spenders Bill and Melinda Gates, he unveiled The Giving Pledge.

This is a campaign aimed at encouraging the world's billionaires to promise to donate most of their fortunes to philanthropic organizations. Buffett himself primed the pump several years earlier, committing to eventually give away over 99% of his wealth to such entities.

Ever low-key, Buffett downplayed his generosity when making his own pledge. "Measured by dollars, this commitment is large," he wrote. "In a comparative sense, though, many individuals give more to others every day."

Warren Buffett just bought nearly 9 million shares of this company
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Follow along as we countdown the days until Berkshire Hathaway's annual shareholder meeting in Omaha, Nebraska on May 3. A handful of Fools will be attending the event and live chatting with other Fools around the globe! Click HERE to set a reminder for yourself about the live chat!

The previous articles in our "12 Days of Berkshire" series:
12 Reasons Warren Buffett Is an Incredible Investor and How You Can Learn From Him

11 Things in Your House Making Warren Buffett Money

10 Reasons Berkshire Hathaway Is the Best Stock You Can Buy

9 Warren Buffett-Approved Dividend Stocks

8 Stocks Warren Buffett Should Never Buy

7 Things We Can Learn From Warren Buffett’s Biggest Money Mistakes

6 Companies Warren Buffett Helped Save

Warren Buffett’s 5 Best Businesses


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  • Report this Comment On April 30, 2014, at 11:47 AM, bikeridervk wrote:

    I've learned a lot reading the Annual Report. I'm still trying to uderstand "intrinsic value".

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