Dian's Column
Dian's Archive


Happy Birthday to Warren Buffett and cheers to his money making prowess

By Dian Vujovich

America’s favorite and oh-so affable master of money-making, Warren Buffett, turns 84 on Saturday, August 30. I don’t know what you’d give this seemingly happy-go-lucky billionaire other than” Happy Birthday” wishes along with a big “Thank You” for the riches he has afforded all investors—the lucky, the rich and the rest of us.

The lucky would be those who hopped on Buffett’s bandwagon in 1964 when he became majority shareholder and stuck along for the ride. If you were such a person and had invested $1,000 in Berkshire Hathaway that year, that amount would be about $10.5 million higher today, according to Yahoo Finance.

The rich ones would be the 1 percent of the 1 percenters who have enough money to afford purchasing shares of Berkshire Hathaway (BRK-A) stock today (8/29). It’s now trading around $205,000 a share. That’s close to its 52-week high of $205,445.000 and a handsome bit away from the 52-week low, $163,038.

The rest of us include anyone who may or may not invest in the Berkshire Hathaway B shares (BRK-B) trading around $137. a share, along with those who choose to learn from this Master.

Sticking with that what –can-we- learn notion, here are five things Warren Buffet has taught investors during his successful investing lifetime:

•Buy good companies, change when necessary and remember there’s nothing wrong with cash.

In general, Buffett seems to like investing in U.S. companies such as Geico, IBM, BNSF railroad, Wells Fargo, etc. He adds positions when he likes them as he recently did with Charter Communication and Now Inc. and increases holdings he likes— such as those of Suncor Energy and Verizon Communications. Positions are sold or lowered when deemed appropriate and cash is always good:Through June 30, Berkshire had over $55 billion in cash, according to Yahoo Finance.

•Keep good records and pay the piper when necessary. We all make investing mistakes and Berkshire Hathaway Inc. is no exception. Recently the company agreed to pay a civil penalty of $896,000 for “failure to comply with the premerger reporting and waiting requirements of the Hart-Scott Rodino Act.”

•Be charitable. Buffett is the third riches man in the world and is the second most generous man in the world. He has donated a lifetime total of $20 billion.

•It takes time to make money. According to Yahoo Finance, if you invested $1,000 in Berkshire Hathaway in 1970 that amount would be around $4.86 million higher today. Start in 2000 and the amount would be around $3,218 higher.

• Every year is a different year. “I don’t want anybody buying Berkshire thinking that they can make a lot of money fast,” Mr. Buffett told an interviewer. “They’re not going to do it, in the first place. And some of them will blame themselves, and some of them will blame me. They’ll all be disappointed. I don’t want disappointed people. The idea of giving people crazy expectations has terrified me from the moment I first started selling stocks.”

On that note, from 2008 to 2013, the S&P 500 returned 128%, while Berkshire (based on book value per Class A share) returned 80%.

•Best of all…..If there is one Buffett factoid worth remembering it is this: 99% of Buffett’s wealth was earned after his 50th birthday, according to The Motley Fool.

Bottom line: Making money knows no age boundary.

To read more articles, please visit the column archive.

[ top ]