WARREN BUFFETT
Tell me who are the heroes of your life, I will tell you who you will become in the future. This is what Warren Buffett says. American Business magnet, The world's greatest investor, The most successful money maker, Author, Warren Buffett. Someone who took the world that you can earn money even while you are sleeping. Through Warren Buffett's company called Berkshire Hathaway, Warren Buffett has been able to not only invest in other companies but also to buy other companies. If you had invested 1000 dollars in Warren Buffett's company in those days, the value of it today is 05 million dollars.
Warren Buffett's businesses include Construction, Electric, Luxury items, Finance, Insurance, Apparel, Media, Logistic, Furniture, Food and beverage, House holding, Real estate, Chemicals, Business services, Retails, Defense, Sports, Leasing and Manufacturing. Warren Buffett has made his portfolio so that every sector is covered. Not only that, they have taken shares of billion-dollar companies like Coca-Cola, Apple, American Express, Bank of America, General Motors, MasterCard and invested in them. Warren Buffett says, yes, I have made my investments in a way that belongs to many fields, but if I take my company, the highest revenue comes from only one field. You will find out what that is as you go through this case study. If you are a fan of Warren Buffett, you probably know this. You can also comment about it in the comment section.
In 2008, Warren Buffett became the number one richest person in the world after defeating Bill Gates. Not only that, Warren Buffet has been able to stay among the ten richest people in the world for many years. Today, Warren Buffett's net worth is more than 100 billion US dollars. But the important thing here is not Warren Buffett's assets nor this one, but how did Warren Buffett do these things? That's what matters. Warren Buffett says, I look at 16 things before making an investment. We talk about what those are in this case study. So, like in other case studies, in this case study, we will dig into the life of Warren Buffett. If you feel that you got value from the time you are going to spend reading this article, share it with those who know this article and comment. So, let's go to the article…
Now talking about Warren Buffett, he has mastered the art of making money even before he became an investor. How do you know? Warren Buffett says, as humans, we all have different talents. We are all good at something. That's how I'm good at making money. That's why people call me the world's greatest money maker. Warren Buffett says a very nice job in 06 years. He says, I will go to a liquor store near my house and do a little observation. He says, I started inspecting the ground to see which drink bottle cap has fallen on the floor more. He saw that the lid of the Coca-Cola brand has fallen to the ground. So, he realized that people are buying more of this drink. For that reason, he takes 06 Coca-Cola from the same shop and goes to another place and sells it at a profit. Things to do in these 06 years.
Warren Buffett goes to the salon to get a haircut at the age of 17. He told the hair cutter there that I want to cut my hair as soon as possible. Let's get a haircut, but there are other people who want you to wait in line. That day, Warren Buffett felt it strongly in his head. Getting a haircut means waiting in line. Warren Buffett says, I got a business idea. You know what? The idea that came to him was that he said to the owner of that salon, OK, there is a problem. People who come to cut their hair have to wait for a long time, so I will give you a solution. I will bring a timbale machine here so that people who come to get a haircut don't have to wait. They can play it. But there is a thing here, you have to give me a part of the income that comes from it. Don't worry, you are in no danger. I will buy this machine. Because of this, the number of people coming to your salon can also increase.
Warren Buffett's sister tells this story in an interview. He says, Warren Buffett said 16 years ago that I will become the richest man in the world someday. It was for that reason that the 13-year-old had to sign his tax return. Because he earned income from that time. Warren Buffett said one day, I'm not going to invest money in everything I see. I think a lot before investing. In an interview, a person asked Warren Buffett, why is your website not beautiful even though you have so much money? Warren Buffett laughed and said, why would I pay a designer a lot of money to make it? I am not going to make a big difference just because I put some pictures there, some colors. That's why I'm still living in my same house for 20 years.
Warren Buffett says that I have bought Apple shares. But I don't use an apple phone. For example, Tim Cook, the CEO of Apple company, has called me and told me that I will give you an Apple phone, I will teach you this, and ask you to use it. I told him that I only use the phone to make calls. That's why the phone I have is good enough. One day Warren Buffett went to his grandfather's shop to help him. Now he went to his grandfather's shop and did the work of lifting and loading the goods. He thought I could earn a lot of money. Now after a lot of hard work, when he went to get the money, he did not get even 1 dollar from that work. Now Warren Buffett is very upset. Now he thinks, I work so hard and he gives me so little money. Warren Buffett says, I realized then that before doing something, you need to make an agreement. All these things he understood at a young age.
If Warren Buffett is a good master of making money, he read a book called "One Thousand Ways to Make One Thousand Dollars" at the age of 7. In one way, he has read that measuring people's weight can also be done as a business. Warren Buffett reads about it and thinks about it. OK, how much do I need for a weighing machine? How long does it take to do two? How long will it take to spread it throughout my village? Things to think about in these 07 years. Warren Buffett says, I have sold Coca-Cola, sold Bubblegum's, sold ladies items, sold stamps and sold them, sold magazines, delivered, and sold water bottles.
Warren Buffett says, I tried to start a business when other people were playing baseball. I tried to sell things that's why people call me the world's greatest money maker. So now you are thinking that Warren Buffett has made many attempts to earn money since his childhood. It is clear to me. Then how does Warren Buffett get involved in this investment subject? We will talk about that next. Warren Buffett buys his first stock at the age of 11. That's for $38. This is the first stock that Warren Buffett bought. So, after he bought it, he often searches for stock market news and stock market updates. Now he is very excited because of his first experience. But there is a small incident, he saw that the stock bought at 38 dollars goes to 28 dollars. Now imagine how Warren Buffett felt when he bought his first stock. He was very tensed by this work.
Now Warren Buffet thinks I'm going to lose my money. After a few days, the one he bought for $38 went to $28, and after a while it became $40. Warren Buffett thought, what went to 28 dollars has come to 40 dollars, I can keep 2 dollars profit and he sells it. After a while, when Warren Buffett continued on this subject, when he was reading the news, he saw that the stock he bought was at $40 and went to $200. Warren Buffett wonders, what happened when I bought it at $38 and sold it at $40, and here it is at $200. I lost the opportunity to earn good money. Warren Buffett says, that's when I understood the importance of long-term investment.
But even though it happened in those days, today there is a person who is like Warren Buffett's right hand, Charlie Munger who is 85 years old and he is the Vice Chairman of Berkshire Hathaway. He said in an interview, Warren Buffett, before buying any stock, we as an organization have a small check list. We will look at that. Before doing anything, we should be able to understand the relevant business. That is the first one. Second, we look at what is the competitive advantage of the company we are going to invest in? What is the advantage of this company compared to other businesses? Thirdly, we look at the management of the company we are going to invest in. After looking at these three, the fourth thing is the price. This is the check list that we follow regularly.
Charlie Munger says in an interview, when we went to buy the shares of Coca-Cola Company, they had completed all these check lists. That means a good product, a good team and things like that are why we decide to buy the shares of that company as soon as possible. As of today, we are a company that owns shares worth 10 billion dollars in Coca-Cola. Warren Buffett had a coach named Benjamin Graham. Now Warren Buffett had an amazing desire to go to Benjamin Graham and work with him. But when Warren Buffett told it to Benjamin, Benjamin Graham rejected it at first. He says, I can allow you to come to work but since you have equal skill and knowledge, you can find a job somewhere else. I would like to give a job as a help to someone who has difficulty getting such a job. Then Warren Buffett said, OK, I'll work for you for free, if you hire me. Now Benjamin Graham is giving the job to Warren Buffett because of this unlimited interest.
But after that many interesting things happen between these two. So, when others were telling fairy tales even at that age, Warren Buffett worked with Benjamin Graham and used to read financial statements of companies. So, when these two were there, many problems started to arise between these two. Do you know how? According to Benjamin Graham, before investing in a company, it is enough to analyze the data of the company only quantitative data. No? His theory is that you can decide.
But Warren Buffett presented a completely different opinion. You know what? Warren Buffett said, it is not enough to look at the financial data alone, we need to look at the quantitative data of that company as well. For example, the company's team, leadership, business model, competitive advantage. So, Warren Buffett and Benjamin Graham eventually split due to these arguments. Warren Buffett still says today, yes, we shared such an opinion, but what I still say today is that my coach, Benjamin Graham, was a great foundation for my investment mindset. That's what Warren Buffett still says. There are 02 valuable rules that I learned from Benjamin.
Rule number 01- Never lose your money
Rule number 02- Never forget rule number 01
One day, in an interview, the interviewer asked Warren Buffett, how can you manage such a huge company now that you are so old? What do you think is the greatest skill you have to manage an organization like this? Warren Buffett says, I can tell you many reasons. But there is one reason that I like and interesting and it helped me a lot to come to this place. You know what? Warren Buffet says, I am not very good at public speaking. I used to get scared as soon as I was asked to do public speaking. So, because I want to develop that skill, I read a book called "How to win friends and influence people". It allowed me to collect many valuable skills in my life. For example, when you talk to a person, try to talk often so that person is inspired. Call him by his first name. I used to do many things like this. This is why I still tell my students that the best investment I have made in my life is learning public speaking since I was a child.
No matter how great an investor Warren Buffett is, Warren Buffett still says, I don't look at the price too much. I am looking at the return on investment. For example, if I buy a farm, I don't look at its price. How much yield can I get from that farm in the future? How much fruit can be produced? Can grain be produced? How long will it take me to sell them? At the end I think about the price. If you take Warren Buffett's Berkshire Hathaway company, if you look at the areas in which they have invested in the companies, you can find a very beautiful pattern and you will be able to find something subtle. That is, when you look at the fields that Warren Buffett's company has invested in, they have invested more in this insurance sector. Do you know why it has been done? Warren Buffett says, the reason why I have made my portfolio so that more revenue comes from the insurance sector is that the business model of an insurance business is that the customers pay money to them in advance.
Unlike other businesses. What's in it for me? This will increase the cash flow of my company. That money increases means that I can take that money and invest in other businesses. That is why I have invested more in the insurance sector. In one of Warren Buffett's lectures at a university, a student stood up and asked a question, sir, what do you really look for when you are going to invest in a company? What kind of things do you look for before investing? Can I explain a little? Warren Buffett says, there are many things to see. But let me tell you something first. If you don't have self-confidence, it is not a good thing to invest in the stock that you will buy in the next 10 years. Buying today and selling tomorrow means you are a trader. I don't recommend it that much. But in any case, now I will tell you 16 things to look at as an answer to the question you asked.
01. It is better to buy a fair company at a low price than to buy a big company at a fair price.
02. See if the long run of the company is successful
03. Read financial reports.
04. Look at management
05. Look at the competitive advantage
06. See if the return is also available between 5-10 years
07. See how it has been performed in history
08. Don't go for overvalued stocks
09. Buy low value but valuable stocks
10. Don't do this as a gamble
11. See if the company has loans
12. Look at the profit margins
13. Not only that, but also see if the profit margins increase every year
14. Check whether the company's growth is stable
15. Study the valuation given to the company very carefully
16. Remember that if you find it difficult to understand the business of the concerned company, do not go to buy that stock.
In the case study we did about Bill Gates earlier, we said that Bill Gate and Warren Buffett are two good friends. But do you know how these two got together? For example, Bill Gates says I am one of the IT fields. He is someone in the financial field. Then we are not compatible at all. But the two of them liked each other on the first day they met. That means Bill Gates says he learns something from my knowledge and I learn something from his knowledge. We are both improving. That's why Warren Buffett says to choose people for your network carefully. At least he wants to be better than you in some way, then you will automatically move in that direction. Warren Buffett says, as humans, we each have different abilities. I am good at making money. And there are people who are good at spending money. Bill Gates is one such person. It is for that reason that 31 billion dollars of my wealth has been included in the Bill & Melinda Gates foundation.
Okay, we have now dug up Warren Buffett's life and talked about this case study. I believe that you can add many important things to your life.
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