Warren Edward Buffett was born in Omaha, Nebraska to Howard, a politician/businessman and Leila Buffett, a homemaker on August 30, 1930. He is the second oldest of three children and the only son. Buffet began his education at Rose Hill Elementary School in Omaha.
A career change with Warren's father in 1942, being elected into a four year term as one of the U. S House of Representatives caused the Buffett's to have to move to Fredericksburg, Virginia to be closer to his new job. Warren continued his elementary education and attended Alice Deal Junior High school and later graduated from Woodrow High School. As a child Warren wasn't a normal kid, he was able to calculate numbers off the top of his head.
He took interests in the type of work his father was in and wanted to make money at an early age. At the age of six years old, Buffett purchased a 6-pack of Coca-Cola from his grandfather's grocery store for twenty five cents, went from door to door and resold each of the bottles for a nickel, pocketing a five cent profit. At eleven years old Warren purchased three shares of Cities Service, at $38 per share for both himself and his sister Doris. Shortly after buying the stock, it fell to just over $27 per share.
A frightened but resilient Warren held his shares until they rebounded to $40. He promptly sold them a mistake he would soon come to regret. Cities Service shot up to $200. The experience taught him one of the basic lessons of investing: Patience is a virtue. While in high school Warren carried out many successful money making ideas such as: delivering newspaper, selling weekly magazines, Coca-Cola, chewing gum, golf balls, stamps all door to door and detailing cars.
He also worked in his grandfather's grocery store. In 1944, Warren filed an income tax return, and took a $35 deduction for the use of his bicycle and watch on his paper route. Warren Buffett is the CEO and chairman of Berkshire Hathaway. Berkshire Hathaway began as a textile manufacturing company in 1839. In 1962, Warren Buffett began purchasing stock in Berkshire Hathaway. He soon purchased enough shares to control the company.
Buffett continued Berkshire Hathaway's business of textiles until 1967; it was at that time he expanded into the insurance industry as well as in other investments. By 1985, the last of Berkshire Hathaway's textile operations were shut down. Berkshire Hathaway is a conglomerate holding company that is headquartered in Omaha, Nebraska. The company manages many subsidiary companies.
From 2000 to 2010, their stock produced a return of seventy-six percent. For that same time period, the S&P 500's return was a negative eleven percent. As of December 31, 2009 Berkshire's Class A shares sold for $99,200, making them the highest priced shares on The New York Stock Exchange. The high price of Berkshire Hathaway's stock can be attributed to the fact that they have never had a stock split and have only paid out a dividend one time.
A dividend of ten cents was paid in 1967. The company's refusal to split its shares of stock indicates Buffett's interest in attracting long-term investors. This has also reduced the liquidity of the stock. Early in Buffett's career at Berkshire Hathaway he focused mainly on long term investments in publicly held companies.
Recently the Buffett has concentrated on buying entire companies. Berkshire Hathaway now owns a diverse range of businesses such as railroads, retail, and manufacturing companies. Berkshire Hathaway's first endeavor in the insurance industry was to purchase National Indemnity Company. In the late 1970s Berkshire Hathaway obtained an equity claim in the Government Employees Insurance Company (commonly known as GEICO).
In 1996, Berkshire acquired GEICO; it is a major source of capital for the company. Berkshire Hathaway's apparel companies include Russell Corporation, Fruit of the Loom, and H.H. Brown Shoe. They also own Nebraska Furniture Mart, Pampered Chef, and See's Candies. They have also acquired a ninety percent equity interest in MiTek Incorporated. This company has its headquarters in Chesterfield Missouri and makes engineered connector products, engineering software and services, and manufacturing machinery for the building components industry. Another local company owned by Berkshire Hathaway is XTRA Lease.
They are leaders in the leasing of transportation equipment including over-the-road and storage trailers, chassis, and domestic containers. In 1970, Warren Buffett's salary as CEO of Berkshire Hathaway was a mere $50,000. At $100,000, his current salary is still well under that of most CEOs. He makes the majority of his money on his investments. As of 2005, Buffett owned thirty-eight percent of Berkshire Hathaway. Bill Gate's investment company is the second largest shareholder. He owns more than five percent of the company's class B shares. He is also a member of Berkshire Hathaway's board of directors.