Warren Buffett’s Investment Principles

Introduction

Warren Edward Buffett is an American businessperson. He is also a successful investor who ranks among the rich and prosperous investors. Warren Buffett’s aptitude for money and business started at unusually tender age. At the age of 13 years, Buffett started a business as a paperboy selling horseracing tip sheet. Most of Warren’s wealth and treasure can be attributed to Berkshire Hathaway Company. He served as the chief executive and was the dominant shareholder in the company. By 1990, Warren Buffett had acquired the billionaire status, which he has maintained to date. According to Forbes, by September 2012, Warren Buffett was worth $46 billion (Brownlee, p. 12).

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Main Body

Warren Buffett is widely recognized as a successful investor. He is also humanitarian and a business tycoon. He is also acknowledged as a great communicator. This is seen through his mails to other shareholders. In 1977, through the fortune magazine, Buffett warned about the effects of inflation. Economic arithmetic indicates that inflation is the most devastating tax imposed by the legislation arm of government. Buffett argued that inflation could consume capital easily (Brownlee, p. 92).

In 1999, Warren warned investors of unrealistic expectations. According to a Fortune article, he advised investors to expect a 6% return on stocks when the interest rates remained similar. Warren Buffett astonished the world in 2006 when he gave the world’s largest charitable donation ever. This is the reason why his children are not considerable beneficiaries of his fortune. His belief in passing wealth from one generation to the next also affirms this. He donated 83% of his fortune to the Bill and Melinda Gates foundation. This made him a philanthropic leader (Brownlee, p. 73).

On investment issues, Buffett has widely let his views be known. For instance, on the issues concerning taxes, Warren proposed to the Senate to spare the estate tax. This was meant to ensure there was no plutocracy. Opponents noted that Buffett was meant to benefit from this proposal. In this case, he was to develop and market insurance policies to protect the policyholders from any future estate tax settlement. On gambling, Buffett noted that the government’s involvement was a tax on ignorance, and as such, not appropriate (Brownlee, p. 153).

Regarding the current increase in trade imbalance, he noted that the situation would lead to weakening of the American currency, as well as national assets. He argued that handing over too many U.S. assets to foreigners in the form of security would eventually devalue the U.S. dollar. However, in the early 2000s, the imbalance in trade persuaded Buffett to try the foreign currency market. In deed, Buffett cut down his investment owing to the rise in the costs associated with currency contracts. On energy, Buffett invested in the new energy automobile business.

He made an investment worth two hundred and thirty million dollars, which enabled him to own ten per cent stake in BYD Company. Under one year, he had a 500% profit. Buffett is now considering venturing in renewable energy, as he already owns wind farms (Brownlee, p. 123).

Conclusion

Warren Buffett’s career stretches back to the 1940s. In his teenage, he was already a member of GEICO insurance board and a millionaire. There are several tents that are attributed to the billionaire, most of which cut across the investment field where he has significantly thrived. Through various speeches and articles, Buffett is known to combine business and humor. Warren Buffett has given most of his wealth to charity through large donations. Therefore, he is a philanthropist and a strong advocator for democracy.

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Works Cited

Brownlee, Adam. Building a Small Business That Warren Buffett Would Love. Hoboken, N.J: Wiley, 2012. Print.

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StudyCorgi. (2021, February 24). Warren Buffett’s Investment Principles. Retrieved from https://studycorgi.com/warren-buffetts-investment-principles/

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StudyCorgi. 2021. "Warren Buffett’s Investment Principles." February 24, 2021. https://studycorgi.com/warren-buffetts-investment-principles/.

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StudyCorgi. (2021) 'Warren Buffett’s Investment Principles'. 24 February.

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