AIB Featured Business Leader Warren Buffett
Warren Buffett is a name we are all rather familiar with, and as the most successful investor of the 20th century, rightly so. This year Buffett was named the third richest person on Forbes’ world’s richest list. The deserving title comes from Buffett’s diversified holding company, Berkshire Hathaway, which he purchased in 1962. The business magnate, investor and philanthropist had a humble upbringing, born in Omaha, Nebraska, before graduating from the University of Nebraska-Lincoln at age 19 with a Bachelors of Science in Business Administration. Buffett wanted to further his education, and after being rejected from Harvard Business School, he enrolled at the Columbia Business School, graduating with a Master of Science in Economics.
In 1962 Buffett acquired struggling textiles company Berkshire Hathaway, which he could see potential in. Today, Berkshire Hathaway is listed as the fifth largest public company in the world, and owns a diverse portfolio of businesses in industries including confectionery, retail, railroad, media, utilities and many more.
Buffet’s success is often attributed to his investment strategy, which is to only invest in long-term ideas, rather than to try to time the market or look for quick profits. “Our favourite holding period is forever” says Buffett.
When Buffett purchases a company, he regularly maintains its management as well, as these are the people who are as passionate about their business as he is about investing. A personal strategy that Buffet often refers to is the 2-list strategy, which involves listing your top 25 goals, then circling your top 5. Everything that is not circled is to become your list to avoid, until you’ve succeeded with your top 5 goals. This process of elimination is something that Buffett believes strongly in, as it enables him to eliminate ruthlessly and force focus.
There are many reasons why Buffet has exceled as a business leader, however arguably one his most outstanding achievements to date is the honour of receiving the Presidential Medal of Freedom, which he was awarded in February 2011 by President Barack Obama. This achievement is known as America’s highest civilian honour award. President Barack Obama commented that Buffett is “not only one of the richest men, he is the one of the most-respected”.
Buffett is known for being a philanthropist, however his desire and passion to invest in struggling companies and turn them around is his main trademark. This is what makes Buffett a great business leader and an inspiration to all business people alike.
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This article was written by Ashlee Gerrard on behalf of the Australian Institute of Business. All opinions are that of the writer and do not necessarily reflect the opinion of AIB. The following sources have been used to prepare this article: Investing Answers; Forbes; Bloomberg; The Huffington Post; Hyperlink Online