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Discovering the Warren Buffett Investment Philosophy
My initial awareness of Warren Buffett emerged during a Thanksgiving hike in Virginia’s scenic Blue Ridge Mountains in the early 1980s. A scientist friend, who transitioned from US Navy space labs to launch a biotech startup, revealed his decision to acquire several shares of Buffett’s Berkshire Hathaway conglomerate for each of his children. This introduction sparked a long-term fascination to understand the investment principles of one of the most successful investors.
Back then, the share value stood at $400, which seemed an exorbitant investment, especially when compared to UK stocks often valued at less than a pound.
Eventually, those $400 shares belonging to my friend would appreciate to $2.1 million apiece, funding his children’s education at prestigious preparatory schools and leading universities, while still providing funds for initial home down payments.
The advantage of investing in Buffett’s strategy of renowned brands, dependable markets, and robust cash flow was initially lost on me. I foolishly declined a worthwhile prospect because $400 per share seemed expensive. However, my interest had been piqued.
As Berkshire Hathaway’s equity value increased and “Buffett billionaires” (passive investors who allocated their savings there) became common, I resolved to experience one of the company’s annual meetings in Nebraska, which were so popular they were dubbed “Woodstock for Investors.”
Pursuing an Interview with Warren Buffett
Two decades following my initial, neglected introduction, I started contacting Buffett’s personal assistant to secure an interview with the iconic investor around the time of his yearly event in Omaha. It was more a handshake and a casual exchange. Nevertheless, the commitment to meet was kept.
Buffett’s yearly public gathering was distinctive. It commenced with a retail visit in the suburban mall controlled by Buffett, which featured his local furniture outlet, an upscale jewelry shop, and See’s Candies, all elements of his diverse collection of local holdings.
It culminated with Buffett throwing the ceremonial first pitch at a local baseball match, before heading to Gorat’s Steak House, a favored spot for the non-drinking Buffett, for a dinner featuring cherry cola and steak.
Warren Buffett has pledged to allocate 99% of his $160 billion fortune to philanthropic foundations.
An Unexpected Discovery in Omaha
My initial evening in the Omaha suburbs, after meeting with Buffett in his understated downtown office, coincided with the Sabbath. I inquired at my hotel about the presence of a nearby synagogue. Fortunately, there was one a short walk away, which was unusual for the US.
Surprisingly, the synagogue, a fashionable structure featuring high windows and vibrant silk curtains, was part of a larger complex. It incorporated a fitness center with a swimming pool, luxurious housing for seniors, and expansive community areas. The existence of such an extravagant campus in the heartland, near Omaha’s stockyards, was puzzling.
During the evening prayers, the relatively young rabbi greeted me. He asked about my origins and invited me to a dinner held that night for the cheder (Sunday school) parents.
While seated near him, I queried how the Midwest possessed sufficient resources to erect a facility more akin to what one would expect in Los Angeles or Miami.
He explained that his predecessor, Rabbi Myer Kripke, Warren Buffett, and their wives had developed a close bond through playing bridge and resided close to each other in the Omaha neighborhood of Happy Hollow.
Kripke inherited $67,000, mostly from an aunt, and lacked investment knowledge. He gained the confidence to consult Buffett, aware of his involvement in investments. Buffett instructed him to write a check, promising to manage it. By the mid-1990s, Buffett’s genius had grown the rabbi’s inheritance to $25 million.
Alex Brummer, pictured in the early 1980s, could have acquired shares for $400 – which today would be valued at approximately $771,000.
Rabbi Kripke’s Legacy of Philanthropy
Kripke, who had little concern for individual prosperity, embarked on a journey of philanthropy. The synagogue and community center, as his successor explained, served as his contribution to the ministry he had served.
Remaining capital was used by Kripke and his wife to donate $7 million towards restoring a deteriorating library spire at the Jewish Theological Seminary in New York, where he had studied.
My evening revealed rare insight into how Buffett’s modest lifestyle, investment expertise, and honesty had positively impacted a segment of American society.
He even insisted on answering questions from all journalists present. A stark contrast to the carefully planned “press briefings” organized by today’s financiers and politicians. Buffett, now 94, will leave a lasting philanthropic legacy. He has committed 99% of his $160 billion worth to charitable foundations. This is in addition to the $55 billion given to the Bill and Melinda Gates Foundation, dedicated to combating diseases such as river blindness in Africa.
As Yiddish saying goes, Buffett is a real mensch—an honorable and upright person.