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  • The most respected investor in the world is undoubtedly Warren Buffet.

  • If others had to come up with inventions ahead of their time to be on the top of Forbes list.

  • This man has been the second richest man in the world for many years in a raw by simply

  • investing.

  • And what sets him apart from others is that he started with absolutely nothing.

  • Today, we will take a look at how warren buffet invests and how exactly he made over 85 billion

  • dollars.

  • But first, let's take a look at how buffet got into the investing first.

  • Warren buffet grew up in an average family, so he quickly learned the value of money.

  • At the age of 13, he started delivering newspapers, selling magazines and made a substantial amount

  • of money.

  • Which he invested later on into 40 acres of farmland.

  • He realized that if he wants to grow faster, he needs to get into the business.

  • When he turned 15, he used his savings to buy pinball machines and placed them in barber

  • shops.

  • Within few months he owned 3 different machines and then sold the business for 1200 dollars

  • or over 16 thousand dollars in today's money.

  • Fortunately, he was rejected by Harvard business school because then he applied to Columbia

  • business school, where he met his Mentor, Benjamin Graham.

  • Graham taught him how to win consistently in the stock market without speculations.

  • His method was simple, find undervalued companies, stocks that are priced lower than they actually

  • worth.

  • Buffet quickly realized the potential of this strategy.

  • So he went to work with his mentor at his investment partnership where he mastered his

  • method.

  • When Graham decided to retire, Buffet has already saved up around 150K dollars or 1.5

  • million dollars in today's dollars.

  • So, he decided to start his own investment partnership.

  • He applied the same strategy.

  • But in general, he was mainly looking for small companies that are doing just good enough,

  • but still, are undervalued.

  • Such as, Dempster Mill, a windmill manufacturing company which was a struggling business at

  • a time.

  • It was trading at 18 dollars per share.

  • But Buffet realized that company's assets worth 75 dollars per share.

  • So even if the company goes bankrupt, assets could be sold and he would still make a profit.

  • So over the next couple of years, he kept acquiring Dempster's Mill shares until he

  • became the majority shareholder.

  • In order to make a good profit from his investment.

  • Buffet changed the management, improved the operations and then sold the company three

  • times higher, than the amount he invested (80 dollars per share).

  • Buffet made multiple similar investments where he made a substantial profit.

  • And in less than 5 years of starting his partnership, the value of his investments grew to millions

  • of dollars.

  • In fact, his personal wealth finally crossed a million dollar.

  • After acquiring Berkshire Hathaway, his approach to investing changed.

  • Instead of focusing on small struggling companies.

  • He started buying more successful companies that are undervalued, such as the American

  • Express.

  • But, what actually brought him up to the top of Forbes list is the insurance business.

  • Buffet realized that Insurance companies work exactly like banks.

  • You regularly pay your premium for example, but only get your money back, if you get into

  • an accident.

  • So insurance's companies have a constant flow of cash.

  • Which are technically considered liabilities.

  • Exactly like the money you deposit into a bank.

  • Suddenly, Warren Buffet found himself having access to an enormous amount of money which

  • he quickly started investing in the right companies.

  • And in the next few years, his personal net worth crossed a billion dollar.

  • He kept doubling his net worth every few years by investing in some of the most successful

  • companies such as Coca-Cola, Bank of America, GM and so on.

  • Until he became the richest man in the world in 2008.

  • Buffet didn't achieve that by simply speculating and hoping to win.

  • But rather understood how the stock market works and consistently used the same strategy.

  • The good news is that, you can also learn how the stock market works and certainly be

  • like warren buffet if you put the effort.

  • And for that reason, we have found for you a perfect course on skillshare that will teach

  • you everything you need to know.

  • We can't cover everything here on this channel since our videos are extremely difficult to

  • make.

  • So, by using the link in the description, you will get the course for free for the first

  • 2 month and help this channel.

  • So, give it a try.

The most respected investor in the world is undoubtedly Warren Buffet.

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Here is How Warren Buffett Made 85 Billion Dollars

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    Summer posted on 2020/10/30
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