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					            ENTREPRENEURSHIP – RICH & POWERFUL
Name:          Date:

            Bill Gates – Warren Buffett - Carlos Slim
Assignment: Read their “Profiles” and “Answer” the
questions.
1. Who is the richest man?




2. How did each man earn their fortune?
   a. Gates

  b. Buffett

  c. Slim

3. How “old” are these men?
   a. Gates

  b. Buffett

  c. Slim
4. Who is still working in their business?




5. What are their plans for distributing their wealth, when they
   die?
   a. Gates

  b. Buffett

  c. Slim



6. For each MAN – list five interesting “facts” learning from the
   readings.

  Gates
  a.
  b.
  c.
  d.
  e.
   Buffett
   a.
   b.
   c.
   d.
   e.

   Slim
   a.
   b.
   c.
   d.
   e.


Bill Gates
From Wikipedia, the free encyclopedia
Jump to: navigation, search
For other people named Bill Gates, see Bill Gates (disambiguation).


                       Bill Gates
 Bill Gates at the World Economic Forum in Davos, 2007


             October 28, 1955 (age 55)
Born
             Seattle, Washington, U.S.


Residence    Medina, Washington, U.S.


Nationality American


Alma mater Harvard University (dropped out in 1975)


             Chairman of Microsoft
             Chairman of Corbis
             Co-Chair of the Bill & Melinda Gates
Occupation
             Foundation
             Director of Berkshire Hathaway
             CEO of Cascade Investment


Net worth      US$56 billion (2011)[1]


Religion     Agnostic[2]
  Spouse       Melinda Gates (m. 1994–present)


  Children     3


               William H. Gates, Sr.
  Parents
               Mary Maxwell Gates


                        Signature




                         Website


                         Bill Gates


William Henry "Bill" Gates III (born October 28, 1955)[3] is an American business magnate,
philanthropist, author, and is chairman of Microsoft, the software company he founded with Paul
Allen. He is consistently ranked among the world's wealthiest people[4] and was the wealthiest
overall from 1995 to 2009, excluding 2008, when he was ranked third.[5] During his career at
Microsoft, Gates held the positions of CEO and chief software architect, and remains the largest
individual shareholder, with more than 8 percent of the common stock.[6] He has also authored or
co-authored several books.

Gates is one of the best-known entrepreneurs of the personal computer revolution. Although he
is admired by many, a number of industry insiders criticize his business tactics, which they
consider anti-competitive, an opinion which has in some cases been upheld by the courts.[7][8] In
the later stages of his career, Gates has pursued a number of philanthropic endeavors, donating
large amounts of money to various charitable organizations and scientific research programs
through the Bill & Melinda Gates Foundation, established in 2000.

Gates stepped down as chief executive officer of Microsoft in January 2000. He remained as
chairman and created the position of chief software architect. In June 2006, Gates announced that
he would be transitioning from full-time work at Microsoft to part-time work, and full-time work
at the Bill & Melinda Gates Foundation. He gradually transferred his duties to Ray Ozzie, chief
software architect, and Craig Mundie, chief research and strategy officer. Gates' last full-time
day at Microsoft was June 27, 2008. He remains at Microsoft as non-executive chairman.
Carlos Slim
From Wikipedia, the free encyclopedia

Jump to: navigation, search

For his son, see Carlos Slim Domit.

This is an Arabic name; the family name is Salim.

This name uses Spanish naming customs. The first or paternal family name is "Slim" and the second or
maternal family name is "Helú".


                         Carlos Slim




                 Carlos Slim, October 24, 2007


                January 28, 1940 (age 71)
  Born
                Mexico City, Mexico


  Residence     Mexico


  Nationality   Mexican
  Ethnicity    Lebanese


  Alma mater Universidad Nacional Autónoma de México


               Chairman & CEO of Telmex, América Móvil
  Occupation
               and Grupo Carso


               World's wealthiest person (2007, 2010,
  Known for
               2011)


  Net worth      US$74 billion (2011)[1]


  Religion     Maronite Christian


  Spouse       Soumaya Domit (m. 1967–1999)


               Carlos
               Marco Antonio
               Patrick
  Children
               Soumaya
               Vanessa
               Johanna


               Julián Slim Haddad (deceased)
  Parents
               Linda Helú



Carlos Slim Helú (Spanish pronunciation: [ˈkaɾlos esˈlim eˈlu]; born January 28, 1940) is a Mexican
business magnate and philanthropist[2] who has at various times been noted as the world's
wealthiest person. He is the chairman and CEO of telecommunications companies Telmex and
América Móvil and has extensive holdings in other Mexican companies through his
conglomerate, Grupo Carso SAB, as well as business interests elsewhere in the world.

América Móvil, which at 2010 was Latin America’s largest mobile-phone carrier, accounted for
around US$49 billion of his wealth by the end of 2010.[3] His corporate holdings at February
2011 have been estimated at US$74 billion and from these estimates he is the wealthiest person
in the world.[1]


Contents
[hide]

        1 Background
        2 Development of business interests
        3 Personal wealth
        4 Philanthropy
        5 Achievements and directorships
        6 Criticism
        7 Awards
        8 Personal life
        9 Notes
        10 External links


[edit] Background

Slim was born in Mexico City, Mexico. In 1902, his father, Julián Slim Haddad, a Maronite
Christian born in Lebanon, emigrated to Mexico at the age of 14; at the time he did not speak
Spanish. It was not uncommon for Lebanese children to be sent abroad before they reached the
age of 15 because they could thus avoid being conscripted into the army of the Ottoman Empire.
At the time of his arrival, three of Haddad's older brothers were already living in Mexico.[2]

In 1911, Julián established a dry goods store, La Estrella del Oriente (The Star of the Orient). By
1921, he had purchased real estate in the flourishing commercial district of Mexico City. These
enterprises became the source of considerable wealth.

The parents of Carlos' mother, Linda Helú, immigrated to Mexico from Lebanon during the late
19th century and founded one of the first magazines for the Lebanese-Mexican community,
using an Arabic printing press they had brought with them.[2] Linda Helú was born in Parral,
Chihuahua.[2][4]

In August 1926, Julián Slim and Linda Helú married. They had six children: Nour, Alma, Julián,
José, Carlos and Linda. Julián senior, who had been influential in the Lebanese-Mexican
business community, died in 1953.[2]

[edit] Development of business interests
            This section relies largely or entirely upon a single source. Please help improve this article
            by introducing appropriate citations to additional sources. (February 2011)
Slim and his siblings were taught basic business practices by their father, and at the age of 12
Slim bought shares in a Mexican bank. He went on to study engineering at the National
Autonomous University of Mexico, while simultaneously teaching algebra and linear
programming there. In 1965 he incorporated Inversora Bursátil and then bought Jarritos del Sur.
In 1966, already worth US$40 million,[5] he founded Inmobiliaria Carso. Three months later he
married Soumaya Domit Gemayel (the Carso name derives from the first three letters of Carlo
and the first two of Soumaya) and they remained married until her death in 1999.[2]

Construction, real estate and mining businesses were the focus of his early career. By 1972 he
had established or acquired a further seven businesses in these categories, including one which
rented construction equipment. In 1976 he branched out by buying a 60% interest in a printing
business and in 1980 he consolidated his business interests by forming Grupo Galas as the parent
company of a conglomerate that had interests in industry, construction, mining, retail, food and
tobacco.[2]

In 1982 the Mexican economy, which had a substantial reliance on oil exports, contracted rapidly
as the price of oil fell and interest rates rose worldwide. Banks and other businesses were
nationalised, crippled or collapsed and the peso was devalued.[citation needed] At this time, and
during the period of recovery to 1985, Slim invested heavily. He bought outright, or a large
percentage of, numerous Mexican businesses, including Reynolds Aluminio, General Popo
(General Tire's trading name in Mexico), Bimex hotels and Sanborns, a food retailer. He also
acquired a 40% interest in the Mexican arm of British American Tobacco and 50% of that of
Hershey's. He moved into financial services as well, buying Seguros de México and creating
from it, along with other purchases such as Fianzas La Guardiana and Casa de Bolsa Inbursa, the
Grupo Financiero Inbursa, Many of these acquisitions were financed by the cash flows from
Cigitam, a tobacco business which he bought early in the economic downturn.[2]

He added the Nacrobre group of companies – which trade in copper and aluminium products – in
1986, along with a chemicals business, Química Fluor, and others.[2]

In 1990 the Grupo Carso was floated as a public company, with share placements initially in
Mexico and then worldwide.[2]

Later in 1990 he acted in concert with France Télécom and Southwestern Bell Corporation in
order to buy landline telephony company Telmex from the Mexican government.[2] By 2006, 90
percent of the telephone lines in Mexico are operated by Telmex, whilst his mobile telephony
company, Telcel, operates almost eighty percent of all the country's cellphones.[6] Telcel was
created out of the Radiomóvil Dipsa company.[2]

In 1991 he acquired Hoteles Calinda (today, OSTAR Grupo Hotelero) and in 1993 increased his
stakes in General Tire and Grupo Aluminio to the point where he had a majority interest.[2]

In 1996 Grupo Carso was split into three companies – Carso Global Telecom, Grupo Carso and
Invercorporación – and the following year Slim bought the Mexican arm of Sears Roebuck.[2]
1999 saw Slim expanding his business interests beyond Latin America. He set up Telmex USA
and also acquired a stake in Tracfone, a US cellular telephone company. At the same time he
established Carso Infraestructura y Construcción, S. A. (CICSA) as a part of the Grupo Carso,
this being a construction and engineering company.[2] It was also at this time that he had heart
surgery and subsequently passed on much of the day-to-day involvement in the businesses to his
children and their spouses.[6]

América Telecom, the holding company for América Móvil was incorporated in 2000. It took
stakes in various cellular telephone companies outside Mexico, including the Brazilian ATL and
Telecom Americas concerns, Techtel in Argentina, and others in Guatemala and Ecuador. In
subsequent years there was further investment in this sphere, including deals involving
companies in Colombia, Nicaragua, Peru, Chile, Honduras and El Salvador. 2000 also saw a
venture with Microsoft which led to the start of the Spanish T1msn portal, later renamed
ProdigyMSN.[2]

He formed Impulsora del Desarrollo y el Empleo en America Latina SAB de CV (IDEAL –
roughly translated as "Promoter of Development and Employment in Latin America"), a Mexico-
based company primarily engaged in not-for-profit infrastructure development. This was in
2005, when he also invested in the Volaris airline.[2]

Having amassed a 50.1% stake in Cigatam, the tobacco company, Slim reduced his holdings by
selling a large part of that to Philip Morris in 2007 for $1.1bn, while in the same year also selling
his entire interest in a tile company, Porcelanite, for $800m. He also licensed the Saks name and
opened Saks Fifth Avenue in Santa Fé, Mexico. The following year saw him take a 6.4% stake in
The New York Times Company.[2]

On December 8, 2007, Grupo Carso announced that the remaining 103 CompUSA stores would
be either liquidated or sold, bringing an end to the struggling company.[7] After 28 years he
became the Honorary Lifetime Chairman of the business. He is also Chairman of Teléfonos de
Mexico, América Móvil, and Grupo Financiero Inbursa.

[edit] Personal wealth

On August 4, 2007, The Wall Street Journal ran a cover story profiling Slim. The article said,
"While the market value of his stake in publicly traded companies could decline at any time, at
the moment he is probably wealthier than Bill Gates".[8] On March 29, 2007, Slim surpassed
Warren Buffett as the world's second richest person with an estimated net worth of $53.1 billion
compared to Buffet's $52.4 billion.[9] According to The Wall Street Journal, Slim credits part of
his ability to "discover investment opportunities" early to the writings of his friend, futurist
author Alvin Toffler.[8]

On August 8, 2007, Fortune reported that Slim had overtaken Gates as the world's richest man.
Slim's estimated fortune soared to $59 billion, based on the value of his public holdings at the
end of July. Gates' net worth was estimated to be at least $58 billion.[8][10]
On March 5, 2008, Forbes ranked Slim as the world's second-richest person, behind Warren
Buffett and ahead of Bill Gates.[11] On March 11, 2009, Forbes ranked Slim as the world's third-
richest person, behind Gates and Buffett and ahead of Lawrence Ellison.[11]

On March 10, 2010, Forbes once again reported that Slim had overtaken Gates as the world's
richest man, with a net worth of $53.5 billion. Gates and Buffett now have a net worth of
$53 billion and $47 billion respectively.[11] He was the first Mexican to top the list.[12] It was the
first time in 16 years that the person on top of the list was not from the United States.[13] It was
also the first time the person at the top of the list was from an "emerging economy."[14]

In March 2011, Forbes stated that Slim had maintained his position as the wealthiest person in
the world, with his fortune estimated at $74 billion.[1]

[edit] Philanthropy

In 1995 he established Fundación Telmex, a broad-ranging philanthropic foundation. This
followed the creation of his eponymous non-profit philanthropic foundation, Fundación Carlos
Slim Helú in 1986. In 2007 it was announced that the latter body had an asset base of $4 billion
and that it would be establishing Carso Institutes for Health, Sports and Education. Furthermore,
it was to work in support of an initiative of Bill Clinton to aid the people of Latin America.[2]

Among the activities of Fundación Telmex has been the organisation of Copa Telmex, an
amateur sports tournament which in 2007 was recognised by Guinness World Records as having
the most participants of any such tournament in the world, a record which it extended in 2008.
Together with Fundación Carlos Slim Helú, this organisation announced in the same year that it
was to invest more than $250 million in Mexican sports programmes, from grass-roots level to
Olympic standard.[2]

The Fundación Carlos Slim Helú sponsors the Museo Soumaya in Mexico City which has the
most extensive Rodin and Dalí collection in Latin America and one of the largest in the world, as
well as religious artworks from colonial times.[citation needed]

In 2000, Slim, along with ex-broadcaster Jacobo Zabludowsky organized the Fundación del
Centro Histórico de la Ciudad de México A.C. (Mexico City Historic Downtown Foundation),
with the objective to revitalizing and rescuing Mexico City's historic downtown area to enable
more people to live, work and find entertainment there.[2] He has been Chairman of the
Executive Committee for the Restoration of the Historic Jeripollas since 2001.[citation needed]

In 2010 he inaugurated the first phase of the Plaza Mariana project in the Basilica de Guadalupe
to reorganize tolerated commerce[clarification needed] in the atrium and adjacent space.[citation needed] He
also inaugurated his version of the Rockefeller Center where most of his ventures will now share
a common headquarters address, Plaza Carso.[citation needed]
[edit] Achievements and directorships

Slim has been vice-president of the Mexican Stock Exchange and president of the Mexican
Association of Brokerage Houses. He was the first president of the Latin-American Committee
of the New York Stock Exchange Administration Council, and was in office from 1996 through
1998.

He was on the Board of Directors of the Altria Group (previously known as Philip Morris) until
his resignation in April 2006. Slim was also on the Board of Directors of Alcatel. Slim currently
sits on the Board of Directors for Philip Morris International. He was on the Board of Directors
of SBC Communications until July 2004, when he quit to devote more time to the World
Education & Development Fund, which is focused on infrastructure, health and education
projects. In 1997, just before the company introduced its iMac line, Slim bought 3% of Apple
Inc.'s stock.

In 2008 it was reported that Slim had shown an interest in buying the Honda Formula One
team.[15] Telmex is sponsoring the Sauber F1 team for the 2011 season.[16] [17] [18]

[edit] Criticism

The Mexican magnate's growing fortune has caused a controversy because it has been amassed
in a developing country where per capita income does not surpass $14,500 a year, and nearly
17% of the population lives in poverty.[19] Critics claim that Slim is a monopolist, pointing to
Telmex's control of 90% of the Mexican landline telephone market. Slim's wealth is the
equivalent of roughly 5% of Mexico's annual economic output.[20] Telmex, of which 49.1% is
owned by Slim and his family, charges among the highest usage fees in the world, according to
the Organisation for Economic Co-operation and Development.[21]

According to Professor Celso Garrido, an economist at the Universidad Nacional Autónoma de
México, Slim's domination of Mexico's conglomerates prevents the growth of smaller
companies, resulting in a shortage of paying jobs and forcing many Mexicans to seek better lives
north of the Rio Grande.[22]

"When you live for others' opinions, you are dead. I don't want to live thinking about how I'll be
remembered". Slim claims indifference about his position on Forbes list of the worlds richest
people and says he has no interest in becoming the world's richest person. When asked to explain
his sudden increase in wealth at a press conference soon after Forbes annual rankings were
published, he reportedly said, "The stock market goes up ... and down", and noted that his
fortune could quickly drop.[20]

[edit] Awards

Slim has been awarded the Entrepreneurial Merit Medal of Honor from Mexico's Chamber of
Commerce. He is a "gold patron" of the American Academy of Achievement,[23] a Commander
in the Belgian Order of Leopold II, CEO of the year in 2003 by Latin Trade magazine, and one
year later CEO of the decade by the same magazine.
In 2008 his philanthropy was recognised with the award of The National Order of the Cedar by
the Lebanese government.[2]

[edit] Personal life

Slim was married to Soumaya Domit from 1967 until her death in 1999. Among her interests
were various philanthropic projects, including the creation of a legal framework for organ
donation.[2]

Slim has six children: Carlos, Marco Antonio, Patrick, Soumaya, Vanessa, and Johanna.[citation
needed]




Warren Buffett
From Wikipedia, the free encyclopedia

Jump to: navigation, search


                      Warren Buffett




   Buffett speaking to students from the University of Kansas
                School of Business, May 6, 2005


                   Warren Edward Buffett
   Born            August 30, 1930 (age 80)
                   Omaha, Nebraska, U.S.
  Nationality     American


                  University of Nebraska
  Alma mater
                  Columbia University


                  Chairman & CEO of Berkshire Hathaway,
  Occupation
                  Investor


  Salary          US$100,000[1]


  Net worth         US$50 billion (2011)[2]


                  Susan Thompson Buffett (1952–2004)
  Spouse
                  Astrid Menks (2006–present)[3]


                  Susan Alice Buffett
  Children        Howard Graham Buffett
                  Peter Andrew Buffett


                         Signature




Warren Edward Buffett (pronounced /ˈbʌfɨt/; born August 30, 1930) is an American investor,
industrialist and philanthropist. He is widely regarded as one of the most successful investors in
the world. Often called the "legendary investor, Warren Buffett",[4][5] he is the primary
shareholder, chairman and CEO of Berkshire Hathaway.[6] He is consistently ranked among the
world's wealthiest people. He was ranked as the world's wealthiest person in 2008[7] and is the
third wealthiest person in the world as of 2011.[8]

Buffett is called the "Oracle of Omaha"[9] or the "Sage of Omaha"[10] and is noted for his
adherence to the value investing philosophy and for his personal frugality despite his immense
wealth.[11] Buffett is also a notable philanthropist, having pledged to give away 99 percent[12] of
his fortune to philanthropic causes, primarily via the Gates Foundation. He also serves as a
member of the board of trustees at Grinnell College.[13]
Contents
[hide]

        1 Early life
        2 Career
             o 2.1 As a millionaire
             o 2.2 As a billionaire
             o 2.3 Late 2000s recession
        3 Personal life
             o 3.1 Lineage
             o 3.2 Recognition
             o 3.3 Politics
             o 3.4 Writings
             o 3.5 Wealth
             o 3.6 Philanthropy
        4 Public positions
             o 4.1 Buffett and tobacco
             o 4.2 Buffett and coal
             o 4.3 Klamath river
             o 4.4 Trade deficit
             o 4.5 Dollar and gold
             o 4.6 Taxes
             o 4.7 Expensing of stock options
             o 4.8 Investing in China
        5 Books about Buffett
        6 Bibliography
        7 See also
        8 References
        9 External links


Early life

Buffett was born in 1930 in Omaha, Nebraska, the second of three children and only son of
businessman & politician, Howard Buffett,[14] and his wife Leila (née Stahl). Buffett began his
education at Rose Hill Elementary School in Omaha. In 1942, his father was elected to the first
of four terms in the United States Congress, and after moving with his family to Washington,
D.C., Warren finished elementary school, attended Alice Deal Junior High School, and
graduated from Woodrow Wilson High School in 1947, where his senior yearbook picture reads:
"likes math; a future stock broker."[15]

Even as a child, Buffett displayed an interest in making and saving money. He went door to door
selling chewing gum, Coca-Cola, or weekly magazines. For a while, he worked in his
grandfather's grocery store. While still in high school, he carried out several successful money-
making ideas: delivering newspapers, selling golfballs and stamps, and detailing cars, among
them. Filing his first income tax return in 1944, Buffett took a $35 deduction for the use of his
bicycle and watch on his paper route.[16] In 1945, in his sophomore year of high school, Buffett
and a friend spent $25 to purchase a used pinball machine, which they placed in the local barber
shop. Within months, they owned several machines in different barber shops.

Buffett's interest in the stock market and investing also dated to his childhood, to the days he
spent in the customers' lounge of a regional stock brokerage near the office of his father's own
brokerage company. On a trip to New York City at the age of ten, he made a point to visit the
New York Stock Exchange. At the age of 11, he bought three shares of Cities Service Preferred
for himself, and three for his sister.[17][18] While in high school he invested in a business owned
by his father and bought a farm worked by a tenant farmer. By the time he finished college,
Buffett had accumulated more than $90,000 in savings measured in 2009 dollars.




Benjamin Graham (1894–1976)




Phil Fisher (1907–2004)

Buffett entered college as a freshmen in 1947 at the Wharton Business School of the University
of Pennsylvania and studied there for two years from 1947 to 1949. In the year 1950, when he
entered his junior year, he transferred to the University of Nebraska–Lincoln where at the age of
nineteen, he graduated with a degree of Bachelor of Science in Business Administration. After
the completion of his undergraduate studies, Buffett enrolled at Columbia Business School after
learning that Benjamin Graham (author of "The Intelligent Investor" – one of his favorite books
on investing) and David Dodd, two well-known securities analysts, taught there. He received a
M.S. in Economics from Columbia Business School in 1951. Buffett also attended the New York
Institute of Finance. In Buffett’s own words:

     I’m 15 percent Fisher and 85 percent Benjamin Graham.[19]
“
     The basic ideas of investing are to look at stocks as business, use the market's
     fluctuations to your advantage, and seek a margin of safety. That’s what Ben Graham
     taught us. A hundred years from now they will still be the cornerstones of
     investing.[20]
                                                                                                  ”
Career
See also: List of assets owned by Berkshire Hathaway

Warren Buffett was employed from 1951–54 at Buffett-Falk & Co., Omaha as an investment
salesman, from 1954–1956 at Graham-Newman Corp., New York as a securities analyst, from
1956–1969 at Buffett Partnership, Ltd., Omaha as a general partner and from 1970 – Present at
Berkshire Hathaway Inc, Omaha as its Chairman, CEO.

In 1950 (20 years old) Buffett had made and saved $9,800. In April 1952, Buffett discovered
Graham was on the board of GEICO insurance. Taking a train to Washington, D.C. on a
Saturday, he knocked on the door of GEICO's headquarters until a janitor allowed him in. There
he met Lorimer Davidson, Geico's Vice President, and the two discussed the insurance business
for hours. Davidson would eventually become Buffett's life-long friend and a lasting influence[21]
and later recall that he found Buffett to be an "extraordinary man" after only fifteen minutes.
Buffett graduated from Columbia and wanted to work on Wall Street, however, both his father
and Ben Graham urged him not to. He offered to work for Graham for free, but Graham
refused.[22]

Buffett returned to Omaha and worked as a stockbroker while taking a Dale Carnegie public
speaking course.[citation needed] Using what he learned, he felt confident enough to teach an
"Investment Principles" night class at the University of Nebraska-Omaha. The average age of his
students was more than twice his own. During this time he also purchased a Sinclair Texaco gas
station as a side investment. However, this did not turn out to be a successful business venture.

In 1952[23] Buffett married Susan Thompson at Dundee Presbyterian Church and the next year
they had their first child, Susan Alice Buffett. In 1954, Buffett accepted a job at Benjamin
Graham's partnership. His starting salary was $12,000 a year (approximately $97,000 adjusted to
2008 dollars). There he worked closely with Walter Schloss. Graham was a tough man to work
for. He was adamant that stocks provide a wide margin of safety after weighting the trade-off
between their price and their intrinsic value. The argument made sense to Buffett but he
questioned whether the criteria were too stringent and caused the company to miss out on big
winners that had more qualitative values.[citation needed] That same year the Buffetts had their
second child, Howard Graham Buffett. In 1956, Benjamin Graham retired and closed his
partnership. At this time Buffett's personal savings were over $174,000 ($1.2 million inflation
adjusted to 2009 dollars) and he started Buffett Partnership Ltd., an investment partnership in
Omaha.
Buffett's home in Omaha

In 1957, Buffett had three partnerships operating the entire year. He purchased a five-bedroom
stucco house in Omaha, where he still lives, for $31,500. In 1958 the Buffett's third child, Peter
Andrew Buffett, was born. Buffett operated five partnerships the entire year. In 1959, the
company grew to six partnerships operating the entire year and Buffett was introduced to Charlie
Munger. By 1960, Buffett had seven partnerships operating: Buffett Associates, Buffett Fund,
Dacee, Emdee, Glenoff, Mo-Buff and Underwood. He asked one of his partners, a doctor, to find
ten other doctors willing to invest $10,000 each in his partnership. Eventually eleven agreed, and
Buffett pooled their money with a mere $100 original investment of his own. In 1961, Buffett
revealed that Sanborn Map Company accounted for 35% of the partnership's assets. He
explained that in 1958 Sanborn stock sold at only $45 per share when the value of the Sanborn
investment portfolio was $65 per share. This meant that buyers valued Sanborn stock at "minus
$20" per share and were unwilling to pay more than 70 cents on the dollar for an investment
portfolio with a map business thrown in for nothing. This earned him a spot on the board of
Sanborn.

As a millionaire

In 1962, Buffett became a millionaire, because of his partnerships, which in January 1962 had an
excess of $7,178,500, of which over $1,025,000 belonged to Buffett. Buffett merged all
partnerships into one partnership. Buffett invested in and eventually took control of a textile
manufacturing firm, Berkshire Hathaway. Buffett's partnerships began purchasing shares at
$7.60 per share. In 1965, when Buffett's partnerships aggressively began purchasing Berkshire,
they paid $14.86 per share while the company had working capital of $19 per share. This did not
include the value of fixed assets (factory and equipment). Buffett took control of Berkshire
Hathaway at the board meeting and named a new president, Ken Chace, to run the company. In
1966, Buffett closed the partnership to new money. Buffett wrote in his letter: "... unless it
appears that circumstances have changed (under some conditions added capital would improve
results) or unless new partners can bring some asset to the partnership other than simply capital, I
intend to admit no additional partners to BPL."

In a second letter, Buffett announced his first investment in a private business — Hochschild,
Kohn and Co, a privately owned Baltimore department store. In 1967, Berkshire paid out its first
and only dividend of 10 cents. In 1969, following his most successful year, Buffett liquidated the
partnership and transferred their assets to his partners. Among the assets paid out were shares of
Berkshire Hathaway. In 1970, as chairman of Berkshire Hathaway, Buffett began writing his
now-famous annual letters to shareholders. However, he lived solely on his salary of $50,000 per
year, and his outside investment income. In 1979, Berkshire began the year trading at $775 per
share, and ended at $1,310. Buffett's net worth reached $620 million, placing him on the Forbes
400 for the first time.

In 1973, Berkshire began to acquire stock in the Washington Post Company. Buffett became
close friends with Katharine Graham, who controlled the company and its flagship newspaper,
and became a member of its board of directors. In 1974, the SEC opened a formal investigation
into Warren Buffett and Berkshire's acquisition of WESCO, due to possible conflict of interest.
No charges were brought. In 1977, Berkshire indirectly purchased the Buffalo Evening News for
$32.5 million. Antitrust charges started, instigated by its rival, the Buffalo Courier-Express. Both
papers lost money, until the Courier-Express folded in 1982.

In 1979, Berkshire began to acquire stock in ABC. Capital Cities announced $3.5 billion
purchase of ABC on March 18, 1985 surprised the media industry, as ABC was some four times
bigger than Capital Cities was at the time. Berkshire Hathaway chairman Warren Buffett helped
finance the deal in return for a 25% stake in the combined company.[24] The newly merged
company, known as Capital Cities/ABC (or CapCities/ABC), was forced to sell off some stations
due to FCC ownership rules. Also, the two companies owned several radio stations in the same
markets.[25]

In 1987, Berkshire Hathaway purchased 12% stake in Salomon Inc., making it the largest
shareholder and Buffett the director. In 1990, a scandal involving John Gutfreund (former CEO
of Salomon Brothers) surfaced. A rogue trader, Paul Mozer, was submitting bids in excess of
what was allowed by the Treasury rules. When this was discovered and brought to the attention
of Gutfreund, he did not immediately suspend the rogue trader. Gutfreund left the company in
August 1991.[26] Buffett became Chairman of Salomon until the crisis passed; on September 4,
1991, he testified before Congress.[27] In 1988, Buffett began buying stock in Coca-Cola
Company, eventually purchasing up to 7% of the company for $1.02 billion. It would turn out to
be one of Berkshire's most lucrative investments, and one which it still holds.

As a billionaire

Buffett became a billionaire on paper when Berkshire Hathaway began selling class A shares on
May 29, 1990, when the market closed at $7,175 a share.[28] In 1998, he acquired General Re
(Gen Re), (in a rare move, for stock). In 2002, Buffett became involved with Maurice R.
Greenberg at AIG, with General Re providing reinsurance. On March 15, 2005, AIG's board
forced Greenberg to resign from his post as Chairman and CEO under the shadow of criticism
from Eliot Spitzer, former attorney general of the state of New York. On February 9, 2006, AIG
and the New York State Attorney General's office agreed to a settlement in which AIG would
pay a fine of $1.6 billion.[29] In 2010, the federal government settled with Berkshire Hathaway
for $92 million in return for the firm avoiding prosecution in an AIG fraud scheme, and
undergoing 'corporate governance concessions'.[30]

In 2002, Buffett entered in $11 billion worth of forward contracts to deliver U.S. dollars against
other currencies. By April 2006, his total gain on these contracts was over $2 billion. In 2006,
Buffett announced in June that he gradually would give away 85% of his Berkshire holdings to
five foundations in annual gifts of stock, starting in July 2006. The largest contribution would go
to the Bill and Melinda Gates Foundation.[31] In 2007, in a letter to shareholders, Buffett
announced that he was looking for a younger successor, or perhaps successors, to run his
investment business.[32] Buffett had previously selected Lou Simpson, who runs investments at
Geico, to fill that role. However, Simpson is only six years younger than Buffett.
Late 2000s recession

Buffett ran into criticism[33] during the subprime crisis of 2007–2008, part of the late 2000s
recession, that he had allocated capital too early resulting in suboptimal deals. “Buy American. I
am.” he wrote for an opinion piece published recently in the New York Times.[34] Buffett has
called the 2007—present downturn in the financial sector "poetic justice".[35] Buffett's Berkshire
Hathaway suffered a 77% drop in earnings during Q3 2008 and several of his recent deals appear
to be running into large mark-to-market losses.[36]

Berkshire Hathaway acquired 10% perpetual preferred stock of Goldman Sachs.[37] Some of
Buffett's Index put options (European exercise at expiry only) that he wrote (sold) are currently
running around $6.73 billion mark-to-market losses.[38] The scale of the potential loss prompted
the SEC to demand that Berkshire produce, "a more robust disclosure" of factors used to value
the contracts.[38] Buffett also helped Dow Chemical pay for its $18.8 billion takeover of Rohm &
Haas. He thus became the single largest shareholder in the enlarged group with his Berkshire
Hathaway, which provided $3 billion, underlining his instrumental role during the current crisis
in debt and equity markets.[39]

In 2008, Buffett became the richest man in the world dethroning Bill Gates, worth $62 billion
according to Forbes,[40] and $58 billion according to Yahoo.[41] Bill Gates had been number one
on the Forbes list for 13 consecutive years.[42] In 2009, Bill Gates regained number one of the list
according to Forbes magazine, with Buffett second. Their values have dropped to $40 billion and
$37 billion respectively, Buffett having (according to Forbes) lost $25 billion in 12 months
during 2008/2009.[43]

In October 2008, the media reported that Warren Buffett had agreed to buy General Electric
(GE) preferred stock.[44] The operation included extra special incentives: he received an option to
buy 3 billion GE at $22.25 in the next five years, and also received a 10% dividend (callable
within three years). In February 2009, Warren Buffett sold part of Procter & Gamble Co, and
Johnson & Johnson shares from his portfolio.[45]

In addition to suggestions of mistiming, questions have been raised as to the wisdom in keeping
some of Berkshire's major holdings, including The Coca-Cola Company (NYSE:KO) which in
1998 peaked at $86. Buffett discussed the difficulties of knowing when to sell in the company's
2004 annual report:

That may seem easy to do when one looks through an always-clean, rear-view mirror.
Unfortunately, however, it’s the windshield through which investors must peer, and that glass is
invariably fogged.[46]

In March 2009, Buffett stated in a cable television interview that the economy had "fallen off a
cliff... Not only has the economy slowed down a lot, but people have really changed their habits
like I haven't seen". Additionally, Buffett fears we may revisit a 1970s level of inflation, which
led to a painful stagflation that lasted many years.[47][48]
In 2009, Warren Buffett invested $2.6 billion as a part of Swiss Re's raising equity capital.[49][50]
Berkshire Hathaway already owns a 3% stake, with rights to own more than 20%.[51] In 2009,
Warren Buffett acquired Burlington Northern Santa Fe Corp. for $34 billion in cash and stock.
Alice Schroeder, author of Snowball, stated that a reason for the purchase was to diversify
Berkshire Hathaway from the financial industry.[52] Measured by market capitalization in the
Financial Times Global 500 Berkshire Hathaway as of June 2009 was the eighteenth largest
corporation on earth.[53]

In 2009, Buffett divested his failed investment in ConocoPhillips, saying to his Berkshire
investors,

I bought a large amount of ConocoPhillips stock when oil and gas prices were near their peak. I
in no way anticipated the dramatic fall in energy prices that occurred in the last half of the year. I
still believe the odds are good that oil sells far higher in the future than the current $40–$50
price. But so far I have been dead wrong. Even if prices should rise, moreover, the terrible timing
of my purchase has cost Berkshire several billion dollars.[54]

The merger with the Burlington Northern Santa Fe Railway (BNSF), closed upon BNSF
shareholder approval in 1Q2010. This deal is valued at approximately $34 billion and reflects an
increase of a previously existing stake of about 22%.

In June 2010, Buffett defended the credit rating agencies for their role in the US financial crisis,
claiming that:

Very, very few people could appreciate the bubble. That's the nature of bubbles – they're mass
delusions.[55]

On March 18 2011, Goldman Sachs acquired Federal Reserve approval to buy back Berkshire's
preferred stock in Goldman. Buffet has been reluctant to give up the stock which average $1.4
million in dividend a day,[56] stating:[57]

I'm going to be the Osama bin Laden of capitalism. I'm on my way to an unknown destination in
Asia where I'm going to look for a cave. If the U.S. Armed forces can't find Osama bin Laden in
10 years, let Goldman Sachs try to find me.[58]

Personal life

Buffett married Susan Buffett (née Thompson) in 1952. They had three children, Susie, Howard
and Peter. The couple began living separately in 1977, although they remained married until her
death in July 2004. Their daughter, Susie, lives in Omaha and does charitable work through the
Susan A. Buffett Foundation and is a national board member of Girls, Inc. In 2006, on his
seventy-sixth birthday, Warren married his never-married longtime-companion, Astrid Menks,
who was then sixty years old. She had lived with him since his wife's departure in 1977 to San
Francisco.[59] It was Susan Buffett who arranged for the two to meet before she left Omaha to
pursue her singing career. All three were close and holiday cards to friends were signed "Warren,
Susie and Astrid".[60] Susan Buffett briefly discussed this relationship in an interview on the
Charlie Rose Show shortly before her death, in a rare glimpse into Buffett's personal life.[61]

Warren Buffett disowned his son Peter's adopted daughter, Nicole, in 2006 after she participated
in the Jamie Johnson documentary, The One Percent. Although his first wife had referred to
Nicole as one of her "adored grandchildren",[62] Buffett wrote her a letter stating, "I have not
emotionally or legally adopted you as a grandchild, nor have the rest of my family adopted you
as a niece or a cousin." He signed the letter "Warren."[63][64][65]

His 2006 annual salary was about $100,000, which is small compared to senior executive
remuneration in comparable companies.[66] In 2007, and 2008, he earned a total compensation of
$175,000, which included a base salary of just $100,000.[67][68] He lives in the same house in the
central Dundee neighborhood of Omaha that he bought in 1958 for $31,500, today valued at
around $700,000 (although he also owns a $4 million house in Laguna Beach, California).[69] In
1989 after having spent nearly 6.7 million dollars of Berkshire's funds on a private jet, Buffett
sheepishly named it "The Indefensible". This act was a break from his past condemnation of
extravagant purchases by other CEOs and his history of using more public transportation.[70]

He remains an avid player of the card game bridge, which he learned from Sharon Osberg, and
plays with her and Bill Gates.[71] He spends twelve hours a week playing the game.[72] In 2006,
he sponsored a bridge match for the Buffett Cup. Modeled on the Ryder Cup in golf, held
immediately before it, and in the same city, a team of twelve bridge players from the United
States took on twelve Europeans in the event. He is a dedicated, lifelong follower of Nebraska
football, and attends as many games as his schedule permits. He supported the hire of Bo Pelini
following the 2007 season stating, "It was getting kind of desperate around here".[73] He watched
the 2009 game against Oklahoma from the Nebraska sideline after being named an honorary
assistant coach.[74]

Warren Buffett worked with Christopher Webber on an animated series with chief Andy
Heyward, of DiC Entertainment, and then A Squared Entertainment. The series features Buffett
and Munger, and teaches children healthy financial habits for life.[75][76] Buffett was raised
Presbyterian but has since described himself as agnostic[77] when it comes to religious beliefs. In
December 2006 it was reported that Buffett does not carry a cell phone, does not have a
computer at his desk, and drives his own automobile,[78] a Cadillac DTS.[79] Buffett wears tailor-
made suits from the Chinese label Trands; earlier he wore Ermenegildo Zegna.[80]

Lineage

Buffett's DNA report revealed that his paternal ancestors hail from northern Scandinavia, while
his maternal ancestors most likely have roots in Iberia or Estonia.[81]

Recognition

In 1999, Buffett was named the top money manager of the twentieth century in a survey by the
Carson Group, ahead of Peter Lynch and John Templeton.[82] In 2007, he was listed among
Time's 100 Most Influential People in the world.[83] In 2011, President Barack Obama awarded
him the Presidential Medal of Freedom.[84] Most recently, Buffett, along with Bill Gates, was
named the most influential global thinker in Foreign Policy's 2010 report.[85]

Politics




Buffett and President Obama at the Oval Office, July 14, 2010

In addition to other political contributions over the years, Buffett has formally endorsed and
made campaign contributions to Barack Obama's presidential campaign. On July 2, 2008, Buffett
attended a $28,500 per plate fundraiser for Obama's campaign in Chicago hosted by Obama's
National Finance Chair, Penny Pritzker and her husband, as well as Obama advisor Valerie
Jarrett.[86] Buffett backed Obama for president, and intimated that John McCain's views on social
justice were so far from his own that McCain would need a "lobotomy" for Buffett to change his
endorsement.[87] During the second 2008 U.S. presidential debate, candidates John McCain and
Barack Obama, after being asked first by presidential debate mediator Tom Brokaw, both
mentioned Buffett as a possible future Secretary of the Treasury.[88] Later, in the third and final
presidential debate, Obama mentioned Buffett as a potential economic advisor.[89] Buffett was
also finance advisor to California Republican Governor Arnold Schwarzenegger during his 2003
election campaign.[90]

Writings

Warren Buffett's writings include his annual reports and various articles. Buffett is recognized by
communicators[91] as one of the great story-tellers, as evidenced by his annual letters to
shareholders. He warned about the pernicious effects of inflation:[92]

The arithmetic makes it plain that inflation is a far more devastating tax than anything that has been
enacted by our legislatures. The inflation tax has a fantastic ability to simply consume capital. It makes
no difference to a widow with her savings in a 5 percent passbook account whether she pays 100
percent income tax on her interest income during a period of zero inflation, or pays no income taxes
during years of 5 percent inflation.

—Buffett, Fortune (1977)

In his article The Superinvestors of Graham-and-Doddsville, Buffett refuted the academic
Efficient-market hypothesis, that beating the S&P 500 was "pure chance", by highlighting a
number of students of the Graham and Dodd value investing school of thought. In addition to
himself, Buffett named Walter J. Schloss, Tom Knapp, Ed Anderson (Tweedy, Brown Inc.), Bill
Ruane (Sequoia Fund, Inc.), Charles Munger (Buffett's own business partner at Berkshire), Rick
Guerin (Pacific Partners, Ltd.), and Stan Perlmeter (Perlmeter Investments).[93] In his November
1999 Fortune article, he warned of investors' unrealistic expectations:[94]

Let me summarize what I've been saying about the stock market: I think it's very hard to come up with a
persuasive case that equities will over the next 17 years perform anything like—anything like—they've
performed in the past 17. If I had to pick the most probable return, from appreciation and dividends
combined, that investors in aggregate—repeat, aggregate—would earn in a world of constant interest
rates, 2% inflation, and those ever hurtful frictional costs, it would be 6%!

—Buffett, Fortune (1999)

Wealth

In 2008 he was ranked by Forbes as the richest person in the world with an estimated net worth
of approximately US$62 billion.[95] In 2009, after donating billions of dollars to charity, Buffett
was ranked as the second richest man in the United States with a net worth of US$37
billion[96][97] with only Bill Gates ranked higher than Buffett. His net worth is up to $47 billion in
the past 12 months.[98]

Philanthropy

The following quotation from 1988 highlights Warren Buffett's thoughts on his wealth and why
he long planned to re-allocate it:

     I don't have a problem with guilt about money. The way I see it is that my money represents
“    an enormous number of claim checks on society. It's like I have these little pieces of paper
     that I can turn into consumption. If I wanted to, I could hire 10,000 people to do nothing but
     paint my picture every day for the rest of my life. And the GDP would go up. But the utility of
     the product would be zilch, and I would be keeping those 10,000 people from doing AIDS
     research, or teaching, or nursing. I don't do that though. I don't use very many of those claim
     checks. There's nothing material I want very much. And I'm going to give virtually all of those
     claim checks to charity when my wife and I die. (Lowe 1997:165–166)
                                                                                                       ”
From a NY Times article: "I don't believe in dynastic wealth", Warren Buffett said, calling those
who grow up in wealthy circumstances "members of the lucky sperm club".[99] Buffett has
written several times of his belief that, in a market economy, the rich earn outsized rewards for
their talents:
     A market economy creates some lopsided payoffs to participants. The right endowment of
“    vocal chords, anatomical structure, physical strength, or mental powers can produce
     enormous piles of claim checks (stocks, bonds, and other forms of capital) on future national
     output. Proper selection of ancestors similarly can result in lifetime supplies of such tickets
     upon birth. If zero real investment returns diverted a bit greater portion of the national
     output from such stockholders to equally worthy and hardworking citizens lacking jackpot-
     producing talents, it would seem unlikely to pose such an insult to an equitable world as to
     risk Divine Intervention.[100]
                                                                                                       ”
His children will not inherit a significant proportion of his wealth. These actions are consistent
with statements he has made in the past indicating his opposition to the transfer of great fortunes
from one generation to the next.[101] Buffett once commented, "I want to give my kids just
enough so that they would feel that they could do anything, but not so much that they would feel
like doing nothing".[102]

In June 2006, he announced a plan to give away his fortune to charity, with 83% of it going to
the Bill & Melinda Gates Foundation.[103] He pledged about the equivalent of 10 million
Berkshire Hathaway Class B shares to the Bill & Melinda Gates Foundation (worth
approximately US$30.7 billion as of June 23, 2006),[104] making it the largest charitable donation
in history, and Buffett one of the leaders of philanthrocapitalism.[105] The foundation will receive
5% of the total donation on an annualised basis each July, beginning in 2006. (Significantly,
however, the pledge is conditional upon the foundation's giving away each year, beginning in
2009, an amount that is at least equal to the value of the entire previous year's gift from Buffett,
in addition to 5% of the foundation's net assets.) Buffett also will join the board of directors of
the Gates Foundation, although he does not plan to be actively involved in the foundation's
investments.[106][107]

This is a significant shift from previous statements Buffett has made, having stated that most of
his fortune would pass to his Buffett Foundation.[108] The bulk of the estate of his wife, valued at
$2.6 billion, went to that foundation when she died in 2004.[109] He also pledged $50-million to
the Nuclear Threat Initiative, in Washington, where he has served as an adviser since 2002.[110]

In 2006, he auctioned his 2001 Lincoln Town Car[111] on eBay to raise money for Girls, Inc.[112]
In 2007, he auctioned a luncheon with himself that raised a final bid of $650,100 for a
charity.[113] On June 27, 2008, Zhao Danyang, a general manager at Pure Heart China Growth
Investment Fund, won the 2008 5-day online "Power Lunch with Warren Buffett" charity auction
with a bid of $2,110,100. Auction proceeds benefit the San Francisco Glide Foundation.[114][115]
The following year, executives from Toronto-based Salida Capital paid US$1.68 million to dine
with Buffett.[116]

In a letter to Fortune Magazine's website in 2010 Buffett remarked:
      “My luck was accentuated by my living in a market system that sometimes produces
“     distorted results, though overall it serves our country well... I’ve worked in an economy that
      rewards someone who saves the lives of others on a battlefield with a medal, rewards a
      great teacher with thank-you notes from parents, but rewards those who can detect the
      mispricing of securities with sums reaching into the billions. In short, fate’s distribution of
      long straws is wildly capricious.”

      . (Buffett Says ‘Capricious’ Economy Requires Charity (Update1) by Hugh Son,
      Bloomberg, June 16, 2010 16:17 EDT)
                                                                                                                   ”
This statement was made as part of a joint proposal with Bill Gates to encourage other wealthy
individuals to pool some of their fortunes for charitable purposes.

Bill Gates's wife urged people to learn a lesson from the philanthropic efforts of the family that
sold its home and gave away half of its value, as detailed in The Power of Half.[117][118] On
December 9, 2010, Buffett, Bill Gates, and Mark Zuckerberg (Facebook's CEO), signed a
promise they called the "Gates-Buffett Giving Pledge", in which they promised to donate to
charity at least half of their wealth over the course of time, and invited others among the wealthy
to donate 50% or more of their wealth to charity.[119][120]

Public positions

Buffett's speeches are known for mixing business discussions with humor. Each year, Buffett
presides over Berkshire Hathaway's annual shareholder meeting in the Qwest Center in Omaha,
Nebraska, an event drawing over 20,000 visitors from both United States and abroad, giving it
the nickname "Woodstock of Capitalism".[121] Berkshire's annual reports and letters to
shareholders, prepared by Buffett, frequently receive coverage by the financial media. Buffett's
writings are known for containing literary quotes ranging from the Bible to Mae West,[122] as
well as Midwestern advice, and numerous jokes.

Buffett and tobacco

During the RJR Nabisco, Inc. hostile takeover fight in 1987, Buffett was quoted as telling John
Gutfreund:[123]

I’ll tell you why I like the cigarette business. It costs a penny to make. Sell it for a dollar. It’s addictive.
And there’s fantastic brand loyalty.

—Buffett, quoted in Barbarians at the Gate: The Fall of RJR Nabisco

Speaking at Berkshire Hathaway Inc.'s 1994 annual meeting, Buffett said investments in tobacco
are:[124]
fraught with questions that relate to societal attitudes and those of the present administration. I would
not like to have a significant percentage of my net worth invested in tobacco businesses. The economy
of the business may be fine, but that doesn't mean it has a bright future.

—Buffett, Berkshire Hathaway annual meeting (1994)

Buffett and coal

In 2007, Buffett's PacifiCorp, a subsidiary of his MidAmerican Energy Company, canceled six
proposed coal-fired power plants. These included Utah's Intermountain Power Project Unit 3,
Jim Bridger Unit 5, and four proposed plants previously included in PacifiCorp's Integrated
Resource Plan. The cancellations came in the wake of pressure from regulators and citizen
groups, including a petition drive organized by Salt Lake City commercial real estate broker
Alexander Lofft and directed at Buffett personally. The 1,600 petitioners, who described
themselves in a letter to Buffett as "a collection of citizens, business owners and managers,
service professionals, public servants, and organization representatives ... your friends and new
customers here in Utah," explained that, in their view, any further expansion of coal generation
in Utah would "compromise our health, obscure our viewsheds, shrink and contaminate our
watersheds, and thin out our most beloved snow pack," concluding that "our attractiveness as a
place to live and work is also threatened, and so is our economic competitiveness as a major
metro area and a state, compromising our recent gains in income and property values".[125]

Klamath river

American Indian tribes and salmon fisherman sought to win support from Warren Buffett for a
proposal to remove four hydroelectric dams from the Klamath River. He had David Sokol
respond that the FERC would decide the question.[126][127]

Trade deficit

Buffett views the United States' expanding trade deficit as a trend that will devalue the US dollar
and US assets. He believes that the US dollar will lose value in the long run, as a result of putting
a larger portion of ownership of US assets in the hands of foreigners. In his letter to shareholders
in March 2005, Warren Buffett predicted that in another ten years’ time the net ownership of the
U.S. by outsiders would amount to $11 trillion.

Americans ... would chafe at the idea of perpetually paying tribute to their creditors and owners
abroad. A country that is now aspiring to an ‘ownership society’ will not find happiness in —
and I’ll use hyperbole here for emphasis — a 'sharecropping society’.

Author Ann Pettifor has adopted the image in her writings and has stated: "He is right. And so
the thing we must fear most now, is not just the collapse of banks and investment funds, or of the
international financial architecture, but of a 'sharecropper society, angry at its downfall".[128]
Dollar and gold

This induced Buffett to enter the foreign currency market for the first time in 2002. However, he
substantially reduced his stake in 2005 as changing interest rates increased the costs of holding
currency contracts. Buffett continues to be bearish on the dollar, and says he is looking to make
acquisitions of companies which derive a substantial portion of their revenues from outside the
United States. Buffett emphasized the non-productive aspect of a gold standard for the USD in
1998 at Harvard:

It gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole,
bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from
Mars would be scratching their head.

In 1977 Buffett was also quoted as saying about stocks, gold, farmland, and inflation:

Stocks are probably still the best of all the poor alternatives in an era of inflation — at least they
are if you buy in at appropriate prices.[129]

Taxes

Buffett stated that he only paid 19% of his income for 2006 ($48.1 million) in total federal taxes
(due to their being from dividends & capital gains), while his employees paid 33% of theirs,
despite making much less money.[130] “How can this be fair?” Buffet asked, regarding how little
he pays in taxes compared to his employees. “How can this be right?” He also added:

        “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re
        winning.”[131][132]

Buffett favors the inheritance tax, saying that repealing it would be like "choosing the 2020
Olympic team by picking the eldest sons of the gold-medal winners in the 2000 Olympics".[133]
In 2007, Buffett testified before the Senate and urged them to preserve the estate tax so as to
avoid a plutocracy.[134] Some critics have argued that Buffett (through Berkshire Hathaway) has a
personal interest in the continuation of the estate tax, since Berkshire Hathaway has benefited
from the estate tax in past business dealings and had developed and marketed insurance policies
to protect policy holders against future estate tax payments.[135] Buffett believes government
should not be in the business of gambling, or legalizing casinos, calling it a tax on ignorance.[136]

Expensing of stock options

He has been a strong proponent of stock option expensing, on the Income Statement. At the 2004
annual meeting, he lambasted a bill before the United States Congress that would consider only
some company-issued stock options compensation as an expense, likening the bill to one that
was almost passed by the Indiana House of Representatives to change the value of Pi from
3.14159 to 3.2 through legislative fiat.[137]
When a company gives something of value to its employees in return for their services, it is
clearly a compensation expense. And if expenses don't belong in the earnings statement, where
in the world do they belong?[138]

Investing in China

Buffett invested in PetroChina Company Limited and in a rare move, posted a commentary[139]
on Berkshire Hathaway's website stating why he would not divest from the company despite
calls from some activists to do so, due to its connection with the Sudanese civil war that caused
Harvard to divest from the company in 2005. He did, however, sell this stake soon afterwards,
sparing him the billions of dollars he would have lost had he held on to the company in the midst
of the steep drop in oil prices beginning in the summer of 2008.

In October 2008, Buffett invested in new energy automobile business by paying $230 million for
10% of BYD Company (SEHK: 1211), which runs a subsidiary of electric automobile
manufacturer BYD Auto. In less than one year, the investment has reaped him over 500% return
of profit.[140]

				
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