American investor and business magnate, Buffett, is the third richest man on the planet. Forbes has estimated Mr Buffett’s overall wealth to be $82.5 billion in 2019.
He turned a loss making textile mill into one of the most successful holding companies that the world has ever witnessed. He is the CEO, President and Chairman of Berkshire Hathaway which is by far one of the most respected and valuable American companies listed on the New York Stock Exchange. Berkshire Hathaway has over 288,500 people employed with revenue more than $166 billion.
Besides being a great businessman, Warren Buffett has also got a remarkable sense for generosity. He has pledged 99% of his fortune to the Gates Foundation. His reputation got him couple of nicknames. Some call him the “Oracle of Omaha” or the “Wizard of Omaha”. He will always be a role model for the younger generation and everybody who tries to understand his business strategy in order to be as successful as he is.
Buffett’s Trading History.
All stated trades are related to buying substantial share stakes of companies while they were at the lowest trading value. He had a vision that these companies will change their course and bring him substantial gains.
- In 1941, when he was 11, Buffett purchases his first 12 shares of Cities Service for $38 each. When he was selling the shares, they had a trading value of $200 per share.
- In 1951 Buffett purchases Geico Insurance, which remains a 100% owned by Berkshire Hathaway.
- Purchasing Berkshire Hathaway, an ailing textile mill and converting it into profitable company, was the biggest success that Warren Buffett achieved as a businessman. Even though the company is no longer in the textile business, it continues to hold the old name as his principal holding company.
- In 1972 Buffett purchased Sees candy from Sees family for $25 million. Today that very investment is valued at $1.35 billion.
- Scott Fetzer was purchased in 1985 for $315 million; this investment got him market control over products like Kirby vacuums and World Book Encyclopaedia.
- Buffett purchased 11% of the retail manufacturer Gillett for $600 million in 1989; 24 months later, his investment was valued at $800 million in addition to a $52.5 million dividend he would receive annually.
- Buffett also invested $600 million in S&P 500. Value of that investment stands at $2.2 billion minus dividends received.
- Buffett purchases American Express, which was selling at $35 per share on huge investor sell on charges of fraud. Just a year later, the share price more than doubles. Berkshire Hathaway owns 13.5% of American Express today.
- Berkshire Hathaway purchased 7% of Coca-Cola for $1.02 billion. This remains Buffett’s most lucrative purchase till date.
A part of his famous trades include gaining a stake in some of the most successful companies in the world.
In 2014, Berkshire Hathaway has significant holdings in the following companies:
- American Express – 13.5%
- Anheuser-Busch – 9.8%
- Goldman Sachs – 2.8%
- IBM – 6%
- M&T Bank – 4.2%
- Munich RE – 10.2%
- P&G – 1.93%
- Coca-Cola – 8.92%
- Buffett’s Trading Strategy
Buffett’s trading style and strategy is based on one simple principle. He believes in patience and understanding of the market in order to gain returns in the long-term. Buffett believes the world consists of a number of small opportunities which are worth the investment. He believes that, on most occasions, businesses are not worth their selling value. But very rarely some businesses are just given away. His investment strategy is based on identifying these rare opportunities and then buying it big. (Chamblis Jarboe)
Does Warren Buffett trade Forex?
“Buffet advises people not to invest in assets without a dividend. Forex has no dividend. He trades what he knows – the stock market – and it’s worked out well for him. How do we know he’s following his own advice? His trades are pretty much a matter of public record. He trades through Berkshire Hathaway, a public company. They have shown no Forex profits that I’m aware of. Berkshire Hathaway’s companies buy and sell foreign currency as they need to in order to do business internationally, not as a source of revenue. So I’d say the answer is no. Just because he could be making money in Forex doesn’t mean he is. Buffet is open that he’s missed a lot of opportunities over the years because he was pursing other opportunities. He wouldn’t be a great investor if he was pursuing every great opportunity. Also, Forex profits can be taxable, depending on where you live.”(David Rogers)
On the other hand, Sean Mollet said, “Warren Buffet doesn’t trade much of anything. He’s the father of what’s called “Value investing”, which is a long term buy/hold strategy. Trading of any kind goes very much against his principals. He purposely doesn’t split the stock of Berkshire to keep the price ridiculously high and thereby discourage others from “trading” in it. Forex? That’s not just trading, but pure speculation. He wouldn’t get near it with a 50 foot pole.”
“Warren Buffett needs no introduction in the investment world. But he’s not normally thought of much in the world of FOREX trading. After all, Buffett and his irascible partner Charlie Munger are not active traders. Instead, they built their fortunes (and those of thousands of others) primarily through the judicious acquisition of stocks and often of entire companies. Where some traders measure holding time in minutes, Buffett frequently holds his positions for decades.
Let’s be honest – Buffett is also likely to advise most individual investors against attempting to speculate currencies or commodities directly. His preference is for the long-term ownership of productive assets. That is, assets that themselves produce a dividend, interest, or quietly amass profits and grow without intervention. So there are limitations to the usefulness of the application of Warren Buffett’s philosophical and historic approach to long-term investing and applying it to short- and medium- term currency speculators.” , said Karl Dittmann.
Why forex is better other financial activities?
The sharing below is by Dani Oh, Forex Market Trader And Mentor at Dani Oh.
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