Warren Buffet is the chairman and CEO of Berkshire Hathaway; originally a New England textile company and his estimated net worth is over $87 billion as of January 2018. He’s been nicknamed “The Oracle of Omaha” due to his savoir-faire or know-how in the investment of the correct stock for a great part of the time. He’s an “oracle” because he has insight and can predict things. He believes in value investing which means that it’s the intrinsic worth of a company that is important; the actual value of the company’s own merit.
What type of Investments does he do?
Buffet has been valuing investing and buying shares since 1962 for his company and is the third richest person in the world. Not only is he a savvy investor but he’s also a true philanthropist who has already given away $27 billion of his wealth in the last decade to a variety of very worthy causes.
So Why is the Intrinsic Value of a Stock so Important?
Warren has always believed that when a stock’s intrinsic value is calculated an investor can ascertain a suitable amount of safety. There’s a certain type of buffer or cushion between the price you believe the stock is worth and the price the market as a whole sees that same stock’s worth. In that way you will always limit your loss even if the stock falls below your estimate.
Mr. Buffet might only be a frugal man who owns a flip-phone and lives in a simple home in Nebraska but he sure is the master of making money; a generous man who likes to play bridge eat at McDonald’s and drink lots of Coca-Cola. He reads all types of information most of the day but does not use technology and generously gives away a lot of his wealth.
Just imagine if you were alive in 1964 and had invested $1000 in the Berkshire Hathaway stock which by the way at the time only cost $19 a share you would have made $13 0 000 by today!