Warren Buffett’s First Stock
Warren Buffett is one of the richest men in the world being worth over 75 billion dollars. But he wasn’t always the stock Guru. He was quite a novice buying 6 shares of cities served, along with his sister at the tender age of 11 years old. Even missing the opportunity of making thousands of dollars he was able to profit a few hundred dollars. This was his introduction on how stocks work.
Young Warren and his sister Doris purchase 6 shares of City Services (an oil servicing company) at $38 per share. When the market started sloping towards the downside, the siblings panicked and let the shares go at $40 per share. Eventually, that same stock Rose to $200 a share. Even though the siblings missed out on $1,200 profit on 6 shares, a gain is always better than a loss.
The question, I know you’re wondering how an 11-year-old could afford that many shares at that price it was set for back in 1942? That was a lot of money in those days. Warren has been a businessman since the age of six. His first hustle was selling chewing gum. Also he sold Coca-Cola door-to-door, sold golf balls, deliver newspapers; which he saved $2,000, collected coins and stamps; which he sold, gambled on racehorses and profited when people threw away their second and third place ticket.
The two strengths that Warren carried all of his life are discipline and patience. He sticks to his budget. His daily breakfast budget at McDonald’s is between $2.61 through $3.17. After budgeting, he invests in something that he is an expert on.
In conclusion, from the early part of his life, he was always selling something and investing the profits into the stock market. He was discipline from the start. His very first lesson in the market was patience. Within a week of purchasing his first share, he lost a third of the stock value within a few weeks. Had he just let the shares sit for some time and appreciate, he would have wracked thousands of dollars. He compares the stock market to baseball, saying that you don’t swing at every pitch, but when the ball is where it should be, it’s only right that the swing for a home run.