The Snowball

Probability, statistics was Warren buffet friend.

Read book 1000 ways to make 1000$.

By Age 11 saved 120$ in 1941, bought shares using that

Sold golfball, purchased pinball machines and rented it to bars and restaurants, delivered newspaper, sold subscriptions on 3 routes one where us senators lived, earned 175$ a month.

In 1944 filed tax return citing watches and bike as deduction.

Studied Accounting and Business

Rejected by Harvard, accepted by Columbia University.

Memorized Security Analysis by David Dod.

Read companies history top-down to understand its intrinsic value and compare it with perceived value.

Couldn't stand loosing someone hard earned money.

Only invested in undervalued and then reinvested dividends.

He was patient.

Bought as much as possible of undervalued company he believed.

Buffet was creature of habit.

When Amex stocks tanked he invested more.

He made mistakes, neighbouring community disliked buffet, as he failed Dempster mill manufacturing, by placing wrong management in charge, didn't invest additional capital in Berkshire Hathway as textile manufacturer.

Closed its door to new members, tighten rules, he never invested in something he didn't understand, likes easy, safe, profitable and pleasant.

He doesn't invest in companies that have potential or proven human problems, like impending layoff, plant closures, history of execs fighting with union labor.

When He made acquisitions he also made sure companies were being run by reliable management.

Buffet also faced challenges from SEC, in his marriage.

Asked for help when he needed and remembered to payback when the time was right.

To be loved as much people as possible, among those whom you want to love you.

He gave 85%(to be precise $35 billion) to Bill and Melinda Gates Foundation.

Found success by paying attention to human elements of business

20 punches philosophy to make diligent investment:

• Imagine you have a card that only allows to invest 20 times in your lifetime

• Each investment you make, adds a punch hole in your card