BY FILIPE R. COSTA
How to Invest Like...
Warren BuffeTt "I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years." — Warren Buffett
A Missed Opportunity? Life is really like a dark box full of surprises! You shouldn't feel all that sad when you fear having missed the biggest opportunity of your life. While missing such a valuable opportunity is certainly a shame, it sometimes means becoming open to other opportunities you just don't know about yet. Certain events that we judge negatively can change our lives forever in an unthinkable way. Take Warren Buffett, for example. Had he been accepted by the business school of his choice – Harvard Business School – I probably wouldn't be writing about him today; Forbes wouldn't rank him in its billionaires list; and Berkshire Hathaway would have been long gone as a failed textile corporation. The Harvard rejection steered Buffett in the direction of Columbia Business School where he learned how to invest from the father of value investing, Benjamin Graham. Fifty-five years after learning from the best, Buffett became one of the most influential investors while amassing a personal fortune of $67.3 billion.
The "Prodigal Son" of Value Investing If Benjamin Graham is the father of value investing, Warren Buffett is certainly the prodigal son. The most serious follower of Graham's formula, Buffett has been investing with huge success for more than 50 years. He is living proof of the fallacy of the efficient market hypothesis, which claims that any return in excess of the market return can only be achieved by chance or by embracing extra risk. With a track record of five decades of successful investments behind him, it's hard to attribute Buffett's experience to any of the above.
Because of his great success in business ventures, after finishing college Buffett was not willing to continue studying. There was a world of opportunities out there so why spend time at University? But upon his father's persistence he enrolled at the Wharton School of the University of Pennsylvania and later transferred to the University of Nebraska-Lincoln, where he graduated with a Bachelors of Science in Business Administration, at the age of 19. By then Buffett was willing to enrol at Harvard Business School but his application was rejected. After learning that Benjamin Graham was teaching at Columbia Business
14 | ISSUE 14 – MAY 2016 Master Investor is a registered trademark of Master Investor Limited | www.masterinvestor.co.uk