How Warren Buffet Accumulated £22b

**blast_investor** Mon Feb 13, 2006 10:44 pm

How Warren Buffet Accumulated £22b
How Buffett Accumulated £22b

By Maynard Paton (TMFMayn)
August 24, 2005

Warren Buffett celebrates his 75th birthday next week. The legendary investor is currently worth some $40b (roughly £22b) and is the second richest person in the world. While his friends and family struggle to think of a suitable present, mere mortals like you and me probably ought to reflect on how he accumulated so much money.

Year Buffett's
approximate
wealth (US$)
1930 0
1950 10,000
1955 100,000
1962 1,000,000
1965 5,000,000
1967 10,000,000
1969 25,000,000
1977 50,000,000
1979 100,000,000
1983 500,000,000
1985 1,000,000,000
1993 5,000,000,000
1995 10,000,000,000
1998 20,000,000,000
2003 40,000,000,000
Now 40,278,000,000

more, click below:

http://www.fool.co.uk/news/Comment/2005/c050824c.htm

**jinbai** Tue Feb 14, 2006 12:11 am

Annually performance is 31.8% in 55 years, really amazing!

**blast_investor** Tue Feb 14, 2006 12:31 am

31% was probably over-statement.

Warren Buffet earned performance bonus from his hedge fund in early years.

I believe in 1960 to 1970, Warren Buffet made about 30% per year return before fee.

Overall, I would say his stock market return was 20% to 25% return per year over 50 years.

This investment record was best in the world. Nobody else beat him.

jinbai wrote: Annually performance is 31.8% in 55 years, really amazing!

**grapes** Wed Feb 15, 2006 2:03 pm

I had the impression that in his early years, he managed other ppl's money. If at the end of the year, he lost money, he lost the same portion as his partners'. If he made money, his partner would give him some of their portion about a certain percentage , say 1% or 15%. I think that is how he really accelerated the speed of his personal return. Otherwise, even at a rate of 40%, he may not be so rich as he is now with his very small initial capitial. And that is why he need a good reputation.

When you said Joel Greenblatt made 40% annually for recent 20 years, do he also work the same way?

blast_investor wrote: 31% was probably over-statement.

Warren Buffet earned performance bonus from his hedge fund in early years.

I believe in 1960 to 1970, Warren Buffet made about 30% per year return before fee.

Overall, I would say his stock market return was 20% to 25% return per year over 50 years.

This investment record was best in the world. Nobody else beat him.

jinbai wrote: Annually performance is 31.8% in 55 years, really amazing!

**blast_investor** Wed Feb 15, 2006 2:37 pm

From what I read, Warren Buffet's old hedge fund charged pretty much standard hedge fund fee:

No fee if loss, for gains, 25% of profit from the gain.

Warren Buffet invests all of his own money in the hedge fund, essentially the hedge fund performance was his own wealth path.

In 1950 to 1970's for his hedge fund, the fund performance was 30% per year average before fee, and about 24% per year average after fees.

Joel Greenblatt did same thing as hedge fund manager. But Joel Greenblatt only managed other people's money for very short time. He said he returned all other people's money after a few years. His current hedge fund is only his own money, no other people's money.

grapes wrote: I had the impression that in his early years, he managed other ppl's money. If at the end of the year, he lost money, he lost the same portion as his partners'. If he made money, his partner would give him some of their portion about a certain percentage , say 1% or 15%. I think that is how he really accelerated the speed of his personal return. Otherwise, even at a rate of 40%, he may not be so rich as he is now with his very small initial capitial. And that is why he need a good reputation.

When you said Joel Greenblatt made 40% annually for recent 20 years, do he also work the same way?

blast_investor wrote: 31% was probably over-statement.

Warren Buffet earned performance bonus from his hedge fund in early years.

I believe in 1960 to 1970, Warren Buffet made about 30% per year return before fee.

Overall, I would say his stock market return was 20% to 25% return per year over 50 years.

This investment record was best in the world. Nobody else beat him.

jinbai wrote: Annually performance is 31.8% in 55 years, really amazing!

**blast_investor** Wed Feb 15, 2006 3:03 pm

20% plus annual return is extremely high number in the long run.

Most business can not make that much over the long run. The only business that can beat Buffet is Bill Gate from Microsoft.

**zdplus** Fri May 26, 2006 11:18 pm

Buffett mainly made money out of stock investment
or out of the acquired corps? It seems when berkshire
became pretty large, it's normal for it to acquire corps
.

blast_investor wrote: 20% plus annual return is extremely high number in the long run.

Most business can not make that much over the long run. The only business that can beat Buffet is Bill Gate from Microsoft.

**RT Wolf** Sat May 27, 2006 8:02 am

In some ways it's tough to call him solely an investor. He is also a businessman. His networth started going berserk after he bought berkshire and started buying larger and larger companies.

What I'm trying to say is that instead of his networth being solely caused by his profits on investments, a large part of his networth is simply the value of the companies that berkshire has acquired, which is normal considering everything. That doesn't make him any less amazing. Perhaps it makes him more, because it emphasizes how many different arenas he has mastery over.

**RT Wolf** Sat May 27, 2006 8:06 am

zdplus, he made his biggest and most important money (the early money) from stock investments. The partnership was all investment and that gave him enuogh money to acquire berkshire, which gave him the capital necessary to buy other companies and investments. I believe he said that two of his most important acquisitions were coca cola and geico.

Although, in a way, Buffett is very hands off, so you could say that when Berkshire acquires a company, he is simply buying all of the stock of the company and letting the people run the company themselves, like he would in the stock market.

Either way, he views investment and acquiring companies in more or less the same way--that he's buying a business.