Warren Buffett is one of the few investors who has achieved
truly cult-like status. Fondly known as the "Oracle of Omaha" -- a
nickname well-deserved for his uncanny investing savvy -- Buffett
is the world's third-richest person and is currently worth an
estimated $47 billion. Professionals and amateur investors alike
hang on his every word in hopes of gleaning just a touch of his
Buffett appears to be a folksy, predictable everyman. But make
no mistake: at his core, Buffett is a shrewd financial genius. His
everyman persona masks some of the most interesting and
unbelievable traits that make Buffett who he is -- including these
10 facts you won't believe are true:
1. Buffett made one of his most successful investments
because of salad dressing.
Buffett owes one of his first big killings to a Wall Street
scandal almost no one remembers -- the fascinating story of Tino De
##In 1963, De Angelis's company, Allied Crude Vegetable Oil, had
a neat little scheme going. De Angelis figured out that instead of
buying and selling ships filled with vegetable oil, he could load
the ships with water and just a little oil floating on top. De
Angelis used the phantom oil as
for loans, borrowing in excess of $175 million (over $1.2 billion
in today's dollars) against worthless tanks full of water. He was
able to hoodwink his lenders for quite some time.
And who were these gullible saps?
None other than
American Express (
. When AmEx's losses from the "
salad oil scandal
" caused the stock to lose half its value, a cagey investor from
Omaha took notice and loaded up on $13 million worth of AXP stock.
Today, Buffett's total investment in the company is worth over $7.8
billion (he's made subsequent stock purchases) and it's his
third-largest holding behind
Wells Fargo (
2. Buffett is giving almost all of his money to charity,
not his children.
In June 2006, Buffett announced his plan to give away 85% of his
wealth to charity. He has long said his intention is to "do good"
rather than hoard his money for himself and his family.
"There's no reason why future generations of little Buffetts
should command society just because they came from the right womb.
Where's the justice in that?" he said.
50 Warren Buffett Quotes to Inspire Your
Buffett has pledged to gradually give billions in
Berkshire Hathaway (NYSE: BRK.B)
stock to five foundations. Each year, Buffett will donate a
pre-determined number of
(with the number of shares declining each year, though the idea is
that they will increase in value by enough to maintain a somewhat
steady annual contribution). Over 80% of the shares will go to the
Bill & Melinda Gates Foundation. The other 20% of the shares
will be divided among foundations headed by Buffett's three
children, Susan, Howard, and Peter, as well as to the foundation
set up to honor his late wife, the Susan Thompson Buffett
You might be surprised that his children fully support his
decision. "The truth is it would be insane to leave us that much
money," said Susan Buffett. "It just would be."
3. Buffett had a unique love life.
Buffett has had a pretty tumultuous love life. He was married to
his first wife, Susie, for 52 years, from 1952 until her death from
oral cancer in 2004. But Buffett worked voraciously and never
really put much time into his home life. To compound his marital
problems, in the 1970s he became romantically involved with
Katharine Graham, publisher of
The Washington Post
(see below). Even though Susie was horrified and humiliated,
she eventually wrote to Graham to give her permission to date her
In 1978, after their children were grown, Susie moved to San
Francisco and lived there, without her husband, for 27 years.
Because she knew he needed someone to take care of him, Susie
introduced her husband to Astrid Menks, a restaurant hostess in
Omaha. Menks lived with Buffett for 27 years until they were
married in 2004.
Though they were physically separated, the Buffetts never
divorced and they often talked on the phone and attended functions
together. Buffett would later reflect that letting Susie leave was
the worst mistake of his life. He was by her side when she passed
away from oral cancer in 2004.
has a lifelong relationship with the Washington
Buffett started his lifelong relationship with
The Washington Post (
in high school. As a young paperboy, Buffett personally delivered
nearly 500,000 copies (on bicycle) of the newspaper to his
neighbors in Omaha.
As Buffett grew older, his admiration for the Washington
newspaper went beyond the product itself. At age 46, he became
romantically involved with the Post's 59-year-old publisher,
Katharine Graham. Graham introduced Buffett to New York society and
Buffett tutored Graham in the ways of business. Buffett and Bill
Gates served as pallbearers at Graham's funeral in 2001.
In 1974, the Oracle of Omaha joined the Washington Post's board
of directors, where
he would remain for 37 years
. He recently stepped down as a board director in January, but he
continues to have an unabated "love for the product, the company
and the management." Berkshire Hathaway is the newspaper's largest
shareholder with a commanding 24% stake in the company.
5. Buffett's father was the Ron Paul of his day.
Howard Buffett was a four-term
Republican member of Congress and a staunch
, like Rep. Ron Paul today.
The elder Buffett fought against FDR's social programs and
warned that expansion of government eroded individual liberty. Much
like Paul, he was a strict constitutionalist, and believed that
"devious government intervention in the economic affairs of the
nation… [were] not contemplated by the men who wrote the
And while Warren Buffett may not advocate the
, his father was a strong supporter of it, just like Rep. Paul. In
newspaper article from May 1948
, Rep. Buffett wrote, "In a free country the monetary unit rests
upon a fixed foundation of gold… independent of the ruling
politicians… unless you are willing to surrender your children and
your country to galloping
, war and slavery, then this cause demands your support… we must
win the battle to restore honest money."
6. Buffett's views on taxes do not extend to his
Buffett may have told the world he ought to pay more in taxes,
but only in regard to his personal wealth.
Berkshire Hathaway is an extremely tax efficient company: The
billions he famously invested in
Bank of America (
Goldman Sachs (GS)
were purposely not structured as "loans," but instead involved the
creation of special shares just for Buffett. Why? Because a
corporation like Berkshire can exclude 70% of income it receives as
dividends. Only 30% is taxable.
Buffett has always been obsessed with tax efficiency. When he
was a just 13 he filed his first tax return, taking care to claim a
for his bike because he used it to deliver newspapers.
recently hired a man who paid millions -- twice --
just to have lunch with him.
Think $5.25 million is a steep price to pay to have lunch with a
Ted Weschler, managing partner at
Peninsula Capital Advisors, has twice placed the winning bid for a
charity lunch with Buffett. Proceeds go to Glide, a San
Francisco-based church and mission.
However, if you knew those lunches lead to a dream job at
Berkshire Hathaway, you might change your tune. Buffett announced
in September 2011 that Weschler would soon join the company to run
a portion of its investments.
plays bridge online at least four times a
While poker is a popular game among the rich and famous,
Buffett's obsession is bridge. He has competed in online bridge
tournaments for years alongside fellow billionaire Bill Gates. In
case you want to try your hand at beating them, Gates plays online
under the name "Chalengr" and Buffett goes under the name
##In fact, Buffett's good friend and bridge partner, Sharon
Osberg, was the person who first taught Buffett to use a computer
(even Bill Gates had been unsuccessful in that task). Buffett plays
bridge online with Osberg at least four times a week. Osberg, a
two-time World Champion bridge player and former executive for
Wells Fargo, has been playing bridge with him for more than 20
Buffett, Gates and Osberg have also helped fund a program to
teach bridge in junior high schools. Buffett believes
bridge can help teach kids
math skills, logical thinking and how to work well with
disowned his granddaughter.
After his son Peter's adopted daughter Nicole appeared on a
documentary about the wealth disparity in America called The One
Percent, Buffett effectively disowned his granddaughter. In a
comment about how Buffett would respond to her appearance in the
film, Nicole said, "I definitely fear judgment. Money is the spoke
in my grandfather's wheel of life."
Nicole's fears were validated. After the documentary appearance,
Buffett wrote her a searing letter that said, "I have not
emotionally or legally adopted you as a grandchild, nor have the
rest of my family adopted you as a niece or a cousin."
What was his reasoning for the seemingly harsh punishment? Her
"perceived sense of entitlement and self-appointed
role as family spokesperson"
in the documentary upset Buffett beyond reproach.
owns relatively few stocks -- but those he owns, he
tries to hold "forever."
Some investors think Berkshire Hathaway is a collection of
highly diversified stocks, almost like a
. But Berkshire is no mutual fund. Buffett's goal is plain and
simple: find undervalued companies, regardless of their industry,
and hold them forever.
[Warren Buffett admirer and
co-founder, Paul Tracy, has an affinity for "forever" stocks. If
you haven't already, I encourage you to take some time and
watch a presentation
he recently put together called
"The 10 Best Stocks to Hold Forever."
While most ETFs and mutual funds own hundreds or thousands of
different stocks, Berkshire Hathaway's portfolio is remarkably
simple. It consists of stock from roughly 30 companies, including
Coca-Cola, Wells Fargo, American Express, Procter & Gamble,
Kraft, Johnson & Johnson, ConocoPhillips and
Buffett has always preferred to invest in companies and
industries he understands well. After all, if you can't understand
how a business makes money how can you possibly understand its true
value? And luckily for us, it's an approach any investor can master
(click here to read
8 Signs You're Investing Like Buffett