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Warren Buffett is one of the wealthiest people on the planet.
A big part of how he got there was through taking advantage of long-term investing.
Today - Warren - Buffett - Number - Bloomberg
Today, Warren Buffett is number three on Bloomberg’s list of the world’s wealthiest people with a fortune of $83.4 billion.
The story of how Buffett got to where he is today is fascinating and is one of the best lessons in the power of compounding.
Age - Buffett - Age - Fortune - Years
At the age of 21, Buffett was worth just $20,000, but by the age of 30, his fortune had hit $1 million. By 39 he was worth $25 million, and ten years later his wealth had grown to several hundred million.
What most people don't realize is that most of Buffett's fortune was created after 50th birthday. At 52 he was worth $620 million, a figure that exploded to $17 billion by age 66. The snowball has only accelerated since then. In fact between his 83rd and 87th birthdays, Buffett's wealth has grown by around the same amount as it did during the first 66 years of his life.
Kevin - Martelli - Martek - Partners - Hedge
Kevin Martelli of Martek Partners, a Swiss-based hedge fund, tried to outline why Buffett has been so successful in his career in a recent presentation titled, A Perspective on Value Investing.
Mr. Martelli compares Buffett's investment approach to that of a private equity fund, which follows a similar strategy to Berkshire -- finding attractive businesses to buy to generate market-beating returns.
Differences - Buffett - Approach - Equity
That being said, there are several key differences between Buffett's approach and that of private equity.
For example, private equity funds tend to conduct rigorous due diligence and detailed businesses plans/spreadsheets. Buffett meanwhile generally focuses on management's track record, and research is limited to annual reports.
Equity - Use - Leverage - Something - Buffett
Also, private equity is known to make heavy use of leverage, something Buffett tries to avoid and private equity managers tend to have...
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