Which alternative investments could generate enough income? Which alternative investment management strategy to choose? Many new investors strive to get the right answer to these questions. Definitely, it is a huge challenge. However, there are many success stories in the world where dreams come true. First, we should define what is success. Is it related to recognition? Yes, of course. Is it related to rewards or compensations? Mostly, yes. And definitely, it is the opposite of failure. Do these terms help to characterize a successful trader or investor? For the most part, it does. If trader’s or investor’s alternative investment management strategies work perfectly, he will fulfill all these characterizations.
However, there are only a few personalities all over the world known for their spectacular achievements in financial markets. Warren Buffett is one of the most successful and richest investor ever lived in the world. In 1941, at the age of 11, Warren bought his first 6 shares of Cities service at a price of $38 per share. At that time it was all the capital he had. As the price of stocks increased to $40, he immediately sold his shares and realized $12 in profits. However, after a few years stock price increased impressively and reached $202. Later Buffet emphasized this case as good lesson in patience in investing.
At the age of 15, he buys a 40 acre farmland in Omaha by using his money he earned when he was a paperboy. After 2 years Warren Buffet and his friend Donald Dandy started a company. They bought a used pinball machine for $25 and situated next to the barbershop, which earned $50 every week. In next few months Warren and Donald acquired two more machines and sold their business for $1200 later.
In 1956, Buffett, seven family members and friends established Buffett Associates Ltd with a total investment of $105 thousands. 3 years after, he doubled the capital of the partnership mostly by buying undervalued companies. At age 31, Warren was the owner of seven other partnerships, and made his first million. In 1961, he made his first million dollar investment in Dempster (a windmill manufacturing company), and sold it 3 times more expensive after a few years. Until 1968, Buffett Associates Ltd invested into several companies: Berkshire Hathaway, Walt Disney, American Express etc, and increased the value of the partnership to $104 million. At the age of 49, Warren’s personal net worth is about $100 million. In 1990, Warren Buffett became a paper billionaire, when Berkshire Hathaway started selling shares at a closing price of $7175. In 2008, Forbes ranked Warren as the wealthiest man in the world, with total net worth of 44 billion dollars. All alternative investment management strategies he made through his life, gained him the nickname, “Oracle of Omaha.” In 2010, Warren signed a promise called the “Gates-Buffett Giving Pledge”, where he promised to donate more than 99% of his wealth to the charity.