He used it to become the sole owner of the Irvine Company and bank 12 billion

He used it to become the sole owner of the irvine

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is #26. He used it to become the sole owner of the Irvine Company and bank $12 billion. The Irvine Company is one of the largest construction companies in California and the developer of about a fifth of Orange County. The list of billionaires who used this strategy to become mega-wealthy goes on and on but wouldn’t be complete without mentioning that the world’s second wealthiest man, Warren Buffett (worth $37 billion), the world’s best investor, used this strategy of investing to build his immense fortune and to increase his ownership and compounded return in companies like American Express, Washington Post, GEICO, and Coca- Cola. This strategy is also the basis of thousands of little fortunes, including mine. In fact, as any of the billionaires I mentioned above would agree, it’s much easier to use the strategy if you are a small investor. Being a big investor is actually a huge disadvantage in using this strategy. Mr. Buffett once said, “Anyone who says that size does not hurt investment performance is selling. The highest rates of return I’ve ever achieved were in the 1950s. I killed the Dow. You ought to see the numbers. But I was investing peanuts then. It’s a huge structural advantage not to have a lot of money.” * I used this strategy to build my wealth by buying shares of bio-science, software, and other private companies. And soon, if you pay attention and are willing to do a bit of fun work, you’ll discover that this incredible strategy can be the basis of your fortune, too. STOCKPILING
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I call this amazing strategy “stockpiling” … as in “stash,” “accumulate,” and “collect.” It means exactly as it sounds—stockpiling, as in piling up stocks. Not just any stock at any price, though. The essence of stockpiling is to buy stock in a business you’d be excited to own all of, then hope the price goes down so you can “stash,” “accumulate,” and “collect” as much as you can afford at as low a price as possible. Sounds strange, I know. But again, all of the billionaires I listed above and many more on Forbes’s World’s Billionaires list are stockpilers of businesses. (Note: This list might have changed by the time you read this but not the stories behind these guys’ wealth-building strategies.) Buy a Business, Not a Stock “Buy a Business, Not a Stock” was a chapter title in my first book. It’s such a key way of thinking that I can’t reiterate it enough: You must stop thinking that stock investing is any different from buying a business. When you buy a business you’re buying shares of the business. If you buy some percentage of the total shares, you become a part owner. Buy all the shares and you own the whole business. There is no difference between that process and buying public stock in a business . As long as you treat owning shares of public stocks as different from owning a piece of a business, you will fail to understand and execute the stockpiling strategy. A typical stock investor is unhappy when the price of his stock goes down, because he has no understanding of the true value of the business that stock represents. But that’s because typical stock investors
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  • Spring '20
  • Warren Buffett

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