KEY POINTS:
Warren Buffett, the newly anointed "world's richest man", claims he has never been to bed with an ugly woman, but "I've sure woken up with a few."
In truth, Buffett was quoting a song at the time and, as usual, he was talking about his investments, not the
women in his life.
Even though Buffett only made the number one spot in the annual Forbes Rich List last week, as his personal fortune swelled by US$10 billion ($12.6 billion) in a year to more than US$62 billion, he has dwelt among the world's richest for decades.
What is remarkable about Buffett and his wealth is his steadfastness in its accumulation. He is a plodding tortoise in a world of racing hares, whose slow and steady tactics have beaten every boom and bust Wall Street has endured in 30 years.
In 1979, aged 49, he first appeared on Forbes's directory of the moneyed, with a personal wealth of $620 million. It is typical of Buffett that in his journey to the top, his fortune has increased exactly 100 times since then. He likes to keep his calculations simple enough to do on the back of an envelope.
He has made a lot of money by making a lot of very sound investments. He is an entirely self-made man, about whom nobody seems to have a bad word to say. It's a bit sickening, really.
The middle child of three, Buffett was born on August 30, 1930. His father, Howard, came from a family of grocers but set himself up in business as a small-town stockbroker in Nebraska.
At the age of 11, Warren was already out to make a profit, selling fizzy drinks door-to-door with a friend. The pair developed an arithmetical system for picking winning race horses and set up a tip sheet called Stable Boy Selections with their drinks profits. When Buffett Sr found out their little scheme was shut down.
Warren filed his first tax return aged just 13 in 1943, listing his bicycle - used on the drinks delivery round - as a deductible expense.
The family moved to Washington, DC, a few years later, as Buffett's father was elected to the US Congress. Like a lot of kids his age, Warren donned the customary newsboy cap and took to hawking papers in the wealthy Washington suburbs. Buffett added magazines and comics to his bag on those days that he collected the money so he could offer something to the servants or the lady of the house.
He didn't fritter away his earnings but invested what he made in pinball machines that he leased to local barbers' shops. Most people in DC took the Washington Post, still the American capital's favoured journal, and Buffett grew to love the paper. Even though he was only one of hundreds of delivery boys, he managed to strike up relationships with the paper's management and, many years later, its owner Katharine Graham.
In 1973, Buffett bought a large shareholding in the Washington Post, which he still holds today, as one of the central investments in his Berkshire Hathaway holding company. It has increased in value more than 100 times and is typical of a Buffett tip.
"The Washington Post is the stock he has held the longest," says Roger Lowenstein, author of Buffett: The Making of an American Capitalist. "And really it typifies his constancy. The key to understanding him as a man is that he is so constant in everything he does."
Buffett was written off in the 90s for missing out on the dotcom boom. He didn't touch any of the thousands of fly-by-night internet companies that managed to convince investors to part with billions of dollars before promptly going bust. That anyone can class that as "missing out" is beyond Buffett's comprehension.
He had seen it all before. He came of age in the "go-go" 60s, as he likes to call the era. While all around him were investing in the latest hi-tech gadgets and faddish corporations, Buffett was following the teachings of Benjamin Graham, the economist and investor who became his tutor and some would say guru, at Columbia Business School in New York.
Graham and his colleague David Dodd were champions of a method known as "value investing". Simply put, it relies on studying a company's fundamental underlying value and then deciding if that value is reflected in its share price. This relatively simple method is how Buffett managed to make US$10 billion in a year when Wall Street lost hundreds of billions in the sub-prime crisis.
As consistent as Buffett is in his professional life, so, too, is he in many aspects of his personal life. He does not live the life of a billionaire.
He bought his current home in humble Omaha, Nebraska, for $31,000 in 1958. It is worth about $700,000 today. He drives around in a modest Cadillac, he wears jumpers and rumpled suits, he doesn't own a mobile phone and doesn't like computers.
He drinks Cherry Coke and likes to eat a T-bone steak, cooked rare, with a double order of hash browns from Gorat's Steak House down the street from his house. His followers are a cultish bunch who celebrate his folksy charm and flock to his annual meeting in Omaha to enjoy Dairy Queen ice cream and Cherry Cokes galore.
Buffett's private life veers sharply from the conventional and middle of the road, however. He and his first wife Susan were married in 1952 and had three children together. But by the late 70s, his wife was eager to pursue her own interests in San Francisco. She owned 3 per cent of Berkshire Hathaway's stock and used her money and influence to promote civil rights and abortion rights campaigns. She was also an avid singer and a friend of Neil Sedaka, who encouraged her to pursue her cabaret and recording career in California.
When she left Warren in 1977, they decided to remain married but Susan worried about leaving her somewhat eccentric husband and so went out to recruit a "companion" for him.
One night in 1977, while singing onstage at an Omaha restaurant, Susan met Astrid Menks, a young Latvian waitress with whom she instantly struck up a friendship. From that day, the three formed a triangular relationship - Susan would accompany Warren to functions in California and New York while Astrid was always waiting for him at home. They would send cards at Christmas from "Warren, Susan and Astrid".
Susan died suddenly of a stroke in 2004 and just two years later, on his 76th birthday, Menks and Buffett tied the knot in a small, private ceremony.
Buffett had long planned to leave his entire fortune to Susan, as he truly believed she would outlive him. She was supposed to give everything away to charity, something she was very good at. Much better than Buffett, at any rate.
Some used to interpret Buffett's unwillingness to give his money away as meanness. Friends prefer to say that he does not like the publicity that comes with big charity.
"He has a deep mistrust of anyone who has an interest in his money," Lowenstein says. "He used to joke about the kind of people who say things like, 'With my ideas and your money, we could work miracles'."
Buffett's supposed meanness was underscored in 2006 when he disowned his adopted granddaughter Nicole for speaking out about his refusal to give her money in a documentary about the lives of the rich and their offspring. The spat was public and ugly, and exposed a rare glimpse of Buffett smarting from an event he perceived as a betrayal.
His children and grandchildren were all well cared for until leaving college, at which point he gave them each $10,000 and told them to get on with it. Nicole is the only one to have complained.
But the accusations of stinginess stopped when, in June 2006, Buffett gave 10 million Berkshire Hathaway shares (worth some $30.7 billion at the time) to the Bill and Melinda Gates Foundation, the largest charitable donation in history. Over the years, his entire wealth will be disbursed in this way, but none of it in his name.
Handing over the financial product of his life's work was a big step for Buffett, who has lined up a number of potential successors inside Berkshire Hathaway to run the company after he dies. Susan's unexpected death is said to have finally brought home a sense of his own mortality.
In his most recent letter to shareholders, he revealed as much with another of his trademark bad jokes.
"I've reluctantly discarded the notion of my continuing to manage the portfolio after my death," he wrote, "abandoning my hope to give new meaning to the term 'thinking outside the box'."
- OBSERVER
* AN AMERICAN CAPITALIST
Born Warren Edward Buffett, August 30, 1930, in Omaha, Nebraska. Married Susan Thompson in 1952. Began an open relationship with Astrid Menks, a Latvian waitress, in 1977 after separating from Susan. Married Menks in 2006, two years after Susan's death.
Best of times: Becoming the richest man in the world as a champion of "value investing" - finding solid, household-name investments that make money in good times as well as bad.
Worst of times: The death of Susan brought home a sense of his own mortality. It did, however, lead to his decision to give US$30 billion worth of shares to the Bill and Melinda Gates Foundation, the largest charitable gift in history.
What he says: "The line separating investment and speculation, which is never bright and clear, becomes blurred still further when most market participants have recently enjoyed triumphs. Nothing sedates rationality like large doses of effortless money."
What others say: "If he doesn't understand something, he doesn't go there. I believe that is why, even though Bill Gates is on the board of Berkshire Hathaway, is a close friend and Buffett has given all his money to the Gates Foundation, he still has never bought a share of Microsoft." -
- Roger Lowenstein, author of Buffett: The Making of an American Capitalist