Today, Warren Buffett is an investing icon. He laid the foundation for his successful career on the stock market in his childhood – but back then he had completely different intentions.
• Warren Buffett was active on the stock market early on
• Rebellion against living conditions causes him to short AT&T stock
• Various attempts at telecommunications investments
Star investor Warren Buffett, also known as the “Oracle of Omaha,” is 95 years old today. But even star investors started small, as a look at the 2017 HBO documentary “Becoming Warren Buffett” shows.
Betting against AT&T stock
One of Warren Buffett’s early business ideas is well known: As a six-year-old, he bought Coca-Cola bottles in six-packs for 25 cents and sold the individual bottles directly to doorsteps for a price of 5 cents per bottle. He pocketed the 20 percent profit. He later worked as a newspaper delivery boy, sold golf balls and finally acquired his first stock market shares at the age of eleven: he bought three shares in the utility company Cities Service.
The experience he gained with his first stock market transaction came in handy about a year later, because instead of purely trading in stocks, Buffett, as a twelve to thirteen-year-old, even worked in an industry that he no longer has anything to do with today, namely as a short seller.
“I just lost interest in school. I enjoyed tormenting my teachers,” he said in the HBO documentary about his life. “For example, at the time, AT&T was the stock that all the teachers owned for retirement. So I decided that it would drive my teachers a little crazy if I shorted the stock. … So I shorted 10 shares of AT&T and brought the confirmation to show the teachers that I shorted the stock. They thought I was a big pain in the ass, but thought I knew a lot about stocks,” Buffett recalls.
Teenage life in upheaval
The reason for short selling AT&T shares, i.e. a bet on the stock’s price decline, apparently had little to do with the fact that Buffett wanted to explore all the possibilities of the stock market himself. Instead, he attributes this step to his personal situation at the time, which was in transition at the time: “When I was about 12 or 13 years old, we, my family, moved to Washington. I was angry, I was having fun in Omaha. And I lost all my friends, and now I moved to a city where they were all strange, so I was very, very unhappy,” says Buffett. He lost interest in school and rebelled against his teachers at the time.
AT&T shares later end up in Berkshire Hathaway’s portfolio
While the teenager Buffett had sold AT&T shares short, the later company boss Buffett approached this investment completely differently. As CEO of Berkshire Hathaway, the investor bought shares in the North American telecommunications group in 2015, which at the time apparently met the criteria for his value strategy. Berkshire acquired 59.3 million shares at the time, but sold all of them in the next two quarters.
Buffett tried his hand at an AT&T competitor several times and bought Verizon shares, for the first time in 2014 and most recently in 2021. In the intervening years, however, he repeatedly threw part of his share package back onto the market, and in 2022 his company finally exited completely.
Claudia Stephan, editorial team at finanzen.net
– On our own behalf –
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