# The Oracle of Omaha: How Warren Buffett Built His Fortune

## Who Is the Oracle of Omaha?

The Oracle of Omaha is a nickname for [Warren Buffett](https://www.investopedia.com/articles/01/071801.asp), arguably one of the greatest investors of all time. Buffett is the chair and CEO of [Berkshire Hathaway](https://www.investopedia.com/terms/b/berkshire-hathaway.asp), a company that he became the controlling shareholder of in the mid-1960s.

He is called the Oracle of Omaha because the investment community very closely follows his investment picks and comments on the market, and he lives and works in Omaha, Nebraska.

### Key Takeaways

*   Billionaire Warren Buffett (who lives and works in Omaha, Nebraska) is known as the Oracle of Omaha, a nickname he earned as one of the world's most successful and closely followed investors.
*   The Oracle of Omaha built his fortune as a value investor, buying undervalued stocks with sound fundamentals for a discounted price, then holding them as long-term investments.
*   Buffett is chair and CEO of Berkshire Hathaway, which owns over 60 companies, including GEICO Insurance, Duracell, and See's Candies.

![Warren Buffett](https://www.investopedia.com/thmb/YAqIWa3H4DLZEt0G8h8TDRnvyz0=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/buffetts-road-to-riches-503bf79a9c444047840ea156fd648143.png)

*— Alison Czinkota / Investopedia*

## Wealth and Net Worth

Warren Buffett is one of the richest men in the world. He built his fortune using a simple yet powerful [investment strategy](https://www.investopedia.com/terms/i/investmentstrategy.asp). His investments are long-term positions, accomplished by the purchase of fundamentally sound companies that are trading well below their [intrinsic value](https://www.investopedia.com/terms/i/intrinsicvalue.asp). Some of his most publicized investments include Coca-Cola, Gillette, and Dairy Queen. As of May 2025, the Oracle of Omaha is estimated to have a net worth of over $156 billion.

> **Fast Fact**
>
> In 2006, Warren Buffett pledged to give away over 99% of his fortune.

## The Oracle of Omaha’s Early Years

Warren Buffett was born in Omaha, Nebraska, in 1930 to Howard and Leila Buffett. The Oracle of Omaha’s father was a [stockbroker](https://www.investopedia.com/terms/s/stockbroker.asp), which gave him an early introduction to the stock market. Buffett purchased his first stock at age 11; he bought three [shares](https://www.investopedia.com/terms/s/shares.asp) of Cities Service Preferred for $38 per share and sold them at $40 per share. After he sold the stock, it advanced to $200. On reflection, Buffett believes this taught him the virtue of patience.

Buffett demonstrated business prowess from his early teens, running a paper delivery business and completing his own tax returns. The Oracle of Omaha started a pinball machine business while in high school and went on to sell the business for $1,300. He graduated from the University of Nebraska with a business degree.

> **Important**
>
> On May 1, 2021, the vice chair of Berkshire Hathaway, Charlie Munger, unofficially announced that Warren Buffett would be succeeded as CEO by Greg Abel when the 91-year-old Buffett eventually steps down. Abel is CEO of Berkshire Hathaway Energy and vice chair in charge of noninsurance operations.

## The Oracle of Omaha’s Investment Philosophy

Warren Buffett is a [value investor](https://www.investopedia.com/terms/v/valueinvesting.asp) and a follower of the Benjamin Graham school of value investing. Columbia Business School professors, [Benjamin Graham](https://www.investopedia.com/terms/b/bengraham.asp) and David Dodd, developed their investing concepts, which in 1949 were published in Graham's book, _"_The Intelligent Investor".

As a value investor, Buffett looks to purchase companies that are below their intrinsic worth but have the potential to make money. Buffett attempts to do this by buying companies that are out of favor with the market. He values a company by assessing its fundamentals, such as [return on equity](https://www.investopedia.com/terms/r/returnonequity.asp) and profitability.

For example, Buffett likes a company to have a low debt/equity ratio. He wants earnings growth generated from [shareholders' equity](https://www.investopedia.com/terms/s/stockholdersequity.asp) as opposed to debt. The Oracle of Omaha’s quote, “It’s far better to buy a [wonderful company at a fair price](https://www.investopedia.com/warren-buffett-reveals-the-1-way-to-protect-your-money-from-inflation-11788838) than a fair company at a wonderful price,” sums up his investment philosophy.

## Investing in Coca-Cola

Warren Buffett’s investment in Coca-Cola is one of the most celebrated and lucrative stock picks in financial history, embodying his long-term, value-driven investment philosophy.

Buffett began buying Coca-Cola shares in 1988, in the wake of the 1987 stock market crash. Over several years, he invested approximately $1.3 billion, acquiring about 400 million shares, which at the time represented around 6–7% of the company. Buffett was drawn to Coca-Cola’s powerful global brand, its “economic moat,” and its consistent ability to generate stable cash flows.

As of 2025, the original $1.3 billion investment is worth nearly $25 billion. Keep in mind that in 2025, Berkshire Hathaway is set to receive $816 million in dividends from its 400 million Coca-Cola shares, which pay $2.04 per share annually.

## Investing In Apple

Warren Buffett’s investment in Apple marked a notable shift in his traditional approach, as he had long been hesitant to invest in technology companies. Berkshire Hathaway began buying Apple stock in 2016. However, Buffett quickly took a personal interest in the company and dramatically increased the stake, viewing Apple not as a typical tech stock but as a consumer product company with strong brand loyalty and recurring revenue. It's estimated that as of May 2025, Berkshire Hathaway holds 300 million shares of Apple.

## Who Is Warren Buffett?

Warren Buffett is an American investor, business tycoon, and philanthropist, best known as the chairman and CEO of Berkshire Hathaway. He is one of the most successful investors in history.

## How Did Warren Buffett Make His Money?

Buffett made his fortune through smart investments and ownership of businesses, primarily through his company, Berkshire Hathaway, which owns or holds stakes in companies like Apple, Coca-Cola, and Geico.

## What Is Warren Buffett’s Investment Strategy?

Buffett follows a value investing strategy, focusing on buying quality companies at fair prices and holding them long term. He emphasizes fundamentals, management quality, and economic moats.

## The Bottom Line

Warren Buffett is a legendary American investor and the longtime CEO of Berkshire Hathaway, known for his [disciplined value investing approach](https://www.investopedia.com/warren-buffett-charlie-munger-simple-investments-11755043) and long-term strategy. Despite his immense wealth, he lives modestly and has pledged to give away the majority of his fortune through philanthropic efforts.

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