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Warren Buffett Childhood Story [Part 7] The 12-Year-Old Prodigy in the Stock Exchange

Updated: Aug 22, 2023


Warren Buffett Childhood Story

Last time, we journeyed back to when a young Warren Buffett, barely out of his toddler years, was already making waves in the business world. Picture this: a 6-year-old, eyes gleaming with curiosity, diving into finance books and sealing deals like it's child's play. Well, for Warren, it kind of was! I bet you're wondering, "What on earth was he up to when he hit 12?"

Hold onto your hats! Today, we're zooming in on 12-year-old Buffett’s escapades, ready to unearth secrets from the boy wonder himself.

At Buffett Online School, we believe in investing in great companies you understand, and utilizing Free Investing Resources to kickstart your investment journey is one of the best ways to learn.

Warren Buffett's Childhood Story


You remember our tale of young Warren, right? From ages 6 to 10, not just content with playing hopscotch or climbing trees. He had grander plans. Aspirations of diving into the glamorous realm of stockbroking filled his dreams. At 8, while most kids were probably trading cards, Warren was neck-deep in financial literature, especially those that delved into stocks and investments. Come 9, and he's out there, not just playing but conducting market surveys. And by 10? Imagine him, side by side with his dad, Howard, meticulously crafting bond and stock charts. For Warren, numbers weren't just digits; they told stories of profit and loss, ventures and adventures. This was Warren Buffett's childhood story; he was so smitten that he'd scribble stock prices wherever he could, turning mundane math into a masterpiece of its own!


Warren Buffett Buying His First Stock

By the time he was 12, in April 1942, young Buffett had bought his first stock. He used the money he saved from working to buy three shares of "City Service" for himself and his sister at $38 each, his entire savings.

Warren Buffett Childhood Story Cities Service Company

However, investing isn't always smooth sailing. The price of "City Service" soon dropped to $27. But young Buffett patiently waited instead of panicking over a 30% loss. When the price rose to over $40, he sold his shares. After deducting commission fees, he earned a net profit of $5 from his first stock investment. Interestingly, a few years later, the "Cities Service" price soared to $200.


This solidifies a key principle in Buffett's investment philosophy: patience is vital.


Warren Buffett's Unique Vision

In addition to patience, Buffett had a unique vision. Many years later, when Buffett became a stock market guru and was interviewed by Forbes magazine, he said, "I seemed to see a bright light in the dark, and I've been interested in stocks since I was young. My father was a stockbroker, so that I could learn from him. I collected data for him, and he taught me how to read market trends and analyze securities using Benjamin Graham's methods. This grounding and learning experience was critical in my life."


Not only was Buffett interested in the stock market, but he was also eager to try anything related to numbers and making money. For instance, he and his friend Bob Russell started a horse racing "prediction journal" called "Real Winners Chosen by the Track Shack Boys". They took it seriously, printing numerous promotional flyers and selling them everywhere at the Aksarben racetrack. Friends were amazed at Buffett's memory, as he could recall the population of American cities and even statistics related to baseball games and horse racing. This earned him the nickname "Electronic Camera," as he could memorize numbers effortlessly after seeing them.

Buffett Family in World War II and Relocating

At the end of 1941, the US decided to join World War II, bringing significant changes to Buffett's family. At that time, the US President was Franklin D. Roosevelt, leading the Democratic Party with strong dominance. In Omaha, the Republican Party needed someone to counter the Democrats, and since Howard had criticized the President's new economic policies, he was chosen to run for the House of Representatives and unexpectedly won.

By the end of 1942, Howard moved his family to Washington, D.C. This relocation was challenging for young Buffett, who grew up in Omaha and studied at Deal Junior High School. He struggled to adjust and even planned to run away with a friend. However, he eventually returned home, and, facing unhappiness, he resumed working as a paperboy.

At 12, young Buffett profited from his first stock investment and applied his investment skills to horse racing and other industries. But he was still a child. After relocating and facing immense discomfort and pain, how would Buffett utilize what seemed like a low-end job with no growth opportunities to craft unique business models?

In the next article, we'll delve into Buffett's lifelong connection with Washington, which promises to be riveting!

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Warren Buffett Childhood Story

Remember, you have the choice to cultivate the right investing mindset and unlock your potential to build wealth through intelligent investing. Together, we can create a network of educated investors who make informed decisions and contribute to their financial well-being!


In the meantime, feel free to check out some of our blog posts to continue your learning. You can also join our BOS Telegram channel for more investing insights.

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