How Warren Buffett Changed the Way We Think of Investing

No one used 'value investing' as well or for as long as he did while helming Berkshire

- Michael J. de la Merced, Maureen Farrell and Lauren Hirsch

NEW YORK - As Mr Warren Buffett, 94, called an end to his historic run atop Berkshire Hathaway, Wall Street luminaries rushed to praise the man whose extraordinary investment career spanned more than 80 years (he bought his first shares when he was 11).

The famed investor delivered a more than 5,500,000 per cent return on Berkshire's stock as he turned a once-failing textile firm into the most valuable company in the world that is not either a tech giant or state oil producer. In the process, he became the rare investor who crossed over into public consciousness through his folksy wisdom and witticisms.

Mr Buffett's approach to investing is deceptively simple.

"Forget what you know about buying fair businesses at wonderful prices; instead, buy wonderful businesses at fair prices," he once wrote to Berkshire shareholders.

This method - known as value investing - had existed long before Mr Buffett began his career. But no one did it as well - or for as long - as he did.

Over the 60 years that Mr Buffett has controlled Berkshire Hathaway, he used value investing to turn a failing textile manufacturer into a US$1.1 trillion (S$1.4 trillion) conglomerate, corporate takeover machine and microcosm of the US economy.

One of America's largest railroads? Owned by Berkshire. The biggest shareholder in American Express and Coca-Cola? Berkshire, too.

Mr Buffett amassed a Midas-like personal fortune, valued at about US$168 billion, and along the way became the avuncular avatar of American-style capitalism who was called upon for help by both corporate executives and government officials in the 2008 financial crisis.

That unparalleled success earned him millions of admirers around the world. Tens of thousands of them were on hand at Berkshire's annual meeting in Omaha on May 3 when he declared he finally planned to step down as chief executive.