In 45 years of marriage, Donald and Mildred Othmer built a quiet and unpretentious life. Like so many of their day they practically blended in with the woodwork.
Donald was a chemical engineering professor, while his wife was a former teacher and English major from the University of Nebraska.
Outside of work, the two were as ordinary as it gets, never ones to be confused with the flashy types.
Friends often remarked that they “lived comfortably but not ostentatiously, and rarely talked about their money.” At times they even took in tenants, since they had the room to spare.
So needless to say, when both of them finally passed away in their nineties, it surprised everyone who knew them that they had been keeping company among the super-rich all this time.
Behind the ordinary actually lay the extraordinary: The Othmers left behind a fortune worth $800 million.
As it turns out, the unassuming couple from Brooklyn knew this young fellow named Warren Buffett— and in the early 1960s, they had entrusted him with $25,000 each to invest.
The rest, I guess you could say, is history…
Over the years, they simply sat back and watched their money grow and grow and grow.
“They just rode along,” Buffett said. “The investment never changed their lives.”
As for that nice young upstart, he still lives in the same house he bought three decades ago for $31,500, and not long ago, drove a Lincoln Towncar with a license plate that read “THRIFTY”.
But buried beneath that cuddly, down-home facade is something else entirely: a market shark if there ever was one.
That’s why when the news breaks that Warren has been buying stocks people take notice.
The good news for investors is that Buffett has been buying stocks of late—not selling them. As it turns out, in the worst quarter for stocks since 2009 Buffett has gone on a virtual spending spree.
From Bloomberg by Andrew Frye entitled: Buffett Spends $23.9 Billion on Stock Purchases.
“Warren Buffett’s Berkshire Hathaway Inc. (BRK/A) invested $23.9 billion in the third quarter, the most in at least 15 years, as he accelerated stock purchases and broadened the portfolio beyond consumer and financial-company holdings.
Berkshire bought almost $7 billion of equity securities in the three months ended Sept. 30, compared with $3.62 billion in the second quarter and $834 million in the first, the Omaha, Nebraska-based company said Nov. 4 in a filing. Stockholdings labeled “commercial, industrial and other” soared 62 percent in the three months to $17.4 billion on a cost basis, surpassing equity investments in financial and consumer-product firms.
“He sees something, and it’s big,” said Thomas Russo, a partner at Berkshire investor Gardner Russo & Gardner.
Buffett, 81, drew down Berkshire’s cash as Europe’s debt crisis and Standard & Poor’s downgrade of the U.S. pushed stocks to their worst quarterly performance since 2008. The investments disclosed Nov. 4 include $6.9 billion of equities, $5 billion for preferred shares and warrants in Bank of America Corp. and the acquisition of Lubrizol Corp. for about $9 billion.
The last time Buffett invested more than $20 billion in a period was 2008 when he did it in both the second and fourth quarters of the year. Buffett deployed more than $70 billion that year, including $10.1 billion on stocks, as the S&P 500 posted its biggest decline since 1937.”
Meanwhile, his investment techniques are as simple as his tastes. He buys rock-solid companies trading well below their intrinsic value and holds on to them.
“I don’t look to jump over 7-foot bars,” Warren Buffett has said. “I look around for 1-foot bars that I can step over… Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
Since then, he has turned those same value investing techniques into a legendary career at Berkshire-Hathaway built in part on his eternal American optimism.
“Money,” Buffett calmly asserts, “will always flow toward opportunity, and there is an abundance of that in America. Now, as in 1776, 1861, 1932 and 1941, America’s best days lie ahead.”
The good news is that it’s never too late to start building a lifetime of wealth.
Somewhere along the road to financial freedom…
THE MARKET CRUNCHER
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