Renowned investor Warren Buffett has a lesser-known side that was revealed in his 2017 HBO documentary “Becoming Warren Buffett.” At age 93, Buffett is often seen as a wise figure dispensing life and investment advice. But the documentary sheds light on his youthful indiscretions, including an instance of shoplifting from Sears with friends.
He also challenged his teachers by betting against their retirement stock. But this act wasn’t just teenage rebellion. It was an early hint of his genius in the stock market, even if it rubbed his teachers the wrong way.
Buffett’s youthful rebellion was rooted in his dissatisfaction with moving from Omaha, Nebraska, to Washington, D.C.
“When I was about 12 or 13, we moved to Washington, my family. I was mad, I was having fun in Omaha. And I lost all my friends, and now I moved to a town where they were all strange, so I was very, very unhappy,” Buffett said. The emotional upheaval led to a loss of interest in school, and he found a way to express his discontent.
“At school, I just lost interest. I took pleasure in tormenting my teachers,” he said in the documentary. “At that time, for example, AT&T was the stock that all teachers owned for their retirement. So I decided it would drive my teachers a little crazy if I were to short the stock. … So I shorted 10 shares of AT&T and brought the confirmation to show the teachers that I was shorting the stock. They found me a big pain in the neck, but they did think I knew a lot about stocks.”
Short selling a stock involves borrowing shares and selling them with the expectation that the stock price will fall, allowing the seller to buy them back at a lower price and return them to the lender, pocketing the difference. This strategy, while legal, is often seen as a risky investment move, particularly for a young investor like Buffett at the time.
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This early experience with stocks was just the beginning for Buffett. Years later, as the head of Berkshire Hathaway Inc., he engaged with AT&T Inc. again, but under different circumstances. In the third quarter of 2015, Berkshire Hathaway bought a significant stake in AT&T, acquiring 59.3 million shares. The investment strategy changed rapidly, as Berkshire Hathaway sold its stake in AT&T over the next two quarters, selling 46.6 million shares in the first quarter of 2016 and 12.7 million shares in the fourth quarter of 2015.
Buffett’s early bet against AT&T and his later investment decisions demonstrate his deep understanding and evolving strategies in the stock market. From a young age, Buffett displayed a keen interest in stocks and investments, a trait that would define his career and contribute to his reputation as one of the most successful investors of all time.
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