Business Insider

Happy Birthday Warren Buffett - 14 Stunning Facts About His Wealth

Warren Buffett has been incredibly successful, and he's extremely wealthy. In fact, he's worth about $62.1 billion right now. But how much is $62.1 billion really, and how good is Buffett at investing? We've put together some facts that put his skill in perspective:


Ninety-nine percent of Buffett's wealth was earned after his 50th birthday.

When Buffett was 52, his net worth was about $376 million. Plus, he made about 94% of his wealth after turning 60. At 59, he was worth "only" $3.8 billion.

Talk about long-term investment strategies.

 

 


Berkshire's Book Value beat the S&P 500 in 43 out of 46 years on a five-year rolling-average basis.

This chart shows the five-year moving-average annual price returns for Berkshire's stock and the S&P 500 since Buffett's takeover. Since 1999, although Buffett has still tended to beat the market, it has been by a more modest amount than in the past.


Among legends, Buffett has the longest track record for beating the market.

This chart compares investors with the S&P 500 over time. Buffett's outperformance has lasted longer than that of other great investors.


Buffett's net worth of $62.3 billion is equal to the combined GDPs of Lebanon and Iceland.

Lebanon's 2014 GDP was an estimated $45.73 billion. Iceland's 2014 GDP was as estimated $17.04 billion.

Source: World Bank

 

 

 


In 2013, Buffett made on average $37 million per day — more than what Jennifer Lawrence made that year.

Luke MacGregor/Reuters

According to Forbes, Jennifer Lawrence was the second-highest-paid actress in 2013, and she is estimated to have made $34 million that year. Warren Buffett made $37 million per day in 2013.

Source: MarketWatch


You could pay a year's tuition for seven Columbia students with what Buffett made in an hour in 2013.

Columbia University was thesecond most expensive university in the US. Tuition and fees is about $53,523. Buffett made $1.5 million per hour in 2013.

Source: CNBC

Apple: Taxes Or Jobs, But Not Both

Apple's official statement on the EU ruling against its Irish tax arrangements tells you all you need to know about what is at stake: You can have taxes, or you can have jobs, but Apple is in no mood to deliver both.

After learning this morning thatthe EU expects Apple to pay €13 billion (£11 billion, $14.5 billion) in back taxes, the company said, "it will have a profound and harmful effect on investment and job creation in Europe."

That is not a threat, technically. But it will be seen as one by EU politicians who want to attract new companies to their countries. 

Back in 1991, Apple struck a tax deal with Ireland that was completely above-board and legal. The Irish government provided Apple with a "comfort letter" that said if it based its European operations in Ireland, it would pay very low rates of tax.

In the 15 years since, Apple has created thousands of jobs in Ireland. By 2015 it had 5,000 employees in the country. Another 1,000 jobs are planned for the HQ in Cork. This year, Apple will open its Athenry site, with another 200 jobs in the making. 

 

The deal between Apple and Ireland was pretty clear: Give us low taxes and we will give you jobs. A note from a meeting between the government and an Apple tax advisor in 1990 basically said exactly that:

"Apple was now the largest employer in the Cork area with 1,000 direct employees and 500 persons engaged on a subcontract basis. It was stated that the company is at present reviewing its worldwide operations and wishes to establish a profit margin on its Irish operations."

Apple is now the single largest taxpayer in Ireland, so it has the kind of negotiating strength to get what it wants. 

Apple has noted that its tax arrangements were agreed to repeatedly by Ireland's government. The European Commission itself says the agreements were legal, albeit mistaken. But Margrethe Vestager, the EU's competition commissioner, made Apple's Irish tax arrangements sound like a scam:

  • Apple's effective European tax rate was 1%, on sales of €16 billion or more per year.
  • It sunk as low as  0.005% in 2014.
  • Apple created a head office that did not exist: "This 'head office' had no operating capacity to handle and manage the distribution business, or any other substantive business for that matter. ... The 'head office' did not have any employees or own premises."
  • The pact deprived other European countries of billions of euros in unpaid taxes.

Perhaps the most serious part of Vestager's case against Apple is the way it contradicts Apple's longstanding assertion that it does not pay corporation taxes in the US because its foreign (i.e. non-American) revenues are reinvested in the foreign territories that earn them. Apple's annual report has said, "substantially all of the Company’s undistributed international earnings intended to be indefinitely reinvested in operations outside the U.S. were generated by subsidiaries organized in Ireland, which has a statutory tax rate of 12.5%." 

That 12.5% rate appears to have been Irish mist. The European money was actually being funnelled back to the US, Vestager says. Apple's Irish operations had a cost-sharing agreement with the US HQ  in which they were allowed to use Apple's intellectual property if, in return, they paid for the American R&D expenses to create that IP. The EC statement says:

"Under this agreement, Apple Sales International and Apple Operations Europe make yearly payments to Apple in the US to fund research and development efforts conducted on behalf of the Irish companies in the US. These payments amounted to about US$ 2 billion in 2011 and significantly increased in 2014. These expenses, mainly borne by Apple Sales International, contributed to fund more than half of all research efforts by the Apple group in the US to develop its intellectual property worldwide."

(Critics may also ask how many more jobs would have been created in Europe if the money generated in Europe had actually stayed in Europe.)

Vestager's ruling will also be read as a threat by dozens of other international companies who previously used Europe's flexible tax arrangements. The European Commission concluded in October 2015 that Luxembourg and the Netherlands granted tax advantages to Fiat and Starbucks. It is currently investigating Amazon and McDonald's.

The ruling will be appealed. It will be years before it is resolved. It won't hurt Apple — the €13 billion in unpaid tax is roughly equivalent to only one month's revenue, and Apple has always kept a massive amount of cash stashed in foreign countries precisely because it does not want to move it into jurisdictions where it might be taxed.

The more immediate problem is whether global companies will even bother with Ireland in the future if they cannot get the tax breaks they want ... and whether that, in the long term, will reduce the total tax take in Europe.

With that in mind, Apple published a longer statement this morning, reiterating the link between jobs and taxes:

Beyond the obvious targeting of Apple, the most profound and harmful effect of this ruling will be on investment and job creation in Europe. Using the Commission’s theory, every company in Ireland and across Europe is suddenly at risk of being subjected to taxes under laws that never existed.

... We are committed to Ireland and we plan to continue investing there, growing and serving our customers with the same level of passion and commitment. 

Restaurants In China Are Replacing Waiters With Robots

Chinese restaurants started to replace their workers with robots as early as 2006. Though some have proven pretty incompetent, they're still cheaper than human wait staff — the approximate $1,200 up-front cost per robot is just a couple months' salary for an average server in China (though robot prices vary).

Robot waiters seem to have taken off in China because they're novel and fun, rather than for their efficiency. Many robots in Chinese restaurants appear anthropomorphic and toy-like — The Wall Street Journal writes that the Chinese even refer to their robots as jiqiren (机器人), literally meaning "machine people."

Here's a look at seven Chinese restaurants that have replaced some of their staff with robo-waiters.

These ten robot waiters serve customers in Chengdu, China, carrying dishes around and giving simple greetings to customers.

They cost around $11,310 each when they were bought in 2014.

Under Armour Is Taking Over Old FAO Schwarz Space

Under Armour is opening a new store in Manhattan, in the building FAO Schwarz used to call home, the company announced on Tuesday morning.

According to CNBC, the company will take hold of the 53,000 square-foot space in 2018.  

While the opening of one store doesn't always make headlines, CNBC notes that this new store will fuse experiences, such as work-out classes, with traditional shopping.

CEO Kevin Plank said on a recent earnings call that the new space will be "t he single greatest retail store in the world."

Under Armour already has a boost in that it sells activewear, one of the few categories for which consumers will pay a premium.

Under Armour posted another quarter of sales growth, making it the 25th consecutive quarter with over 20% revenue growth, the company noted.

How Old Were Self-Made Billionaires When They Made Their First Million

Mark Zuckerberg had $1 million in the bank at the ripe age of 22, while Larry Ellison didn't reach millionaire status until age 42. Today, they're both billionaires.

Some successful entrepreneurs strike it rich early on. For others, it takes decades.

Using an infographic from UK-based web platform Fleximize, we've broken out the age at which Zuckerberg, Ellison, Cuban, and other self-made billionaires made their first million.


Mark Zuckerberg: 22

The Facebook cofounder and CEO became a millionaire in 2006 at age 22.

It didn't take long for him to make the leap from self-made millionaire to billionaire. At the age of 23, Facebook's IPO made Zuckerberg the youngest self-made billionaire in history.

Today's estimated net worth: $43.9 billion

Evan Spiegel: 23

The Snapchat cofounder and CEO became a millionaire in 2013 at age 23.

Two years later, the value in his Snapchat shares reached $1 billion, making him a 25-year-old self-made billionaire.

Today's estimated net worth: $2.1 billion


Sir Richard Branson: 23

Britain's high-profile billionaire earned his first million in 1973 at age 23.

Nearly two decades later, the Virgin Group founder reached self-made-billionaire status at age 41.

Today's estimated net worth: $5.1 billion


Carlos Slim: 25

The Telecom magnate became a self-made millionaire in 1965 at age 25, thanks to real-estate investments.

About 25 years later, his net worth passed $1 billion at age 51. He finished 2015 as the second-richest person in the world.

Today's estimated net worth: $50.1 billion


Larry Page: 25

Google's cofounder earned his first million in 1999 at age 25.

The company's IPO in 2004 sent his net worth over $1 billion, making him a self-made billionaire at age 30.

Today's estimated net worth: $35.1 billion


Bill Gates: 26

Microsoft's cofounder became a self-made millionaire in 1981 at age 26, thanks to Microsoft's IPO.

The value in his shares surpassed $1 billion by the time he was 31, making him the youngest billionaire ever at the time. Today,Gates is the richest man in the world.

Today's estimated net worth: $74.7 billion


Elon Musk: 27

The cofounder of PayPal and Tesla Motors and founder of SpaceX reached self-made-millionaire status in 1999 at age 27 when he sold a web-software company for over $300 million.

By age 41, his net worth had surpassed $1 billion.

Today's estimated net worth: $10.8 billion


Sara Blakely: 29

It only took one year of running her company, Spanx, before Blakely became a millionaire in 2000 at age 29.

A little over a decade later, she became the youngest self-made woman billionaire at age 41.

Today's estimated net worth: $1 billion


jpg-7.jpg

Warren Buffett: 30

The investing legend and CEO of Berkshire Hathaway became a millionaire in 1960 at age 30.

He reached self-made-billionaire status by age 56 and finished 2015 as the third-richest man in the world.

Today's estimated net worth: $60.1 billion


Mark Cuban: 32

The "Shark Tank" investor and Dallas Mavericks owner became a millionaire in 1990 at age 32, when he sold his first company, MicroSolutions.

Less than 10 years later, he sold his second company, Broadcast.com, and became a self-made billionaire at age 40.

Today's estimated net worth: $3 billion


Oprah Winfrey: 32

The media mogul and queen of daytime television became a self-made millionaire in 1986 at age 32. In 2003, she became the first black woman billionaire in history at age 49.

Today's estimated net worth: $3 billion

 


Zhou Qunfei: 33

The founder of Lens Technology became a self-made millionaire in 2003 at age 33.

In 2015, Lens Technology went public, making her a billionaire and the world's richest self-made woman at age 45.

Today's estimated net worth: $5.9 billion


Jeff Bezos: 33

Amazon's founder and CEO became a self-made millionaire in 1997 at age 33 when Amazon's IPO raised $54 million. A quick two years later he achieved billionaire status at age 35.

Today's estimated net worth: $43.5 billion


George Lucas: 34

The creator of "Star Wars" and founder of production company Lucasfilm became a self-made millionaire in 1978 at age 34. His stake in Lucasfilm helped him make the jump from millionaire to billionaire at age 52.

Today's estimated net worth: $4.5 billion

 


Denise Coates: 38

The co-CEO of online-gambling firm Bet365 became a millionaire in 2005 at age 38 after selling her company for $40 million. Her 50% stake in Bet365 made her a self-made billionaire by age 47.

Today's estimated net worth: $3.8 billion

 


Meg Whitman: 40

The former eBay CEO, and current Hewlett-Packard CEO, became a self-made millionaire in 1996 at age 40. Two years later, at age 42, her net worth exceeded $1 billion after she took eBay public. 

Today's estimated net worth: $1.89 billion

 


Larry Ellison: 42

The founder and CEO of Oracle became a self-made millionaire in 1986 at age 42. Shortly after, he achieved billionaire status at age 49, thanks to his stake in Oracle and the company's rapid growth. 

Today's estimated net worth: $43.6 billion

Wealthy New Yorkers Are Purchasing Vacation Homes Down The Block

You may not immediately think to purchase a vacation home in the same city as your permanent residence, but more and more real estate agents are saying this is a growing trend among homebuyers.

The Wall Street Journal recently reported examples of this phenomenon in major cities across the US, including couples with two homes in Miami and Los Angeles. 

But why spend the money for another place just a few miles away?

Victoria Shtainer, a New York City-based realtor with Compass, said that some of her clients purchasing homes in Brooklyn say they want a change of scenery from their Manhattan neighborhoods.

"It's a different feeling and a different mindset," Shtainer said to Business Insider. "You feel like you're away from your everyday problems and work and you are able to take yourself to a different place."

Buying another home in a different borough allows homeowners to experience a new neighborhood's nightlife and restaurants. Instead of rushing back to their permanent address, they'd have more freedom to spend the night or the weekend at their second home. She said her clients enjoy changing their everyday routine.

"You go to the same streets, same doorman," Shtainer said. "Here, you have all your things in a different place and you transform yourself."

Gill Chowdhury, a New York City-based broker with Douglas Elliman Real Estate, said he has clients who are based uptown, but who are using a second home in Tribecca as a "test run" before purchasing a larger home in the same neighborhood.

"They want to get a better sense of the neighborhood, more so than just going in the neighborhood and going home everyday, but really to experience and immerse themselves in what it's actually like to live downtown," Chowdhury said.

This lifestyle, of course, comes at a price. Shtainer describes these clients as people who "have disposable income."

"It's a luxury that few of us can afford, but they love it," Shtainer said. "They would not have it any other way."

Sotheby's International Realty

Chowdhury also acknowledges that clients must be of a certain economic background to be able to purchase second homes.

"There are various reasons why people with the money would want to and end up making that decision," he said. "I think for the most part that there's that 'staycation' aspect."

Shtainer has also seen clients who might want a beach vacation, but who don't want to go too far from Manhattan.

"There's people that live in the city and they have a summer residence in Brooklyn on the water," Shtainer said. "You could take the train and be there in 45 minutes and you're on the boardwalk, you're beachfront, and you spend the whole weekend on the water."

A home on the beach in Brooklyn is not only closer, but is also much cheaper than purchasing a home in the Hamptons.

"They want to be beachfront, and these apartments are affordable because they are under $1 million, and you have the beach downstairs," Shtainer said. "To replicate this in the Hamptons, you need at least $5 million, plus it's more of a commute."

Zillow/140 Oceana Dr.

To separate the living experiences in clients' permanent homes and vacation homes, Shtainer said the homes often have a very distinct feel to them.

"One house has a beachy feel, compared to the home in Manhattan with a modern feel to it," she said. "The second home is usually more casual."

So if you're a New Yorker looking for a "staycation" experience without the cost or travel time to the Hamptons, perhaps a second home nearby is a new purchase you should consider.

Here's What Wall Street Thinks of Microsoft Buying LinkedIn

Monday kicked off to a huge start with the announcement that Microsoft was buying social-media platform LinkedIn for $26.2 billion.

The move had wide-ranging impact, from the tech world to Wall Street.

Wall Street analysts were quick to break down the deal and what it means for the broader investing environment.

Overall, the mood seems to be positive. LinkedIn provides some good strategic opportunities for Microsoft, while the exit for LinkedIn investors is a solid boon, given the company's slowing growth.

We've collected the insights from a few of these analysts. Check out their opinions below:


Mark May and Walter Pritchard, Citi

May and Pritchard believe that the deal is a win for Microsoft.

"From an Microsoft perspective, we believe the strategic rationale makes sense," said the Citi analysts.

Their note continued: "LinkedIn has, for some time, been the 'Outlook address book' for most business professionals. There are likely new ways Microsoft can integrate/extend this franchise by owning it."

For LinkedIn, it appears that the sale price of the move is an admission that the company was facing strategic challenges.

The note said:

Not to take away from a nice exit for most LinkedIn investors, but the sale may also reflect an admission of the company's recent issues. LinkedIn management's guidance for [calendar year 2016] suggests that revenue growth will slow to ~20% in the second half of the year — down from ~45% just two years previously.


Brent Thill, UBS

Thill thinks that the deal fits in nicely with Microsoft's strategic direction.

"In our view, the deal makes strategic sense as it helps build out Microsoft's application layer, which has been looking for growth, and also ties nicely to Microsoft tools such as Delve (org analytics, data visualization), Office 365 Groups, and Power BI," he said in a note.

On the con side, Thill mentions that Microsoft has never done well with large merger deals — see: Nokia — and there could be a culture clash between the younger LinkedIn thinking and the mature Microsoft way of doing things.


Victor Anthony, Axiom Capital Management

Anthony loves LinkedIn, saying that the company has "one of the best business models on the Internet" and is bullish on the deal for three reasons:

  1. LinkedIn's Talent Solutions business in strong and is "only 20% penetrated into large enterprises."
  2. The Marketing Solutions and Premium Solutions have a "strong growth opportunity."
  3. LinkedIn's presence in China is growing, and it is "one of the few Internet companies we believe has a better chance of succeeding in that market."

The analyst also said that he expects Microsoft's size and cash to help LinkedIn's business to grow by leaps and bounds.

Additionally, Anthony said that this means every tech company outside of Alphabet, Amazon, Facebook, and Alibaba is a possible acquisition target.


Randle Reese, Avondale Partners

Reese does not think that LinkedIn customers are going to be happy with the deal, despite the benefits Microsoft could bring.

"We also expect the universe of recruiters, the key customer base of LinkedIn, to react negatively to this deal," the analyst wrote in a note.

"On the other hand, LinkedIn might benefit from the greater size and sophistication of the Microsoft enterprise sales force," he continued.


Brian Pitz, Jefferies

Pitz said that the deal is a key step in Microsoft's large-scale shift.

"The acquisition, which is expected to close later this year, further enhances Microsoft's transition from a desktop software firm to a cloud computing services provider," the analyst said in a note.

Additionally, Pitz believes that the deal underscores a new trend in technology mergers and acquisitions.

Pitz wrote:

LinkedIn's unique position and reach highlights the value of a differentiated asset in the Internet landscape.

We believe that M&A will continue to be a theme in the Internet with a focus on uniquely positioned platforms, 100% owned IP, and differentiated technology in fragmented industries.

Hackers Got The New York Fed To Transfer Them $81,000,000

DHAKA/NEW YORK (Reuters) - Hours before the Federal ReserveBank of New York approved four fraudulent requests to send $81 million from a Bangladesh Bank account to cyber thieves, the Fed branch blocked those same requests because they lacked information required to transfer money, according to two people with direct knowledge of the matter.

On the day of the theft in February, the New York Fed initially rejected 35 requests to transfer funds to various overseas accounts, a New York Fed official and a senior Bangladesh Bank official told Reuters. The Fed’s decision to later fulfill a handful of resubmitted requests raises questions about whether it missed red flags.

The New York arm of the U.S. central bank initially denied the transfer requests because they lacked proper formatting for the SWIFT messaging system, the network banks use for international financial transfers, the two officials said.

The Bangladesh Bank official said they lacked the names of correspondent banks, which typically receive wired funds. The Fed rejected the requests, which came from hackers who had broken into the SWIFT network through Bangladesh Bank systems.

Later in the day, however, the cyber thieves resubmitted those 35 requests. On the second try, the messages had the proper formatting, the New York Fed official said. The requests had been authenticated by SWIFT, the first line of defense against fraudulent wire transfers.

Despite the technical compliance, the New York Fed rejected 30 of the requests a second time. But the Fed did approve five requests – for a total of $101 million. Later, one of those five transfers - a $20 million request - was reversed because of a misspelling.

The New York Fed has said it blocked the 30 resubmitted requests because they were flagged for economic sanctions review. Only afterward were they deemed potentially fraudulent.

The Bangladesh Bank official and another source close to the bank said the New York Fed should have rejected all the requests on both the first and second attempts.

The source close to the bank, who also had direct knowledge of the matter, said anomalies in the four transfers that ultimately went through should have raised questions at the New York Fed. They were paid to individual recipients, a rarity for Bangladesh's central bank, and the false names on the four approved withdrawals also appeared on some of the 30 resubmitted requests rejected by the bank, said the source close to the Bangladesh Bank.

"Of course, we asked the Fed why the repetition of the names did not create red flags," the source said.

"They are saying they rejected 35 badly submitted ones," the source said. But when the requests were re-submitted, they "paid 5 of them and stopped 30. Why? They can give no answer."

Bangladesh Bank and SWIFT declined to comment. The New York Fed has said there were no problems with its procedures for approving SWIFT fund transfers, and declined to comment on whether it missed any warning signs.

The cyber theft from Bangladesh’s central bank - and recent disclosures of other similar fraud attempts - have brought scrutiny on the SWIFT messaging system. SWIFT is a cooperative of global banks formally known as the Society for Worldwide Interbank Financial Telecommunication, and its transaction system was used as a conduit for one of the largest cyber bank heists in history.

In the United States, a congressional committee has launched a probe into the New York Fed's role in the bank heist. The Bangladeshi central bank might seek compensation for the funds from the Federal Reserve, and Bangladesh Bank police have said that recent installation of a new SWIFT settlement system at the bank last fall may have provided thieves an opportunity to gain access to the bank’s SWIFT servers.

RED FLAGS?

The New York Fed's reviews of payment requests that come over the SWIFT system are focused chiefly on guarding against money laundering and transfers to people and entities that are under U.S. government sanctions, Fed officials have said. But requests often also are temporarily halted to fix typos and other formatting problems.

The Fed branch has said its clients, including Bangladesh Bank, and SWIFT have primary responsibility for preventing unauthorized transfers.

Fed employees queried Bangladesh Bank about the purpose of the payments requested on Feb. 4 and again on Feb. 5, according to a letter to congresswoman Carolyn Maloney (D-NY) by New York Fed General Counsel Thomas Baxter.

The four transfers totaling $81 million went to accounts in the Philippines. The money wound up with casinos and casino agents and remains missing. An attempt to transfer $20 million to a foundation in Sri Lanka was reversed because the word “foundation” was misspelled.

The source close to Bangladesh Bank said questions about the anomalies in the approved requests were discussed at a meeting in Basel last month between New York Fed President William Dudley, Bangladesh Bank Governor Fazle Kabir and representatives from SWIFT.

Rep. Maloney and Tom Carper, the top Democrat on the Senate Homeland Security Committee, both have made inquiries to the New York Fed.

The House Science Committee informed the New York Fed in a letter this week that it is launching a probe into its handling of the transfer requests. The committee plans to examine the New York Fed’s response to the heist, the oversight of SWIFT, and whether additional measures are needed to address vulnerabilities to cyber attacks.

SWIFT, which has come under scrutiny after the Bangladesh Bank heist and cyber attacks in at least three other cases, plans a new program to improve security and also wants banks to "drastically" improve information sharing.

(Additional reporting by Tom Bergin in London; Editing by Raju Gopalakrishnan and David Greising)

Read the original article on Reuters. Copyright 2016. Follow Reuters on Twitter.