Chairman, Berkshire Hathaway Inc., Omaha, Neb.
Warren Buffett, the second-richest person in America, is the world's greatest investor.
He's proven that it's possible to beat the market consistently over long periods of time, contrary to the academic theory of the efficient market hypothesis and the empirical performance of money managers.
He has been called "the most famous practitioner of value investing.
Investors follow every move he makes because of his successful track record. As one pension executive commented in Pensions & Investments in 1993, "After (Mr. Buffett) has accumulated a stock, typically the investment community jumps on the bandwagon."
In 1999, P&I reported that The Carson Group, a financial consultant in New York, ranked Mr. Buffett as the greatest manager of the 20th century. In a survey of investment managers that elicited more than 300 responses, 86.4% of respondents put him on their top-10 lists. You have to wonder why the other 13.6% didn't.
As Mr. Buffett once wrote in a tribute to Benjamin Graham, "It is rare that the founder of a discipline does not find his work eclipsed in rather short order by successors." In a similar way, after his some half-century of investing, no one has eclipsed Mr. Buffett in the realm of applying investment ideas.
"The essence of Warren Buffett's contribution to the investing public" is his concept of relating investing in a stock to buying a business, said Robert G. Hagstrom Jr., Bryn Mawr, Pa.-based portfolio manager of Legg Mason Focus Trust Mutual Fund and president and chief investment officer of Legg Mason Focus Capital Inc. Mr. Hagstrom also wrote three books about Mr. Buffett's investing technique.
"He believes you should try to understand a business as if you are the owner — what are the economics of running the business, what is a fair value for buying the business," Mr. Hagstrom said. "No one did that before him. Ben Graham talked about low p/e, but not how to value a business."