Renowned investor Warren Buffett has a lesser-known side that was revealed in his 2017 HBO documentary “Becoming Warren Buffett.” At 93 years old, Buffett is often considered a wise figure dispensing life and investing advice. But the documentary sheds light on his youthful indiscretions, including a case of shoplifting at Sears with friends.
He also challenged his teachers by betting on their retirement stocks. But this act was not just teenage rebellion. It was a first indication of his genius in the stock market, even if it offended his teachers.
Buffett’s youthful rebellion was rooted in his dissatisfaction with leaving Omaha, Nebraska, for Washington, DC.
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“When I was about 12 or 13, we moved to Washington, my family. I was angry, 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 displeasure.
“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 had for retirement. So I decided it would drive my teachers a little crazy if I had to short the stock. …So I shorted 10 shares of AT&T and brought the confirmation to show the teachers that I was short the stock. They found me very troublesome, but they thought I knew a lot about stocks.
Short selling a stock involves borrowing shares and selling them in the hope that the stock price will fall, allowing the seller to buy them back at a lower price and return them to the lender, pocketing thus the difference. This strategy, although legal, is often considered a risky investment, especially for a young investor like Buffett at the time.
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This first experience with stocks was just the beginning for Buffett. Years later, as head of Berkshire Hathaway Inc., he re-engaged with AT&T Inc., but under different circumstances. In the third quarter of 2015, Berkshire Hathaway acquired a significant stake in AT&T, acquiring 59.3 million shares. The investment strategy changed quickly, 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 first bet against AT&T and his subsequent investment decisions demonstrate his deep understanding and evolution of his strategies in the stock market. From a young age, Buffett showed a keen interest in stocks and investing, a trait that would define his career and contribute to his reputation as the most successful investor of all time.
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This item Warren Buffett says, “I took pleasure in tormenting my professors” – he bet against their retirement stocks, risking their financial security for the fun of it originally appeared on Benzinga.com
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