One fine day in 1954, Warren received a call from none other than Graham. Graham offered him a position which he had long awaited.

Graham’s approach was lucrative but it wasn’t fun. Warren spent his days analyzing financial reports, crunching figures which were a challenge to Buffett’s mathematical skills in searching for investment opportunities. The difference between the Graham and Buffett philosophies began to surface when Warren became interested in how a company worked – what made it superior to competitors while Ben simply wanted numbers (income statement, balance sheet and profit and loss).

Warren was particularly interested in a company’s management as a major factor when deciding to invest, to the extent of drove all the way to a company’s work-place to understand for himself the business-nature.

By Ben’s nature, value investing means saying no a lot more than saying yes, and Buffett soon felt constrained by Graham’s strict rules. He believed it made much sense to buy good businesses at a fair price, rather than dying businesses on the cheap-sale. Buffett returned to Omaha two years later, when Graham informed Warren that he decided to retire.

Warren Buffett’s First Step of the Journey
In 1956, at the age of twenty-five, Buffett started his own investment company, the Buffett Associates Ltd, using $5,000 of his own funds and collecting $100,000 from interested friends and family (mostly Omaha hometown investors). Appointed himself as general partner, Warren began to purchase stocks. His goal was to beat the Dow Jones Industrial Average by an average of 10 percent a year.

The partnership was a great success and Buffett is said to have averaged an impressive 251.0% profit, while the Dow was up only 74.3% during the period of five years. By 1962, the partnership had capital in excess of $7.2 million, of which $1 million was Buffett’s personal stake (he didn’t charge a fee for the partnership but was entitled to 25% of the profits). The partnership was dissolved in 1969 and the money invested together with profit was returned to all the initial investors. Warren formed “Buffett Partnerships Ltd” in order to increase the minimum investment from investors.