Warren Buffett was smiling today at the White House as Barack Obama presented him with the nation’s highest civilian honor, the Presidential Medal of Freedom.
And the audience laughed as President Obama recounted recounted one of Buffett’s earliest investing mistakes:
In 1942, an 11-year-old boy from Omaha, Nebraska, invested his entire fortune in six shares of Cities Service Preferred at $38 per share. The stock soon dropped sharply, devastating his holdings. (Laughter.) But true to form, the boy did not panic. He held those shares until the stock rebounded, earning himself a small profit. Things got a little bit better after that. (Laughter.)
But that story also has a more serious side.
In The Snowball, biographer Alice Schroeder writes that the young stockpicker sold for a small profit at $40 per share, in part due to pressure from Doris, his sister and partner in the deal. It then soared to $202 a share.
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