US$5.3 Million for Lunch

Buffett fans front hard cash for lunch

Warren Buffett says it's a miracle that he found one of Berkshire's two new investment managers through his famous annual lunch auction. He offered Ted Weschler a job after he'd paid nearly US$5.3 million over two years to dine with Buffett.

Bill Gates and Warren Buffett

Buffett said he just hopes the 13th annual online auction will again raise a significant amount of money for the Glide Foundation, which provides social services to the poor and homeless in San Francisco.

Bidding is under way and will run until next weekend. The previous four winning bids have all exceeded US$2 million with new records set every year.

"It's gone way, way, way beyond my expectations," Buffett said. "We'll see what happens this year."

Besides his business success, Buffett's philanthropy is also a draw for bidders. Buffett has slowly given away the bulk of his fortune since 2006. He plans to eventually divide most of his shares of Berkshire stock between five charitable foundations, with the largest chunk going to the Bill & Melinda Gates Foundation. Buffett and Gates have also been encouraging other wealthy people to give away at least half of their fortunes. Nearly 80 of the nation's wealthiest families have signed the pledge. The auction provides a significant portion of the Glide Foundation's roughly US$17 million annual budget. Buffett's late first wife, Susan, introduced him to Glide's founder, the Reverend Cecil Williams, after she became a supporter of the charity.

"We were really blessed to run across Warren Buffett years ago," Williams said.

Buffett said he was impressed by the work Glide does in helping people whom the world has forgotten to find hope again.

"I just think what they do is extraordinary."

He was diagnosed with prostate cancer this year, but remained committed to the auction. Williams said he was impressed by Buffett's commitment.

"He let us know that he was going to make sure things will work. We're just very excited about it again this year."

Buffett has said that his prostate cancer was detected early and isn't remotely life-threatening. He plans to undergo six weeks of radiation treatments next month.

At the lunch, Buffett will spend several hours discussing whatever it is the winner would like to talk about, traditionally at New York's Smith and Wollensky steak house. The restaurant donates at least US$10,000 to Glide each year to host the auction lunch. The only topics the billionaire chairman and chief executive of Berkshire Hathaway will not address are potential future investments. Buffett says many of the questions he gets at the lunches are about non-business subjects such as family and philanthropy. Past winners of the auction have said they believe the time with Buffett was well worth the price they paid in the auction.

Buffett's company owns roughly 80 subsidiaries including insurance, furniture, clothing, jewellery and sweet companies, restaurants and natural gas and corporate jet firms, and has major investments in such companies as Coca-Cola and Wells Fargo & Co.

Warren Edward Buffett (born August 30, 1930) is a business magnate, sharemarket investor, and philanthropist. He is widely considered the most successful investor of the 20th century. He is chairman and CEO of Berkshire Hathaway. He is consistently ranked among the world's wealthiest people. He was ranked as the world's wealthiest person in 2008 ^]and is the third wealthiest person in the world as of 2011. In 2012, Time named Buffett one of the most influential people in the world.

Buffett is called the "Wizard of Omaha", "Oracle of Omaha"^], or the "Sage of Omaha" and is noted for his adherence to the value investing philosophy and for his personal frugality despite his immense wealth. He still lives in the first house he purchased for $31,000 in 1958. Buffett is also a notable philanthropist, having pledged to give away 99 percent of his fortune to philanthropic causes, primarily via the Gates Foundation. On April 11, 2012, he was diagnosed with prostate cancer.

Warren Buffett

Buffett was born in Omaha, Nebraska, the second of three children and only son of U.S. Representative Howard Buffett.  Buffett began his education at Rose Hill Elementary School in Omaha. In 1942, his father was elected to the first of four terms in the United States Congress, and after moving with his family to Washington, D.C., Warren finished elementary school, attended Alice Deal Junior High School, and graduated from Woodrow Wilson High School in 1947, where his senior yearbook picture reads: "likes math; a future stock broker."

Even as a child, Buffett displayed an interest in making and saving money. He went door to door selling chewing gum, Coca-Cola, or weekly magazines. For a while, he worked in his grandfather's grocery store. While still in high school he was successful in making money by delivering newspapers, selling golfballs and stamps, and detailing cars, among other means. Filing his first income tax return in 1944, Buffett took a $35 deduction for the use of his bicycle and watch on his paper route. In 1945, in his sophomore year of high school, Buffett and a friend spent $25 to purchase a used pinball machine, which they placed in the local barber shop. Within months, they owned several machines in different barber shops.

Buffett's interest in the stock market and investing also dated to his childhood, to the days he spent in the customers' lounge of a regional stock brokerage near the office of his father's own brokerage company. On a trip to New York City at the age of ten, he made a point to visit the New York Stock Exchange. At the age of 11, he bought three shares of Cities Service Preferred for himself, and three for his sister. While in high school he invested in a business owned by his father and bought a farm worked by a tenant farmer. By the time he finished college, Buffett had accumulated more than $90,000 in savings measured in 2009 dollars.

His current net worth is estimated at US$44 billion but was US$62 billion before he teamed up with Bill Gates and started giving his fortune away.