From a failing textile mill to a trillion-dollar giant: The Warren Buffett story

Warren Buffett, who transformed Berkshire Hathaway from a struggling textile manufacturer into a company valued at more than $1 trillion, stepped down as Chairman and became chairman emeritus of the company on September 18. His son, Howard G. Buffett, succeeded him as chairman, while Greg Abel remains chief executive officer. Buffett, 96, continues as a director and shareholder.

The leadership change marks the end of Buffett’s formal role at the top of Berkshire Hathaway after more than six decades. He took control of the company in 1965 and built it into a group with businesses spanning insurance, railways, energy, manufacturing, retail and services.

Also Read| Buffett exits Berkshire chair: Read Oracle of Omaha's letter to shareholders

The mill that ran out of road

Buffett was born in Omaha, Nebraska, on August 30, 1930. His father, Howard Buffett, was a stockbroker and US Congressman.

Buffett showed an interest in business from an early age. He sold newspapers, ran small businesses and began investing in stocks as a child. He studied at the University of Pennsylvania’s Wharton School before graduating from the University of Nebraska.

He later earned a master’s degree in economics from Columbia University, where he studied under Benjamin Graham. Graham’s approach to buying undervalued companies became the foundation of Buffett’s investment style.

After working at his father’s brokerage firm and later at Graham-Newman Corporation, Buffett returned to Omaha in 1956. He set up Buffett Partnership Ltd., an investment partnership that bought shares in companies trading below their estimated value.

By the early 1960s, Buffett had begun buying shares in Berkshire Hathaway, a New England textile manufacturer. He took control of the company in 1965.

The textile business was losing its importance, but Buffett saw an opportunity to use Berkshire’s capital elsewhere. He eventually closed the textile operations and began redirecting money towards insurance, investments and operating businesses.

The insurance engine behind the empire

The most important change in Berkshire’s business came through insurance.

In 1967, Berkshire bought National Indemnity, an insurance company. Insurance companies collect premiums before they pay claims. That money, known as insurance float, can be invested while it remains with the insurer.

Berkshire used this model to build a large pool of capital. Its insurance operations later expanded to include GEICO, reinsurance businesses and other insurance companies.

The group’s 2025 annual report said its US-based insurers had combined statutory surplus of about $333 billion at the end of that year. Berkshire’s major insurance subsidiaries were rated AA+ by Standard & Poor’s and A++ by A.M. Best.

Insurance gave Buffett capital. His investment decisions determined how that capital was used.

Buying businesses, not just stocks

Buffett became known for buying shares in companies that he believed had strong brands, dependable earnings and capable management.

Some of Berkshire’s best-known investments over the years have included Coca-Cola, American Express and Apple. The company has also acquired businesses outright, including See’s Candies, Dairy Queen, Nebraska Furniture Mart and NetJets.

Berkshire’s operating businesses now include:

• GEICO and other insurance companies
• BNSF Railway
• Berkshire Hathaway Energy
• manufacturing and building-products businesses
• retailers and consumer brands
• service companies, including NetJets

Unlike many conglomerates, Berkshire gives considerable independence to the managers of its subsidiaries. Buffett has generally focused on capital allocation, major acquisitions and choosing managers rather than directing the daily operations of each company.

The investment rules behind the rise

Buffett’s approach is often described as value investing. It involves buying a business at a price below its estimated worth and holding it for the long term.

His investment principles include understanding the business, assessing its competitive strength, examining its management and avoiding excessive debt.

Buffett has also warned investors against frequent trading and decisions driven by fear or excitement. He has often compared buying shares to buying a part of a business rather than purchasing a short-term market bet.

His thinking was shaped first by Graham and later by Charlie Munger, Berkshire’s longtime vice-chairman. Munger helped Buffett move beyond buying only statistically cheap companies and focus more on businesses with strong economics and durable advantages.

Munger died in November 2023.

The numbers did the talking

Berkshire Hathaway’s stock-market performance made Buffett one of the most closely followed investors in the world.

According to Berkshire’s 2025 annual report, the company’s per-share market value rose at a compounded annual rate of 19.7% between 1965 and 2025. The S&P 500, including dividends, returned 10.5% annually over the same period.

Berkshire’s overall gain during that period was 6,099,294%, compared with 46,061% for the S&P 500, according to the company’s figures.

These numbers reflect more than Buffett’s stock-picking. They also include the performance of Berkshire’s insurance, railway, energy, manufacturing and consumer businesses.

A partnership that shaped Berkshire

For decades, Buffett and Munger were the public face of Berkshire Hathaway.

Their annual shareholder meetings in Omaha attracted thousands of investors. The event became known as the “Woodstock of Capitalism”, with shareholders attending to hear the two investors discuss markets, businesses, management and human behaviour.

Buffett’s annual letters to shareholders also became widely read. They explained Berkshire’s decisions in simple language and often included lessons about investing, corporate governance and financial discipline.

Succession without a sudden break

Buffett announced in 2025 that Greg Abel would succeed him as Berkshire Hathaway’s chief executive officer. Abel took over on January 1, 2026.

Abel had previously overseen Berkshire’s non-insurance businesses, including BNSF Railway, Berkshire Hathaway Energy, See’s Candies and Dairy Queen. Ajit Jain continued to oversee the insurance operations.

Buffett initially remained chairman after stepping down as CEO. On September 18, 2026, Berkshire announced that he would become chairman emeritus and that Howard Buffett would become chairman.

Howard Buffett has been a Berkshire director since 1993. He has also led the Howard G. Buffett Foundation since 1999, with its work focused on food security, conflict mitigation and conservation.

In his letter to shareholders announcing the latest transition, Warren Buffett said Abel had taken control of the company’s important decisions. He wrote: “Father Time always wins.”

A fortune with a charitable end

Most of Buffett’s wealth comes from his ownership of Berkshire Hathaway shares. His net worth changes with the value of the company’s stock.

Buffett has pledged to give away nearly all of his wealth. Since 2006, he has donated billions of dollars in Berkshire shares to charitable organisations, including the Bill & Melinda Gates Foundation and foundations associated with his children.

He co-founded the Giving Pledge with Bill Gates and Melinda French Gates. The initiative encourages wealthy individuals to commit most of their fortunes to philanthropy.

Buffett has said his children will eventually oversee the distribution of his remaining wealth. His donations have focused on areas including education, public health, poverty reduction, women’s reproductive health and food security.

The next chapter

Buffett’s formal leadership of Berkshire Hathaway has ended, but his influence remains built into the company’s structure.

Greg Abel now runs the business. Howard Buffett is responsible for the chairmanship and the protection of Berkshire’s culture. Warren Buffett remains on the board and continues to hold shares in the company.

The story that began with a failing textile mill now stands as one of the longest-running examples of patient capital allocation. Buffett’s legacy is not limited to the fortune he created. It also includes the way Berkshire Hathaway operates, the managers it has developed and the investment principles it has passed on to generations of shareholders.