00:00 Berkshire Hathaway is a holding company that started as a textile mill and now owns various companies, including Dairy Queen, Duracell, and Brooks running shoes, as well as large stakes in other publicly traded companies like Amazon and Apple. Warren Buffett, the man behind Berkshire Hathaway, claims that purchasing the company was his biggest investment mistake, costing him $200 billion in opportunity cost. This episode will focus on the story of Warren Buffett and how his thinking evolved to create Berkshire Hathaway.

08:51 Warren Buffett's parents, Howard and Layla, met at the college newspaper and Howard went on to become a stockbroker in Omaha in the late 1920s.

18:29 Warren Buffett's father, Howard, becomes a stockbroker in Omaha in 1927, but loses his job and all the family's money during the stock market crash of 1929, prompting him to start his own brokerage firm during the Great Depression.

27:50 Warren Buffett, at the age of 10, becomes fascinated with the wealth he sees at the New York Stock Exchange and sets a goal to become a millionaire by the age of 35, realizing that money can create more money through compounding.

36:28 Warren Buffett buys six shares of preferred stock in a company called Cities Service with his sister, but sells it before the stock price skyrockets, teaching him the lesson to not fixate on the price paid for something and to stay focused on long-term wins.

46:11 Warren Buffett graduates high school at age 16 and attends the University of Pennsylvania's Wharton Business School, but his real passion is investing and he eventually transfers to the University of Nebraska at Lincoln to accelerate his studies and graduate early.

55:44 Warren Buffett becomes fascinated with the concept of compounding and the future value of money, leading him to have a different perspective on spending and a singular focus on the future compounded value of his money.

01:04:27 Warren Buffett becomes enamored with the concept of compounding and the future value of money, leading him to have a different perspective on spending and a singular focus on the future compounded value of his money.

01:13:21 Warren Buffett sells all of his Geico stock in 1952, succumbing to Graham's approach of constantly buying and selling securities, but if he had held onto it, he would have made much more money.

01:22:02 Warren Buffett reconnects with Susie Thompson, convinces her to marry him, and sets up the first Warren Buffett partnership with his dad, gaining more capital to invest.

01:31:11 Warren Buffett structures partnerships with a 4% annual return hurdle, keeping half of any returns generated above that benchmark, and personally covering 25% of the losses of his partners.

01:40:50 Warren Buffett's partnerships are managing over $7 million in total, he gets an office, hires a couple of people, consolidates all the various vehicles into one, and puts all of his own money in as well.

01:50:04 Warren Buffett sees an opportunity in American Express after a scandal rocks the company and invests a total of $13 million, eventually making a 2.5x return on his investment.

01:59:18 Warren Buffett launches a tender offer for shares of Berkshire Hathaway, eventually forcing out Stanton and becoming chairman of the company, despite the fact that it is a terrible asset to own and he could have made more money investing elsewhere.

02:08:41 Warren Buffett refuses to invest in technology companies, including Intel, despite being on the board of Grinnell College when they had the opportunity to invest in the Intel seed round, a decision he would later regret.

02:18:21 Warren Buffett acquires National Indemnity, a company that ensures high-risk and esoteric policies, and combines it with Berkshire Hathaway, creating the insight of marrying an insurance business with operating companies to build a two-sided flywheel of more insurance businesses and operations that generate float to invest in more operating businesses.

02:27:39 Warren Buffett's genius probabilistic thinking, individualistic decision making, and master capital allocation skills, combined with owning an insurance company, lead to excellent returns and a compounded result of 2,795 percent over the 12 years of the Buffett partnership.

02:36:58 Warren Buffett decides to hold his stock in the private companies and plans to buy more, signaling his understanding of the power of uninterrupted compounding and the importance of independent thought in investing.

02:46:25 Warren Buffett's decision to shut down his investment partnership during a boom time, despite returning over 50% and going against the norm of raising more capital, exemplifies his adherence to the principle of being fearful when others are greedy and vice versa.

02:55:14 Warren Buffett's partnerships returned 30% for 12 years, compounding to a 28X return, making it one of the greatest hedge funds of all time.

03:04:20 The hosts wrap up the episode and mention the upcoming Berkshire Hathaway 2021 annual shareholder meeting.