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He procured a route with the Times-Herald, the Post’s competitor, covering the same territory as he had with the Post. As Buffett would recall, if a subscriber cancelled one paper and wanted the other, “there was my shining face the next day”. Soon Warren had five delivery routes, and close to 500 papers to deliver each morning.Warren’s crown jewel was the Westchester Apartments, a cluster of red- brick, eight-storey high-rises on Cathedral Avenue. He quickly developed an assembly-line approach that was worthy of the young Henry Ford. He would drop off half of the papers for each building on the eighth-floor lift landing and half on the fourth floor. Then he would run through the building on foot, floor by floor, sliding the papers in front of each apartment. On collection day, he left an envelope at the front desk, sparing himself from having to go door-to-door.Figuring that he could increase his profits by adding to his product line, Warren peddled magazines at the apartments, too In short, he had turned his paper routes into a business.

He was earning $175 a month – what many a young man was earning as a full-time wage – and saving every dime. In 1945, when he was still only 14, he took $1,200 of his profits and invested it in 40 acres of Nebraska farmland.By his senior year at school, Warren was spending much of his time playing pinball with his friend Donald Danly, who had bought a used pinball machine for $25. The machine often broke, and, as Danly tinkered with it, Warren took note of his friend’s mechanical skill. Warren had an idea: why not put the machine in the barber’s shop on Wisconsin Avenue and rent it out?Warren approached the barber, who agreed to a 50:50 split At the end of the first day, they found $14 in the machine. Within a month or so, Warren and Danly had machines in three barber’s shops Prospering, they expanded to seven. Warren – living a real-life fantasy – thought of a name, the Wilson Coin Operated Machine Company “Eventually we were making $50 a week,” he recalled.

“I hadn’t dreamed life could be so good.”By July 1950, from all his ventures combined, Buffett had saved $9,800. That small grubstake would be the source of every dollar that Buffett would ever earn.LATER that year, Buffett arrived at Columbia University, in New York, where he became one of 20 students taught by the legendary Ben Graham, whose approach to investment became the basis of much of Buffett’s subsequent career. Many of Graham’s ideas had been published the previous year, in The Intelligent Investor, which boiled his philosophy down to three words – margin of safety. An investor, he said, ought to insist on a gap – a big gap – between the price he was willing to pay and his estimate of what a stock was worth. This was identical to leaving room for error in driving a car. If the margin was great enough, the investor ought to be safe.

But what if he was not? Suppose, that is, that the stock kept dropping. Assuming that nothing about the business had changed, Graham said, the investor should pay no heed to the ticker tape, no matter how grim its tidings. Indeed, an investor who became unduly discouraged by a market drop and who allowed himself to be stampeded into selling at a poor price was “perversely transforming his basic advantage into a basic disadvantage”.Graham’s accent was on cheap stocks – “cigar butts”, or stocks that one could pick up almost for free, like spent cigars, and that might have a couple of valuable “puffs” left in them. One of the assignments he gave his students that year was to research the performance of shares trading for less than $5 To Buffett, these ideas were the Rosetta stone. He had already run the gamut of speculative technique; he had done stock tips, Magee charts – one system after another in the name of keeping up with the trend.