Zara’s Amancio Ortega Overtakes Buffett In Wealth

Berkshire Hathaway B shares Warren BuffettBy Mark Hirschey (Work of Mark Hirschey) [CC BY-SA 2.0], via Wikimedia Commons

They say clothes make the man, and it may well be true, but it’s for certain that clothes are behind the fortune of the world’s second richest man. According to the Bloomberg Billionaires Index, the Spanish clothing magnate Amancio Ortega — the man behind Zara — is now worth $71.5 billion, overtaking American Warren Buffett at $70.2 billion.

More on Amancio Ortega

Ortega was born in 1936 in the north of Spain. The son of a railway employee, he began working in a clothing store at the age of 13. Ortega opened his first clothing store back in 1975 with partner Rosalia Mera.

Bloomberg estimates that Ortega’s fortune is up this year by $10.4 billion (17%) His clothing empire Inditex operates over 6,600 stores under various brands, and reported turnover of close to $20 billion in the year through January. Inditex sets itself apart from other retailers with its “fast fashion” offering, with pieces appearing in within weeks of conception, and being replaced by even newer designs just as swiftly.

Boosted clothing riches with commercial real estate

Of note, a significant chunk of Ortega’s fortune actually comes from real estate. Ortega has mainly been investing his Inditex dividends in various commercial properties in major European and American cities through two tax friendly Spanish investment vehicles.

Buffett fortune down this year due to philanthropy

Warren Buffett, the 84-year-old billionaire who has been investing in stocks since he was 11, has seen his fortune slip a bit in the past year. American Express and Coca-Cola, two firms held in his investment vehicle Berkshire Hathaway, have seen their share prices weaken over the past 12 months.

Keep in mind that Buffett’s ongoing philanthropy is main reason why his wealth slipped last year. Buffett donated almost $3 billion of Berkshire Hathaway stock to five charities, with the bulk of the funds earmarked for the Bill and Melinda Gates Foundation. The Oracle of Omaha made a commitment several years ago to donate most of his fortune to worthy causes before his death.

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1 Comment on "Zara’s Amancio Ortega Overtakes Buffett In Wealth"

  1. Buffett himself said:
    “Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace, and those who read their Graham & Dodd will continue to prosper.”

    Benjamin Graham – also known as The Dean of Wall Street and The Father of Value Investing – was a scholar and financial analyst who mentored legendary investors such as Warren Buffett, William J. Ruane, Irving Kahn and Walter J. Schloss.

    Graham’s first recommended strategy – for casual investors – was to invest in Index stocks.
    For more serious investors, Graham recommended three different categories of stocks – Defensive, Enterprising and NCAV – and 17 qualitative and quantitative rules for identifying them.
    For advanced investors, Graham described various special situations or “workouts”.

    The first requires almost no analysis, and is easily accomplished today with a good S&P500 Index fund.
    The last requires more than the average level of ability and experience. Such stocks are also not amenable to impartial algorithmic analysis, and require a case-specific approach.

    But Defensive, Enterprising and NCAV stocks can be reliably detected by today’s data-mining software, and offer a great avenue for accurate automated analysis and profitable investment.

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