Renowned investor Warren Buffett has lost the title of the world's richest man to Microsoft (MSFT) founder Bill Gates, according to Forbes magazine's annual ranking of the wealthiest individuals.

Gates, who stepped down as the software giant's boss last year to focus on the charitable organization he runs with his wife, has some $40 billion to his name. With less than half of his vast fortune invested in Microsoft stock, he managed to deflect some of the damage as the shares plunged 45 percent last year.

Buffett slipped to second place with $37 billion. Berkshire Hathaway (BRK.A), his sprawling holding company, suffered its worst returns in 44 years in 2008, leading Buffett to admit that he "did some dumb things in investments."

The two men are friends. Buffett is a generous donor to the Bill & Melinda Gates Foundation. In 2006, he announced that he would give away 85 percent of his Berkshire stock, with Gates' organization getting the lion's share of it.

Forbes' list of the richest people in the world serves as the who's-who of the global capitalist class. Gates had been atop the rankings for 13 years before being supplanted by Buffett last year.

Rounding out the top five were Carlos Slim Helú, the Mexican cellular phone mogul who recently made a big investment in the New York Times Co. (NYT), with $35 billion; Larry Ellison, founder of tech giant Oracle (ORCL), with $22.5 billion; and Ingvar Kamprad, founder of chic Swedish furniture store Ikea, with $22 billion.

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