16. Dan Monen.
17. Warren Buffett, letter to partners, January 18, 1963.
18. David Strassler.
19. Warren Buffett, letter to partners, January 24, 1962.
20. In his letter to partners of January 24, 1962, Buffett wrote: “You will not be right simply because a large number of people momentarily agree with you.” Compare this to Graham’s comment on disagreeing with the crowd on page 44.
21. Warren Buffett, letter to partners, January 24, 1962.
22. Ibid.
23. Hugh S. Hord.
24. Keith McCormick.
25. James Koley; Gordon Ryan.
26. Peter Buffett; Tom Rogers; Thama Friedman.
27. Doris Buffett Bryant.
28. Ibid.
29. Peter Buffett.
30. Eunice Denenberg.
31. Yale Trustin.
32. Eunice Denenberg.
33. Warren Buffett, letter to partners, January 24, 1962.
34. Roy Tolles.
35. Lee Seemann.
36. Richard Holland.
37. Robert Dorr, “Ex-Omahan Traded Law for Board Room,” Omaha World-Herald, August 31, 1977.
38. Warren Buffett, letter to partners, January 18, 1963.
39. Ibid.
40. Dorr, “Investor at 11.”
41. Bob Billig; Ed Anderson.
42. Warren Buffett, appendix to letter to partners, 1964.
43. Warren Buffett, letter to partners, January 18, 1963.
Chapter 5. PARTNERS
1. Warren Buffett, letter to partners, January 20, 1966.
2. Frederic Sondern, Jr., “Checks That Never Bounce,” Reader’s Digest, August 1963.
3. “Credit: Toward a Cashless Society,” Time, November 5, 1965.
4. American Express Co., 2963 Annual Report, 22.
5. Howard Clark.
6. See the Pulitzer-prize-winning account of Norman C. Miller in the Wall Street Journal, “How Phantom Salad Oil Was Used to Engineer $100 Million Swindle,” December 2, 1963; Murray Kempton, “The Salad Oil Mystery,” New Republic, July 24, 1965.
7. Josephine Lorella [owner of Ross’s].
8. “How Omaha Beats Wall Street.”
9. Graham, Intelligent Investor, 283.
10. Smith, Supermoney, 193.
11. Howard Clark.
12. Davis, “Buffett Takes Stock.”
13. Warren Buffett, letter to partners, January 20, 1966.
14. Warren Buffett, letter to partners, January 18, 1965.
15. Warren Buffett, letter to partners, January 18, 1963.
16. Warren Buffett, letter to partners, January 18, 1965.
17. Warren Buffett, letter to partners, January 18, 1963.
18. Ibid.; Warren Buffett, letters to partners, January 18, 1965.
19. William Brown.
20. Warren Buffett, letter to partners, January 24, 1962.
21. Warren Buffett, letters to partners, January 18, 1964, and January 18, 1965.
22. Warren Buffett, letter to partners, January 18, 1965.
23. Ibid.
24. Warren Buffett, letter to partners, January 20, 1966.
25. Ibid.
26. Ibid.
27. Graham, Intelligent Investor, 282.
28. Warren Buffett, letter to partners, January 18, 1965.
29. Richard Holland.
30. Marshall Weinberg.
31. Martha Tolles.
32. Smith, Supermoney, 182; Richard Holland.
33. “Buffett Enthusiastic Birch Member,” Omaha World-Herald, April 1, 1961.
34. Keith McCormick.
35. Elizabeth Flynn, “Panel Cracks Wall of Prejudice with Humor, Common Sense,” Omaha World-Herald, March 30, 1962. Similar groups had been organized in Kansas City and Des Moines.
36. U.S. Senator Bob Kerrey [D-Neb.].
37. Dan Monen.
38. Howard Graham Buffett.
39. The phrase is from Peter Buffett.
40. Marshall Weinberg.
41. Ibid.
42. Barbara Morrow.
43. Tom Rogers. The younger Susie recalled that when the Buffetts went to Disneyland, Warren would sit on a bench and read and join the family at lunchtime.
44. “How Omaha Beats Wall Street”; Barbara Morrow.
45. “How Omaha Beats Wall Street.”
46. Smith, Supermoney, 193.
47. Warren Buffett, talk at Kenan-Flagler Business School, University of North Carolina, October 20, 1994.
48. Warren Buffett, letter to partners, January 20, 1966.
49. Warren Buffett, letter to partners, January 25, 1967.
50. Warren Buffett, letter to partners, January 20, 1966.
51. Dorr, “Investor at 11.”
52. Jack Hyde, “Buffett Means Business,” Daily News Record, May 20, 1965.
53. Ann Seemann Drickey.
Chapter 6. Go-Go
1. Warren Buffett, letter to partners, January 20, 1966.
2. Warren Buffett, letter to partners, July 12, 1966.
3. Ibid.
4. Warren Buffett, letter to partners, January 25, 1967.
5. Ibid.
6. John Brooks, The Go-Go Years (New York: Weybright & Talley, 1973), 210.
7. “The Ghost of Fred Carr,” Business Week, August 25, 1973.
8. “A Fund Wizard Builds an Empire,” Business Week, May 3, 1969.
9. Warren Buffett, letter to partners, January 25, 1967.
10. Ibid.
11. Benjamin Rosner.
12. Warren Buffett, letter to partners, July 12, 1967.
13. U.S. Senate, Committee on Banking and Currency, “Mutual Fund Legislation of 1967,” August 2, 1967.
14. John M. Keynes, The General Theory of Employment, Interest and Money (1st ed. 1936; New York: Cambridge Univ. Press, 1973), 154–55.
15. The Collected Writings of John Maynard Keynes, vol. 12, ed. Donald Moggridge (New York: Macmillan, 1983). See ch. 1, “Keynes as an Investor.”
16. Keynes, General Theory, 156.
17. All discussions of crowd psychology—including this one—are indebted to Gustave Le Bon’s small-shelf classic The Crowd: A Study of the Popular Mind (1st trans. 1896; London: Ernest Benn, 1938).
18. This version of the tale, which Buffett knew in the sixties, is from Berkshire Hathaway Inc., 1985 Annual Report, p. 5.
19. Galbraith, The Great Crash, 47.
20. Brooks, Go-Go Years, 280–85.
21. Ford Foundation, 1966 Annual Report, vii.
22. I. Ross, “McGeorge Bundy and the New Foundation Style,” Fortune, April 1968.
23. Warren Buffett, letter to partners, October 9, 1967.
24. Warren Buffett, letter to partners, January 24, 1968.
25. Loomis, “Inside Story”; Davis, “Buffett Takes Stock.”
26. Buffett, talk at UNC, 1994; Berkshire Hathaway Inc., 1995 Annual Report, 16.
27. Warren Buffett, letter to partners, January 24, 1968.
28. Warren Buffett, letter to Graham group, January 16, 1968.
29. Warren Buffett, letter to Graham group, January 2, 1968.
30. Charlie Munger; Davis, “Buffett Takes Stock.”
31. Warren Buffett, letter to partners, October 9, 1967.
32. Buffett discussed his continuing fidelity to Graham’s ideas in the Berkshire Hathaway 1983 Annual Report, p. 4.
33. Lowe, Benjamin Graham, 3.
34. Jack Alexander.
35. Warren Buffett, talk at Columbia, 1993.
36. Warren Buffett, letter to partners, January 24, 1968.
37. Brooks, Go-Go Years, 183–84.
38. Warren Buffett, letter to partners, July 11, 1968.
39. Brooks, Go-Go Years, 267–68.
40. Warren Buffett, letter to partners, January 24, 1968.
41. Warren Buffett, letter to partners, January 22, 1969.
42. “Expert on Investing Plans to Slow Down,” Omaha World-Herald, February 25, 1968.
43. Ed Anderson.
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44. Robin Wood.
45. Wall Street Transcript, January 1969; Burton G. Malkiel, A Random Walk down Wall Street (1st ed. 1973; New York: Norton, 1991), 173; Brooks, Go-Go Years, 267–70.
46. Wall Street Transcript, January 1969.
47. Warren Buffett, letter to partners, January 22, 1969.
48. Wall Street Transcript, multiple issues.
49. Wall Street Transcript, interview with William R. Berkley, December 8, 1969.
50. Warren Buffett, letter to partners, January 22, 1969.
51. “Fund Wizard Builds an Empire.”
52. Warren Buffett, letter to partners, May 29, 1969.
53. Dan Monen; Charlie Munger.
54. Warren Buffett, letter to partners, May 29, 1969.
55. Estimated from a partnership filing of January 1, 1969.
56. Warren Buffett, letter to partners, May 29, 1969.
57. Robert Dorr, “Buffett Plans to Shut Down Finance Firm,” Omaha World-Herald, June 2, 1969.
58. C. J. Loomis, “Hard Times Come to the Hedge Funds,” Fortune, January 1970.
59. Smith, Supermoney, 198–99.
60. Fran Burton. Burton’s father supported Buffett’s entry.
61. Jonathan R. Laing, “The Collector: Investor Who Piled Up $100 Million in the ’6os Piles Up Firms Today,” Wall Street Journal, March 31, 1977.
62. The reference to Belous is from Supreme Court of the U.S., No. 70–18, 1971 Term, Roe v. Wade, Brief for Appellants, 108–9.
63. Evelyn Simpson, “Looking Back: Swivel Neck Needed for Focus Change Today,” Omaha World-Herald, October 5, 1969.
64. Brooks, Go-Go Years, 261.
65. Lipper Analytical Services; “Ghost of Fred Carr.”
66. Brooks, Go-Go Years, 4.
67. Warren Buffett, letter to partners, February 18, 1970.
68. Leland Olson.
69. Warren Buffett, letter to partners, February 25, 1970.
70. Warren Buffett, letter to partners, December 5, 1969.
71. Ibid.
Chapter 7. BERKSHIRE HATHAWAY
1. Herman Melville, Moby-Dick (1st ed. 1851; New York: Bantam, 1986), 40.
2. Spinner: People and Culture in Southeastern Massachusetts, vol. 4 (New Bedford: Spinner Publications, 1988), 185.
3. Bess Zarafonitis, “When Cloth Mills Made City’s Gold,” New Bedford Standard-Times, August 18, 1985.
4. Horatio Hathaway, A New Bedford Merchant (New Bedford: private printing, 1930), 3–10; Zarafonitis, “When Mills Made Gold”; “The New Mill of the Hathaway Manufacturing Company,” New Bedford Evening Standard, December 24, 1888.
5. People and Culture, 185; Zarafonitis, “When Mills Made Gold.”
6. People and Culture, 185.
7. Ibid, 186.
8. Seabury Stanton, Berkshire Hathaway Inc: A Saga of Courage (New York: Newcomen Society, 1962), 15–16 [account of Newcomen Society dinner, Boston, 1961].
9. Stanton, Saga of Courage, 17–18; People and Culture, 186.
10. Malcolm Chace; “The Chace Tradition,” Warp and Filling [Berkshire Hathaway magazine], Autumn 1965.
11. Stanton, Saga of Courage, 10.
12. Ibid, 11.
13. Kenneth V. Chace.
14. Ibid.
15. Jack Stanton.
16. Ralph Rigby.
17. Stanton, Saga of Courage, 20; Ken Chace.
18. Value Line, reports of Richard N. Tillison, March 18, 1963, June 17, 1963, and September 13, 1963.
19. “The New Team at Berkshire Hathaway,” Warp and Filling, Autumn 1965.
20. Susan and Warren Buffett, eulogy for Daniel Cowin.
21. “New Berkshire Interests Plan No Policy Shift,” New Bedford Standard-Times, May 11, 1965.
22. Ken Chace; Jack Stanton. Warp and Filling, published by Berkshire, reported in the Autumn 1965 edition that Buffett had been “suddenly revealed” as the controlling shareholder.
23. Malcolm Chace.
24. “New Berkshire Interests Plan No Policy Shift.”
25. Ibid.; Joseph L. Goodrich, “K. V. Chace Heads Berkshire Hathaway,” Providence Journal, May 11, 1965.
26. “Seabury Stanton Resigns at Berkshire,” New Bedford Standard-Times, May 10, 1965.
27. Berkshire Hathaway, Letters to Shareholders, 1977–1984, 1.
28. Berkshire Hathaway Inc., 1985 Annual Report, 8.
29. Berkshire Hathaway Inc., 1966 Annual Report, 3.
30. Ringwalt, Tales of National Indemnity, 3.
31. Ibid, 46.
32. Robert Dorr, “ ‘Unusual Risk’ Ringwalt Specialty,” Omaha World-Herald, March 12, 1967.
33. Ringwalt, Tales of National Indemnity, 62–63.
34. Berkshire Hathaway Inc., 1969 Annual Report, 2.
35. Ralph Rigby.
36. SEC File No. HO-784, in the matter of Blue Chip Stamps, et al.
37. Ibid, [italics added].
38. Berkshire Hathaway Inc., 1970 Annual Report, 1.
39. Warren Buffett, letter to partners, December 5, 1969.
40. Ken Chace.
41. See, for instance, Buffett’s letter to partners of January 20, 1966: “Berkshire is a delight to own.”
Chapter 8. RETURN OF THE NATIVE
1. Train, Money Masters, 9.
2. Warren Buffett, letter to John Spears, July 6, 1971.
3. Loomis, “Hard Times.”
4. Doris Buffett Bryant.
5. Jack Z. Smith, “Warren Buffett: Corn-fed Capitalist,” Fort Worth Star-Telegram, June 7, 1987.
6. Caroline Mayer.
7. Layne Yahnke.
8. SEC File No. HO-784, Blue Chip Stamps, et al./Charles E. Rickershauser, Jr., letter to Stanley Sporkin, December 1, 1975.
9. SEC File No. HO-784, Blue Chip Stamps, et al./Warren Buffett, letter to Lawrence Seidman, March 4, 1975.
10. SEC File No. HO-784, Blue Chip Stamps, et al./Warren Buffett, letter to Ambrose Jackson, April 2, 1973.
11. George Rushing. As a minority-owned venture, the bank failed. It was ultimately sold to Norwest Corp., at a 90 percent loss to the original stockholders.
12. Charles Heider; Sam Thorson, “Warren Buffet [sic], Omahan in Search of Social Challenges,” Lincoln Journal & Star, March 18, 1973.
13. Thorson, “Omahan in Search.”
14. Charlie Peters. One of the editors was Taylor Branch, later the biographer of Martin Luther King, Jr.
15. Stan Lipsey.
16. Previously, Boys Town’s report was combined with that of the Archdiocese of Omaha.
17. SEC File No. HO-784, Blue Chip Stamps, et al./Warren Buffett, letter to Martin J. Burke, October 27, 1972.
18. Laing, “The Collector.”
19. Stan Lipsey.
20. There is a record of Berkshire’s stock purchases in SEC File No. HO-784, Blue Chip Stamps, et al.
21. Peter Buffett.
22. Barbara Morrow.
23. Peter Buffett; Tom Rogers [the Buffetts’ nephew].
24. Buffett, 1984 Graham and Dodd seminar.
25. Norman Williamson.
26. William H. Schumann III, Executive Director, Corporate Development, letter to author, September 21, 1992. Buffett’s compound average gain was 8.6 percent. The year-by-year record: 1973, –14.2 percent; 1974, –12.6 percent; 1975, +33 percent; 1976, +45.4 percent; 1977, +4.1 percent. FMC also hired several other value managers at Buffett’s suggestion.
27. SEC File No. HO-784, Blue Chip Stamps, et al./Donald Mutschler, letter to Warren Buffett, August 29, 1973.
28. Buffett, 1984 Graham and Dodd seminar.
29. Wall Street Transcript, May 7, 1973.
30. SEC File No. HO-784, Blue Chip Stamps, et al./Warren Buffett, letter to William Taylor, October 1, 1973.
31. 1986 Capital Cities/ABC management conference.
32. “Pension Fund and Money Managers,” Wall Street Transcript, December 23, 1974.
33. Carl Spielvogel.
34. Verne McKenzie; Conrad Taff.
35. Ed And
erson; Walter Schloss.
36. SEC File No. HO-784, Blue Chip Stamps, et al./Warren Buffett, letter to Eugene Abegg, January 23, 1974.
37. Berkshire Hathaway Inc., 1974 Annual Report, 4.
38. Wall Street Transcript, April 23, 1973.
39. William G. Shepherd, “The Size of the Bear,” Business Week, August 3, 1974; William Gordon, “Poppa Bear Market,” Barron’s, August 26, 1974.
40. Wall Street Transcript, January 1974.
41. Howard Stein, “Some Thoughts for Financial Analysts,” reprinted in Wall Street Transcript, June 17, 1974 [italics added].
42. Benjamin Graham, “Renaissance of Value,” as reprinted in Barrons, September 23, 1974.
43. Reprinted in Wall Street Transcript, September 1, 1974.
44. “Look at All Those Beautiful, Scantily Clad Girls out There!” Forbes, November 1, 1974. Forbes prudishly substituted “harem” for “whorehouse.”
Chapter 9. ALTER EGO
1. Charlie Munger.
2. James Gipson.
3. George Michaelis witnessed the interchange.
4. Berkshire Hathaway Inc., 1991 Annual Report, 9–10; Robert Flaherty; SEC File No. HO-784, Blue Chip Stamps, et al., testimony of Warren Buffett, March 21, 1975, p. 22.
5. SEC File No. HO-784, Blue Chip Stamps, et al./Warren Buffett, letter to Charles N. Huggins, November 29, 1974.
6. SEC File No. HO-784, Blue Chip Stamps, et al./Warren Buffett, letter to Charles N. Huggins, December 13, 1972.
7. SEC File No. HO-784, Blue Chip Stamps, et al./Warren Buffett, letter to Donald Koeppel [president, Blue Chip], May 8, 1972.
8. SEC File No. HO-784, Blue Chip Stamps, et al./Warren Buffett, letter to Donald B. Koeppel, April 6, 1972.
9. SEC File No. HO-784, Blue Chip Stamps, et al., testimony of Buffett, p. 26.
10. Ibid., 24–26.
11. Ibid., 42–43.
12. SEC File No. HO-784, Blue Chip Stamps, et al., testimony of Buffett, pp. 63–64; testimony of Charlie Munger, March 19–20, 1975, p. 53.
13. SEC File No. HO-784, Blue Chip Stamps, et al., notes of Louis R. Vincenti, February 7, 1973.
14. Ira Marshall.
15. California v. Belous, Amici Curiae in Support of Appellant. Joan Babbott; Mary Ripley; Ruth Roemer; Dr. Keith Russell.
16. Joan Babbott.
17. Charles Munger, “Bad Judgments, Common Causes,” talk at California Institute of Technology, February 17, 1992.
18. SEC File No. HO-784, Blue Chip Stamps, et al., testimony of Elizabeth Peters, March 20, 1975, pp. 19, 32–40.
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