Dear Mr. Buffett_ What an Investor Learns 1,269 Miles From Wall Street - Janet M. Tavakoli [120]
Warren Buffett may be my benchmark for sanity in the global financial markets (and how to conduct one’s life), but he is not perfect and is not above using statistics to his advantage. At his annual meeting he joked that he (at 77) and Charlie Munger (at 84) have an average age of 80. They are aging by 1.25 percent per year, whereas 50-year-old executives are aging around 2 percent per year. According to these statistics, I am aging around 60 percent faster than Warren.
I really must write him about that.
Notes
Preface
1 Josh Hamilton and Dan Reichl, “Buffett Has $2.1 Million Lunch Date with Hedge-Fund Manager,” Bloomberg News, 28 June 2008.
2 Steven F. Hayward, Churchill on Leadership (Rocklin, CA: Forum, 1997), 3.
Chapter 1: An Unanswered Invitation
1 Warren Buffett to Janet Tavakoli, letter, 6 June 2005.
2 Ann C. Logue, “The Cassandra of Credit Derivatives,” Business Week Chicago, 28 January 2008.
3 Warren Buffett,“Shareholder Letter,” Berkshire Hathaway 2002 Annual Report, 14.
4 Ibid., 11.
5 Ibid., 13.
6 Ibid., 14.
7 Ibid., 15.
Chapter 2: Lunch with Warren
1 Katherine Graham, Personal History (New York: Random House, 1997), 534.
2 Ibid., 531.
3 Taesu Bynun, “IMDb Mini Biography for Dustin Hoffman,” Mndb.com, 2008.
4 Carol J. Loomis, “The Jones Nobody Keeps Up With,” Fortune, April 1966.
5 Benjamin Graham, The Intelligent Investor (New York : Harper & Row, 1973), 108.
6 Benoit Mandelbrot and Richard L. Hudson, The (Mis)Behavior of Markets (New York : Basic Books, 2004), 261.
7 Based on the Yale Endowment Updates 1993-2007 and Berkshire Hathaway historical daily share price data from Yahoo! Finance.
8 Benjamin Graham, The Intelligent Investor (New York: Harper & Row, 1973), 277.
9 Ibid., 103.
10 Cifuentes Arturo, “CDOs and Their Ratings: Chronicle of a Foretold Disaster,” Total Securitization, 4 June 2007.
11 Brooke Masters, “Former Reagan Aide Charged with Fraud,” Financial Times, 26 March 2007.
12 Warren Buffett to Janet Tavakoli, e-mail correspondence, 27 August 2007.
Chapter 3: The Prairie Princes versus the Princes of Darkness
1 Berkshire Hathaway 2007 Annual Report, 15.
2 Julie Rannazzisi, “Coca-Cola to Expense Stock Options,” CBS Marketwatch .com, 14 July 2002.
3 Tom McGinty, “Fewer Investors Back Plans to Weigh in Executive Compensation,” Wall Street Journal, 22 May 2008.
4 Janet Tavakoli, “FASB in Error on Options Valuation,” Financial Times, 5 April 2004.
5 Warren Buffett, “Fuzzy Math and Stock Options,” Washington Post, 6 July 2004.
6 Mark Maremont, “Authorities Probe Improper Backdating of Options—Practice Allows Executives to Bolster Their Stock Gains; A Highly Beneficial Pattern, Wall Street Journal, 11 November 2005.
7 Charles Forelle and James Bandler, “The Perfect Payday—Some CEOs Reap Millions by Landing Stock Options When They Are Most Valuable; Luck—or Something Else?” Wall Street Journal, 18 March 2006.
8 “Perfect Payday: Options Scorecard,” Wall Street Journal, 4 September 2007.
9 Kip Hagopian, “Point of View: Expensing Employee Stock Options is Improper Accounting,” California Management Review 48 no. 4 (Summer 2006): 136-156.
10 Holman W. Jenkins, Jr., “Stock Option Fiends Revealed,” Wall Street Journal, 30 August 2006.
11 Janet Tavakoli, “The Golden Fleece Award for Optional Integrity,” Tavakoli Structured Finance, Inc. (client note), September 6, 2006.
12 Janet Tavakoli, “The Golden Fleece Award for Optional Integrity,” Lipper HedgeWorld, October 2, 2006 (printed with permission of Tavakoli Structured Finance, Inc., which retains the copyright).
13 Warren Buffett to Janet Tavakoli, e-mail correspondence, 2 October 2006.
14 Kevin Allisonin, “HP’s Dunn Charged With Conspiracy,” Financial Times, 5 October 2006.
15 Warren Buffett, memo of September 27 was published in the Financial Times on October 9, 2008. It was sent