Dear Mr. Buffett_ What an Investor Learns 1,269 Miles From Wall Street - Janet M. Tavakoli [9]
I mentioned that Comedy Central’s The Daily Show with Jon Stewart often has better news analysis than what tries to pass as news shows on other channels. Warren hadn’t watched the program, but asked if he should. I said Stewart’s interviews of leading world figures might be of interest, and later occasionally sent a link. Warren had not yet gotten around to getting a TiVO. Neither had I.
Warren displays an open mind to all new ideas. Warren and I both love our newspapers, but we love news more, wherever we find it. The challenge is to find reliable news. I was about to discover that some of the information I had read about Warren Buffett was incorrect, and the coming years would reveal more inaccuracies.
Dustin Hoffman once remarked on a story he read about how he and Tom Cruise were holding up shooting because they were a couple of prima donnas. The story was fabricated: “but if I wasn’t making a movie with him and I just picked up the paper, I’d believe it. That’s interesting, isn’t it?”3 There is a reason we call it the “Information Age,” not the “Age of Wisdom.”
Financial research often ends where the Internet begins. Articles are frequently incorrect, urban legend is sometimes presented as fact, and trivial errors sometimes become viral financial lore. Benjamin Graham, Warren Buffett’s Columbia School professor and mentor, founded a hedge fund in the 1920s. Warren says that Graham’s hedge fund was the earliest as far as he knows, though there may have been another before it. Yet, most media report that the first hedge fund founded in the United States was done so in 1949 by A. W. Jones.4 Financial journalists rarely mention Benjamin Graham’s fund. Apparently there are no Google references to the 1920s.
On a televised talk show, Ben Bradlee, vice president and managing editor of the Washington Post, held that he didn’t think newspapers would ever be supplanted by the Internet. Some Internet sources are excellent, but it is still unclear if they can make enough revenue to continue putting out quality information, and new competitors keep popping up on the Web. He is probably correct that there will always be a demand for newspapers; but newspaper revenues are already being partially supplanted as they lose chunks of lucrative classified ad revenues to the Internet.
Unlike Bradlee, Warren does not let nostalgia get in the way of a good business strategy. On November 21, 2005, Cathy Baron Tamraz, the founder of Business Wire, a San Francisco-based distributor of online press releases, sent Warren a letter in which she told him, “We run a tight ship and keep spending under wraps . . .” She describes a business with no secretaries or management layers, and they invest most of what they have to stay abreast of technology. By the time he finished reading the letter,Warren had decided to acquire a business perfect for his investment style: it has dedicated management, eliminates unnecessary overhead, produces a product people need and has huge potential for revenue growth. By March 2006, Warren had closed the deal, making Business Wire, an Internet phenomenon, a wholly owned subsidiary of Berkshire Hathaway.
An assistant handles Warren’s e-mail. This is because Warren molds technology to his lifestyle rather than letting it mold him. He joked that Bill Gates offered to send him an attractive young female computer expert to show him the ropes.Warren, however, is quite comfortable with the computer. He plays hours of online bridge, and he asked me about my bridge-playing skills: “Do you play online?” Warren encouraged me to, but I like to see the other players. I responded: “Audrey Grant, a master bridge player I met, says bridge is about luck, skill, and your relationship with your partner. I like to hear the bidding with all the inflections.”
At the mention of Audrey Grant,Warren’s eyes twinkled with delight; he knows her. I had already told him “Tavakoli” is my ex-husband’s name,