The Snowball_ Warren Buffett and the Business of Life - Alice Schroeder [217]
One hundred percent of the book’s reviewers mentioned Buffett. John Brooks, dean of the Wall Street writers, described him as a “Puritan in Babylon” among the “greedy, sideburned young portfolio wizards.”54 Overnight, he was a star.
Even in Omaha, Supermoney created a minor sensation. Buffett had been crowned as the king of investors in a best-selling book. After fifteen years, the jury had come in. He was now “the Warren Buffett.”
36
Two Drowned Rats
Omaha and Washington, D.C. • 1971
Buffett had craved a niche in the publishing big leagues for quite some time. Since newspapers, which were mostly family-owned businesses, had recently gone through a spasm of selling themselves and now looked cheap, he and Charlie Munger had worked ceaselessly to buy one. They had tried, unsuccessfully, to buy the Cincinnati Enquirer from Scripps Howard,1 and Buffett had tried to buy another Scripps company, the New Mexico State Tribune Company, which published the Albuquerque Tribune,2 for Blue Chip, but that bid failed too.
In 1971, Charles Peters, publisher of the Washington Monthly, had gotten a call from Buffett, asking him to introduce Buffett and Munger to Washington Post publisher Katharine Graham. Buffett said that he and Munger had bought some stock in the New Yorker and wanted to buy the whole magazine. They had talked to Peter Fleischmann, chairman of the New Yorker and a large shareholder, who was willing to sell, but they wanted a partner in the purchase and thought the Washington Post might be the right choice.
Peters wasn’t surprised to get the call. Aha, he thought, Buffett must be interested in the Post stock now that the Graham family is taking the company public. Perhaps all the recent public offerings of newspapers were why he continued to own the Washington Monthly. If the Monthly turned out to be an entry point for making a killing on the Post, then the failed investment could be justified financially.
On the brink of the Post’s initial public offering in 1971,3 Peters set up the meeting to explore a partnership to buy the New Yorker. Buffett had never bought public offerings, which he felt were overhyped and overpromoted; they were the opposite of the unloved cigar butts or great-company-at-the-right-price choices like American Express or See’s Candies that he and Munger sought. So Buffett had no plans to buy Post stock, but he and Munger flew to Washington and went to meet Kay Graham at the Washington Post headquarters, a monolithic eight-story 1950s white building with the paper’s name in its distinctive Gothic-style typeface above the door.
Though publisher of the Post, Kay Graham had come late in life to running a newspaper. When she took it over eight years earlier, at age forty-six, she was a widow with four children and had never worked in a business. Now she found herself preparing for the challenge of running a public company under the unremitting scrutiny of investors and the press.
“Charlie and I met her very, very briefly, for twenty minutes. I had no idea what she was like. The idea that she’d be frightened of her own business—I didn’t know any of that. It was raining like hell, so we came in looking like a couple of drowned rats, and you know how we dress anyway.”
As they sat in her office, “She couldn’t have been nicer to us. Then she suggested we go see Fritz Beebe, the chairman of the board, who was really the guy kind of running the place up in New York, which we did. But we weren’t going anyplace with it.”
At the time, Graham had no interest in the New Yorker purchase that had prompted the visit—and there was nothing in the meeting to suggest that she and Buffett would one day be great friends. He made