The Snowball_ Warren Buffett and the Business of Life - Alice Schroeder [22]
“When I was a kid,” Warren would later say, “I got all kinds of good things. I had the advantage of a home where people talked about interesting things, and I had intelligent parents and I went to decent schools. I don’t think I could have been raised with a better pair of parents. That was enormously important. I didn’t get money from my parents, and I really didn’t want it. But I was born at the right time and place. I won the ‘Ovarian Lottery.’”
Buffett always credited most of his success to luck. When it came to his recollections of his family, however, he was creating some of his own reality. Few would agree he couldn’t have been raised with a better set of parents. When he talked about how important it is for parents to have an Inner Scorecard when raising their kids, he always used his father’s Inner Scorecard as an example. He never mentioned his mother.
6
The Bathtub Steeplechase
Omaha • 1930s
In the 1920s, the champagne bubbles of a frothy stock market led ordinary people to invest for the first time.1 By 1927, Howard Buffett decided to join them and got a job as a stockbroker with the Union State Bank.
The celebration ended two years later. On “Black Tuesday,” October 29, 1929, the market dropped $14 billion in a single day.2 Wealth worth four times the budget of the United States government evaporated in a few hours.3 The market’s losses in 1929 cost $30 billion, close to what the country had spent fighting World War I.4
Amid the bankruptcies and suicides that followed, people began to hoard money, and nobody wanted stocks.
“It was four months before my dad made his next sale. His first commission was five bucks. My mother used to go out with him at night on the streetcar, waiting outside when he would call on somebody, just so he wouldn’t feel so depressed when he came home.”
Ten months after the crash, on August 30, 1930, the Buffetts’ second child, Warren Edward, was born, five weeks before his due date.
An anxious Howard went to see his father, hoping to be hired on at the family grocery store. All the Buffetts, even those with other jobs, put in a stint at the store every week, but only his brother Fred worked there full-time, and that for meager pay. Now, Ernest told Howard that he had no money to pay another son.5
In one sense, Howard felt relief. He’d “escaped” from working at the store and never wanted to go back.6 But he worried that his family would starve. “Don’t worry about food, Howard,” Ernest told him. “I’ll just let your bill run.”
“That was my grandfather,” Warren says. “‘I’ll just let the bill run.’” It wasn’t that Ernest didn’t love his family, “you just wished he showed it a little more often.”
“I guess you’d better go back on home to West Point,” Howard told his wife. “At least you’ll have three meals a day.” But Leila stayed. She walked to Robert’s Dairy to pay the bill rather than pay a streetcar fare. She started skipping her church circle because she couldn’t afford the twenty-nine cents for her turn at bringing coffee.7 Rather than run up a tab at the family store, she sometimes went without to make sure Howard was fed.8
One Saturday, two weeks before Warren’s first birthday, people stood on line downtown, dripping with sweat in the hundred-degree heat, waiting to reclaim their cash from the shaky custody of the local banks. They shuffled forward from early morning until ten p.m. and counted and recounted the people ahead in line, silently repeating a financial rosary: Please, God, let there be money left when it’s my turn.9
Not every prayer was heard. Four state banks closed their doors that month,