The Snowball_ Warren Buffett and the Business of Life - Alice Schroeder [262]
Buffett arrived at Sunnylands filled with curiosity to meet Annenberg. The two already had a connection; Annenberg was the brother of Aye Simon, the “spoiled, spoiled” widow of Ben Rosner’s former partner Leo Simon—the same Aye Simon whom Rosner had decided to screw when he had sold Associated Retailing to Buffett too cheap, because she was no longer his partner. On the one occasion that Buffett had met her, Aye Simon had entertained him in her vast art-filled apartment in New York City. Maids tiptoed back and forth carrying silver trays of cucumber sandwiches; Aye explained to Buffett that her “Pop,” Moe Annenberg, once had his goons, known as “the boys,” “take a few shots at Leo” to improve his attitude toward Moe. You can still see the bullet holes on a building on a certain corner of Michigan Avenue in Chicago, she told Buffett. Aye then asked for her son to join the Buffett partnership. Warren, “envisioning bullets” if he turned in a year of bad results, had “tap-danced” his way out of the situation.
Her brother, Walter, had spent decades establishing a reputation for propriety about as different from the image of bullets on Michigan Avenue as you could get. Sunnylands was a vast, opulent oasis in the desert in Rancho Mirage, California. Amid a garden filled with the images of Mayan sun gods, Rodin’s bronze sculpture of Eve stood in a reflecting pool, covering her face in shame. Hundreds of floating bromeliads gazed up at her from the water beneath her feet. At Sunnylands, Annenberg had entertained Prince Charles, hosted Frank Sinatra’s fourth wedding, and given his friend Richard Nixon peace and quiet to write his last State of the Union address.
“He had a courtly way about him and was very formal. We went outside in back by the pool, and Walter sat down. He was beautifully dressed and looked as though everything he was wearing had been bought that morning. He was about seventy at the time, and I was about forty-seven. And he said, in a nice, kind manner, as if he were talking to a young man he was trying to help, ‘Mr. Buffett, the first thing you should understand is, nobody likes to be criticized.’ That was setting the ground rules for getting along.”
Nothing could be easier for Buffett. “I said, ‘Yes, Mr. Ambassador. I’ve got it. Don’t worry about that one.’
“And then he started in on ‘Essentiality.’
“‘There are three properties in the world,’ he said, ‘that have the quality of ‘Essentiality.’ They are the Daily Racing Form, the TV Guide, and the Wall Street Journal. And I own two out of three.’
“What he meant by ‘Essentiality’ was that, even during the Depression, he saw the Racing Form being sold for two and a half bucks down in Cuba.”
The Racing Form had that quality because there was no source of better or more complete information about handicapping horses.
“It sold a hundred fifty thousand copies a day, and it had for about fifty years. It cost more than two bucks, and it was essential. If you were headed to the racetrack and were a serious racing handicapper, you wanted the Racing Form. He could charge whatever he wanted, and people were going to pay it. It’s like selling needles to addicts, basically.
“So every year, Walter would go in and say, ‘Mirror, mirror, on the wall, how much should I raise the price of the Racing Form this fall?’
“And the mirror would always say, ‘Walter, charge another quarter!’”
This was when you could buy the entire New York Times or Washington Post