The Snowball_ Warren Buffett and the Business of Life - Alice Schroeder [511]
Finally, New York Governor Eliot Spitzer, who launched the investigation, resigned only a month after the defendants in the AIG trial were convicted, following revelations that he patronized the prostitutes of an escort service called the Emperor’s Club.
Notes
Chapter 1
1. This quote, or its variation, “Behind every great fortune there is a great crime,” is cited endlessly without a specific source: for example, in Mario Puzo’s The Godfather and in commentary on The Sopranos and on the Internet bubble. This pithier version condenses what Honoré de Balzac actually wrote in Father Goriot: “The secret of a great success for which you are at a loss to account is a crime that has never been found out, because it was properly executed.”
Chapter 2
1. Herbert Allen made an exception for Ken Auletta, the first and only time a writer was allowed to attend and write about Sun Valley. “What I Did at Summer Camp” appeared in the New Yorker, July 26, 1999.
2. Interview with Don Keough. Other guests commented on Buffett’s role at Sun Valley as well.
3. Except Donald Trump, of course.
4. Dyan Machan, “Herbert Allen and His Merry Dealsters,” Forbes, July 1, 1996.
5. Elephant herds are matriarchal, and the females eject the males from the herd as soon as they are old enough to become dominant and aggressive. Then the solitary males approach herds of females, trying to mate. However, this isn’t exactly the way human elephant-bumping works.
6. Allen & Co. does not release the numbers, but the conference was said to cost around $10 million, more than $36,000 per invited family. Whether $5 or $15 million, that pays for a lot of fly-fishing and golf over the course of a long weekend. Much of the money pays for the conference’s exhaustive security and logistics.
7. Buffett likes to tell a joke about having worked his way up to this exalted state: starting from a trailer, then the lodge, then a lesser condo, and so forth.
8. Herbert Allen’s son Herbert Jr. is usually referred to as “Herb.” However, Buffett refers to Herbert Sr. as “Herb” as a mark of their friendship, as do a few other people.
9. This portrait of Sun Valley and the impact of the dotcom billionaires is drawn from interviews with a number of people, including investment managers with no ax to grind. Most asked not to be named.
10. Allen & Co. and author estimate. This is the total assets under management of money managers who attend the conference, added to the personal fortunes of the guests. It represents their total economic power, not their consumption of wealth. By comparison, the capitalized value of the U.S. stock market at the time was about ten trillion dollars.
11. $340,000 per car in Alaska, Delaware, Hawaii, Montana, New Hampshire, both Dakotas, Vermont, Wyoming, and throw in Washington, D.C., to boot (since the District of Columbia is not a state).
12. Interview with Herbert Allen.
13. Buffett had spoken twice before at the Allen conference, in 1992 and 1995.
14. Buffett and Munger preached plenty to their shareholders at Berkshire Hathaway annual meetings, but this preaching to the choir doesn’t count.
15. Al Pagel, “Coca-Cola Turns to the Midlands for Leadership,” Omaha World-Herald, March 14,1982.
16. Buffett’s remarks have been condensed for readability and length.
17. PowerPoint is the Microsoft program most often used to make the slide presentations so ubiquitous in corporate America.
18. Interview with Bill Gates.
19. Corporate profits at the time were more than 6% of GDP, compared to a long-term average of 4.88%. They have since risen to over 9%, far above historic standards.
20. Over long periods the U.S. economy has grown at a real rate of 3% and a nominal rate (after inflation) of 5%. Other than a postwar boom or recovery from severe recession, this level is rarely exceeded.
21. American Motors, smallest of the “Big Four” automakers, sold out to Chrysler in