The Snowball_ Warren Buffett and the Business of Life - Alice Schroeder [527]
8. Howard Buffett wrote to former president Hoover, October 23, 1952: “I have no enthusiasm for Eisenhower, but your decision to support his election is good enough for me.” He apparently changed his mind after this letter was written.
9. Interview with Roberta Buffett Bialek.
10. Interview with Katie Buffett, who recalled this conversation and found it amusing. “Warren’s probably forgotten he told me that one,” she said.
11. Susan Goodwillie Stedman, recalling personal interview with Susan Thompson Buffett conducted November 2001, courtesy of Susan Goodwillie Stedman and Elizabeth Wheeler.
12. Interview with Susan T. Buffett.
13. Interviews with Mary and Dick Holland, Warren Buffett.
14. Interviews with Racquel Newman, Astrid Buffett.
15. The IQ story is a family tale, but since Dr. Thompson was in charge of IQ testing for the whole school system, it has at least some credence. Within the family, Dr. Thompson often tested his daughters and grandchildren while he was creating new psychology and intelligence tests. Whatever her IQ, Dottie was considered no dummy.
16. This story is related in Leila Buffett’s diary. Also, Gabe Parks, “Court Has Nomination Vote Vacancy,” Omaha World-Herald, July 4, 1954.
17. “Buffett May Join Faculty at UNO,” Omaha World-Herald, April 30, 1952; Buffett-Falk and Company announcement, Omaha-World Herald, January 9, 1953; “Talks on Government Scheduled at Midland,” Omaha World-Herald, February 6, 1955; “Buffett Midland Lecturer in 1956,” Omaha World-Herald, February 15, 1955.
18. Warren Buffett letter to “Pop” Howard Buffett, dated “Wednesday,” presumed August 4, 1954. “Scarsdale G.I. Suicide, Army Reports the Death of Pvt. Newton Graham in France,” New York Times, August 3, 1954. The entire text of the item read: “Frankfurt, Germany, Aug. 2 (Reuters)—Pvt. Newton Graham of Scarsdale, N.Y., committed suicide at La Rochelle, France, the United States Army announced today.” Newton—named after Sir Isaac Newton—was the second of Graham’s sons to be named Isaac Newton; the first had died of meningitis at age nine. Noting Newton’s increasing mental instability, which he labeled “highly neurotic, even probably schizophrenic,” Graham had written letters trying to get him discharged from the army, but failed. (Benjamin Graham, The Memoirs of the Dean of Wall Street. New York: McGraw-Hill, 1996.)
19. Susie Buffett Jr. says she had a crib.
20. Using the term “pay” loosely, since all of the earnings are not actually paid out as a dividend. This distinction was once the subject of heavy academic debate as to the discount that should be imputed to a stock’s valuation for earnings that were not paid out. The premium assigned to companies that pay dividends has waned for a number of reasons. See also the reference to “The Frozen Corporation” in Chapter 46, “Rubicon.”
21. Interview with Fred Stanback.
22. His personal investment return that year was 144.8%, compared to 50.1% for the DJIA.
23. Union Underwear was the predecessor to Fruit of the Loom.
24. Buffett recalled this classic story in an interview.
25. Interview with Sue James Stewart.
26. Interview with Elizabeth Trumble.
27. Interview with Roxanne Brandt.
28. I Love Lucy, Season 1, Episode 6, November 11, 1951.
29. Buffett’s exact quote was “I can see her pulsing and moaning as she said, ‘Tell me more…’”
Chapter 21
1. Berkshire Hathaway chairman’s letter, 1988.
2. The tax code exemption applied to LIFO inventory liquidations. For tax purposes Rockwood used LIFO accounting, which let it calculate profits using the most recent cocoa-bean prices, which minimized taxes. Correspondingly, cocoa beans were carried in inventory at old prices. A large taxable profit would therefore occur if it sold the inventory.
3. Pritzker created a business conglomerate through his investing activities, but is best known as founder of the Hyatt hotel chain.
4. At the onset of the exchange period, Accra cocoa beans, which made up half of Rockwood’s 13-million-pound pile, were trading at $0.52 a pound.