The Snowball_ Warren Buffett and the Business of Life - Alice Schroeder [534]
10. Interview with Dick and Mary Holland.
11. Interview with Peter Buffett.
12. Interview with Howie Buffett.
13. Ibid.
14. Gateway, May 26, 1961.
15. “Paul Revere’s Ride,” Henry Wadsworth Longfellow. Listen my children, and you shall hear of the multitudes rescued by Susan Buffett.
16. From remarks made by Eisenberg at Susie’s funeral.
17. According to his autobiography, Stranger to the Game (written with Lonnie Wheeler, New York: Penguin, 1994), Bob Gibson lived in Omaha in the off season. He talks about playing basketball in Omaha with a white team in 1964, traveling to Iowa for games, and hanging out at a bar on North 30th Street. The bartender wouldn’t serve him.
18. Howard Buffett quoted in Paul Williams, “Buffett Tells Why He Joined Birch Society,” Benson Sun, April 6, 1961.
19. The Christian Anti-Communist Crusade was founded in 1953 by “a crisp, energetic, self-confident Austrian,” Fred Schwarz, who was a physician, psychiatrist, and lay preacher. It used media to spread its anti-Communist philosophy. Cabell Phillips, “Physician Leads Anti-Red Drive with ‘Poor Man’s Birch Society,’” New York Times, April 30, 1961. See the CACC website, http://www.schwarzreport.org/.
20. Leila Buffett letter to Dr. Hills, December 10, 1958.
21. Leila Buffett to Mrs. Kray, May 23, 1960.
22. Interview with Susie Buffett Jr. and Howie Buffett. They recall their father’s behavior during this period as routine and, with hindsight, as a form of denial.
23. Interview with Howie Buffett.
24. Interview with Chuck Peterson.
25. According to Chuck Peterson, Carol Angle “did not hear well.” This is a example of Buffett’s raconteuring. She says she had progressive hearing loss.
26. Interview with Lee Seeman.
27. Interview with Dick Holland.
28. Interviews with Frank Matthews Jr. and Walter Schloss, who agree that Schloss introduced them on the street corner.
29. This is how hedge funds are commonly managed to stay within the legal investor limit today.
30. George Payne was also a founding member of this partnership. By then, B-C had been folded into Underwood. Along with the ten partnerships, Warren and his father were still operating Buffett & Buffett.
31. The Dow’s results include dividends received. Note that this was the performance for the partnership before Warren’s fees.
32. Interview with Chuck Peterson.
33. Interviews with Kelsey Flower, Meg Mueller.
34. Interview with Stan Lipsey.
35. Buffett was 31 on January 1, 1962, but his personal investments and gains in the partnership had taken him past the million-dollar mark months earlier, when he was still 30.
36. Interview with Bill Scott.
37. Buffett waived his fee for Scott, one of the two most lucrative arrangements he ever made with an employee. (See Henry Brandt in “Haystacks of Gold” and “Folly” for the other.)
38. He put in everything except his investment in Data Documents, a personal investment in a private company.
39. Letter to partners, July 6, 1962. In the second quarter of 1962, the Dow fell from 723.5 to 561.3, or 23%. In the first half of that year, the partnership saw a loss before payments to partners of 7.5%, compared with a loss of 21.7% including dividends for the Dow—the partners had a14.2% outperformance.
40. Buffett’s phrase is a clever reworking of Graham’s original. In The Intelligent Investor: “The sovereign virtue of all formula plans lies in the compulsion they bring upon the investor to sell when the crowd is buying and to buy when the crowd lacks confidence” (Intelligent Investor, Part I: General Approaches to Investment VI: Portfolio Policy for the Enterprising Investor: The Positive Side, 1949 edition). And in Security Analysis: “It would require bond investors to act with especial caution when things are booming and with greater confidence when times are hard” (Security Analysis, Part II: Fixed-Value Investments, XI: Specific Standards for Bond Investment, 1940 edition).
Chapter 25
1. Warren Buffett typewritten file memo, undated.
2. Warren Buffett letter to Bob Dunn,