The Snowball_ Warren Buffett and the Business of Life - Alice Schroeder [553]
28. Buffett’s trading style that year suggested he might be pessimistic about the economy and was preparing for a downturn. He wrote straight covered-call options on Kennecott Copper and down-and-out options, a more sophisticated type of covered call that limits the downside and upside within a specified range, on several stocks such as Ford Motors, General Motors, and Black & Decker. Selling calls on the latter three economically sensitive stocks was not a market call, but does suggest that he was more pessimistic than optimistic about the economy. Letter from Warren Buffett to Jack Ringwalt, March 9, 1972.
29. At December 31, 1973, his Post stock was worth $7.9 million.
30. Catherine Elberfeld letter to Warren Buffett, May 1974.
31. Ben Graham wrote about this Eau Claire, Wisconsin, company in The Intelligent Investor.
32. “I’d have made a hell of a lot more money if I hadn’t sold it. I would have made a fortune out of the stock,” Buffett says. He says he got off quickly when he learned the CEO had different deals with every director about pay. Vornado was under different management and owned discount stores. Today it is a real estate investment trust managed by Steven Roth.
33. Interview with Bob Malott.
34. Buffett says he immediately told Malott that FMC should buy back its own stock, which was cheap. Although FMC considered the idea, it didn’t follow through.
35. Black enrollment had risen to one third and was projected to rise to nearly half in the fall. A desegregation suit was pending and the building did not conform to fire codes. Some white students had already transferred out of fears that Central and Tech High, the city’s toughest school, would be merged. Dana Parsons, “Central Parents Express Fears, Seek Changes,” Omaha World-Herald, May 9, 1974. The committee proposed changes that in effect created a magnet school oriented to college prep.
36. Mark Trustin, a neighbor, gave Hamilton to the Buffetts.
37. Interview with Susie Buffett Jr., who says she wasn’t planning to become a police officer.
38. Interview with Peter Buffett.
39. Interview with Dave Stryker.
40. In the Temptations’ world, men are the Daisy Maes: “Since I Lost My Baby,” “The Way You Do the Things You Do,” “(I Know) I’m Losing You,” “I Can’t Get Next to You,” “Just My Imagination,” “Treat Her like a Lady,” and, of course, “Ain’t Too Proud to Beg.”
41. From several sources both close to Susie at the time and who knew her later.
42. Interview with Peter Buffett.
43. His dividends from Blue Chip were also about $160,000 per year before taxes.
44. By having Diversified buy insurance from (“reinsure”) National Indemnity through its new subsidiary. The cash was transferred by paying a premium to Diversified. Charles T. Munger testimony, In the Matter of Blue Chip Stamps, Berkshire Hathaway Incorporated, HO-784, Thursday, March 20, 1975, pp. 188–194.
45. By year-end 1973, Reinsurance Corp. of Nebraska (renamed Columbia Insurance) had amassed investments of $9 million, which is indicative of its cash flows.
46. Charles T. Munger testimony, In the Matter of Blue Chip Stamps, Berkshire Hathaway Incorporated, HO-784, Wednesday, March 19, 1975. Both had previously owned some stock. Munger had bought a block and Gottesman bought stock his partners sold.
47. Charles T. Munger testimony, In the Matter of Blue Chip Stamps, Berkshire Hathaway Incorporated, HO-784, Thursday, March 20, 1975, p. 193.
48. Charles T. Munger testimony, In the Matter of Blue Chip Stamps, Berkshire Hathaway Incorporated, HO-784, Thursday, March 20, 1975, p. 190.
49. They were reported at the end of the year in DRC’s annual report, but few people read it, and it took legwork and initiative to get more timely information from SEC Form 3s and 4s. DRC’s 11.2% position was disclosed in BRK’s 1973 annual