The Snowball_ Warren Buffett and the Business of Life - Alice Schroeder [554]
50. For $1.9 million.
51. Don Koeppel letter to Warren Buffett, June 15, 1973.
Chapter 39
1. From peak to trough in the Depression (September 3, 1929, to July 8, 1932), the Dow fell 89%. From peak to trough in the early 1970s (January 11, 1974, to December 6, 1974), the Dow fell 45%—the two worst bear markets of the century.
2. Robert Redford interview, cited by Graham in Personal History. New York: Alfred A. Knopf, 1997.
3. Katharine Graham, Personal History.
4. The television stations owned by both would have created a conflict.
5. Katharine Graham, Personal History.
6. Al Pagel, “What Makes Susie Sing?” Omaha World-Herald, April 17, 1977.
7. Interview with Gladys Kaiser.
8. From a letter that Graham wrote Buffett, reprinted in Personal History. Don Graham recalls his mother telling him that Susie cooked eggs for her, and Susie and Warren watched Kay eat them and did not eat any themselves.
9. Measured from its peak.
10. Interview with Charlie Munger.
11. “Fighting the Tape,” Forbes, April 1, 1973.
12. The seat would have sold for a quarter of what Ruane, Cunniff had paid for it.
13. The record was 1970: Sequoia 12.11% vs. S&P 20.6%; 1971: Sequoia 13.64% vs. S&P 14.29%; 1972: Sequoia 3.61% vs. S&P 18.98%; 1973: Sequoia (24.8%) vs. S&P (14.72%).
14. Marshall Weinberg as well as Buffett confirmed this in interviews. Malott says he does not recall it.
15. Loomis joined Sandy Gottesman at First Manhattan; Brandt went to work at Abraham & Co.
16. “Look at All Those Beautiful, Scantily Clad Girls Out There!” Forbes, November 1, 1974.
17. “Forbes didn’t use what I considered to be the most significant line,” said Buffett in a letter to Pat Ellebracht on October 24, 1974, repeating this quote.
18. Interview with Rod Rathbun; Omni arbitration files of the National Indemnity Company.
19. Compounded over thirty years at 20%, this was perhaps a $2.4 billion investment return forgone. Buffett and Munger have referred to it as the greatest missed opportunity in the history of Berkshire Hathaway. The details are arcane but the essence of the story is as portrayed here.
20. “Why the SEC’s Enforcer Is in Over His Head,” BusinessWeek, October 11, 1976.
21. Interview with Verne McKenzie.
22. Letter from Charlie Munger to Chuck Rickershauser “re: Diversified Retailing—Berkshire Hathaway Proposed Merger,” October 22, 1974.
23. Interview with Betty Casper Peters.
24. Interview with Verne McKenzie.
25. Robin Rickershauser, who has often heard this clever trope from her husband, did not realize he originated it until contacted by the author.
26. If true, investors would have been selling without required information about the buyer and his reasons.
27. Charles T. Munger testimony, In the Matter of Blue Chip Stamps, Berkshire Hathaway Incorporated, HO-784, Thursday, March 20, 1975, p. 112.
28. The increase in Santa Barbara’s price if the deal collapsed would only partially hedge this risk.
29. Charles T. Munger testimony, In the Matter of Blue Chip Stamps, Berkshire Hathaway Incorporated, HO-784, Thursday, March 20, 1975, pp. 112–13.
30. Interview with Judge Stanley Sporkin.
31. Ibid. This lawyer was so particularly ferocious that the author was asked not to mention his name.
32. A thick file of documents produced in response to the SEC’s February 1975 subpoena illustrates several points: 1) it contained no evidence that Buffett bought on inside information or expecting a takeover; 2) Buffett had become expert on water company regulation and ratemaking, and his interest and expertise in this narrow subject was prodigious; 3) this aspect of the investigation must have been intrusive and an embarrassing form of déjà vù, as it included production of his correspondence with Forbes that attempted to clear his name.
33. Partly because of state restrictions on how much stock any one insurance company could hold, the diagram was more complicated than it would have been otherwise. The version shown on pages 412–413 was created by Verne