The Snowball_ Warren Buffett and the Business of Life - Alice Schroeder [581]
33. According to one partner, the lawyer was dubious about the rushed process, saying maybe there was some trickery involved, and wanting to slow things down and take more time to look over the details.
34. Roger Lowenstein, When Genius Failed.
35. Michael Lewis, “How the Eggheads Cracked,” New York Times Magazine, January 24, 1999.
36. Interview with Fred Gitelman, Sharon Osberg.
37. After three 0.25% interest-rate cuts—September 29, October 15, and October 17—the market leapt 24% from its low on August 31 of 7,539 to an all-time high of 9,374 on October 23.
38. Michael Lewis, “How the Eggheads Cracked.”
39. Roger Lowenstein, When Genius Failed.
40. Interview with Eric Rosenfeld.
41. The Federal Reserve’s instant and dramatic cut of interest rates gave rise to a concept called the “Greenspan Put,” the idea that the Federal Reserve would swamp the market with liquidity to bail out investors in a crisis. The Greenspan Put theoretically encourages people to worry less about risk. Greenspan denied there was a Greenspan Put. “It takes a good deal longer for the cycle to expand than for it to contract,” he said. “Therefore we are innocent.” (Reuters, October 1, 2007, quoting Greenspan speaking in London.)
Chapter 52
1. Kurt Eichenwald, The Informant. New York: Broadway, 2000. Unbeknownst to Howie, Andreas reportedly made an illegal donation in response to at least one request that Howie had passed along, shrugging off the fine as the cost of doing business.
2. Interview with Howie Buffett.
3. Ibid.; Scott Kilman, Thomas M. Burton, and Richard Gibson, “Seeds of Doubt: An Executive Becomes Informant for the FBI, Stunning Giant ADM—Price Fixing in Agribusiness Is Focus of Major Probe; Other Firms Subpoenaed—A Microphone in the Briefcase,” Wall Street Journal, July 11, 1995; Sharon Walsh, “Tapes Aid U.S. in Archer Daniels Midland Probe; Recordings Made by Executive Acting as FBI Informant Lead to Seizure of Company Files,” Washington Post, July 11, 1995; Ronald Henkoff and Richard Behar, “Andreas’s Mole Problem Is Becoming a Mountain,” Fortune, August 21, 1995; Mark Whitacre, “My Life as a Corporate Mole for the FBI,” Fortune, September 4, 1995.
4. Interview with Kathleen Cole.
5. Astrid was going to be well taken care of by Warren, too, although, as he says about the apparent willingness of his fans to buy any article belonging to him—his wallet, his car; “She’s got one of my wisdom teeth. It’s the ugliest thing you’ve ever seen. That’s her ace in the hole.”
6. Interview with Bill Gates.
7. Every board member interviewed reached some variation of this conclusion, no matter where they stood on later events.
8. Mark Pendergast, For God, Country, and Coca-Cola. New York: Charles Scribner’s Sons, 1993.
9. Speaking at the 1998 Berkshire Hathaway shareholder meeting.
10. At the time, NetJets marketed itself both as NetJets and by its legal name, Executive Jet, Inc. It was renamed NetJets in 2002.
11. Interviews with sources; Anthony Bianco, “The Warren Buffett You Don’t Know,” BusinessWeek, July 5, 1999.
12. The business requires a “core fleet” of redundant aircraft, so expensive that running a fractional jet company is by definition unprofitable unless done on a huge scale (or used as a loss-leader by an aircraft manufacturer or other company with a tie-in product).
13. It cost Berkshire over nine times what it paid for the remaining half of GEICO almost three years earlier. The GEICO purchase doubled Berkshire’s existing float (to $7.6 billion), while Gen Re tripled that (to $22.7 billion).
14. Interview with Tad Montross.
15. BRK paid approximately three times book value, a premium to prevailing prices at the time. The reinsurance business became more competitive after this acquisition, and multiples have since declined.
16. Berkshire Hathaway 1997 annual shareholders’ meeting, May 5, 1997.
17. Shawn Tully, “Stock May Be Surging Toward an Earnings