The Snowball_ Warren Buffett and the Business of Life - Alice Schroeder [583]
34. Had the board supported him, it would have left Ivester a weakened CEO. He would also have been gambling that Allen and Buffett would not resign from the board, an instantly fatal blow. Allen and Buffett were also gambling that if Ivester threw himself on the board’s mercy and survived, it would not be for long.
35. Interview with James Robinson, former CEO of American Express and Coca-Cola board member.
36. KO stock dropped 14% in two days.
37. Betsy Morris and Patricia Sellers, “What Really Happened at Coke.”
38. Martin Sosnoff, “Buffett: What Went Wrong?” Forbes, December 31, 1999.
39. Andrew Barry, “What’s Wrong, Warren?” Barron’s, December 27, 1999.
40. Andy Serwer, “The Oracle of Everything,” Fortune, November 11, 2002.
41. Interview with Kathleen Cole.
42. Interview with Susie Buffett Jr.
43. Interview with Peter Buffett.
44. Interview with Howie Buffett.
45. Interviews with Howie Buffett, Peter Buffett, Susie Buffett Jr.
Chapter 54
1. Joe Lauria, “Buffett Bombs as High-Tech Funds Boom,” Sunday Times (London), January 2, 2000.
2. The expected profit on the deal was 90%; i.e., the premium covered odds that the lottery would hit 1 out of 10 times whereas in fact it was expected to hit less than 1 out of 100 times.
3. Every 10% change in KO was equivalent to 2.5% of BRK (a percentage that is representative over time), but the stocks often traded almost in tandem—especially when there was bad news at Coca-Cola—as if BRK and KO were one and the same.
4. Beth Kwon, “Buffett Health Scrape Illustrates Power—or Myth—of Message Boards,” TheStreet.com, February 11, 2000. The story made the Financial Times say, “Warren Buffett may not be sick, but his share price is,” in the “Lex” column, February 12, 2000. Financial Times described the rap on Buffett not buying tech stocks as a “serious charge.”
5. Berkshire Hathaway press release; also see “Berkshire Hathaway Denies Buffett Is Seriously Ill,” New York Times, February 11, 2000. The way that Buffett uses probabilities to describe things is one of his intriguing qualities; what if he had said that the rumors were 90% false?
6. Ed Anderson, “Thesis vs. Antithesis: Hegel, Bagels, and Market Theories,” Computer Reseller News, March 13, 2000.
7. Warren Buffett and Charlie Munger, “We Don’t Get Paid for Activity, Just for Being Right. As to How Long We’ll Wait, We’ll Wait Indefinitely,” Outstanding Investor Digest, Vol. XIII, Nos. 3 & 4, September 24, 1998, and “We Should All Have Lower Expectations—In Fact, Make That Dramatically Lower….,” Outstanding Investor Digest, Vol. XIV, Nos. 2 & 3, December 10, 1999.
8. “Focus: Warren Buffett,” Guardian, March 15, 2000 (emphasis added).
9. Some commentators understood that the bubble was bursting but since the averages continued to move higher, the general perception was slower to change. Federal Reserve Chairman Alan Greenspan’s comments were seized on as reason for concern or relief, depending on the listener’s perspective. See Matt Kranz and James Kim, “Bear Stages Sneak Attack on Net Stocks,” USA Today, February 16, 2000; Greg Ip, “Stalking a Bear Market,” Wall Street Journal, February 28, 2000; “Technology Stocks Continue to Dominate,” USA Today, March 2, 2000.
10. E. S. Browning and Aaron Lucchetti, “The New Chips: Conservative Investors Finally Are Saying: Maybe Tech Isn’t a Fad,” Wall Street Journal, March 10, 2000. The Journal cited another investor as saying, “It’s like when the railroads started up and were changing the whole face of the nation.” Yes, it was much like that. Speculation in railroad stocks led directly to the financial panics of 1869, 1873, and 1901. The Erie railroad and Northern Pacific stock corners were only two episodes in the long history of colorful financial chicanery surrounding railroad stocks.
11. Gretchen Morgenson, “If You Think Last Week Was Wild,” New York Times, March 19, 2000. Another sign that the game was