19. Elizabeth Peters.
20. Ibid.; SEC File No. HO-784, Blue Chip Stamps, et al., testimony of Peters, pp. 38–39.
21. Berkshire Hathaway and Blue Chip Stamps, 1975 proxy statements; Berkshire Prospectus, November 27, 1978.
22. SEC File No. HO-784, Blue Chip Stamps, et al., Charles Munger, letter to Charles E. Rickershauser, Jr., October 22, 1974.
23. SEC File No. HO-784, Blue Chip Stamps, et al., Order directing private investigation, December 10, 1974.
24. SEC File No. HO-784, Blue Chip Stamps, et al., testimony of Munger, pp. 51–52, 73, 87–88.
25. Ibid., 111–14.
26. SEC File No. HO-784, Blue Chip Stamps, et al., testimony of Buffett, pp. 98–102.
27. SEC File No. HO-784, Blue Chip Stamps, et al., testimony of Munger, pp. 17, 30–31, 36–37,193.
28. SEC File No. HO-784, Blue Chip Stamps, et al., testimony of Buffett, pp. 70–71,133–34.
29. SEC File No. HO-784, Blue Chip Stamps, et al., testimony of Munger, p. 195.
30. SEC File No. HO-784, Blue Chip Stamps, et al., testimony of Buffett, p. 157.
31. SEC File No. HO-784, Blue Chip Stamps, et al., Charles Rickershauser, letter to Stanley Sporkin, December 1, 1975.
32. SEC File No. HO-784, Blue Chip Stamps, et al., testimony of Buffett, p. 161.
33. Ibid.
34. SEC, Schedule 13D, Berkshire Hathaway Inc., July 28, 1983. The $32.45 is based on Buffett’s interest in Berkshire following the 1983 conversion of Blue Chip shares into Berkshire.
Chapter 10. WASHINGTON REDUX
1. Lynn Rosellini, “The Katharine Graham Story,” Washington Star, November 13 and 14, 1978 [first two of five-part series].
2. Robert G. Kaiser, “The Strike at The Washington Post,” Washington Post, February 29, 1976; Pat Munroe and Caryl Rivers, “Kay Graham Talks About Her Job at the Helm of Washington Post,” Editor 6. Publisher, May 2, 1964.
3. Kaiser, “Strike”; Carol Felsenthal, Power, Privilege, and the Post (New York: Putnam, 1993), 228–31.
4. Richard Cohen, “A Woman of Influence,” Women’s Wear Daily, March 27, 1969.
5. Katharine Graham, “Learning by Doing,” Bulletin of the American Academy of Arts and Sciences, May 1989; Jane Howard, “Katharine Graham: The Power That Didn’t Corrupt,” Ms, October 1974; Felsenthal, Power, Privilege, and the Post, 226–28.
6. Graham, “Learning by Doing.”
7. Carl Bernstein and Bob Woodward, All the President’s Men (New York: Simon & Schuster, 1974), 105.
8. “Remarks of Katharine Graham,” Wall Street Transcript, April 1, 1974.
9. Geoffrey Cowan.
10. Katharine Graham; Larry Israel.
11. “Corn-fed Capitalist.” Berkshire’s stake would rise to 15 percent as the Post reduced the number of its outstanding shares.
12. Berkshire Hathaway Inc., 1975 Annual Report, 4.
13. Kaiser, “Strike.”
14. Lloyd Cutler [then outside counsel for the Post].
15. Buffalo Courier-Express, Inc., v. Buffalo Evening News, Inc., Civil Action No. 77–582, U.S. District Court, Western District of New York, Deposition of Katharine Graham, p. 34.
16. Rosellini, “Katharine Graham Story,” November 16, 1978.
17. William Graham.
18. Donald Graham.
19. “Columnist Discovers Buffett,” Omaha World-Herald, March 11, 1977.
20. Katharine Graham.
21. Ron Olson. See also “Corn-fed Capitalist.”
22. Thama Friedman.
23. Pagel, “Susie Sings.”
24. Ibid.
25. Michael Harrison.
26. Barbara Morrow.
27. Barbara Morrow; Roxanne Brandt.
28. Peter Buffett.
29. Kay Graham.
30. Alan Spoon.
31. Joel Chaseman.
32. Lorimer Davidson; Jack Byrne; Michael Frinquelli; Robert Sobel, Salomon Brothers: 1910–1985 (New York: Salomon Brothers [corporate history], 1986), 149.
33. According to an SEC finding, GEICO “failed in material respects to disclose its deteriorating financial condition.” Among other things, it failed to report a change in the formulas for calculating loss reserves which, over the second and third quarters of 1975, reduced reported reserves by $25 million. SEC file, In the matter of GEICO, et al., p. 11, October 27, 1976.
34. Lawrence Seidman; John Steggles.
35. Remarks of Benjamin Graham, La Jolla, April 11, 1974.
36. Charles Brandes.
37. Ed Anderson; Walter Schloss; James Fogarty, “Buffett Questioned in IBM Suit,” Omaha World-Herald, January 24, 1980.
38. William H. Jones, “Stockholders Questioning Often Angry,” Washington Post, April 1, 1976.
39. Sobel, Salomon Brothers, 150.
40. If GEICO had failed, other insurers would have been forced to meet its liabilities by making contributions to state guarantee funds. Byrne thought GEICO was so feared that State Farm preferred to pay for its burial rather than to bring it back to health.
41. Byrne, GEICO, 14–15.
42. GEICO; A.M. Best Co.
43. Warren Buffett, 1987 Capital Cities/ABC management conference.
44. Ibid.
45. Ronald Gutman; Warren Buffett, 1987 Capital Cities/ABC management conference.
46. Jack Byrne.
47. Ibid.
48. Michael Frinquelli.
49. Ibid.
50. Sobel, Salomon Brothers, 151.
51. Jack Byrne.
52. Byrne, GEICO, 21.
53. “Walter & Edwin Schloss Associates, LP’s.”
54. Philip A. Fisher, Common Stocks and Uncommon Profits (New York: Harper & Row, 1960).
55. Warren Buffett, “Benjamin Graham: 1894–1976,” Financial Analysts Journal, November-December 1976.
56. “Warren Buffett: Reluctant Billionaire,” WNET/Thirteen, Adam Smith’s Money World, broadcast June 20, 1988.
57. Buffett, “Benjamin Graham.”
Chapter 11. PRESS LORD
1. Courier-Express v. Evening News, Civil Action No. 77–582, U.S. District Court, Western District of New York, Deposition of Graham, pp. 54–57; Deposition of Vincent Manno, pp. 161–63.
2. Guild collective bargaining manual, February 1, 1977.
3. Courier-Express v. Evening News, Affidavit of Richard C. Lyons, Jr., pp. 4–5.
4. Deposition of Graham, p. 61.
5. Deposition of Manno, pp. 98, 235.
6. Albert Mugel.
7. Deposition of Graham, pp. 64–73.
8. Deposition of Manno, p. 165.
9. 601 Federal Reporter, 2d series, p. 50, Courier-Express v. Evening News, appellate decision, April 16, 1979.
10. Deposition of Manno, pp. 61,115–16,165–80.
11. Murray Light.
12. Justin Kaplan, Mr. Clemens and Mark Twain (New York: Simon & Schuster, 1966), 99.
13. Audit Bureau of Circulation figures for 1976.
14. 601 F.2d 48 (1979) [appellate decision], p. 50. The Evening News published a weekend edition on Saturdays that attracted a large circulation but not a lot of ads.
15. Blue Chip Stamps, 1977 Annual Report, 3.
16. Courier-Express v. Evening News, Affidavit of Warren Buffett, Exhibit A, letter of Buffett to Charles Munger, July 26, 1977.
17. Deposition of Graham, p. 83.
18. Courier-Express v. Evening News, Plaintiff’s memorandum in support of preliminary injunction, pp. 2–3.
19. Affidavit of Buffett, pp. 8,18.
20. “5 Testify in Lawsuit by Courier,” Buffalo Courier-Express, November 6, 1977.
21. Affidavit of Buffett, p. 3.
22. Courier-Express v. Evening News, testimony of Warren Buffett, pp. 12–13, 22.
23. Ibid., 22–23, 26, 28–29.
24. Ibid, 30–31.
25. Daniel Mason.
26. Courier-Express v. Evening News, testimony of Buffett, pp. 44–45.
27. Ibid, 46–47.
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28. Ibid, 48. Furth was citing Laing, “The Collector.”
29. Ibid, 50–52.
30. Blue Chip and/or Berkshire had owned stock in the bridge since the early seventies. After a failed attempt at buying the entire company, Blue Chip sold its interest in 1979.
31. 441 Federal Supplement 1977, p. 644, Courier-Express v. Evening News, November 9, 1977.
32. Ibid, 633, 634, 639, 641–42.
33. Dick Hirsch, “Read All About it,” Bflo., Winter 1978.
34. Berkshire Hathaway Inc., June 30, 1983 Prospectus, 48.
35. Warren Buffett, 1987 Capital Cities/ABC management conference.
36. Ibid.
37. Blue Chip Stamps, 1978 Annual Report, 2.
38. 601 F.2d 48 (1979), pp. 54–55, Courier-Express v. Evening News, U.S. Court of Appeals, second circuit, April 16, 1979.
39. Blue Chip Stamps, 1980 Annual Report (as reprinted in Berkshire Hathaway Inc., 1980 Annual Report, 45–46).
40. Blue Chip Stamps, 1979 Annual Report (as reprinted in Berkshire Hathaway Inc., 1979 Annual Report, 40).
41. Blue Chip Stamps, 1980 Annual Report (as reprinted in Berkshire Hathaway Inc., 1980 Annual Report, 46).
42. Richard Feather [labor negotiator for the Evening News].
43. Charlie Munger.
44. Audit Bureau of Circulation figures as of March 1982.
45. As of year-end 1982. Blue Chip Stamps 1982 Annual Report (as reprinted in Berkshire Hathaway Inc., 1982 Annual Report, 53).
46. Blue Chip Stamps, 1981 Annual Report (as reprinted in Berkshire Hathaway Inc., 1981 Annual Report, 46).
47. Stan Lipsey.
48. Guild collective bargaining manual, April 1, 1991.
49. Berkshire Hathaway Inc., 1984 Annual Report, 8.
50. Ibid., 7.
51. Audit Bureau of Circulation.
52. In 1981, the Courier-Express’s last full year, the combined weekday circulation of the two papers was 396,000. A decade later, in 1991, weekday circulation at the News alone was 306,000, a decline of 23 percent. Similarly, combined Sunday circulation was 449,000 in 1981, compared to 383,000 for the News in 1991.
53. SEC File No. HO-784, Blue Chip Stamps, et al./Warren Buffett, letter to Martin J. Burke, October 27, 1972.
Chapter 12. PARTNERS, REDUX
1. Michael Harrison; “Buffett Serious,” Omaha World-Herald, September 14, 1976.
2. “Buffett Serious”; Peter Buffett.
3. Michael Harrison.
4. Sidney Wood.
5. Pagel, “Susie Sings.”
6. Ibid.
7. Steve Millburg, “Williams Songs Outshine Voice,” Omaha World-Herald, September 5, 1977; Michael Harrison.
8. Peter Buffett; Tom Rogers.
9. Roberta Buffett Bialek.
10. Susan Buffett Greenberg; Charlie Munger; Art Rowsell.
11. Susan Buffett Greenberg.
12. Peter Buffett; Joe Rosenfield.
13. Peter Buffett; Susan Buffett Greenberg; Roberta Buffett Bialek; Anthony Abbott.
14. Anthony Abbott.
15. Peter Buffett.
16. Ron Suskind, “Legend Revisited: Warren Buffett’s Aura as Folksy Sage Masks Tough, Polished Man,” Wall Street Journal, November 8, 1991.
17. Peter Buffett.
18. “Corn-fed Capitalist.”
19. George Bush, speech to Hartford Society of Financial Analysts, October 5, 1979, as reprinted in Wall Street Transcript.
20. Berkshire Hathaway Inc., 1978 Annual Report, 5.
21. Ibid., 4.
22. Laurie Meisler, “The Coming Rush into Equities,” Institutional Investor, September 1979.
23. Heinz H. Biel, “What Alternative?” Forbes, June 25, 1979.
24. “The Death of Equities,” Business Week, August 13, 1979.
25. Warren Buffett, “You Pay a Very High Price in the Stock Market for a Cheery Consensus,” Forbes, August 6, 1979.
26. Art Rowsell.
27. Clifford Hayes; Art Rowsell.
28. Rick Guerin.
29. Richard Azar, letter to Louis Lowenstein, June 24, 1992.
30. Berkshire Hathaway Inc., 1981 Annual Report, 6. On inflation, see also Berkshire reports for 1979 and 1980, and Warren Buffett, “How Inflation Swindles the Equity Investor,” Fortune, May 1977.
31. Berkshire Hathaway Inc., 1979 Annual Report, 9.
32. Berkshire Hathaway Inc., 1980 Annual Report, 8–9.
33. Berkshire Hathaway Inc., 1979 Annual Report, 3.
34. Berkshire Hathaway Inc., 1981 Annual Report, 8.
35. Ibid, 4.
36. Berkshire Hathaway Inc., 1982 Annual Report, 13.
37. Ibid, 13.
38. Ibid, 12.
39. Berkshire Hathaway Inc., 1988 Annual Report, 5.
40. Warren Buffett, letter to shareholders, October 14, 1981.
41. Berkshire Hathaway Inc., 1979 Annual Report, 11.
42. Robert K. Otterbourg, “Banishing Boredom,” Public Relations Journal, July 1990.
43. Berkshire Hathaway Inc., 1979 Annual Report, 10.
44. Berkshire Hathaway Inc., 1982 Annual Report, 3.
45. Berkshire Hathaway Inc., 1983 Annual Report, 2.
46. Berkshire Hathaway Inc., 1981 Annual Report, 4.
47. Gary Putka, “In Binge of Optimism, Stock Market Surges by Record 38.81 Points,” Wall Street Journal, August 18, 1982.
48. Alan Abelson, “Up & Down Wall Street,” Barron’s, May 9, 1983.
49. Berkshire Hathaway Inc., 1983 Annual Report, 12–13.
50. Ibid, 2.
Chapter 13. THE CARPET WOMAN
1. Berkshire Hathaway Inc., 1983 Annual Report, 3.
2. Rose Blumkin; Louis Blumkin; Warren Buffett, talk at Columbia, 1993; Buffett, 1986 Capital Cities/ABC management conference.
3. Michael Kelly, “Mrs. B Cruises into Year 100,” Omaha World-Herald, December 17, 1992.
4. Rose Blumkin.
5. Rose Blumkin; Joyce Wadler, “Furnishing a Life,” Washington Post, May 24, 1984; Robert Dorr, “Break with Furniture Mart Begins to Heal,” Omaha World-Herald, February 2, 1992.
6. Frank E. James, “Mrs. Blumkin’s Secret: Sell Cheap, No Cheating,” Wall Street Journal, May 27, 1984.
7. “Price Cutting Basis of Suit” and “Manufacturer Loses in Fair-Trade Suit,” Omaha World-Herald, July 9, 1949, and June 4, 1951; James, “Mrs. Blumkin’s Secret”; Wadler, “Furnishing a Life”; Berkshire Hathaway Inc., 1983 Annual Report, 3.
8. Wadler, “Furnishing a Life.”
9. Louie Blumkin.
10. Robert Dorr, “Furniture Mart Handshake Deal,” Omaha World-Herald, September 15, 1983; Rose Blumkin; Don Danly.
11. Smith, Supermoney, 192.
12. Buffett, talk at Columbia, 1993.
13. Dorr, “Furniture Mart Handshake Deal.”
14. Berkshire Hathaway Inc., 1988 Annual Report, 8.
15. Warren Buffett, 1986 Capital Cities/ABC management conference.
16. Smith, “Reluctant Billionaire.”
17. Rose Blumkin.
18. Warren Buffett, 1990 Capital Cities/ABC management conference.
19. “Getting Personal,” Omaha World-Herald, June 12, 1977.
20. Chris Olson, “Mrs. B. Uses Home to Eat and Sleep,” Omaha World-Herald, October 28, 1984.
21. Warren Buffett, 1986 Capital Cities/ABC management conference.
22. Donald Yale.
23. Berkshire Hathaway Inc., 1987 Annual Report, 8.
24. Berkshire Hathaway Inc., 1990 Annual Report, 8.
25. Buffett, talk at Columbia, 1993.
26. Donald Keough.
27. Tim Medley, “The Pilgrimage to Omaha,” Mississippi Business Journal, June 10, 1991.
28. Berkshire Hathaway Inc., 1985 Annual Report, 9.
29. Berkshire Hathaway Inc., 1977 Annual Report, 2–3.
30. Berkshire Hathaway Inc., 1980 Annual Report, 7.
31. Berkshire Hathaway Inc., 1979 Annual Report, 5.
32.
Berkshire Hathaway Inc., 1983 Annual Report, 4.
33. Edward Clark [Amalgamated Clothing and Textile Workers Union].
34. Berkshire Hathaway Inc., 1985 Annual Report, 7–10.
35. Ibid.
36. Ibid.
Chapter 14. THE EIGHTIES
1. Allan Sloan, “Why Is No One Safe? (From Hostile Corporate Takeovers),” Forbes, March 11, 1985.
2. Leonard H. Goldenson with Marvin J. Wolf, Beating the Odds (New York: Scribner’s, 1991), 464. Goldenson’s memoir includes recollections by Buffett, Murphy, and others.
3. Tom Murphy.
4. Tom Murphy, 1988 Capital Cities/ABC management conference.
5. Ken Auletta, Three Blind Mice: How the TV Networks Lost Their Way (New York: Random House, 1991), 26; Goldenson, Beating the Odds, 461–62.
6. Tom Murphy [interview and 1988 management conference].
7. Dan Burke; Tom Murphy. Dialogue is largely from Buffett, in Goldenson, Beating the Odds, 464–65, supplemented by Auletta, Three Blind Mice, 41–42.
8. Goldenson, Beating the Odds, 465.
9. Ibid.
10. Dan Burke; Tom Murphy.
11. Reconstruction from Dan Burke, Jeffrey Epstein, Ev Erlick, Michael Mallardi, Tom Murphy, Frederick Pierce, and Bruce Wasserstein.
12. Anthony Bianco, “Why Warren Buffett Is Breaking His Own Rules,” Business Week, April 15, 1985.
13. John Greenwald, “High Times for T. Boone Pickens,” Time, March 14, 1985.
14. John C. Coffee, Jr., Louis Lowenstein, and Susan Rose-Ackerman, eds., Knights, Raiders, and Targets: The Impact of the Hostile Takeover (New York: Oxford University Press, 1988), 22–23.
15. Ralph Schey.
16. Schey was paraphrasing the letter from memory.
17. Robert Dorr, “General Foods Proves Rewarding,” Omaha World-Herald, October 3, 1985.
18. Robert McGough, “The Joys of Being an Insider,” Forbes, December 31, 1984.
19. Gary Greenberg.
20. Fraud litigation brought by Cinerama, a former Technicolor holder, in 1983 was dismissed in 1995. Cinerama’s appraisal claim against Perelman-owned MacAndrews and Forbes was still pending. See Connie Bruck, The Predators’ Ball: The Junk Bond Raiders and the Man Who Staked Them (New York: American Lawyer/Simon & Schuster, 1988), 199–201; Ralph King, Jr., “Ron Perelman’s $640 Million Unsure Thing,” Forbes, October 30, 1984; and McGough, “The Joys of Being an Insider.”
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