Buffett’s testimony in Congress as the reformer and savior of Salomon had turned him from a rich investor into a hero. The success of his open and principled approach to scandal touched the yearning for nobility in many people’s hearts: the dream that honesty is rewarded; that the besmirched can be redeemed through honor. Even as the furor from the crisis died, Buffett’s star rose. Berkshire stock took off on a meteoric streak, bursting past $10,000 a share. Buffett was now worth $4.4 billion. Susie’s stock alone was worth $500 million. His original partners would now have $3.5 million for every $1,000 they had laid out in 1957.
When Buffett walked into a room, the electricity was palpable. In his presence people felt brushed by greatness. They wanted to touch him. They became dumbstruck before him, or babbled inane remarks. No matter what he said, people listened uncritically.
“I was at my best at giving financial advice when I was twenty-one years old and people weren’t listening to me. I could have gotten up there and said the most brilliant things and not very much attention would have been paid to me. And now I can say the dumbest things in the world and a fair number of people will think there’s some great hidden meaning to it or something.”
He went about surrounded by a little haze of fame. Reporters called all the time now. As writers began working on books about Buffett, people who saw him every day found the frenzy incomprehensible. A woman showed up at Berkshire’s office and began bowing to him. Gladys Kaiser was overcome with annoyance. “Don’t bow to him!” she said.
Many Salomon employees and ex-employees were not bowing. He had reined in their freewheeling culture, ruined their bonus day; he disdained their business and they knew it. Plenty of employees had unhappy stories to tell. Soon enough, the contrast between Buffett’s aw-shucks image and his coldly rational side hit the radar screen of the national press. How to explain the dichotomy between Buffett figuratively sitting on a front porch with a glass of lemonade, telling folksy stories, and his long history of sophisticated business feats? What was he doing as interim chairman of an investment bank while describing Wall Street as a gang of con men, sharpies, and cheats?
By 1991, the Wall Street Journal and the New Republic1 took note of his straddling of two worlds, and both ran stories pointing out the mismatch between Buffett’s representation of himself as a middle-class Midwesterner who had woken up in Oz and the elephant-bumping in which he routinely engaged. The Wall Street Journal story ran a sidebar to its article, “Buffett’s Circle Includes the Moneyed and Powerful,” name-dropping people like Walter Annenberg.2 But one of those mentioned in the story would go on to forge a relationship with Buffett that eclipsed all the rest, even though he had known Buffett for only five months at the time of the story’s publication.
Buffett had met Bill Gates that summer over the Fourth of July holiday, when Kay Graham had dragged Buffett to her friend Meg Greenfield’s house on Bainbridge Island, near Seattle, for a long holiday weekend. Greenfield had also recruited him for an all-day visit at the nearby compound that Bill Gates had built for his family. Gates, twenty-five years Buffett’s junior, was appealing to Buffett mainly because he was known to be brilliant and because the two of them were neck-and-neck in the Forbes race. But computers looked like Brussels sprouts to Buffett; no, he did not want to try them this once. Greenfield, however, had assured him that he would like Gates’s parents, Bill Sr. and Mary. With some reluctance, Buffett had agreed to go.
Gates had similar reservations. He was interested in meeting Graham, now a seventy-four-year-old legend, but, “I told my mom, ‘I don’t know about a guy who just invests money and picks stocks.’ … But she insisted.” The day of the visit, Gates flew in on a helicopter so he could make a quick getaway.3
Observers kept a weather eye on his introduction to Buffett. Gates was well-known for unleashing his impatience on things that didn’t interest him. Buffett no longer walked off to read a book when he was bored but had a way of disentangling himself very quickly from conversations he wanted to exit.
Buffett skipped the small talk; he immediately asked Gates whether IBM was going to do well in the future and whether it was a competitor of Microsoft. Computer companies seemed to come and go, and why was that? Gates started explaining. He told Buffett to buy two stocks, Intel and Microsoft. Then he asked Buffett about the economics of newspapers, and Buffett told him that they had gotten worse, because of other media. Within minutes the two were deeply immersed in conversation.
“We talked and talked and talked and talked and paid no attention to anybody else. I started asking him a whole bunch of questions about his business, not expecting to understand any of it. He’s a great teacher, and we couldn’t stop talking.”
The day started to go by; the croquet games began. Gates and Buffett talked on, even as many of Seattle’s best-known people circulated around them. They took a walk on the pebbly beach. They were starting to attract attention. “We were sort of ignoring all these important people, and Bill’s father finally said, gently, that he’d prefer that we join in with the rest of the people a little more.
“Bill started trying to convince me to get a computer. I said, I don’t know what it’s going to do for me. I don’t care how my stock portfolio is doing every five minutes. And I can do my income taxes in my head. Gates said he would pick out the best-looking gal at Microsoft and send her to teach me how to use the computer. He would make it totally painless and pleasant. I told him, ‘You’ve made me an offer I almost can’t refuse, but I will refuse it.’ ”
As the sun descended toward the water during the cocktail hour, Buffett and Gates kept talking. At sunset the helicopter had to leave. Gates did not go with it.4
“Then at dinner, Bill Gates Sr. posed the question to the table: What factor did people feel was the most important in getting to where they’d gotten in life? And I said, ‘Focus,’ And Bill said the same thing.”
It is unclear how many people at the table understood “focus” as Buffett lived that word. This kind of innate focus couldn’t be emulated. It meant the intensity that is the price of excellence. It meant the discipline and passionate perfectionism that made Thomas Edison the quintessential American inventor, Walt Disney the king of family entertainment, and James Brown the Godfather of Soul. It meant single-minded obsession with an ideal.
A day later, Buffett escaped the island and returned to Omaha. He could see that Gates was brilliant and that he understood business very well. But since the days when he had passed on the chance to invest in the start-up of Intel, Buffett had never trusted technology companies as investments. Technology companies came and went, their products often made obsolete. Now, his interest piqued, he bought a hundred shares of Microsoft, which, to him, was like eating a single Cheerio. He still couldn’t bring himself to buy any Intel, even though he sometimes bought a hundred shares of a stock just to keep track of a company.5 But he did invite Gates to the next Buffett Group meeting. Soon thereafter he had gotten the phone call from Don Feuerstein and Tom Strauss and for the next two months had thought of nothing but the miseries of Salomon.
In October, released from the conference rooms of 7 World Trade Center and the browbeatings of Congressmen and regulators for a few days, he went to Vancouver, British Columbia, for the latest meeting of the Buffett Group.
Bill Gates was coming to the meeting for the one particular session that interested him. The Buffett Group was going to review the ten most valuable companies in 1950, 1960, 1970, 1980, 1990—and how the list had changed.
Arriving late because his new seaplane had been delayed by fog, Bill and his girlfriend, Melinda French, slipped into the room unobtrusively from the rear. Melinda had thought that they were going to leave early. However, after about the fourth slide, she realized that maybe they were going to stay.6 Tom Murphy and Dan Burke, who both served on IBM’s board, started talking about why IBM, the leader in hardware, hadn’t gone on to become the leader in software. Buffett said, “I think we’ve got somebody here who can add a little something to this discussion.” Everybody turned around and saw Bill Gates.7 The conversation continued. If you were Sears in 1960, why couldn’t you keep getting the smartest employees and selling at the best prices? What was it you couldn’t see that prevented you from remaining the leader? Most of the proposed answers, regardless of the company, revolved around arrogance, complacency, and what Buffett called the “Institutional Imperative”—the tendency for companies to engage in activity for its own sake and to copy their peers instead of trying to stay ahead of them. Some companies didn’t bring in young people with fresh ideas. Sometimes managements weren’t attuned to tectonic shifts in their industry. Nobody suggested these problems were easy to cure. After a while Buffett asked everyone to pick their favorite stock.
What about Kodak? asked Bill Ruane. He looked back at Gates to see what he would say.
“Kodak is toast,” said Gates.8
Nobody else in the Buffett Group knew that digital technology would make film cameras toast. In 1991, even Kodak didn’t know that it was toast.9
“Bill probably thinks all the television networks are going to get killed,” said Larry Tisch, whose company, Loews Corp., owned a stake in the CBS network.
“No, it’s not that simple,” said Gates. “The way networks create and expose shows is different than camera film, and nothing is going to come in and fundamentally change that. You’ll see some falloff as people move toward variety, but the networks own the content and they can repurpose it. The networks face an interesting challenge as we move the transport of TV onto the Internet. But it’s not like photography, where you get rid of film so knowing how to make film becomes absolutely irrelevant.”10
Now everybody wanted to talk to Gates, who could explain the new digital world and what it meant to them. “The next thing we knew, we were going on the boat that afternoon,” says Gates. “And Kay was making sure that I didn’t just talk to Warren.” That was fortunate, because Buffett—who liked to glue himself to certain people—would have liked to become Bill Gates’s Siamese twin. They headed out on Walter and Suzanne Scott’s enormous boat, the Ice Bear. Graham introduced Gates to Tisch and Murphy and Keough and the rest.11 In half a day, he and Melinda had become de facto members of the Buffett Group.
Thanks partly to the salvation of Salomon, Berkshire stock had nearly doubled by the time Warren was starting to Buffett his way through the arbitration with John Gutfreund, bursting through $18,000 a share. Buffett was now worth $8.5 billion, and Susie’s stock was worth $700 million. The original partners now had $6 million for every $1,000 they’d invested in 1957. Buffett was now the richest man in the United States.
Over the holidays, he and Carol Loomis turned to the annual ritual of writing and editing his chairman’s letter, this time with the awareness of a much larger national—even international—audience. In May 1994, the same month that Gutfreund’s arbitrators awarded him zero, Buffett held his annual shareholder meeting; more than 2,700 people arrived at the Orpheum Theater. Buffett told See’s, the shoe companies, and World Book encyclopedia, which the company also owned, to set up booths in the lobby. See’s sold eight hundred pounds of candy, and more than five hundred pairs of shoes walked out the door.12 World Book sold well, too, although Buffett did not know that it, like Kodak, would soon be toasted by the Internet. Delighted with his shareholders’ purchases, Buffett drove over to Borsheim’s and made an appearance, then showed up at the Furniture Mart. “He goes out to where we have the mattresses displayed,” said Louie Blumkin, “and he’s selling, man.”13 Buffett started to think harder about the idea of hawking products at the shareholder meetings. He vowed to move the meeting to the Holiday Inn, which had more space for sales booths. And next year, he decided, he would also sell Ginsu knives.14
His rising fame swept most of the family along with it. Now that Buffett was worth more than $8 billion, his charitable foundation would be one of the five largest in the world, and it would be Berkshire’s largest shareholder after he died. He had recently added Susie, who was president of the Buffett Foundation but knew nothing about business, to the Berkshire Hathaway board. The foundation had been giving away about $3.5 million a year, which had doubled by 1994—still small by the standards of families of similar wealth. Its future riches, however, were well-known. The Buffett Foundation and its president were suddenly in the public eye.
When Susie had moved to San Francisco and made the decision to stay married to Warren while going her own way, she envisioned being able to keep the two halves of her life separate, quiet, and in balance. She was caught by surprise when her husband became an icon of the business world, carrying her along with him. On the one hand, she wanted her privacy and freedom. On the other hand, she wanted to please Warren, enjoyed running the foundation, and also gravitated toward the elephant-bumping aspects of public life. To maintain her privacy, she had to juggle deftly, keeping a low profile in San Francisco and declining opportunities that went with her husband’s rising stature. Susie expressed resentment of Warren from time to time to various people, as if it were his fault that her life was now so fraught.
Moreover, her pace had been slowed by painful bouts of adhesions in 1987 and more adhesions and a hysterectomy in 1993. Kathleen Cole found herself shuttling her friend and boss to the emergency room distressingly often. The family seemed strangely unperturbed each time Cole called Nebraska to say that Susie had been hospitalized, as if they had adopted her serene attitude.15 “Thank God I have my health,” she often remarked, and continued to view herself as the well person who ministered to the ill, rather than the other way around.
By now she was running a hospice in her apartment. Her first patient was an artist friend who was dying of AIDS, whom she invited to move in and spend his final weeks there. Cole, a former nurse, found herself administering IV drips to a terminal patient while Susie’s other employees strolled in and out of the room, questioning her about foundation matters or the renovations and redecoration of the Laguna Beach house, still metamorphosing after a decade.16 After that, whenever one of Susie’s gay friends who was dying of AIDS neared the end, she invited him to come live with her. She and Cole took some of her dying friends on dream trips, one to Japan, another to Dharamsala for a personal audience with the Dalai Lama. She kept her friends’ ashes on her mantel to make sure that someone would remember them. Peter took to calling his mother the Dalai Mama.
Howie, who had always absorbed so much of his mother’s energy, now stepped out from under her wing at the same time that his father’s growing fame began to have an impact on his life. During 1989, he had become chairman of the Nebraska Ethanol Authority & Development Board. Through this role, he became friendly with Marty Andreas, an executive at Archer Daniels Midland, a large Illinois-based agricultural company that was heavily involved in ethanol. Marty Andreas was nephew of ADM’s CEO, Dwayne Andreas, who served on the Salomon board with Warren. Two years later, thirty-six-year-old Howie was asked to become the youngest member of the ADM board.
Dwayne Andreas had been charged, but acquitted, of making illegal political campaign contributions during Watergate; he also made huge and sometimes controversial donations to politicians of both parties while Congress was repeatedly passing the tax subsidies for ethanol that benefited ADM. Buffett’s view that rich people and powerful business interests were far too able to buy access and influence with politicians conflicted sharply with the way that ADM did business in politics.
Six months after Howie joined the board, Andreas hired him for a job in public affairs. Howie had no public-relations or financial experience, and agreed to move to Decatur, Illinois, where ADM was headquartered. The company put him in charge of working with analysts.17 Howie would not have accepted the offer if he thought it had something to do with his surname or his father’s recently burnished reputation as a paragon of corporate ethics. His expertise in ethanol seemed to him to make it plausible. However, while Howie had many years of experience with people trying to use him for his father’s wealth, he was naive about large corporations, and he saw nothing remarkable in a major company hiring a member of its board of directors to work as a public-affairs spokesperson.
Buffett, who would never invest in a company like ADM or hire a person who mixed business and politics the way Andreas did, said nothing to dissuade his son from serving on a board and working for a company so dependent on largesse from the government. This uncharacteristic reticence speaks volumes about his longing for his son to gain some business experience.
Andreas was tough and demanding, according to Howie, and gave him assignments like buying flour mills in Mexico and working on the North American Free Trade Agreement. But Howie remained the same person as before—driven by adrenaline, energetic, almost painfully honest, and vulnerable. At family trips and gatherings, he still surprised his relatives by jumping out of closets in his gorilla costume.18 Nevertheless, Howie felt that he was getting years of business education compressed into a short time.
In 1992, Buffett had invited Howie to join the board of Berkshire Hathaway, saying that his son would become nonexecutive chairman after he died. Howie’s business experience was still light, he had never finished college, and he was more interested in agriculture than investing. He now had the beginnings of a credible résumé, however. Since Buffett was the largest shareholder of what amounted to a family corporation, he was within his rights to do this. His reasoning was that Howie would steward the culture after he was gone.
Buffett now had to do some mental backflips, however, to reconcile all the statements he had made over the years—denunciations of the evils of the “divine right of the womb,” dynastic wealth, and advantages based on parentage rather than merit—with his decision to make his relatively untested son the chairman of Berkshire Hathaway after he was gone. And it was not clear how Howie’s role would complement that of the next CEO of Berkshire. That may have been the point. Every sign now indicated that Buffett would see to it that power would not be concentrated in any one individual after his death. This might inhibit Berkshire’s potential or it might not, but it would fend off the grisly menace of the Institutional Imperative, which he viewed as the greatest danger that Berkshire faced. Buffett wanted a degree of control from beyond the grave, and this was his first step in getting it.
In a second step, he had put Susie Jr., then Peter, on the board of the Buffett Foundation, with the understanding that Susie Jr. would run the foundation after her mother died. This, by the assumption of all concerned, would not occur until after Warren himself was gone. Buffett’s view of the foundation, as of so many other things, was that “Big Susie will take care of it.” Susie Jr.’s shouldering of foundation responsibilities was presumably many years in the future. A philanthropist in training, she played an active role in her father’s civic and social life in Omaha. As her father’s fame increased, Susie Jr. was also becoming his most frequent elephant-bumping escort, now that Kay Graham, in her seventies, was not getting out as much. Astrid, who only occasionally attended events with him, did volunteer work at the zoo and had no interest in serving on committees or chairing events. Her life was less changed than almost anyone’s by Buffett’s newfound fame, interrupted only by the occasional gawker in the driveway.
Peter had moved to Milwaukee, headquarters of his record label. After a stressful marriage, he had separated from Mary in May 1991, and ever since had been going through a messy divorce. Afterward, Peter formally adopted his twin stepdaughters, Erica and Nicole. While Big Susie had always embraced them as her granddaughters, Warren was more reserved. Later—with hindsight—it would become clear that he viewed the adoption as a new postmarital link forged between Peter and his ex-wife—a link that Warren did not feel bound by himself.
Peter used this traumatic period in his personal life as a catalyst for personal growth. Meanwhile, his career had progressed. His music had begun to reflect Native American elements, which resonated strongly with him. That had led to a job scoring the Fire Dance scene in Dances with Wolves. He was now working on a movie score for The Scarlet Letter and a CBS miniseries.
Peter was respected but not famous, a working musician but not a star. In the music world, the Buffett name meant nothing. His father was proud of his son’s work. But artistry divorced from fame or commercial success flew past Warren just the way his investing and business passion flew past Peter; their worlds did not connect. Yet, oddly, Warren and Peter were the most alike; both shared a passionate commitment to a vocation for which they had been destined from early childhood; both got wrapped up so obsessively in their work that they expected their wives to become their conduit to the outside world.
Buffett also now had, in effect, a third son—Bill Gates.
At first it was what Gates calls “a tiny bit of ‘Warren’s the adult and I’m the child.’ ” Gradually this evolved into “Hey, we’re both in this learning at the same time.”19 Munger often attributed much of Buffett’s success to the fact that he was a “learning machine.” Their common intellect, interests, and way of thinking gave them considerable common ground. They shared the same intensity. Buffett taught Gates about investing and acted as the sounding board for Gates’s ruminations about his business. It was the way Buffett had learned to think in models that impressed Gates most. Buffett was as eager to share his thoughts about what makes a great business with Gates as Gates was eager to hear them.
If Buffett could have found more great businesses, he would have bought them all. He never stopped looking for them. The town where the Superinvestors of Graham-and-Doddsville lived was getting crowded, however. Wall Street had been overrun; there were fewer and fewer pockets of overlooked opportunity. While Buffett’s focus on business never lessened, as the nineties progressed, the deals became larger—but more sporadic. Meanwhile, a new interest took hold. It would not reduce his zeal for Berkshire, but it would alter his social priorities, his travel itineraries, and even his friendships.
What Buffett now wanted to do in his spare time was to play bridge. He had been playing a casual social game for nearly fifty years, and while in New York to handle Salomon, he had started playing a more serious and competitive game. One day in 1993, he was playing in a tournament with George Gillespie and met Sharon Osberg, who was partnered with Carol Loomis.
A former computer programmer, Osberg had grown up with a deck of cards in her hand. By the time she was running Wells Fargo’s start-up Internet business, she had won two world team championships. It didn’t hurt that she was a petite, sweet-faced brunette in her mid-forties.
“The next time she’s going cross-country,” Buffett told Loomis, “have her stop in Omaha. Have her call me.”
“Where’s Omaha?” Osberg said. It took her three days to build up the courage to pick up the phone. “I’d never talked to a living legend before.”20
Osberg, who lived in San Francisco, was on her way to Omaha a week or so later. Buffett took her to dinner at his now-favorite steak house, Gorat’s. Seated in a room full of families eating at Formica tables, Osberg decided to play it safe and declared, “I’m going to have whatever you’re having.” A few minutes later she found herself looking at “a piece of raw meat the size of a baseball mitt.” Afraid of offending a living legend, she ate it. Then they went to the local bridge club to play, after which, at ten o’clock, Buffett took her on a driving tour of Omaha so he could show off his collection. She saw the Nebraska Furniture Mart parking lot, she saw his house, she saw the house he grew up in, she saw Borsheim’s, all from a moving car in the dark. Then he dropped her off at her hotel. Both were leaving early the following day.
The next morning, when Osberg was checking out, the front desk clerk told her, “Someone came in and left a package for you.” Buffett had come to the hotel at four-thirty in the morning and left her a compilation of his annual reports to shareholders, which he had had privately printed and bound into a book.21 She had just become one of Buffett’s people.
Not long after, Buffett sent Osberg to meet Kay Graham when she was in Washington on a business trip. She filled in as a fourth at bridge with Graham and her friends. Soon, Osberg was staying at Graham’s house and playing bridge in Washington on a regular basis with people like Sandra Day O’Connor. She called Buffett from the guest bedroom. “Oh, my God!” she said. “There’s a real Picasso in the bathroom!”
“I never noticed it and I’ve stayed there for thirty years,” Buffett later said of the Picasso sketch. “All I know is she leaves shampoo out.”22
Buffett began to time his trips to coincide with Osberg’s business trips to New York. Before long, the two had become fast friends. Osberg thought it was a shame that the only time Buffett got to play was when he was in a room with other bridge players. He needed a computer. They went round and round about this for several months. Finally Osberg said, “Warren, you really should just try it.” “Okay, okay,” he said. “You come to Omaha and set up the computer, you stay at the house.”
Bridge and Osberg accomplished what even Bill Gates had not. Buffett had the Blumkins send someone over from the Furniture Mart to hook up a computer. Osberg arrived at the house, she got acquainted with Astrid, then taught Buffett how to navigate the Internet and use a mouse. “And he was fearless, just fearless,” Osberg says. “He wanted to play bridge.” And only bridge. “Just write down the things I need to know to get in to play bridge,” he told her. “I don’t want to know anything about anything else. Don’t try to explain to me what this thing is doing.”23 Buffett adopted the moniker “tbone” and began playing on the Internet four or five nights a week with Osberg and other partners. Astrid would fix him an early dinner before he logged on to his bridge game.
Before long, Buffett was so engrossed in Internet bridge that nothing could disturb him. When a bat got into the house and flapped around the TV room, banging into the walls and entangling itself in the curtains, Astrid shrieked, “Warren, there’s a bat in here!” Sitting across the room in his frayed terry-cloth bathrobe, staring at his bridge hand, he never moved his eyes from the screen as he said, “It’s not bothering me any.”24 Astrid called the pest-control people and they removed the bat, all without disturbing his bridge game.
Buffett felt his skills had improved so much under Osberg’s tutelage that he wanted to play in a serious tournament. “Why not start at the top?” she said. They signed up for the mixed pairs at the World Bridge Championships. The Albuquerque convention center was filled with hundreds of people sitting around bridge tables and kibitzers wandering around watching the players. Murmurs and stares flew through the room when the richest man in the United States and two-time world champion Sharon Osberg strolled into the World Bridge Championships together. By now, enough people recognized Buffett’s lanky frame and thatch of gray hair that he caused a stir. For an unranked amateur to show up at the world championships as his first tournament was an unusual thing. For Warren Buffett to do it was shocking.
Osberg expected that they would lose in short order, so the point was to have fun and get some experience. Instead, Buffett sat down at the table and seemed to shut out everything. It was as if there was nobody else in the room. His bridge skills were not close to the level of most other players, but he was able to focus as calmly as if he were playing in his living room. Somehow his intensity overcame the weakness of his game. Osberg was amazed when they qualified for the finals. “We were just good enough,” she says.
But after a day and a half of playing to get to this point, Buffett was exhausted and wrung out. The only breaks had been an hour here and there to slip out for a hamburger. He looked like he had run a marathon. In the break before the finals he told Osberg, “I can’t do it.”
“What?!” she said.
“I can’t do it. Tell them we’re not going to play in the finals. Tell them I had a business emergency,” he said. Now Osberg had the job of explaining this to the World Bridge Federation.
Nobody who qualified for the finals had ever decided not to play. The representatives of the World Bridge Federation were outraged that Warren Buffett would come to their tournament, endorse it by his famous and important presence, qualify for the finals, then try to leave. “You can’t do that!” they said. When Osberg insisted, they threatened to strip her of her ranking and credentials. “I’m not the one who won’t play!” she insisted, repeating that he had a business emergency. Finally, they accepted that she was only Buffett’s proxy, relented, and allowed the two of them to leave without punishing her.
Naturally, Buffett had encouraged Bill Gates, who had fooled around with the game a bit, to become a more serious bridge player. He also sent Osberg to Seattle to set up Bill Gates Sr. on the computer to play bridge, thus beginning to inject her into the Gates family.
Buffett’s relationship with Gates was gradually becoming much closer. On Easter weekend 1993, Bill and Melinda got engaged. On the way back from San Diego, Bill had the pilot give fake weather reports from Seattle to fool Melinda into thinking they were flying home. She was shocked when the aircraft door opened after they landed and Warren and Astrid were waiting on the red carpet at the bottom of the stairs. Warren drove them to Borsheim’s, where they picked out an engagement ring.
Nine months later, Buffett flew to Hawaii for their New Year’s Day wedding. Even though his sister Bertie owned a house on the Big Island of Hawaii, Buffett had never been to Hawaii before. He was as excited about the Gates wedding as if one of his own children were getting married. Bill and Melinda’s wedding conflicted with Charlie Munger’s seventieth birthday party, which was taking place the same weekend. The famously loyal Buffett never dropped his old friends but sometimes had to play Twister to manage his relationships. If a conflict arose, he tended to resolve it by appeasing whoever he thought was most likely to get upset at him—which generally meant that he slighted the most loyal of his friends, the ones he could count on not to criticize or get angry at him. This left the rejected person the paradoxical consolation that he was the one Buffett most trusted and felt closest to. People understood this, so they put up with it. Munger, the long-standing friend, would tolerate almost anything of Buffett, even missing his seventieth birthday party.
So he opted for the wedding and brought along Kay Graham, now seventy-six, who still attended occasions of state like this. Warren, meanwhile, had sent Susie to Los Angeles for Munger’s party, where she sang.25
Susie was used to this sort of thing. She had her own definition of what he needed from the women in his life, and pigeonholed each of them into a utilitarian category. One night when she was at dinner at Gorat’s with Warren, Astrid, and Sharon Osberg, she looked around the table and surveyed the company. Only Kay and Carol Loomis were missing from the harem. She laughed and shook her head. “Someone for everything,” she said.
But before long, Buffett was talking to Osberg several times a day on the phone, taking her along as a traveling companion on his trips, and making her one of his closest confidantes. Much like Astrid, however, she stayed in the background rather than upset the perceived order of all his other relationships, which Buffett had always tended to separate. By the mid-1990s, the public perception of how he spent his time and the way he actually spent it had long diverged. As always, conflicts were resolved to appease whomever might erupt on him. The shrieking wheel got the grease.
Another group of Buffett’s loyal friends joined him for their biennial ritual when the Buffett Group held their meeting at the Kildare Club and in nearby Dublin in September 1995. Because Bill Gates was present (for Gates straddled all of Buffett’s worlds, since Buffett would have liked to become his Siamese twin), the government of Ireland treated them like emperors. Filled with incredible artwork and antiques, the K Club raised all of its own food on-site and prepared it with a European staff and chefs.
The gloss and glamour of the surroundings belied the fact that the Buffett Group members, many of them fabulously wealthy by now, were largely unchanged. Warren saw some of these people only once a year or so; yet he remained utterly devoted to them.
Amid the K Club’s luxury, Buffett handed out copies of a booklet, The Gospel of Wealth by turn-of-the-century industrialist and philanthropist Andrew Carnegie. As he celebrated his sixty-fifth birthday, and took stock of his life to date, he had been rereading Carnegie. Now he led the group in a debate of Carnegie’s premise that “He who dies rich dies disgraced.” Carnegie had honored that philosophy, spending nearly his whole fortune, one of the greatest in history at the time, to establish libraries in towns and cities all over the United States.26 Buffett had always planned to die rich and disgraced. He insisted that the best use of his talents was to keep making more money until he died. He wanted to hear what other people thought and obviously was giving some consideration to this question.
Most of the Buffett Group members were heavily involved in philanthropy, and for years had begged Buffett to loosen his tightfisted ways. They welcomed the dialogue as a sign he might be rethinking his rigid position. When his turn in the conversation came, Bill Gates said, Shouldn’t the measure of accomplishment be how many lives you can save with a given amount of money? He agreed with Buffett that you had to make the money first in order to have the money to give away. But as soon as he had made a certain amount, Gates said, he was going to use it to save more lives in the present, by giving most of it away.27
The Buffett Foundation had chosen two main philanthropic issues, overpopulation and nuclear proliferation, problems that are almost unimaginably hard to solve. Nuclear proliferation didn’t lend itself well to financial solutions, although Buffett would have given as much money as he could to his highest priority, any plausible way of reducing the probability of nuclear war. His analysis of the problem was, characteristically, statistical.
“A nuclear attack is inevitable. It’s the ultimate problem of mankind. If there’s a ten percent probability that something will happen in a year, there’s a 99.5 percent probability that it will happen in fifty years. But if you can get that probability down to three percent, that reduces the probability to only seventy-eight percent in fifty years. And if you can get it down to one percent, there is only a forty percent probability in fifty years. That’s a truly worthwhile goal—it could literally make all the difference in the world.”
The other great problem, in Buffett’s view, was the strain placed on the overburdened planet by too many people. Population control was where the Buffett Foundation had spent most of its money since the mid-1980s. This, too, he approached from a mathematical perspective. In 1950, the world’s population had been about 2.5 billion. By 1990 the world’s population had passed the five-billion mark. The debate over how much this mattered essentially centered over whether technology could outpace population growth, species extinction, and global warming. Buffett looked at the problem of expanding population and diminishing resources in terms of a “margin of safety.”
“There is a carrying capacity to the earth. It’s far, far, far, far, far greater than [Thomas] Malthus ever dreamed. On the other hand, there is some carrying capacity, and the one thing about carrying capacity is that you want to err on the low side. If you were provisioning a huge rocket ship to the moon and had enough for two hundred people and didn’t know how long the journey would take, you probably wouldn’t put more than a hundred fifty people on the ship. And we have a spaceship of sorts, and we don’t know how much the provisions are good for. It’s very hard to argue that the earth would be better off in terms of average happiness or livelihood with twelve billion people instead of six.28 There is a limit, and if you don’t know what that limit is, you’re better off erring on the safe side. It’s a margin of safety approach for the survival of the earth.”
Since the 1970s, Buffett had focused on giving women access to contraception and abortion—issues that were close to Susie’s heart—as the answer to out-of-control population growth. This was a standard point of view among humanist organizations at the time.29
Buffett had been especially moved by the logic of Garrett Hardin, a leader of the population control movement, whose 1968 article “The Tragedy of the Commons” laid out the way that people who have no ownership stake in common goods—the air, the seas—overuse and destroy them.30 While Buffett adopted many of Hardin’s principles, he rejected solutions favored by Hardin, a social Darwinist who espoused authoritarian ideas and had written that the meek not only would inherit, but already had inherited the earth. He considered this “genetic suicide”: “Look around you. How many heroes do you number among your neighbors? Or your colleagues? … Where are the heroes of yesteryear? Where is Sparta now?”31
Buffett thought that the idea of bringing back Sparta had already been tried. The man who had tried it was Adolf Hitler. The Spartans had groomed themselves genetically by abandoning weak or “undesirable” babies on a mountainside. Modern eugenics (social Darwinism) was a philosophy formulated by Sir Francis Galton, who drew on the work of his cousin Charles Darwin and theorized that selective breeding of the human race could improve the quality of the population. This notion had received extremely widespread support in the early twentieth century, until discredited by the experiments of Nazi Germany.32 There was no safe way to think along lines like those Hardin was pursuing, which led to a deadly division of humanity into competing groups.33 Buffett had renounced this view in favor of a civil-rights-based approach to the problems of spaceship Earth.
Accordingly, by 1994, Buffett’s emphasis had shifted from “population control” to reproductive rights.34 This change corresponded with a worldwide evolution in thinking among the population control movement. Women “were no longer to be treated as a convenient means toward the ‘end’ of population control.”35 Buffett had always felt that any means of solving the population problem that involved coercion was out of the question.36 Now he went a step further. “I wouldn’t in any way limit a woman’s right to bear children even if the world were extremely overpopulated, and I wouldn’t ban the right to choose even if there were only two people on the planet and fertility was critical. I think the world should be limited to wanted people first. I don’t think that the numbers should determine how many people are wanted. Even if everybody had seven children, I wouldn’t do as Garrett Hardin said and link the right to the numbers.” So the Buffett Foundation supported reproductive rights.
Increasingly, the complexities and nuances of reproductive rights, civil rights, and population control had all gotten lost in the controversy over abortion. Buffett’s giving ultimately was based on what he called the Ovarian Lottery.37 The idea had great resonance for Buffett.38
“I’ve had it so good in this world, you know. The odds were fifty-to-one against me being born in the United States in 1930. I won the lottery the day I emerged from the womb by being in the United States instead of in some other country where my chances would have been way different.
“Imagine there are two identical twins in the womb, both equally bright and energetic. And the genie says to them, ‘One of you is going to be born in the United States, and one of you is going to be born in Bangladesh. And if you wind up in Bangladesh, you will pay no taxes. What percentage of your income would you bid to be the one that is born in the United States?’ It says something about the fact that society has something to do with your fate and not just your innate qualities. The people who say, ‘I did it all myself,’ and think of themselves as Horatio Alger—believe me, they’d bid more to be in the United States than in Bangladesh. That’s the Ovarian Lottery.”
The Ovarian Lottery had come to shape all of his opinions about politics and philanthropy; Buffett’s ideal was a world in which winners were free to strive, but obliged to narrow the gap by helping the losers. He had grown up with the lynchings and beatings of the civil-rights years; and had heard over and over of the Court House Riot, authority shoved onto a scaffold with a noose around its neck. Perhaps without being aware of it, Buffett had many years ago abandoned the libertarian leanings of his father39 and spiritually circled back toward the democratic idealism of Nebraska’s William Jennings Bryan, who had written of “the class that the rest rested upon.”
Buffett, one of the least peripatetic people imaginable in both philosophy and geography, could make the occasional tectonic shift if enough conviction piled up. Now, after he and Susie returned from Ireland, they met in Vancouver to embark on a seventeen-day trip to China, “Across Cathay.” Buffett’s motivation for this round-the-world jaunt was the Gateses. Bill and Melinda had gone to considerable trouble to make the trip enjoyable for him. Ahead of time, they sent him and the other guests a questionnaire asking what they liked to eat. Buffett was not taking any chances on an experience like the one he’d had at the Moritas’. “I don’t eat any Chinese food,” he responded. “If necessary, serve me rice and I’ll just move it around on my plate, and I’ll go back to my room afterward and eat peanuts. Please get me a Journal every day; it’s really hard if I don’t have my Journal.”40
And so Buffett went to China.
After checking in to Beijing’s grand old Palace Hotel on Goldfish Lane, they ate a magnificent Sichuanese dinner in the hotel’s Emerald Room. The Gateses had arranged for the tour company, Abercrombie & Kent, to send people ahead to teach the chefs to make hamburgers and french fries for Buffett. The first evening, to his delight he was served course after course of his french fries—even for dessert.
In Beijing, the group met the Premier of China. On the third day, they climbed to the top of the Great Wall, where the group found champagne awaiting them—and Cherry Coke for Buffett. Looking down at the world’s largest structure, which represented eleven centuries of innovative engineering, human labor, and Chinese history, everyone waited for Buffett to say something profound. Surely he would be moved by the sight.
“Boy, I sure would have liked to have been the company that got the brick contract for this thing,” he quipped.
The following morning, he skipped the martial-arts lesson in favor of a tour of the local Coca-Cola plant. The next day, the group flew to Ürümqi to board a train—no ordinary train, for the Gateses had arranged for the group to be the first Westerners to rent Chairman Mao’s personal train—for a journey across northwest China. The train followed the Old Silk Road route, making stops along the way so that the group could ride camels in the desert, visit ancient cities and caves, see the giant pandas in Xi’an, and tour the archaeological dig of the imperial Terra Cotta Warriors and Horses. The trip allowed for hours and hours of conversation, during which Buffett and Gates continued their discussions of why some banks are better than other banks, why retailing is such a tough business, the value of Microsoft stock, and the like.41
On the tenth day they visited the site of the Three Gorges Dam project, then boarded the M.S. East Queen, a huge, five-deck cruise ship. The boat passed into the first of the three gorges, the Shennong Xi, where many of those on board donned orange life vests and climbed into longboats that were poled and pulled by river trackers along an upstream tributary of the river. A group of ten men using ropes dragged each boat against the current, while young, supposedly virginal girls sang to encourage the men at their grueling work.
Buffett cracked jokes about the virgins. But that night during the Cantonese dinner, his mind obviously flashing to the implications of the Ovarian Lottery, he said, “There could have been another Bill Gates among those men pulling our boat. They were born here, and they were destined to spend their lives tugging those boats the way they did ours. They didn’t have a chance. It was pure luck that we had a shot at the brass ring.”
From Shennong Xi, the boat steamed on to Outang Gorge, passing villages where schoolchildren came out to bow at the strange Americans. Past a silk-reeling mill, between sheer, mist-shrouded peaks, alongside a traditional cobblestone village, the boat slowly wound its way down the Yangtze. Finally, they arrived in Guilin for a private Li River barge cruise through one of the most scenically beautiful spots on earth, a pristine river lined with thousands of limestone pinnacles covered in a mantle of green, “like jade hairpins,” according to the Tang poet Han Yu. Many of the Gates party bicycled along the riverbank to experience the long waterside parade of two- and three-hundred-foot-high untouched prehistoric stone shafts. Warren, Bill Sr., and Bill Jr. had obtained permission from their wives to have an hours-long bridge orgy on the boat as the barge floated through the magnificent pine-forested landscape.
When they finally arrived in Hong Kong at the end of the trip, Buffett towed the Gateses straight to McDonald’s to buy hamburgers in the middle of the night. “And all the way back from Hong Kong to San Francisco and then on to Omaha, I just read newspapers.”
But long after that journey through China, for years afterward in fact, Buffett’s mind kept returning over and over to one of its moments. It was not the scenery, which he had barely noticed, or the camel ride, memorialized in a photograph. It was not the endless meals of french fries during the Chinese banquets that everyone else had enjoyed. He was thinking about the Three Gorges Dam project and the longboats on the Shennong Xi. But it was not the singing virgins that had beguiled him. It was the fate of the men who spent their lives ceaselessly dragging the longboats upstream that stayed with him, haunting his thoughts about individual destiny and fate.