1. In his memoir, Man of the House (New York: Random House, 1987), the late Congressman Tip O’Neill recalled that his pastor, Monsignor Blunt, said it was a sin for Catholics to go to the Protestant-managed YMCA. O’Neill and a Jewish friend stayed at the Sloane House anyway. The regular rate in the 1930s was sixty-five cents a night, but, O’Neill said, “If you signed up for the Episcopal service, it was only thirty-five cents, with breakfast included. We were nobody’s fool, so we signed up for the thirty-five-cent deal and figured to duck out after breakfast and before the service. But apparently we weren’t the first to think of this brilliant plan, because they locked the doors during breakfast, which meant that we were stuck.” By the 1950s, there was no longer a “pray or pay” deal at the Sloane House. “If there had been,” Buffett says, “I would have experienced a revelation and embraced whatever denomination offered the greatest discount.”
2. Buffett is not certain if the smoking deal applied to all three of the Buffett kids or only his sisters, but they all got the $2,000 on graduation on roughly the same terms.
3. Most of the money was invested in U.S International Securities and Parkersburg Rig & Reel, which he replaced with Tri-Continental Corporation on January 1, 1951. Howard contributed most of the money and Warren contributed the ideas and work, or “sweat equity,” to an informal partnership.
4. Benjamin Graham and David L. Dodd, Security Analysis, Principles and Technique. New York: McGraw-Hill, 1934.
5. Barbara Dodd Anderson letter to Warren Buffett, April 19, 1989.
6. The Union Pacific Railroad in the nineteenth century was the most scandal-plagued and bankruptcy-riddled of the nation’s railroads.
7. William W. Townsend, Bond Salesmanship. New York: Henry Holt, 1924. Buffett read this book three or four times.
8. Interview with Jack Alexander.
9. And, according to Buffett, one woman, Maggie Shanks.
10. Interview with Fred Stanback.
11. At $2,600 a year, Schloss as an investor was making less than the average secretary in 1951, who took home $3,060, according to a survey of the National Secretaries Association.
12. Interview with Fred Stanback.
13. Interview with Walter Schloss. Some material is from The Memoirs of Walter J. Schloss. New York: September Press, 2003.
14. Stryker & Brown was the “market maker,” or principal dealer, in Marshall-Wells stock.
15. Marshall-Wells was the second Graham and Dodd stock he had bought, after Parkersburg Rig & Reel. Stanback confirms the lunch with Green, but can’t recall the date.
16. Not, as has been written, from Who’s Who in America. However, he may have learned it from reading Moody’s, hearing it from David Dodd or Walter Schloss, or from a newspaper or magazine source.
17. Due to a legal technicality, this divestiture of GEICO stock was required in a consent order with the SEC in 1948. Graham-Newman violated Section 12(d)(2) of the Investment Company Act of 1940, although “in the bona fide, though mistaken, belief that the acquisition might lawfully be consummated.” A registered investment company (Graham-Newman was “a diversified management investment company of the open-end type”) cannot acquire more than 10% of the total outstanding voting stock of an insurance company if it does not already have 25% ownership.
18. GEICO oral history interview of Lorimer Davidson by Walter Smith, June 19, 1998, and also see William K. Klingaman, GEICO, The First Forty Years. Washington, D.C.: GEICO Corporation, 1994, for a condensed version of this story.
19. Making $100,000 in 1929 was equivalent to making $1,212,530 in 2007.
20. By 1951, GEICO was deemphasizing mailings in favor of platoons of friendly telephone operators who answered the phone at regional offices and were trained to quickly screen bad risks.
21. The main problem with tontines was that people were gambling with their life insurance policies instead of using them as protection. Originally a “survivor bet,” expulsion from a tontine pool was later based on failure to pay premiums for any reason. “It is a tempting game; but how cruel!” Papers Relating to Tontine Insurance, The Connecticut Mutual Life Insurance Company, Hartford, Conn.: 1887.
22. Office Memorandum, Government Employees Insurance Corporation, Buffett-Falk & Co., October 9, 1951.