1. Estimated. Buffett was managing $878,211 at the end of 1958 in six partnerships. The $50,000 Glenoff Partnership was formed in February 1959. By the end of 1959, the partnerships’ market value had grown to $1,311,884. His personal funds and Buffett & Buffett increased this total.
2. Sanborn sent its customers paste-over revisions each year showing new construction, changed occupancy, new fire-protection facilities, and changed structural materials. A new map was published every few decades. Buffett took note of the company, as far as he recalls, when a large block of stock came up for sale. The widow of the deceased president was reportedly selling 15,000 shares because her son was leaving the company. Phil Carret owned 12,000 shares.
3. Five or ten shares apiece, forty-six shares in total.
4. Buffett had become friendly with the company’s CEO, Parker Herbell, whom he said the rest of the board treated as an “errand boy.” Herbell supported the plan to separate the investments from the map business, and had facilitated some of its underpinnings.
5. “It does not make sense to have management, consultants, and major stockholders in complete agreement regarding a course of action but unable to proceed because of directors owning an insignificant amount of stock.” Warren Buffett letter to C. P. Herbell, September 25, 1959.
6. As part of the deal, the Buffett partnerships agreed to tender their stock.
7. Interview with Doris Buffett.
8. Interview with Kelsey Flower, a childhood friend of Susie Jr.’s.
9. Interview with Dick and Mary Holland.
10. Interview with Peter Buffett.
11. Interview with Howie Buffett.
12. Gateway, May 26, 1961.
13. “Paul Revere’s Ride,” Henry Wadsworth Longfellow. Listen my children, and you shall hear of the multitudes rescued by Susan Buffett.
14. According to his autobiography, Stranger to the Game (written with Lonnie Wheeler, New York: Penguin, 1994), Bob Gibson lived in Omaha in the off season. He talks about playing basketball in Omaha with a white team in 1964, traveling to Iowa for games, and hanging out at a bar on North 30th Street. The bartender wouldn’t serve him.
15. Howard Buffett quoted in Paul Williams, “Buffett Tells Why He Joined Birch Society,” Benson Sun, April 6, 1961.
16. Leila Buffett letter to Dr. Hills, December 10, 1958.
17. Leila Buffett to Mrs. Kray, May 23, 1960.
18. Interview with Susie Buffett Jr. and Howie Buffett. They recall their father’s behavior during this period as routine and, with hindsight, as a form of denial.
19. Interview with Howie Buffett.
20. Interview with Chuck Peterson.
21. Interview with Lee Seeman.
22. Interview with Dick Holland.
23. This is how hedge funds are commonly managed to stay within the legal investor limit today.
24. George Payne was also a founding member of this partnership. By then, B-C had been folded into Underwood. Along with the ten partnerships, Warren and his father were still operating Buffett & Buffett.
25. The Dow’s results include dividends received. Note that this was the performance for the partnership before Warren’s fees.
26. Interview with Chuck Peterson.
27. Interview with Stan Lipsey.
28. Buffett was 31 on January 1, 1962, but his personal investments and gains in the partnership had taken him past the million-dollar mark months earlier, when he was still 30.
29. Interview with Bill Scott.
30. Buffett waived his fee for Scott, one of the two most lucrative arrangements he ever made with an employee. (See Henry Brandt in “Haystacks of Gold” and “Folly” for the other.)
31. He put in everything except his investment in Data Documents, a personal investment in a private company.
32. Letter to partners, July 6, 1962. In the second quarter of 1962, the Dow fell from 723.5 to 561.3, or 23%. In the first half of that year, the partnership saw a loss before payments to partners of 7.5%, compared with a loss of 21.7% including dividends for the Dow—the partners had a 14.2% outperformance.
33. Buffett’s phrase is a clever reworking of Graham’s original. In The Intelligent Investor: “The sovereign virtue of all formula plans lies in the compulsion they bring upon the investor to sell when the crowd is buying and to buy when the crowd lacks confidence” (Intelligent Investor, Part I: General Approaches to Investment VI: Portfolio Policy for the Enterprising Investor: The Positive Side, 1949 edition). And in Security Analysis: “It would require bond investors to act with especial caution when things are booming and with greater confidence when times are hard” (Security Analysis, Part II: Fixed-Value Investments, XI: Specific Standards for Bond Investment, 1940 edition).