1. Interview with Verne McKenzie, who says Buffett explained this to him when he hired him. Without a public exit strategy, this is one of only two ways to realize the value of the assets. Buffett had not yet figured out the other one, as the reader will see.
2. Warren Buffett letter to Clyde Dempster, April 11, 1960.
3. Warren Buffett note to Bob Dunn, June 27, 1958: “… has become increasingly less active in the business and it appeared the company was just drifting with him not interested and no one else having the authority to do anything.… We finally got the job accomplished by letting Clyde stay as president.” He gave Jack Thomsen, executive vice president, temporary operating authority.
4. Interview with Walter Schloss.
5. At $30.25 per share. Warren Buffett letter to Dempster shareholders, September 7, 1961.
6. Warren Buffett letter to partners, July 22, 1961.
7. “Dempster had earned good money in the past, but was currently only breaking even.
“We continued to buy the stock in small quantities for five years. During most of this period I was a director and was becoming consistently less impressed with the earnings prospects under existing management. However, I also became more familiar with the assets and operations and my evaluation of the quantitative factors remained very favorable,” thus leading him to continue buying stock. Letter to partners, January 24, 1962.
8. And water-system parts—as the demand for windmills was waning.
9. “We had parts for windmills and certain farm equipment,” says Scott, “where we had a lock on the business and by repricing it could stop losing money down there. And we were successful to some degree.”
10. January 18, 1963.
11. “Still a Chance City Can Keep Dempster,” Beatrice Daily Sun, September 1, 1963; “Drive to Keep Dempster Rolls,” Omaha World-Herald, September 30, 1963.
12. As Buffett’s successor, Dempster’s chairman W. B. McCarthy, put it, “We understand, as I am sure you do, that a number of the people in Beatrice do not recognize the fine, necessary job that you and Harry accomplished with Dempster.” W. B. McCarthy letter to Warren Buffett, November 19, 1963.
13. Of the $2.8 million total financing, $1.75 million went to pay the sellers and the remainder to expand the operation. “Launch 11th Hour Effort to Keep Dempster Plant Here,” Beatrice Daily Sun, August 29, 1963.
14. “Beatrice Raises $500,000,” Lincoln Evening Journal, September 3, 1963; “Fire Sirens Hail Victory, Beatrice Gets Funds to Keep Dempster,” Omaha World-Herald, September 4, 1963; “Contracts for Dempster Sale Get Signatures,” Beatrice Daily Sun, September 12, 1963.
15. The partnership made $2.3 million, almost three times its investment. Buffett changed the name of the holding company to First Beatrice Corp. and moved its headquarters to Kiewit Plaza.