forbes-on-buffett

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C O N T E N T S 1 HOW OMAHA BEATS WALL STREET Forbes discovered Warren Bu ffe tt in 1969, and this early interview i ntroduced the iconic investor to a wide aud ience for the fi rst ti me. 4 THE MONEY MEN Look At All Those Beauti ful, Scantily Clad Women Out There ! 6 “YOU PAY A VERY HIGH PRICE IN THE STOCK MARKET FOR A CHEERY CONSENSUS” What does Bu ffe tt thi nk now? In this article written for F OR BES he puts it blu ntly: Now is the ti me to buy. 8 WILL THE REAL WARREN BUFFETT PLEASE STAND UP? Warren Bu ffe tt talks like a cracker- barrel Ben Gr aham, but he invents sophisticated arbitr age str ategies that keep him way ahead of the smartest folks on Wall Stree t. 12 WARREN BUFFETT’S IDEA OF HEAVEN: “I DON’T HAVE TO WORK WITH PEOPLE I DON’T LIKE” Warren Bu ffe tt this year moves to the top of The Forbes Four Hu nd red. Herein he ex plai ns how he picks his uncannily successful investments and reveals what he plans on doi ng with all that loot he has accu mulated. 18 N O T-SO-SILENT PA RTNER: MEET CHARLIE MUNGER, Here’s the lawyer who converted Warren Bu ffe tt from an old - fashioned Gr aham value investor to the ulti mate buy - and - hold value str ategist. 23 BUFFETT ON BRIDGE As the Duke of Well i ngton tr ai ned on the playi ng fields of Eton, Warren Bu ffe tt tr ai ns at the brid ge table. 25 THREE LITTLE WORDS Warren Bu ffe tt says he doesn’t thi nk the market is overv alued, yet he buys few stocks. Why ? 2 7 F LYING BUFFETT Lead i ng a revolt of the ai rl i ne busi ness tr aveler. 29 THE BERKSHIRE BUNCH Chance mee ti ngs with an obscu re you ng investment cou nselor made a lot of people wildly rich. Without knowi ng it, they were buyi ng into the greatest compou nd - i nterest machi ne ever bu ilt. 33 A SON’S ADVICE TO HIS FAT H E R How ard Bu ffe tt does not ex pect to inherit his dad’s place on The Forbes 400, but he hardly seems bitter. ON THE COVER: BEN BAKER/REDUX 36 A WORD FROM A DOLLAR BEAR Warren Bu ffe tt’s vote of no confidence in U.S. fiscal pol ic ies is up to $20 bill ion . F O R B E S
N OVEMBER 1, 1 9 6 9 How Omaha Beats Wall Stre e t FORBES DISCOVERED WARREN BUFFETT IN 1969, AND THIS EARLY INTERVIEW INTRODUCED THE ICONIC INVESTOR TO A WIDE AUDIENCE FOR THE FIRST TIME. Warren Bu ffe tt has lived in Washi ngton and New York and stud ied at Colu mbia University Busi ness School, but he has never stayed in these places very long. He has alw ays re tu rned to his home town, Omaha, Nebr. If he were a doctor or lawyer or ord i nary busi nessman, this mi ght not be su rprisi ng. But Bu ffe tt is what is usually called a Wall Stree ter, a Money Man . For the last 12 years he has been ru nni ng one of the most spectacular investment portfol ios in the cou ntry. Si nce adjectives like “spectacular” don’t prove much, we’ll tell you ex actly how spectacular Bu ffe tt has been: $10,000 i nvested in his Bu ffe tt Partnership in 1957 is now worth $260,000. The partnership, recently at $100 mill ion, has grown at an annual compou nded rate of 31%. Over that 12-year period it hasn’t had one year in which it lost money. It gai ned 13% in 1962 and 20% in 1966, years when the Dow aver age fell 7% and 15%, respectively. It hasn’t lost money this year, either. “Oh ,” you say, “a hot stock man .” Not at all. Bu ffe tt has accompl ished this throu gh consistently followi ng fu ndamental ist i nvestment pri nc iples. A lot of you ng money men who now are tu rni ng in miser able performances began with the same i nvestment ideas in the early Si x ties but then forgot them in the Great Chase of the Hot Stock. Bu ffe tt, however, stayed with his pri nc iples. He doesn’t talk about conce pt companies or story stocks. He has never tr aded for a fast tu rn on an earni ngs re port or bou ght little unknown companies, as Fred Carr does. He doesn’t hed ge (i. e., go short) like A. W. Jones, who devised the hed ge fu nd, Bu ffe tt is not a si mple person, but he has si mple tastes . He buys a stock for si mple, basic reasons , not tortuous or sophisticated ones. His stocks, you mi ght say, are sort of like Omaha . His big successes over the years have been in the stocks of ord i nary companies: American Ex press , not Control Data; Cleveland Worsted Mills, not Xerox; Walt Disney, not Kentucky Fried Chicken; Studebaker, not Teledyne. He won’t buy a conglomer ate: They don’t make sense to him. Ditto technological companies: “I can’t understand them. They’re not my style.” Bu ffe tt tells a story on hi mself: “Will iam Morris of Control Data is a relative throu gh marriage, and I could have bou ght it at 16 cents a share [now $150], but I asked: ‘Who needs another computer company ?’” Besides havi ng no use for glamour stocks or conglomer- 1 F O R B E S
Page 1: ON WARREN BUFFETT
Page 5 and 6: in three small rooms in Omaha’s K
Page 7 and 8: nesses did well. Under Bu ffe tt’
Page 9 and 10: hat, will scorn investment in si mi
Page 11 and 12: what Berk shi re Hathaw ay is — c
Page 13 and 14: tr age. We mentioned earl ier that
Page 15 and 16: There’s an excellent chance he’
Page 17 and 18: Bu ffe tt then had about $ 9,800 in
Page 19 and 20: JA N UA RY 22, 1 9 9 6 The Not-So-S
Page 21 and 22: dec ide whe ther they want to becom
Page 23 and 24: JUNE 2, 1 9 9 7 B u ffett On Bridge
Page 25 and 26: O C TOBER 12, 1 9 9 8 The Berkshire
Page 27 and 28: oker age, read an article by Bu ffe
Page 29 and 30: Careful, How ard. “All three of u
Page 31 and 32: JA N UA RY 10, 2 0 0 5 A Wo rd From

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