forbes-on-buffett

O C TOBER 12, 1 9 9 8
The Berkshire Bunch
CHANCE MEETINGS WITH AN OBSCURE YOUNG INVESTMENT COUNSELOR MADE A
LOT OF PEOPLE WILDLY RICH. WITHOUT KNOWING IT, THEY WERE BUYING INTO THE
G R E ATEST COMPOUND-INTEREST MACHINE EVER BUILT.
BY DOLLY SETTON AND ROBERT LENZNER
In 1952 a 21-year- old aspi ri ng
money manager placed a small ad
in an Omaha newspaper inviti ng
people to attend a class on investi
ng. He fi gu red it would be a way to
accustom hi mself to appeari ng
before aud iences. To pre pare he even
spent $100 for a Dale Carnegie
cou rse on publ ic speaki ng.
Five years later Dr. Carol Angle,
a you ng ped iatric ian, si gned up for
the class. She had heard somewhere
that the instructor was a bri ght kid,
and she wanted to hear what he had
to say. Only some 20 others showed
up that day in 1957.
You will by now have guessed the teacher’s name: Bu ffe tt.
Warren Bu ffe tt.
“Warren had us calculate how money would grow, usi ng a
sl ide rule,” Dr. Angle, now 71, recalls. “He br ai nw ashed us to
truly bel ieve in our heart of hearts in the mi r acle of compou
nd interest.”
Persuaded, she and her hus band, Will iam, also a doctor,
i nvited 11 other doctors to a dinner to meet you ng Warren .
Bu ffe tt remembers Bill Angle ge tti ng up at the end of the
d i nner and annou nc i ng: “I’m putti ng $10,000 in. The rest of
you should, too.” They did. Later Carol Angle inc reased her
ante to $30,000. That was half of the Angles’ life savi ngs .
Dr. Angle still pr actices med ic i ne, as director of cl i nical
tox icology at the University of Nebr aska Med ical Center. But
she doesn’t work for the money. Her family’s hold i ngs in Bu f-
fe tt’s Berk shi re Hathaw ay have multipl ied into a fortu ne of
$300 mill ion .
Carol Angle is a charter member
of the Berk shi re Bu nch, a diverse
tribe scattered throu ghout the land
whose early faith in Warren Bu ffe tt
has led to immense riches .
In Omaha alone there may be at
least 30 famil ies with $100 mill ion or
more worth of Berk shi re stock ,
accord i ng to George Morgan, a broker
at Ki rkpatrick Pe ttis who handles
accou nts of many Berk shi re holders .
Mild red and Donald Othmer
d ied recently, leavi ng an estate al most
enti rely in Berk shi re Hathaw ay stock
worth close to $800 mill ion. Mild red’s mother was a friend of
Bu ffe tt’s family. When Mild red married in the 1950s she and
her hus band each invested $25,000 in a Bu ffe tt partnership.
That was before Bu ffe tt had accu mulated enou gh money
to buy control of a stru ggl i ng old New England manu factu rer
of tex tiles, handkerchiefs and su it lini ngs called Berk shi re
Hathaw ay. At the ti me his fi rst converts si gned on, Bu ffe tt was
ru nni ng essentially what we would today call a priv ate investment
partnership. When he dis banded the partnership in
1969, ex plai ni ng that bargai ns were then hard to fi nd, he
re tu rned most of the investors’ money and their pro rata
Berk shi re shares. He recommended to some of his investors
that they tu rn their money over to the small ish Wall Stree t
fi rm Ruane, Cu ni ff & Co. and its Sequoia Fu nd—a recommendation
that neither he nor they have reason to regre t.
For a while he tried ru nni ng Berk shi re as a tex tile company,
with investments on the side. In the end he liqu idated
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F O R B E S