Becoming Warren Buffett Page #3

"But, now that I found out

that you're alive

and teaching at Columbia,

I would really like to come."

And he admitted me.

So, you know what?

That... it just shows,

you never can tell.

Man:
Gentlemen,

Professor Graham.

Warren:

Ben was this incredible teacher.

I mean he... he was a natural,

and he drew us all in.

Are Wall Street professionals...

they more accurate in the shorter

term than the long term forecast?

Well, our studies indicate that you have

your choice between tossing coins...

and taking the consensus

of expert opinions,

and the results are just

about the same in each case.

Warren:

It was like learning baseball

from a fellow

who's batting .400.

It really... it shaped

my professional life.

There are two rules of

investing according to Warren,

and he learned this

from Ben Graham.

Rule number one,

never lose money.

Rule number two,

never forget rule number one.

Ben Graham basically coined

the term "value investing."

He believed

in careful scrutiny

of a company's

financial statements,

and that if you bought value,

it would eventually prove out.

A few years ago,

I went to Amazon,

and sure enough,

they had this manual there,

so while reliving my youth...

other guys were going to Amazon

and probably buying

old "Playboys" or something,

but I bought old

Moody's manuals instead,

and when I got out of school,

I started selling stocks,

I was 20 years old at the time,

looked about 16,

and acted about 12,

so I was not the most impressive

salesperson anybody ever met.

But what I would do was I went

through, page by page,

looking for possibly

undervalued stocks.

Peter Kunhardt:
Is this like going

through an old family album?

Better!

When I got out of business

school at Columbia,

I developed pretty decent

skills in terms of business,

but I hadn't really come to

terms with the world exactly.

Kunhardt:

What were you like around girls back then?

Bad. I was... I was sort of out of the

swing of things there for a while.

I went to my 60th reunion,

and there was a girl there.

I took her out one time to the

Uptown Theater in Washington,

and I asked her whether she

remembered what movie we saw,

and she said,

"No, I don't remember that."

And then she said,

"But I do remember one thing."

And like an idiot,

I said, "What was that?"

And she said, "Well,

you picked me up in a hearse."

And it was true

that I owned

a half-interest in a hearse

while I was in high school,

which was not

the smoothest thing that...

or coolest,

as they would say now...

that you could...

you could do on a date.

There were two turning

points in my life.

Once when

I came out of the womb,

and once when I met

Susie, basically.

She was the girl, yep.

But it took her

a little longer

to figure out

I was the boy.

Susie Buffett:

I was going to be

his youngest sister's roommate

at Northwestern.

So I walk into their house,

he was sitting in this chair,

and he made

some sarcastic quip.

So I made one back.

I thought, "Who is this jerk?"

And that's how we met, yes.

Listen, Warren is smarter

than you even know.

His brain is going

all the time.

And my dad said to me,

"Now you have

to understand about him...

"you're not going to have

discussions with him

"like you would

most normal people,

but he has

a heart of gold."

He was just

totally enamored of her,

and why not?

And she of him.

She'd sit on his lap all the time,

and he'd stroke her hair.

It was softening him.

Susie was

really kind, considerate,

and she was

the balancing force.

Warren:
I just got very,

very, very lucky.

But I was

a lopsided person,

and it took a while,

but she just stood there

with a little watering can

and just nourished me along

and... and changed me.

Somebody once said

that the chains of habit

are too light to be felt until

they're too heavy to be broken.

I had been terrified

of public speaking.

I couldn't do it.

I'd throw up.

And I knew if I didn't cure it then,

I'd never cure it.

And so I saw an ad in the paper

for the Dale Carnegie Course,

which worked on developing your

ability to speak in public,

and I went down there.

Dale Carnegie:

Be sincere.

A good smile

has the same effect

as a puppy's tail.

When a puppy wags...

Warren:

They made us do all these crazy things

to get out of ourselves,

and so we stood on tables

and did all kinds of things.

Warren:

If I hadn't had done that...

my whole life

would have been different.

So in my office

you will not see

the degree I got from the

University of Nebraska.

You will not see the Masters degree

I got from Columbia University,

but you'll see

the little award certificate

I got

from the Dale Carnegie Course.

As a matter of fact,

every week,

the instructor

would give a pencil

to whoever had done the most with

what we'd learned the week before.

And so in the fourth

or fifth week,

I proposed to her mother,

and she said yes.

And so that week,

I won the pencil,

I also got engaged,

and it was

an incredible week.

Warren:

The wedding date was kind of interesting,

because I couldn't see

anything without my glasses,

and I was

so nervous that I...

I just decided

to take off my glasses

and I wouldn't be able to see

all those people out there.

She was 19 when we got

married and I was 21...

but she was so much more mature than I was.

There was no comparison.

She was a better person

than I was...

but when you get married,

it's not a question of saying,

"I'm going to put

a 14% factor in for humor,

and 17% for intellect,

and 22% for looks."

It doesn't work that way.

I knew it was the right decision, and...

and it was.

Woman:

You could live anywhere in the world.

Why do you choose

Omaha, Nebraska?

Yeah, I love it, and I...

you know, I was...

born about a mile from here

and, you know,

I've never had a bad

experience in Omaha.

Well, Omaha and Nebraska

are home to me.

Everything about it

seems like home.

It's a pace,

it's relationships.

There's a lot of continuity.

There's a lot of community.

There's a lot

of friendship.

It's a very solid place

and friendly place

in which to grow up in,

in which to conduct a business.

When I came back

to Omaha in early 1956,

I had no idea

what I was going to do.

A few months after I came back,

some members of the family said,

"What should we do

with our money?"

And I said, "Well,

I'm not going back

"in the business

of selling stocks,

but if you would like

to join me in a partnership,"

I said,

"I'll be glad to do it."

So within a couple of months

after coming back,

I set up

the first partnership.

I wrote

all the checks individually.

I filed

11 income-tax returns.

I took delivery on stocks for

all these different companies.

I...

I was a one-man band there for six years.

Sandy Gottesman:
Warren would sit

upstairs in his little office there,

and I would bring up

the name of a company,

and most of the time he knew

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