Becoming Warren Buffett Page #4

much more than I did

about the company.

He'd know how many shares

were outstanding.

He'd know the capitalization.

He'd know the earnings.

It was absolutely incredible.

I mean when Warren said something,

it meant a heck of a lot,

and I think all of us paid

a lot of attention to Warren

when he took a definite

stand on something.

Charlie Munger:

When I first met Warren back in 1959,

I recognized immediately

that he was

a very intelligent person.

For the last four

or five years,

the stock market

has been booming along

and presumably

forecasting better business,

which has really

not materialized,

so maybe the stock market

is really correcting

a previous incorrect

forecast this time

rather than making

a new correct one.

He made a lot of money

buying thinly traded securities

that were incredibly

cheap statistically.

Loomis:

Warren was, at that time,

dealing with small companies,

and his investments often were

to buy a company

that you could figure was

a discarded cigar butt,

but it had

one more smoke in it,

and he wanted

to buy at the right time

to be able to benefit

from the one smoke.

The first partnership

started with $105,100.

I put up the 100,

and the other people put up the 105,000.

And then at the start of 1962,

I moved to Kiewit Plaza.

And by the time I moved

to Kiewit Plaza,

we had $7 million invested,

and a fair amount

was profits.

I was then renting a house.

I never owned a house to that point.

And then two years later,

I bought the house

I live in today in 1958.

We had three children,

Susie and I.

And we had 'em young,

incidentally,

which was I think was

a very good thing.

My daughter Susie

was born here.

I named her Susie just like that,

as soon as I looked at her,

because she looked

just like her mother,

And she was a cinch.

And then Howie was, you know,

this absolute bundle of energy...

which made things

very difficult

for big Susie

for a while.

Peter again reverted back

to Susie's personality,

and he was an easy child.

Howard Buffett:
Well,

I would describe my childhood as normal,

but who knows

what normal is?

People often think,

"Well, Warren Buffett was

this famous rich guy."

He was not famous,

and he wasn't rich

when we were growing up.

What I saw first and foremost,

day in and day out,

was consistency.

Every day we hear the garage

door close in the house

and then like clockwork,

my dad would come in the door,

"I'm home!" and we'd

all eat dinner together,

which I think surprises

a lot of people.

Susie Buffett, Jr. : My dad,

he used to rock me to sleep at night

and sing "Over the Rainbow,"

so I have

this insanely sentimental

attachment to that song.

I've always had a really close

relationship with him.

Warren:

I've got three very different kids,

and they've got

a common heart,

which they got

from their mother.

She did most

of the work by far

of bringing up

the children,

which is probably

a good thing.

They have more

of her qualities than mine,

which I would...

I would recommend.

Howard:

Well, my mom was

the biggest part

of my life growing up...

even though I got disciplined

on a regular basis

and she was usually

the one doing it,

she was still

my best friend.

She was somebody

who would help anybody,

I mean,

whether she knew 'em or didn't know 'em

or maybe even didn't agree with them,

she would still help them.

Warren:

She was incredibly empathetic,

and she was interested

in every person individually.

She never cared about money

or business at all.

Susie:

I mean he would go around saying,

"I'm going to be the

richest man in the world."

And I think, well,

it's like somebody says,

"I play music,

and I'm gonna be Mozart."

I don't know.

How does anyone know...

How does anyone know?

You know?

So that was okay.

I don't really care about that.

Loomis:

I would say that Susie led Warren

toward changing

his political views.

He grew up

as a young Republican,

his father was

a Republican congressman,

but Susie saw things

in different ways.

She was the catalyst.

Freedom, freedom, freedom!

Louder, louder,

louder, louder, louder!

Freedom, freedom...

What do we want now?

Susie:

When the children were growing up,

I was very involved

in civil rights.

I was immersed in it, and I think

that's what made Warren a Democrat.

He would go with me

to hear speakers.

Warren:
I remember that speech

that Martin Luther King gave.

That was one of the most inspiring

speeches I... I've ever heard.

I come to say to you

this afternoon...

Warren:
Took me right out of my seat.

My wife was with me.

We both had

the same experience.

Martin Luther King: It will not be long.

It was interesting, he...

in that speech, he talked about

truth forever on the scaffold,

long forever on the throne,

but that scaffold sways the future.

Well, he was going

to be dead in six months,

but that scaffold

did sway the future.

My wife was

more active than I was,

but I was 100%

with her mentally.

I was just working a little

more on my own investments.

But it didn't make a difference

what we were gonna do

with the money

after we made it.

I thought I would pile

it up over the years

then she would unpile it

in terms of running a...

one very large foundation.

And I was particularly good

at compounding money,

and therefore society

would benefit by waiting.

I was genetically blessed

with certain wiring

that's very useful in a

highly-developed market system

where there's lots

of chips on the table,

and you know, I happen

to be good at that game.

Ted Williams wrote a book

called "The Science of Hitting,"

and in it he had a picture

of himself at bat

and the strike zone broken

into, I think, 77 squares.

And he said,

if he waited for the pitch

that was really in his sweet spot,

he would bat .400

and if he had to swing at

something on the lower corner,

he would

probably bat .235.

And in investing,

I'm in a no-called strike business,

which is the best business

you can be in.

I can look at a thousand

different companies,

and I don't have to be right on every

one of them or even 50 of 'em...

so I can pick the ball

I want to hit.

And the trick in investing is just to sit

there and watch pitch after pitch to go by

and wait for the one

right in your sweet spot.

And the people that are yelling,

"Swing, you bum"? Ignore 'em.

There's a temptation

for people to act

far too frequently in stocks,

simply because

they're so liquid.

Over the years

you develop a lot of filters,

and I do know what I call

my circle of competence,

so I-I... I stay

within that circle,

and I don't worry about things

that are outside that circle.

Defining what your game is,

where you're going to have an

edge is enormously important.

I bought the first shares

of Berkshire in 1962,

and it was

a northern textile business

destined to become

extinct eventually,

and it was a statistically cheap

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