Becoming Warren Buffett Page #7

I said, you know,

we could make

a tape of Mom yelling,

"Bye, Warren,

I'll be back later!"

And then have the door slam,

and he would just think she was here.

I don't think he knew what she

was doing most of the time.

Once Howie and I

were both gone,

as we've gotten older, she started

to see the writing on the wall here

and just started

trying to figure out

how she could

at least have some more,

as she called it,

a room of her own.

Warren:

The worst mistakes involve

not understanding other people

as well as you might.

Well, she left Omaha in 1977,

and there really isn't much

to say about that.

It was devastating for him,

and I came home,

because I-I... I can't say

I was mad at her exactly,

but I kept thinking,

"How can you leave him?

He's so...

he can't function by himself."

So my mother...

she'd asked a bunch of her friends

to sort of look in on him,

and Astrid was one of them.

Susie:
So I called Astrid.

I said, "Astrid,

"will you take Warren...

make him some soup?

"Go over there

and look after him,

because he's not

gonna make it."

And it took him a while to figure it out,

but he figured it out.

I said, "I'm not leaving you,

because I'll be wherever you

want me when you want me."

Howard:

My mom moved to San Francisco,

and I think one of the reasons it

was important for her to leave Omaha

was because she just felt like she was

kinda trapped in this environment,

that everybody knew

who she was,

that she couldn't have

her own identity.

Peter:
He knew that there was

something she needed to do

and that she really recognized

that the money gave us all and her

a choice in a lot of ways that

a lot of people didn't have.

Munger:
There was a time

Warren was getting criticized.

Here was this very, very rich man

who was getting richer every year,

and really wasn't giving

a lot of money away,

and there was terrific

criticism by some people,

which Warren never said

anything about.

Warren:

The biggest thing in making money is time.

You don't have to be particularly smart,

you just have to be patient.

Susie didn't want

to wait as much as I did,

but she never quite appreciated

compounding like I did.

Susie:

That is a disagreement we have.

I run a foundation now.

I think we should be

giving more money away,

but I understand

why we don't...

because it's... business.

To me the crux of it is,

that it wasn't the money itself.

You can see that

in the way he lives.

I mean, he doesn't buy

huge paintings

or build big houses

or anything like that.

It's all mental with him,

and the money is his scorecard.

And he used to say to me,

"Everybody can read

what I read.

It's a level playing field."

And he loves that,

because he's competitive.

And he's sitting there

all by himself in his office,

reading these things

that everybody else can read,

but he loves the idea

that he's gonna win. Ha!

Munger:

I'll tell you how you do it.

Have you ever seen a juggler

juggle 25 milk bottles?

How did

he ever get to do that?

The answer is he started with one bottle,

then two, then three

and just kept doing it,

and pretty soon he was at 25,

and that's the way we did it.

So, basically,

we started out with cash

and ended up buying

a bunch of businesses,

including insurance companies.

Loomis:
Insurance is, in itself,

a profitable business,

but it has

the additional advantage

of creating something

that's called "float."

Float is the money

that hangs around Berkshire

while a claim is waiting

to be paid.

And Warren turned out

to have a extraordinary ability

to use the money

thrown off by the float

to buy companies that fed

the growth of Berkshire.

Man:
In 1983,

Mrs. B cashed in on her business

by selling control

for $55 million

to a company owned

by investor Warren Buffett.

Loomis:

Warren was quite an expert about newspapers.

He got interested

in the "Post,"

because he recognized it

as a greatly

undervalued company.

Kay Graham:

He had to write me a letter.

"Dear Ms. Graham,

I've just bought 5% of your company,

"and I mean you no harm,

"and I think

it's a great company.

"I know it's Graham owned

and Graham run,

and that's fine with me."

And I thought, "Whoa,

this guy's really terrific."

He used to come to board meetings

with about 20 annual reports

and he would take me

through these annual reports.

It was like going to business

school with Warren Buffett.

Kay Graham did introduce Warren

to the world of Washington,

entirely different group than

he had ever dealt with before.

Peter:

It was clear that working with Kay

gave him a different kind of confidence,

and he was the star.

Woman:

Everyone wants to hear

what Warren Buffett

has to say.

Man:

The Oracle of Omaha

building his image

and having some fun.

Man 2:

Berkshire shares have increased

more than

2,000% in value.

Man 3:
One of the largest market

capitalizations in the world,

and it could grow

a lot larger

since Warren Buffett shows

no sign of slowing down.

Woman 2:

So how did he do it?

By investing in what he

knows and understands...

good old-fashioned American

brands like Coca-Cola,

Fruit of the Loom,

and Dairy Queen.

What inspired you?

This inspired me!

Buy what you like, is that what it is?

Yeah absolutely.

Today, the Coca-Cola

Company will sell

almost two billion

eight-ounce servings

of one form or another

of Coca Cola products.

Now if you get an extra penny a day,

a penny a serving,

that's $20 million a day,

that's $7.3 billion a year

from one penny more.

When you own Coca Cola,

you own a little piece

of the minds of billions

and billions of people.

That is really good.

Man:

Who's got the most $100 bills these days?

Well,

his name is Warren Buffett in this country,

and he has just displaced

his friend Bill Gates

as the richest businessman

in the world.

And the purpose of Wednesday's

meeting was to discuss

Buffett's company,

Berkshire Hathaway's plan

to purchase railroad giant

Burlington Northern,

valued at $26 billion. This would be

Buffett's largest acquisition ever.

Munger:
He's created Berkshire

from virtually nothing

into hundreds of billions

of dollars of market cap.

Nobody else has

a record like that.

Gottesman:

He wanted to have an outstanding reputation

that he'd never really upset the

apple cart when he bought a business,

that he kept

the management in place.

He was establishing

a reputation

that paid off later in life.

It's been building and building

ever since I've known him.

Warren:

It takes 20 years to build a reputation,

then it takes

five minutes to lose it.

Loomis:

When Warren made his investment in Salomon,

I was one of the people,

along with many, many others,

who were quite amazed,

because he had taken

a very critical tone in talking about

investment bankers and about their greed.

And here he was

investing in one,

Salomon Brothers,

that was known to be a member of the club.

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