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I’m going to search the entire UK market for new net current asset value investments. This will take a few days. In the meantime I’ll entertain you by relating the next stage in the Warren Buffett story.
(For new subscribers: the earlier 40-odd Newsletters on Buffett’s investments can be found by searching on my Deep Value Investing site).
A fresh start in January 1970
The 39-year old Buffett had been running investments for partners over thirteen years, and they had received a compound annual return of 23.8%. This is after Buffett had taken his fees for managing the fund. Before those, the return was an astonishing 29.5% per year, compared with the return on the Dow Jones of around 8% pa.
An investor who put $10,000 into Buffett’s Partnership in 1957 could have $160,000 in 1970. In 1969 there were 99 partners. Some of these wanted to take all their cash from the partnership and sold their allocated shares in Berkshire Hathaway and Diversified Retailing. They had received 64% of their value in the partnership in cash and most of the rest as shares in these two companies. The rump partnership fund held 371,400 shares in Blue Chip Stamps (7.5% of the company) which Buffett expected to sell soon and then direct the money to the partners.
Many partners, aware that their friend, Warren, was going to take major shareholdings in Berkshire Hathaway and Diversified Retailing, decided to go along for the ride, keeping at least some of their shares in those two companies. This was in spite of the fact that Buffett had said that the shares would have no/little liquidity and offer no dividends. But the prevailing attitude was: if they were good enough for Warren, they were good enough for them. If Warren was buying, that is all you need to know.
Buffett’s quarter-share of the partnership fund meant that he was very wealthy indeed; he had come a long way from the boy scrabbling around for a few cents. One option was to retire and live a life of idleness and luxury. But neither of these appeal to him. He loves the fun of business, the intellectual challenge of the game, the on-going painting on a great canvas.
While he did turn to other things, such as overseeing the Buffett Foundation granting 50 scholarships per year for black college students, he remained devoted to business. But now the emphasis was most definitely on those businesses controlled by Buffett with his large percentage holdings.
The daily routine
The Buffett Empire was controlled from a small office in Kiewit Plaza, a few blocks from his Omaha home. Typically his 8.30am to 5pm office day was mostly spent making phone calls or simply reading.
He had only 4-5 assistants at this “head office” who covered the mundane tasks such as dealing with stock brokers, keeping accounts and correspondence. And, of course, he had regular phone contact with Charlie Munger.
Committing to his companies
At the end of 1969 the partnership he……..To read the rest of this article, and more like it, subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1
