These notes and highlights are from the book;
The Snowball By Alice Schroeder
“I came back sometime later and asked for the ten thousand dollars Clarke referred to and got a similar result. But I wasn’t proud. So I returned at a later time and asked for five thousand dollars. And at that point, I got rejected again.Read more at location 429
Note: warren was not proud and didnt care to loose face therefore could ask multiple times for a sale after being rejected.
“What you’re doing when you invest is deferring consumption and laying money out now to get more money back at a later time. And there are really only two questions. One is how much you’re going to get back, and the other is when.Read more at location 463
Buffett related Aesop to the great bull market of the 1990s, which he described as baloney. Profits had grown much less than in that previous period, but birds in the bush were expensive because interest rates were low. Fewer people wanted cash—the bird in the hand—at such low rates. So investors were paying unheard-of prices for those birds in the bush. Casually, Buffett referred to this as the “greed factor.”Read more at location 471
Note: people were over paying for equities because they didn’t want to put their money in to cash at such low interest rates.
“There were two thousand auto companies: the most important invention, probably, of the first half of the twentieth century. It had an enormous impact on people’s lives. If you had seen at the time of the first cars how this country would develop in connection with autos, you would have said, ‘This is the place I must be.’ But of the two thousand companies, as of a few years ago, only three car companies survived.21 And, at one time or another, all three were selling for less than book value, which is the amount of money that had been put into the companies and left there. So autos had an enormous impact on America, but in the opposite direction on investors.”Read more at location 488
It’s very hard to promote investment in a mundane product. It’s much easier to promote an esoteric product, even particularly one with losses, because there’s no quantitative guideline.”Read more at location 515
Note: warren invests in the not so sexy products because they can be out the spotlight and be purchased at a good price.
“Praise by name, criticize by category” was Buffett’s rule.Read more at location 567
Near the end of 1999, even many longtime “value investors” who followed Buffett’s style had either shuttered their businesses or given in and bought technology stocks. Buffett did not. What he called his Inner Scorecard—a toughness about financial decisions that had infused him for as long as anyone could remember—kept him from wavering.Read more at location 774
“In teaching your kids, I think the lesson they’re learning at a very, very early age is what their parents put the emphasis on. If all the emphasis is on what the world’s going to think about you, forgetting about how you really behave, you’ll wind up with an Outer Scorecard. Now, my dad: He was a hundred percent Inner Score-card guy.Read more at location 788
“Try to be punctual in all your dealings. You will find it difficult to get along with some men, deal as little as possible with such….Save your credit, for that is better than money….If you go on in business, be content with moderate gains. Don’t be too hasty to get too rich….I want you to live so as to be fit to live and fit to die.”Read more at location 819
But within two weeks Howard and two partners, Carl Falk and George Sklenicka, filed the papers to start a stockbrokerage firm, Buffett, Sklenicka & Co.12 It was a maverick decision—to open a stockbroking business at a time when no one wanted to buy stocks.Read more at location 966
While fifty men stood in line for a $17-a-week job driving the orange Buffett & Son grocery trucks, Howard’s persistence in knocking on doors had made his stockbroking business, now called Buffett & Co., a success.Read more at location 1058
“I knew every player’s history from every team and could have told you clearly every word in that book. I knew it in my sleep.”Read more at location 1214
Note: Warrens memory came from memorizing so many things from a young age.
He wanted money. “It could make me independent. Then I could do what I wanted to do with my life. And the biggest thing I wanted to do was work for myself. I didn’t want other people directing me. The idea of doing what I wanted to do every day was important to me.”Read more at location 1343
Note: the desire to become financially free struck warren early in his child hood
One lesson was not to overly fixate on what he had paid for a stock. The second was not to rush unthinkingly to grab a small profit.Read more at location 1389
For years, Howard had carried in his pocket a handwritten piece of paper, softened and worn to the texture of linen, which said, “I am God’s child. I am in His Hands. As for my body—it was never meant to be permanent. As for my soul—it is immortal. Why, then, should I be afraid of anything?”Read more at location 1424
Know what the deal is in advance.Read more at location 1553
But at the time, he was not above cutting a few corners to get where he wanted to go.Read more at location 1802
The key was having more information than the other guy—then analyzing it right and using it rationally.Read more at location 2177
While “he didn’t make me any smarter,” says Reighard, “he did make me use what I had more efficiently.” Indeed, Warren was a master at using what he had efficiently, his own time especially. He rose early in the morning, ate chicken salad at the dorm for breakfast, then headed off to classes.Read more at location 2434
In 1934 Graham and Dodd had coauthored the seminal text on investing, Security Analysis. The Intelligent Investor was the layman’s version of Security Analysis.Read more at location 2618
Thus, Warren saw a shareholder meeting as a time of accounting for the stewardship of the managers.Read more at location 2695
Graham’s students learned that stocks were not abstract pieces of paper, and their value could be analyzed by figuring what the whole pie of a business was worth, then dividing it into slices.Read more at location 2956
“I learned that it pays to hang around with people better than you are, because you will float upward a little bit. And if you hang around with people that behave worse than you, pretty soon you’ll start sliding down the pole. It just works that way.”Read more at location 3190
Warren felt there was a conflict of interest inherent in the business. He’d recommend a stock like GEICO to his friends and family, and tell them that the best thing to do was to hold it for twenty years. That meant he didn’t get any more commissions from them. “You can’t make a living that way. The system pits your interests against your clients.”Read more at location 3403
Note: there was a conflict of interist being a stockbrocker
that allies are essential; that commitments are so sacred that by nature they should be rare; and that grandstanding rarely gets anything done.Read more at location 3523
Susie and Warren did not take part in the Rogerses’ active social life, since they tended to be more serious-minded and they did not drink,Read more at location 3568
He was always thinking in terms of how much companies would be worth dead—what their assets would be worth if liquidated. Buying at a discount to that value was his “margin of safety”—his backstop against the percentage that presumably would go bankrupt.Read more at location 3655
He and Walter collected numbers from the Moody’s Manuals and filled out hundreds of the simple forms that Graham-Newman used to make decisions.Read more at location 3659
Note: ben had systems in place to purchase stocks
For Warren, holding on to every penny this way, since he had sold that first pack of chewing gum, was one of the two things that had made him comparatively rich at age twenty-five.Read more at location 3704
Note: warren was very frugal to become rich at age 25
If he took a quarter of every dollar he earned for these partners as a fee and then reinvested that in the partnership, he could be a millionaire much faster.Read more at location 3931
“I had sold securities to other people before that, but now I became a fiduciary, and for people who were enormously important to me. These were the people who believed in me. There’s no way in the world I would have taken my aunt Alice’s or my sister’s or my father-in-law’s money if I had thought that I’d lose it. At that point I didn’t think I could lose money over time.”Read more at location 3939
Warren was the seventh. He put in only $100. The rest of his share would come from future fees he earned by managing the partnership. “In effect, I got my leverage from managing the partnership. I was brimming with ideas, but I was not brimming with capital.” Actually, by most of the country’s standards, Warren was brimming with capital. But he viewed the partnership as a compounding machine—once money went into it, he did not intend to make withdrawals. So he needed to earn the $12,000 a year his family would live on from the rest of his funds. He invested that money separately.Read more at location 3947
He devised a formula to charge his new partners. “I got half the upside above a four percent threshold, and I took a quarter of the downside myself. So if I broke even, I lost money. And my obligation to pay back losses was not limited to my capital. It was unlimited.”4Read more at location 3952
Note: 50% above 4% however paid 25% of any losses warrens fee
“I gave them a little summary of the ground rules: Here’s what I can do. Here’s what I can’t do. And here are some things I don’t know whether I can do or not. Here’s how I’ll judge myself. It was fairly short. If you don’t feel this way you shouldn’t join, because I don’t want you unhappy while I’m happy or vice versa.”7Read more at location 3973
He would later come to think of his memory as functioning like a bathtub. The tub filled with ideas and experiences and matters that interested him. When he had no more use for information, whoosh—the plug popped up, and the memory drained away. If new information about a subject appeared, it would replace the old version. If he didn’t want to think about something at all, down the drain it went. Certain events, facts, memories, and even people appeared to vanish. Painful memories were the first to be flushed. The bathtub memory’s efficiency freed up enormous amounts of space for the new and the productive. Buffett thought of the bathtub memory as a helper that allowed him to “look forward,” rather than “looking backward” all the time like his mother. And it allowed him, at the age of twenty-six, to ruminate in depth on business to the exclusion of almost everything else—in pursuit of his goal of becoming a millionaire.Read more at location 4072
Note: warren was able to flush out useless information quickly to free up his mind on more curret and useful data that he could concentrate on and use to get him to his goal of being a millionaire. he had so much focus on his goal it consumed his thoughts
The fastest way to that goal was to raise more money to manage.Read more at location 4079
He did all his own filing. He did the bookkeeping himself and prepared his own tax returns. With its numbers, accuracy, and the measuring of results, the record-keeping aspect of the job pleased him.Read more at location 4104
He tied up the family’s single telephone line with his daily calls to the handful of brokers he used. His expenses were as close to zero as he could get. He listed them by hand on a lined sheet of yellow paper: 31¢ for postage, $15.32 for a Moody’s Manual, $4.00 for the Oil & Gas Journal, $3.08 for telephone calls.19 Except for more meticulous accounting and a great deal more thought, he ran the business much as though he were just anybody trading stocks through a broker for a personal account.Read more at location 4111
Monen eventually accumulated ten percent of National American’s stock. Warren kept it in the original shareholders’ names, with a power of attorney attached that gave him control, rather than transferring it into his name. “That would have tipped Howard off to the fact that I was out there competing with him.Read more at location 4161
He wanted absolute control over the money and would tell his partners nothing about how it was invested. That was the sticking point. Not for him was Ben Graham’s handicap of people riding on his coattails. They would get an annual summary of his performance, and they could put money in or withdraw it only on December 31. The rest of the year, their money would be locked into the partnership.Read more at location 4206
Note: this is how warrens partnerships ran early in the piece
The shortfall, as always, was money—he never seemed to have enough. The kind of companies he was researching often had market values of one to ten million dollars, so he wanted as much as $100,000 to get a significant position in their stocks. Getting more money to manage was key.Read more at location 4229
Note: hence why managed funds give good incentives to finance brokers/advisors. fund money collectors
In his mind $31,500 was a million dollars after compounding for a dozen years or so, because he could invest it at such an impressive rate of return. Thus, he felt as though he were spending an outrageous million dollars on the house.Read more at location 4244
businesses that sold basic items or commodities that could be easily valued, like Davenport Hosiery, Meadow River Coal & Land, Westpan Hydrocarbon, and Maracaibo Oil Exploration.Read more at location 4283
Note: in the begining warren purchased stocks for businesses that could be easily valued
And all the while that Warren was investing during these early years of the partnerships, he never deviated from the principles of Ben Graham. Everything he bought was extraordinarily cheap, cigar butts all, soggy stogies containing one free puff. But that was before he met Charlie Munger.Read more at location 4330
Note: cigar but investing was how warren first invested before meeting charlee munger
Suppose Warren earned 15% for the Buffett Associates partnership. His fee would be $5,781 after each partner got their set 4% interest. With Homer Dodge’s money he would earn fees of $9,081 in total. He would invest his fees back into the partnerships. The next year, he would get 100% of the earnings on that $9,081, plus another round of fees on the others’ capital. And so on.Read more at location 4334
constantly studying science and the achievements of great men.Read more at location 4428
Note: charlie also studdied great mens accomplishments
“Be fearful when others are greedy, and greedy when others are fearful.” This was the time to be greedy.33Read more at location 4681
The stock sold for $18 a share and the company had a steadily growing book value of $72 a share. (“Book value” is the stated value of a company’s assets less what it owes—like a house less the mortgage, or cash in the bank less a credit-card balance.)Read more at location 4694
Munger bought cigar butts, did arbitrage, even acquired small businesses—much of this in Buffett’s style—but he seemed to be heading in a slightly different direction than Buffett. Periodically, he said to Ed Anderson, “I just like the great businesses.” He told Anderson to write up companies like Allergan, the contact-lens-solution maker. Anderson misunderstood and wrote a Grahamian report emphasizing the company’s balance sheet. MungerRead more at location 4877
And he was willing to borrow money to make money, whereas Buffett had never borrowed a significant sum in his life. “I need three million dollars,” Munger would say, on one of his frequent visits to the Union Bank of California. “Sign here,” the bank would reply.19 Munger did enormous trades like British Columbia Power, which was selling at around $19 and being taken over by the Canadian government at a little more than $22. Munger put not just his whole partnership, but all the money he had, and all that he could borrow into an arbitrage on this single stock20 —but only because there was almost no chance that this deal would fall apart. When the transaction went through, the deal paid off handsomely.Read more at location 4888
Note: munger used warrens approach very aggressively
Ben was buying his quite a bit cheaper, and he knew that you want to be not just cheaper but right.Read more at location 5592
Note: ben milton a competitor of one of warrens retail company said its not always about being cheap but being right with your products
He was sick of problem companies like Hochschild-Kohn and was looking for more Ben Rosners, people who had built excellent businesses that he could buy. He and Rosner shared a mutual obsession. As Buffett liked to put it, “Intensity is the price of excellence.”Read more at location 5603
Note: here warren learned the importance of good management
His mind was deep in rigorous philosophical inquiry, torn between the cigar-butt philosophy of Ben Graham andRead more at location 5654
“If an individual has not discovered something that he will die for, he isn’t fit to live,” King said.Read more at location 5816
While he had lowered his investing standards in difficult environments—and would do so again—one compromise he would never make was to give up his margin of safety. This particular quality—to pass up possible riches if he couldn’t limit his risk—was what made him Warren Buffett.Read more at location 6085
Note: if warren ciukdnt contain risk he would not invest. that was his style
The Snowball by Alice Schroeder
Sure enough, Abegg accepted his offer. And doing business with him cinched Buffett’s instinct that strong-willed and ethical entrepreneurs often cared more about how they and the companies they had built were going to be treated by the new owners than about grabbing the last nickel in a sale.Read more at location 6130
Time is the friend of the wonderful business, the enemy of the mediocre….It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.Read more at location 6327
They decided that See’s was like a bond—worth paying $25 million for. If the company had paid out its earnings as “interest,” the interest would average about nine percent. That was not enough—owning a business was riskier than owning a bond, and the “interest rate” was not guaranteed. But the earnings were growing, on average twelve percent a year. So See’s was like a bond whose interest payments grew.25Read more at location 6521
One was the business model’s power, and the other his skill in using it. Above all, he had confidence in himself. “Always,” he says. “Always.”Read more at location 7449
“This is the first time I can remember that you could buy Phil Fisher [growth] stocks at Ben Graham [cigar butt] prices.”Read more at location 7577
He helped her understand that it was always a mistake to pay too much for something you wanted. Impatience was the enemy.Read more at location 7853
When “sightseeing” with Graham, he was focused like a laser on who was there, not on which fork to use. HeRead more at location 7879
Note: Warren had more interest in the people that was at the dinner parties than the food.
Neither Buffett nor Murphy believed in giving away stock if they could possibly help it. “You don’t get rich that way,” says Murphy. So they didn’t buy TV Guide.Read more at location 8255
Buffett explained that stocks, especially stocks of companies that can raise prices as their costs increase, are the best protection against inflation—but their value is still eroded by severe inflation, a problem that he referred to as a “giant corporate tapeworm.”Read more at location 8393
In the winter of 1978, Buffett turned with renewed intensity to writing his annual letter. The previous letter had been a brief report on how the businesses were doing. Now he started drafting lessons on how managements’ performance should be measured, why short-term earnings are a poor criterion for investment decisions, a dissertation on insurance,Read more at location 8502
In Forbes, Buffett wrote that it was time for investors to buy stocks. “The future is never clear,” he wrote; “you pay a very high price in the stock market for a cheery consensus. Uncertainty actually is the friend of the buyer of long-term values.”29Read more at location 8747
The method was the same: Estimate an investment’s intrinsic value, handicap its risk, buy using margin of safety, concentrate, stay in the circle of competence, let it roll as compounding did the work. Anyone could understand these simple ideas, but even though Buffett made the process look effortless, the technique and discipline underlying it involved an enormous amount of work for him and his employees.Read more at location 8830
“Starting from scratch,” he wrote, Kiewit “built one of the great construction companies of the world….Although not the largest, it may well be the most profitable business of its type in the country, an achievement possible only because Kiewit was able to transmit, throughout an organization of thousands of employees, an unremitting insistence on excellence and efficiency.Read more at location 8984
“Kiewit was overwhelmingly a producer, not a consumer,” he went on. “Profits went to build the capacity of the organization, not to provide opulence to the owner.Read more at location 8988
But she had a philosophy: “It’s better to have them hate you than to feel sorry for you.”Read more at location 9108
“Everything Mrs. B knew how to do, she would do fast. She didn’t hesitate and there was no second-guessing. She’d buy five thousand tables or sign a thirty-year lease or buy real estate or hire people. There was no looking back. She just swung. You got about two inches outside the perimeter of her circle of competence, she didn’t even want to talk to you about it. She knew exactly what she was good at, and she had no desire to kid herself about those things.”Read more at location 9156
The wholesalers who had formerly snubbed her now kneeled at her feet. She loved it. “If you want to sell her twenty-three hundred end tables, she will know in a minute what she can pay, how fast she can move them…and she’ll buy them from you. She’ll wait until just before your plane is going to leave in some blizzard when you have to get the hell out of Omaha and can’t afford to miss your flight.”25Read more at location 9168
Then she spoke of America, the country that made her dream come true. Her advice to the graduating seniors: “First, honesty,” she said. “Second, hard work. Next, if you don’t get the job you want right away, tell them you’ll take anything. If you’re good, they’ll keep you.”42Read more at location 9264
I wanted the kind of person who was going to be able to make decisions as to what should get to me and what could get solved below the line—who would tell me all the bad news, because good news always takes care of itself in business. I wanted to hear every bit of bad news as soon as it happened, so we could do something about it. I wanted someone who was ethical, who wouldn’t stick a gun to my head later on knowing that I couldn’t fire him.”67Read more at location 10749
Note: buffet qualities in finding a ceo
Buffett also thought in black-and-white terms about honesty; he had no tolerance for liars and cheaters. So that was that.Read more at location 11075
“Lose money for the firm, and I will be understanding. Lose a shred of reputation for the firm, and I will be ruthless.”Read more at location 11137
What factor did people feel was the most important in getting to where they’d gotten in life? And I said, ‘Focus.’ And Bill said the same thing.” It is unclear how many people at the table understood “focus” as Buffett lived that word. This kind of innate focus couldn’t be emulated. It meant the intensity that is the price of excellence. It meant the discipline and passionate perfectionism that made Thomas Edison the quintessential American inventor, Walt Disney the king of family entertainment, and James Brown the Godfather of Soul. It meant single-minded obsession with an ideal.Read more at location 11469
Now it cost so much to buy a share of BRK that copycats set up investment trusts. Their idea was to mimic Berkshire Hathaway’s stock portfolio and let people buy in smaller units, as if it were a mutual fund. But Berkshire was not a mutual fund; it was a perpetual-motion vacuum cleaner that sucked up businesses and stocks and spit out cash to buy more businesses and stocks. That couldn’t be replicated by buying the stocks it owned. Among other things, you didn’t get Buffett.Read more at location 11863
Note: people couldnt copy buffets model because hey werent reinvestjng the profits like he was.
Rule number one, don’t lose money. Rule number two, don’t forget rule number one. Rule number three, don’t go into debt.Read more at location 11910
Coca-Cola stock was trading as high as forty times its estimated 2000 earnings—a multiple that said investors believed the stock would keep rising by at least twenty percent a year.Read more at location 12280
Note: people worked out cokes roe off pe
“You can’t do well in investing unless you think independently. And the truth is, you are neither right nor wrong because people agree with you. You’re right because your facts and reasoning are right. In the end, that’s what counts.”Read more at location 12401
Never in Buffett’s career had resolution and clear thinking been put to the kind of test that he had endured for the past three years. Every indication in the market said that he was wrong.Read more at location 12535
Yet Buffett showed them a graph indicating that the value of the market was still one-third larger than the economy. That was far higher than the level at which Buffett said he would buy stocks. It was considerably higher than the market had ever stood in modern history—higher, even, than the peak of the Great Bubble of 1929. In fact, the graph suggested that the economy would have to nearly double, or the value of the market would have to fall by nearly half, before he would get really excited about it.7Read more at location 12705
Do what you love and work for whom you admire the most, and you’ve given yourself the best chance in life you can.”Read more at location 12765
“You’d get very rich,” he said, “if you thought of yourself as having a card with only twenty punches in a lifetime, and every financial decision used up one punch. You’d resist the temptation to dabble. You’d make more good decisions and you’d make more big decisions.”Read more at location 12778
Note: make well researched investment investment deciosions. almost as if you only had a limited amount to make.
This was not an excitable crowd. Most of them were prominent businessmen accustomed to stress and pressure, from a generation of men that considered poise and equanimity in the face of disaster as essential as the suits and ties they wore every day to work.Read more at location 12854
Berkshire’s best opportunities always came at times of uncertainty, when others lacked the insight, resources, and fortitude to make the right judgments and commit. “Cash combined with courage in a crisis is priceless,” said Buffett.Read more at location 12892
Some of Berkshire’s businesses struggled in a weak economy. Buffett had always said he’d rather have a lumpy fifteen percent return than a steady ten percent.Read more at location 12908
If he added something to his schedule, he discarded something else. He never rushed. His friends could pick up the phone and call him whenever they liked. He kept his phone calls warmhearted and short.Read more at location 13084
Clayton: “Our financing is getting tight. How about if you just lend to us?” Buffett: “That doesn’t work well for Berkshire Hathaway. Why don’t you just throw together whatever you have lying around that tells about your company and send it to me someday whenever you have a chance?” This classic Buffett maneuver, Casting the Line, resulted in the arrival of a massive Federal Express package the next day. The fish had snapped at the bait.Read more at location 13169
“What is the ideal business?” a shareholder asked when the questions began. “The ideal business is one that earns very high returns on capital and that keeps using lots of capital at those high returns. That becomes a compounding machine,” Buffett said. “So if you had your choice, if you could put a hundred million dollars into a business that earns twenty percent on that capital—twenty million—ideally, it would be able to earn twenty percent on a hundred twenty million the following year and on a hundred forty-four million the following year and so on. You could keep redeploying capital at [those] same returns over time. But there are very, very, very few businesses like that…we can move that money around from those businesses to buy more businesses.”15Read more at location 13240
companies Buffett bought seemed unlikely candidates. Buffett liked managers like Mrs. B—people who shunned the spotlight, who worked as tirelessly as a human anthill—but these people did not manage capital. Where was the capital allocator who could run this thing? The right person had to be willing to sit behind a desk reading financial reports all day long, yet excel at dealing with people in order to retain a bunch of managers who wished they were still working for Warren Buffett.Read more at location 13263
Munger’s favorite construct was to invoke Carl Jacobi: “Invert, always invert.” Turn a situation or problem upside down. Look at it backward. What’s in it for the other guy? What happens if all our plans go wrong? Where don’t we want to go, and how do you get there? Instead of looking for success, make a list of how to fail instead—through sloth, envy, resentment, self-pity, entitlement, all the mental habits of self-defeat. Avoid these qualities and you will succeed. Tell me where I’m going to die, that is, so I don’t go there.Read more at location 13667
Buffett would always love reading newspapers, but his investing was tightly focused on simple businesses that were as close to immortal as possible. Newspapers—in fact, any sort of media—no longer qualified.Read more at location 14698
Buffett had indeed learned through experience that “when in doubt keep holding”; he said, “I’ve made most of my money sitting on my ass.”Read more at location 14760
Be greedy when others are fearful, and fearful when others are greedy, but don’t think you can outsmart the market.Read more at location 14880
As he was picking off bonds, Buffett published a New York Times editorial, “Buy American: I Am,” in which he said that stocks were cheap enough and that while they might get cheaper, looking for the bottom is a fool’s game; that stocks are the best protection against inflation;Read more at location 14955
The actions he had taken with deals struck in 2008 and 2009, in accordance with his saying “Cash combined with courage in a crisis is priceless,” would enrich Berkshire shareholders for many years to come.Read more at location 15143
Challenged on his decision not to sell financial stocks in the spring of 2008, he said he only sold when a company’s competitive advantage disappeared, he lost faith in management, or he needed cash.Read more at location 15160
if you had asked him if he wanted to be the richest man on earth—with his whole heart, he would have said, Yes.Read more at location 15289
Since childhood, he had read every biography he could find of people he admired, looking for the lessons he could learn from their lives.Read more at location 15298
He attached himself to everyone who could help him and coattailed anyone he could find who was smart. He ruled out paying attention to almost anything but business—art, literature, science, travel, architecture—so that he could focus on his passion. He defined a circle of competence to avoid making mistakes.Read more at location 15299
By the end of 1932, Howard Buffett was averaging 40–50% more in commissions than in 1931, based on financial statements of Buffett, Sklenicka & Co.Read more at location 15539
Note: commisions increased for howard buffet by showing people the success of his fund. hard nunbers can sell
Dacee resembled the Buffett Fund. Buffett was credited 25% of any profits over a 4% hurdle rate. Certificate of Limited Partnership, Dacee Ltd., August 9, 1957.Read more at location 16273
Above a 4% to 6% “bogey.” He benchmarked himself against the rate of long-term government bonds, telling his partners that if he could not do better than that, he should not get paid. The wide range of profit-sharing reflected the varying level of risk Warren was taking. In the partnerships that paid him the most, he also had unlimited liability to pay back losses.Read more at location 16277
Buffett was charging 25% of the partnership’s appreciation in excess of 6%.Read more at location 16281
