We learned in chapter 2 about the scientific studies showing the differences in the way women and men approach investing, and we discovered that there are even differences attributable to testosterone, or the relative lack thereof. This lack of testosterone tends to make women less willing to take extreme risks, while the herd behavior of testosterone-laden men can possibly make drops in the stock market even more pronounced.
It may seem a stretch to claim Buffett has the testosterone levels of a woman and not a man (remember the “oversexed guy in a harem” comment?). And, well, as much as breaking the news that Buffett’s actually a woman might be fun, we’ve got to admit he is, in fact, a man complete with, yes, testosterone. (And, we’re certainly not going to go about the various possible ways to verify this, that’s for sure.) However, it is true that he’s surrounded himself with a cadre of smart, strong women over the years. Perhaps the influence of those women has resulted in his feminine side shining forth, as we’ve seen. Let’s get acquainted with some of the most important ones.
The late Susan Buffett (known as Susie to her family and friends) was his first wife and one of the biggest influences on Buffett’s adult years. They met when Buffett was a young man, and she was there for the beginning of all that would become legend—Buffett’s early job with his idol Ben Graham in New York, his return to his beloved hometown of Omaha, the start of the partnership, the purchase and subsequent transformation of Berkshire Hathaway, and the rise of her husband to the ranks of the rich and powerful.
Through it all, Susie was his protector and tireless supporter. She made it so that he could focus on what he wanted to, as much as he wanted to. Not surprisingly, for Buffett that meant studying annual reports and reading up in his study every night, while Susie looked after their three children. Buffett depended on her, and she’s undoubtedly a big part of the reason he was able to become the man he is today. Sadly, she passed away in 2004 of a stroke following a bout with cancer.
Journalist Carol Loomis and bridge champion Sharon Osberg are both close to Buffett, for very different reasons. Loomis has been a longtime friend of his, since meeting him in the 1960s, when she was an investing columnist for Fortune (she remains associated with Fortune today, as an editor-at-large). Buffett’s referred to Loomis as his “best friend,” other than Charlie Munger, of course.1
Buffett and Loomis hit it off and became fast friends. And we have Loomis to thank, in part, for the clarity and wit Buffett has demonstrated over the years in his letters to shareholders. The earliest letters he wrote had been more like bare-bones financial reporting and much less like the expansive, expressive, folksy letters we enjoy today. In 1978, though, Buffett decided he wanted to start using the letters to educate his partners on the important business issues of the day, as well as teach them timeless investing lessons.
Buffett tapped Loomis for the job of helping him edit each year’s offering, and the letters remain today an incredibly useful resource for anyone wanting to learn about investing from the man himself. His voice, temperament, and homespun wisdom shine through in each and every one. In which other giant publicly traded insurance-based holding company’s annual letter to shareholders are you going to be graced with quotes from the likes of Mae West, Woody Allen, and just about everyone in between? Which other executives will take the time to teach you, and will be humble enough to admit their mistakes year after year, in clear language? Just one, folks—Buffett. If you haven’t yet taken the time to read his shareholder letters, make the time for it. You will not be disappointed. (After you finish this book first, of course!)
Bridge champion Sharon Osberg met Buffett through Carol Loomis in 1993 at a bridge tournament and became another close friend of his, as well as one of his favorite bridge partners. (In addition to his voracious reading, one of Buffett’s other loves in life is the card game bridge.) Through playing with Osberg, Buffett’s game improved, and his adoration of the game, and of her, deepened. Her relationship with Buffett has blossomed well beyond the card game, and she is a trusted friend and ally, a loyal member of his tight-knit group of friends. Osberg has said of him, “Warren Buffett is my best friend. We talk every day.”2 A December 2009 profile of Buffett and Osberg again confirmed that they remain close, talking several times a day, often while playing bridge online.3
Buffett met Katharine Graham, the widowed owner of the Washington Post Company, in 1973, when he first became interested in investing in it. Graham was in charge of running the business following her husband’s death, and she was tentative initially about Buffett’s intentions. She did not come from a business background and was nervous about losing the business, or just generally about making mistakes while she was in charge.
Buffett had not a bone of ill will in his body, though, and set about teaching Graham about business and finances, helping her learn and showing her that she had the ability and self-confidence to do a great job and be an effective leader. Remember, too, his childhood paper route, delivering the Washington Post in the D.C. area while his father was in Congress. He’d long loved the company, and had nothing but admiration for it, and for Graham. They became dear friends and were close until her death in 2001.
In Graham’s Pulitzer Prize–winning autobiography, Personal History, she writes of Buffett’s influence on her in the early days of her leadership at the Post: “My business education began in earnest—he literally took me to business school, which was just what I needed. How lucky I was to be educated—to the extent possible—by Warren Buffett, and how many people would have given anything for the same experience. It was hard work for both of us—Warren admitted I needed what he called ‘a little remedial work’—but absolutely vital for me.”4
For all those years, since 1973, Berkshire’s owned a chunk of the Washington Post (about 20 percent at last glance), currently making Buffett’s company the largest shareholder of the venerable newspaper and media outfit. Buffett also served since 1974 on the Post’s board of directors (minus an eight-year period when he was serving on Capital Cities’ board), marking decades of service to the organization. The Post announced in January 2011 that Buffett would be retiring from the board and would not be not seeking reelection for his seat when his term expired in May 2011.5 He has acknowledged in recent times that the newspaper business is difficult in this current age of readily available free online content, saying he wouldn’t invest in another one, but his devotion to the Post and to the Graham family are steadfast.6 His retirement from the Post’s board should not be read as his loyalty wavering, but as a move to simplify his life and focus exclusively on running Berkshire Hathaway. In fact, in classic Buffett form, he said (at the time of the announcement) of Berkshire’s investment in the Washington Post Company, “We’re going to keep every share of stock we have. I would never sell a share of the Post.”7
Another woman who influenced Buffett tremendously was entrepreneur Rose Blumkin, a diminutive Russian immigrant who arrived in America at twenty-three in 1917 speaking no English and having no formal education of any sort (we aren’t talking no college education here—we are talking no education of any kind, ever, period, full stop). Despite what looked like long odds, she started and ran the Nebraska Furniture Mart in Omaha, building an empire from $500.8
With an innate business sense, and a focus on value and never spending even a cent more than she had to, Mrs. B, as she was known to everyone in Omaha and eventually to every Berkshire Hathaway shareholder, endeared herself to Buffett. When he talks about Mrs. B in the Berkshire shareholder letters, it’s much like the lowly pupil or disciple respecting the master. You can tell that his admiration and respect for her are simply immense. He speaks frequently of her hard work and dedication, saying year after year that she was in the store “seven days a week, from opening to close.”9 And this was when she was in her nineties! Imagine how she must have been for the decades and decades prior to that. It’s easy to see why Buffett was inspired by her, and it’s impossible not to be inspired ourselves.
In 1983, he bought her business without ever demanding an audit or insisting on seeing an inventory count. This may seem counterintuitive, given that we know Buffett researches so deeply, but it in fact reflects the respect he had for Mrs. B. He just trusted her word, plain and simple; she had that much integrity. She was also a fiery personality and fierce competitor, with the motto “Sell cheap and tell the truth.” Mrs. B worked well past the age when most of us would consider retiring because, like Buffett, she truly loved and was obsessed with running her business. She died at age 104 in 1998.
Two current female business leaders Buffett has recently shared his admiration for (choosing, as he often does, the Berkshire shareholder letter as his vehicle for lavishing praise) are Susan Jacques of Borsheim’s and Cathy Baron Tamraz of Business Wire, both subsidiaries of Berkshire Hathaway. Of Jacques, Buffett said, “Susan came to Borsheim’s 25 years ago as a $4-an-hour saleswoman. Though she lacked a managerial background, I did not hesitate to make her CEO in 1994. She’s smart, she loves the business, and she loves her associates. That beats having an MBA degree any time.”10
He followed up with his thoughts on Tamraz, saying, “Another of our great managers is Cathy Baron Tamraz, who has significantly increased Business Wire’s earnings since we purchased it early in 2006. She is an owner’s dream. Cathy, it should be noted, began her career as a cab driver.”11
All of these women’s influence on Buffett is as varied as their roles in his life. He appreciates and respects them, though, whether it’s for their business sense, their journalistic acumen, their competitive spirit at the bridge table and on the floor of the furniture store, or their loving and giving nature. We can’t say for certain that Buffett would not be the investor he is today without knowing and having relationships with them, but it is a safe bet that he’s a happier man for it.
While readers of this book, both male and female, probably don’t have the benefit of knowing these women as Buffett has, we can still learn from their examples as well. Who doesn’t read about Mrs. B and marvel at her ability to overcome obstacles, work hard, and build a store—and a legacy—that endures? Or think how impressive it is that Katharine Graham, going into a difficult and uncertain situation without the knowledge she needed, started from the ground up to learn about business, and eventually grew into a mighty figure in the publishing world? Anyone who’s read Buffett’s shareholder letters must be grateful to Carol Loomis for helping him find, define, and tweak his remarkable and unique voice over the years. These were influences for Buffett—and vice versa, naturally—but we can, and should, also embrace their stories, appreciating what they’ve meant to him over the years.