6. Bertrand Russell, Has Man a Future? New York: Simon & Schuster, 1962. This powerful, absolutist book argued that unless something "radical" happened, mankind was eventually doomed by weapons of mass destruction, and predicted the development of mass chemical and biological weapons in the not-distant future.

7. The 1955 Russell-Einstein Manifesto. Russell was president of the Campaign for Nuclear Disarmament in 1958, and was cofounder with Einstein of the Pugwash Conference, a group of scientists concerned about nuclear proliferation.

8. Interview with Dick Holland.

9. Buffett and his chief administrative officer John Harding chose a set of representative large-cap stocks, in effect creating a market index. Buffett did not want to execute the trade through a brokerage firm because the broker kept the proceeds from the sale and paid no interest to him. Harding contacted university endowment funds. Buffett went personally to Chicago to get shares. The idea of lending directly to a short-seller was so novel at the time that most universities passed. However, Harding was able to borrow about $4.6 million of stock.

10. Buffett put $500,000 into treasury bills in the first quarter of 1966.

11. Interview with Susie Buffett Jr., Meg Mueller, Mayrean McDonough.

12. Interview with Kelsey Flower.

13. Interview with Susie Buffett Jr.

14. Interview with Marshall Weinberg.

Chapter 29.

1. "The Raggedy Man," by James Whitcomb Riley, a children's poem about a handyman.

2. Interview with Chuck Peterson.

3. Buffett tells the story, which Charlie Heider recalls and found unforgettable. Parsow doesn't recall it.

4. Both Byer-Rolnick and Oxxford were acquired by Koret in 1967.

5. Interview with Sol Parsow.

6. Gottesman worked for Corvine and Company, which, he says, was going out of business. He founded his own firm, First Manhattan Co., in 1964.

7. Interview with Sandy Gottesman.

8. "That's not negotiating," claims Munger. "It's just using pithy examples to steer people to what they should be doing. Sure, it's persuasion, but it's legitimate persuasion."

9. The Kohns were planning to sell for a quarter less than the tangible net assets of the business. Gottesman had done a private placement of debentures for Hochschild-Kohn with Equitable Life that year and was familiar with its financial statements. His mother-in-law, her brother Martin Kohn, and another sister were equal stockholders who owned a class of preferred stock in the company. The preferred stock was in arrears, not having paid a dividend in some time. In effect, therefore, they could have controlled the business. They had not exercised this privilege, however. The common stock was owned largely by their relative Louis Kohn, from another branch of the family and second in command after Martin Kohn.

10. DRC Offering documents for 8% debentures, December 18, 1967.

11. He gave them the money anyway, partnered with National City to provide $9 million in short-term financing for the deal. Diversified Retailing Company, Inc., Prospectus, December 18, 1967. According to Gottesman and Moody's Bank & Finance Manual, Martin Kohn was on the board of Maryland National Bank.

12. Charles T. Munger testimony, In the Matter of Blue Chip Stamps, Berkshire Hathaway Incorporated, HQ-784. Thursday, March 20, 1975, page 187.

13. Buffett mentioned the problem to the partners in his mid-1966 letter but stressed the more important question of buying a company rather than a stock. Another factor was the banks, which had also started issuing credit cards, cutting further into Hochschild-Kohn's edge.

14. Interview with Charlie Munger. The company was purchased in April 1967.

15. Diversified Retailing Company, Inc., Prospectus, December 18, 1967.

16. Buffett says Rosner told him he got Aye Simon's consent to sell the business by saying something along the following lines: "And to hell with you. If you're going to second-guess it, you come down and run the store." The relationship was irretrievably broken.

Chapter 30.

1. Including Buffett's stock in Data Documents, a separate investment, the Buffetts' net worth was somewhere between $9.5 and $10 million.

2. Buffett's description, in Patricia E. Bauer's "The Convictions of a Long-Distance Investor," Channels, November 1986, was, "One time we had a dog on the roof, and my son called to him and he jumped. It was so awful-the dog that loves you so much that he jumps off the roof..."-leaving the reader to wonder how the dog got on the roof.

3. Interview with Hallie Smith.

4. "Haight-Ashbury: The Birth of Hip," CBC Television, March 24, 1968.

5. In 1967, over 2.5 billion shares traded, topping the previous 1966 record by one third. Thomas Mullaney, "Week in Finance: Washington Bullish," New York Times, December 31, 1967.

6. But insurers looked undervalued and he thought they would get taken over. He bought Home Insurance and Employers Group Associates.

7. Sun Valley Conference, 2001.

8. At high rates of return, and paying no tax. If a shareholder had taken $0.06 a share-after paying a tax on the $0.10 dividend-and put it in the market earning 5% on average, he would have about $0.42. If Buffett had kept that $0.10, and compounded it at the 21% he earned over the past forty years, a shareholder, who would have been slightly diluted over the years, would be $135 richer. Looking at it on a larger scale, the tiny dividend "cost" Berkshire shareholders over $200 million as of 2007.

9. Interview with Verne McKenzie.

10. Letter to partners, July 12, 1967.

11. Interview with Verne McKenzie.

12. "Requiem for an Industry: Industry Comes Full Circle," Providence Sunday Journal, March 3, 1968.

13. Letter to partners, January 25, 1967.

14. By September 30, 1967, the partnership had $14.2 million in treasuries and short-term debt out of a total $83.7 million invested.

15. Alice was a friend of Ringwalt's; the family believed she may have once had some sort of "understanding" that might have led to marriage until Ernest put a stop to it. Ringwalt had a reputation as a ladies' man, but Alice also kept house for her father, and "no one was good enough for her," Buffett says.

16. Interview with Bill Scott.

17. Interview with Charlie Heider.

18. Robert Dorr, "'Unusual Risk' Ringwalt Specialty," Omaha World-Herald, March 12, 1967, and Ringwalt's Tales of National Indemnity and Its Founder (Omaha: National Indemnity Co., 1990) recount stories of lion tamers, circus performers, and hole-in-one contests. Buffett heard of the burlesque stars from Ringwalt.

19. Berkshire paid Heider a $140,000 fee for the transaction.

20. Interview with Bill Scott.

21. With the company closely held, it took only a week to round up the necessary 80% shareholder approvals.

22. In his book, Ringwalt says he was only driving around looking for a metered place on the street because he refused to pay a parking garage.

23. This was a reason why National Indemnity would not need reinsurance, or protection from other insurers, which was both expensive and would make it a dependent.

24. Ringwalt also was included in the shareholder register of Diversified Retailing in 1976 (he actually sold 3,032 shares back to the company in its tender offer).

Chapter 31.

1. As quoted in an interview with Jose Yglesias as Dr. King prepared for the Poor People's Campaign. Jose Yglesias, "Dr. King's March on Washington, Part II," New York Times, March 31, 1968.

2. Wead, who declined to be interviewed, was the director of Wesley House, a community improvement organization of the Methodist Church.

3. Interview with Racquel Newman and her son, Tom Newman. A number of other people recalled Susie and Rackie's activities.

4. Interview with Chuck Peterson.

5. Buffett had met Rosenfield through a connection to Hochschild-Kohn.

6. Grinnell's founder, Congregational minister Josiah Grinnell, pastor of the First Congregational church in Washington, D.C., bolted from its doors in 1852 when his Southern congregation took exception to his abolitionist views. It was Grinnell who sought advice from the famous New York Herald editor Horace Greeley and who heard the words that every schoolchild in America would subsequently learn without knowing their source: "Go West, young man, go West!" The phrase was originally written by John Soule in the Terre Haute Express in 1851.

7. Interview with Waldo "Wally" Walker, Dean of Administration at the time.

8. The luckless George Champion, chairman of the board of Chase Manhattan Bank, followed King on the program, speaking on "Our Obsolete Welfare State."

9. This common paraphrase of Lowell was more eloquent than Lowell's actual words: "Though her portion be the scaffold, And upon the throne be wrong." James Russell Lowell (18191891), "The Present Crisis," 1844.

10. Interview with Hallie Smith.

11. From King's 1963 speech at Western Michigan University. King may have said something like this at the October 1967 Grinnell Convocation, but no transcript exists.

12. King first said this in Cleveland in 1963 and used variations of it in most major speeches thereafter. He called the idea that you can't legislate morality a "half-truth." "It may be true that the law cannot make a man love me," he said, "but it can keep him from lynching me, and I think that is pretty important."

13. Despite flirting briefly with the magic 1,000, it had ended down more than 15%.

14. Letter to partners, January 25, 1967.

15. Letter to partners, January 24, 1968.

16. Galbraith in an interview by Israel Shenker, "Galbraith: '29 Repeats Itself Today," published in the New York Times on May 3, 1970. "The explosion in the mutual funds is the counterpart of the old investment trusts. The public has shown extraordinary willingness to believe there are financial geniuses in the hundreds. Financial genius is a rising stock market. Financial chicanery is a falling stock market." Galbraith reiterates this in "The Commitment to Innocent Fraud," Challenge, Sept.Oct. 1999: "In the world of finance, genius is a rising market."

17. Grinnell forgave Noyce after intervention from his physics professor Grant Gale and, according to Buffett, from Rosenfield.

18. Wallace sought signatures in order to be placed on the Nebraska ballot as a candidate for the American Party.

19. Wallace hired an ex-Klansman as a speechwriter and made a number of inflammatory statements at different times, such as "I reject President Kennedy's statement [that] the people of Birmingham have inflicted abuses on the Negroes...the President wants us to surrender this state to Martin Luther King and his group of Communists." Yet his famous stand, blocking the University of Alabama's Foster Auditorium to prevent the enrollment of two black students until forced by federal marshals and the National Guard to step aside, was a compromise apparently engineered with the White House to appease white supremacists and avoid violence while allowing the blacks to enroll. Wallace later apologized to the black community for his role.

20. Associated Press, "Disorder, Shooting Trail Wallace Visit," Hartford Courant, March 6, 1968; Homer Bigart, "Omaha Negro Leader Asks U.S. Inquiry," New York Times, March 7, 1968.

21. "Race Violence Flares in Omaha After Negro Teen-Ager Is Slain," New York Times, March 6, 1968; Bigart, "Omaha Negro Leader Asks U.S. Inquiry."

22. Associated Press, "Disorder, Shooting Trail Wallace Visit."

23. UPI, "1 Wounded, 16 Held in Omaha Strike," July 8, 1968.

24. He recovered after a lengthy hospital stay. Part of this account is from The Gate City: A History of Omaha (Lincoln: The University of Nebraska Press, 1997).

25. In a December 1981 Playboy interview, Henry Fonda, an Omaha native, recounts witnessing the same event: "It was an experience I will never forget.... My dad's office looked down on the courthouse square and we went up and watched from the window.... It was so horrifying. When it was all over, we went home. My dad never talked about it, never lectured. He just knew the impression it would have on me."

26. April 4, 1968.

27. Interview with Racquel Newman.

28. The club was renamed Ironwood in 1999.

29. By coincidence, at the time, Chuck Peterson had also been put up for the Highland. Peterson was eating there a lot with fellow flying enthusiast Bob Levine and thought he ought to join instead of freeloading.

30. Stan Lipsey, another friend of Buffett's, weighed in on behalf of Chuck Peterson. "I got so high-profile because of that," says Lipsey, "that they made me serve on the board next year. No good deed goes unpunished. A golf buddy named Buck Friedman was the chairman. He was very serious, and I'd be trying to crack them up. He didn't like that I'd call him Buckets."

Chapter 32.

1. Warren Buffett letter to Ben Graham, January 16, 1968.

2. Ibid.

3. Armon Flenn, "Run for Your Money," New York Times, June 3, 1968; "Mutual Interest," Time, January 19, 1968; Robert D. Hershey Jr., "Mutual Funds Reaching Further for Investment," New York Times, September 29, 1968.

4. In 1929, only about 3% of the population owned stock. In 1968, about 12.5% of the population owned stock or equity mutual funds.

5. Letter to partners, July 11, 1968.