Friday, January 28, 2005

Quick Little Ditty

Ran across an interesting interview with Marc Perkins. Read part1 and part2. Marc tells a great little story on Warren Buffett:
I used to trade with him when I was at Salomon . He was a customer of Salomon back in the early '70s, and I can remember when he was buying bank stocks in 1971, the doggy banks, not the growth stock banks. He was buying Harris Trust. And the Manufacturer's Hanover Trust department called up and said they had a big block of stock in Harris Trust for sale. Buffett had a trader, a fellow by the name of Bill Scott in his office in Omaha. And we called Bill Scott and said, "We got a block of Harris Trust for sale." The stock was around $49 and he said, "I'll pay $47." And so we called Manny Hanny back and told them he said he'd pay $47 and they said, "That's ridiculous, down 2 points. That's crazy." Of course, Harris Trust didn't trade very much, so Buffett was the only buyer around.

So we called Scott back and said, "The seller won't go below the market. They'll sell it for 48.5," and Buffett's response was, "Tell them we're not interested." So, we call Manny Hanny back and say, "There are no bids." "What do you mean no bids?" they say. "Tell 'em I'll sell 'em at 47." So Buffett's guy says, "47 is no good any more. We've gone on to something else and we're just not interested." So the Manny Hanny guy couldn't believe that somebody just walked away. So he now starts calling everybody on the Street trying to sell and the next thing you know, the stock is around 44. And he'd call us back back and ask, "Can you buy it now?" And I would call Buffett back and he would say, "I'll pay 42."

That's his whole deal. Iron-willed discipline. People who know what they know and know what they're good at survive over time.
Marc also reveals one of the wisest pieces of advice anyone has ever given to him:
"The secret to success is knowing when you have enough information to make a decision." - Jim Walter of the Jim Walter Corporation
Here's another post from an edited transcript of a talk by none other than Warren Buffett himself. In it Buffett talks about The Super Investors of Graham-and-Doddsville. Read here.

Well, enjoy the posts and have a wonderful weekend. It's raining here in Texas and a bit nippy. I'm hoping to spend the weekend resting my brain from all the system work I've been performing. Read a few good books: The New Laws of the Stock Market Jungle by Michael J. Panzer, Hot Commodities by Jim Rogers, and Blink: The Power of Thinking Without Thinking by Malcolm Gladwell. And of course, play a few games of CandyLand with my daughter. :)

Later Trades.

1 comment:

Anonymous said...

I was a bond salesman back then too. On a slow day I called on a little insurance company and they told me to direct everything to Bill Scott. I sold him just once but it was a huge order. Anyway, before I gave up on more business, I called Scott and Buffett answered the phone. He said Scott was away from his desk and could he take a message. I don't like Buffett's politics but he is a polite and humble man.