16 Comments
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Tim Doyle's avatar

Quite a nugget about what Buffett was looking in an investment. Time to reread The Snowball. Thanks for sharing.

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Kingswell's avatar

Hi Tim - Thanks for reading! Yeah, this is one of my favorite Buffett-related clips since we so seldom get such a clear look at how he makes investment decisions. I’m planning a Snowball re-read myself in 2025. Gets better every time I go back to it.

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Tim Doyle's avatar

There are so many questions I want to ask Alice Schroeder. I’ve been looking at Korea lately and I really wanna know what Warren was looking at for his personal portfolio when he bought the 20 stocks that he did back in 2004. Was it Walter Schloss net nets, undervalued generals, or something else?

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Kingswell's avatar

Yeah, I would love to know more about his Korean investments. Schroeder did a few interviews after The Snowball came out, but then really disappeared from the public eye. I agree -- there's so much I would like to ask her!

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Bob Coleman's avatar

Another saying is to the tune of; "only invests when one buys historical corporate activity at a discount and capture its future for free".

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victsz's avatar

Correct me if I`m wrong.

MarketCap = 60000/16%

Earnings = 1000000*36%

So, the PE is about 1?

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victsz's avatar

Take only half of the profit and without sales growth, the PE is roughly 2, still incredibly low?

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Tad Okutani's avatar

Worth reading over and over, overtime it sinks differently and hopefully become part of my routine. Great one! Thanks a billion.

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Kingswell's avatar

Yeah, this is definitely one I will come back to again and again. Such a cool inside look at how Buffett views investment opportunities.

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Michael's avatar

You did a wonderful job Kevin, thank you so much!

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Kingswell's avatar

Thanks for reading! I greatly appreciate it!

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Joel Sherwood's avatar

Read this post yesterday. Found myself thinking about it and read it in its entirety again today. Great one, thanks.

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Kingswell's avatar

Thanks! Much appreciated :)

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Kiwirob's avatar

Great work on the transcript. I wonder how many people have actually considered the multiple to current earnings that Buffett paid in this case? It was 1 times earnings for a company growing revenue at 70% and maintaining margins.

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Pitchfork Papers's avatar

Excellent and a useful story - I wasn’t aware of the origin story of that investment or where it fitted in to the WEB timeline. As the previous commentator pointed out, time to re-read The Snowball - just in time for Christmas.

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Kingswell's avatar

Thanks! Reading some of his old partnership letters, I always wondered about Mid-Continent Tab Card and what the backstory there was. So glad that Alice Schroeder shared the details!

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