Chapter 17 14 The ABC of Homecoming

In 1984, at the Time Inc. headquarters in New York's Rockefeller Center, Buffett visited its president, J. Richard.Monroe.Berkshire owns 4 percent of Time Inc., and Buffett and Monroe often get together to discuss the news media.And now they all know that there are rumors that Time Inc. is going to be taken over. Buffett thinks he can help the magazine giant stay independent. "Do I want a white knight?" he asked.That's 80s parlance, he's proposing a deal.Monroe said: Warren would have been our largest shareholder, and he'd agreed not to sell it.He could have been one of us.But when I brought this opinion to the board, they asked, "Who is Warren Buffett?"

Companies like Time may think they are immune. "It's not the worst yet, and we're not losing any sleep at night," Monroe wrote.But it didn't take long for the company to discover that it had everything but no immunity.Vanner Communications offered a cut-throat price to take it over, and Time Inc.'s balance sheet would have to be rewritten.Times can serve as a lesson in what can happen to a self-destructive business in an era of mergers.Afterwards, Monroe said with emotion to Buffett's proposal: "It was a big mistake for us not to grasp it." As Monroe and others will find, dramatic changes can happen anywhere and anytime. Four people orchestrating mergers and acquisitions at a humble First Boston firm 10 years ago could now have a company of 110 fall for it.Now the pace of mergers has accelerated. Wall Street trading volume was $12 billion in 1975 and $122 billion in 1984.Investment bankers, long considered the most composed of men, now attract envious and hateful glances.They are young, rich, well-groomed and like to use military terms for metaphors.This spooked America's aging chief executives.

For a century, Wall Street has provided funds at the request of corporate parties.The situation is different now, and the middlemen on Wall Street have taken the initiative.The United States only provides them with ammunition.Jack Se.Ben Han first began to maliciously manipulate the stock market to plummet with a large amount of bonds. Investors had to accept his asking price, no matter how high it was.From this point of view, how similar the 1980s are to past speculative periods.In fact, it was Fred who originally advocated the theory of the quick flip market.Carl suddenly became the first president, and vigorously promoted Jack Sai's large bonds.

Of course, Wall Street is no stranger to speculation and is familiar with merger fever.But the structure of Wall Street has changed. 500 companies are now controlled by professional shareholders such as pension funds and trusts.Their asking price has always been high, swaying the market.In the past, the commitment of major shareholders to a company (at least a good one) was powerful enough to prevent it from being taken over, and now this kind of commitment does not support half a cup of tea. Angie, President of Champion International Group.Searle complained that his shareholders changed so often that he didn't even know who they were.

Buffett's views have changed, too.He once viewed the street from the standpoint of shareholders, and now, in middle age, he sees the same views as corporate presidents—such as Dick.Monroe and Angie.Serge agreed.He was wary of stock market manipulators and the damage they could do to the board, wary of skyrocketing prices in the wake of takeover winds.Once again, he felt that Wall Street had gone too far in its speculative days.But he didn't want to quit this time, he really wanted to make some big deals. He started playing this big game on February 26, 1985.During those few days in Washington he picked up Tom.A call from Murphy, the chairman of Cosmopolitan and a friend of Buffett's.

"Man, you probably won't believe it," Murphy began, "I just bought ABC. You hurry up and teach me how to pay the bill. " Thomas. R. Murphy, like Buffett, his father is also a politician, a judge in Brooklyn. He had introduced Tom to Thomas.Duy and Al.Guests like Smith.Murphy had a happy childhood. He went to the country to escape the summer, went to the club to play golf; and later entered Harvard Business School.His classmate Jim.Burke (who would later become chairman of Johnson & Johnson) thought Murphy was a political genius by nature.He was tall, bald, affable, naturally unaffected, and always greeted people with a fond name of "dude".After he quit his job at Lever Brothers, he took a $10,000-a-year job at Hudson Valley Broadcasting, managing a near-bankrupt UHF station in Albany.

A small company in the Hudson Valley that even retired nuns love to watch. After it managed to buy another TV station in 1957, it began to raise funds from the community, with a stock price of 72 cents.Murphy moved to New York a few years later, moved into a brownstone office, and appointed Daniel.Burke (Jim's brother) as his deputy.They worked closely together, with Murphy in charge of strategy and deals and the hard-line Burke in charge of management. The company, now called Metropolitan, has grown into a radio, cable, and publishing empire.But its style is far from commensurate with its scale.Murphy and Burke have enormous wealth, but their offices are very simple.Metropolis has no buildings of its own and no social employees.Murphy was so frugal that when he once painted the headquarters in Albany, he only let the two walls facing the street be painted, and the two sides facing the Hudson River were not painted.His and Burke's shared wisdom, combined with a frugal style, has kept the Metropolitan Corporation profitable.

Buffett knew Murphy in the early 1970s, and he knew he was the type of person who wouldn't waste a lick of paint at headquarters. In 1977, he bought 3 percent of the Metropolis on behalf of Berkshire, but sold it after a period in the stock market—a decision that Buffett later said he was "really crazy."At the same time, Murphy and Burke began to consult with Buffett before making every big decision.Walt once.Annenberg is about to sell the TV Guide and Rising, part of his publishing empire.According to the Fortune Daily, Buffett said: "Murphy, how about we buy it in half?" He went to see Annenberg in Beverly Hills and offered $1 billion, but was rejected.They had to buy the Swisson Milkshake Company for the next best thing, like two people with a billion dollars on fire.Buffett still wants to be Murphy's partner, and he says Murphy and Burke are the most successful pairing in the country.

Buffett has been interested in ABC for more than a day or two. In the late 1960s, ABC had agreed to transfer to the International Telephone and Telecom Company, but the Ministry of Justice disagreed.Buffett was on the Pacific Stock Exchange when the deal fell through.He said to Munger's assistant: "You know, the fate of ABC is completely in the hands of stock traders, and everyone has the opportunity to control it. I just want this money on hand." In the 1970s, he bought Part of ABC, bought another part in 1984, and when he got the call from Murphy, he already owned 2.5% of ABC.

Murphy is equally interested in ABC.Its local stations are cash cows, and its national networks are priceless. By late 1984, the FCC's intention to annex ABC as the sole television organization was well known.Murphy immediately visited Leonardo. H. Gordonson - 79-year-old founder and president of ABC.They met at the ABC building in New York. "Leonardo," he said, "I don't want to be thrown from the 39th floor by you, but I have an idea." Gordonson didn't kick him down because he knew that ABC had been bitten by a group of people playing stocks. Now, if they succeed, they'll tear the company he's spent his life building into pieces.If he gets to a place where he has to sell, Murphy is certainly the best candidate, at least he can keep the company intact.

Buffett met with Murphy and Burke in New York two days later. Buffett's words were careful: "Think about how it might change your lives." Murphy and Burke understood right away.While the Cosmopolitan owned papers like the Women's Fashion Daily and the Kansas Star, little was known about it outside the circle; Murphy and Burke were like hermits too unknown.Now Murphy, a devout Catholic (he loves to stop by St. Patrick's Cathedral on his way to work), works with network executives in extra-long limousines. Murphy thinks Buffett's first thought was "a personal formula."He wants to move on. Buffett worried about another problem that neither Murphy nor Burke had thought of: If the Met bought ABC, the Wall Street food chain would involve itself. "So what do we do, man?" Murphy asked. "You'd better have a 900-pound gorilla," Buffett said. "A guy who owns a lot of stocks won't sell them regardless of the price." Obviously, the guy has to be rich and loyal. "Would you like to be a gorilla, man?" Buffett later said he didn't think about his role until then.But could he have thought of other gorillas at the time?Burke thinks he's been thinking about it himself.As soon as Murphy suggested it, he cited two obstacles. The Met has a local station in Buffalo.If Berkshire becomes its shareholder, according to FCC law, the TV station and the "Buffalo News" cannot coexist.Buffett says he can't sell newspapers. "I put my whole life into it," he emphasizes.So Murphy agreed to sell the station. The second thing is trickier.Also because of FCC laws, he can't sit on the boards of The Washington Post and Met at the same time.He had a soft spot for the Post and an extraordinary friendship with the Grahams.Therefore, it must be carefully considered. They broke up for good.Buffett flew back to Omaha. After thinking about it, he decided that he was not a director of the Post but still held its stock. His relationship with the Post would not change. After doing the math, Buffett called Murphy that night.He proposed that Berkshire buy 3 million shares of Cosmopolitan at $172.50 a share, which was the market price at the time, (originally only 72 cents.) Murphy immediately agreed.That means Buffett will buy 18% of Cosmopolitan for $500 million, 8x his recent deal with Mrs. B, and 50x his first media investment (Washington Post) .Metropolis relied on Berkshire's blood transfusion to buy ABC. (Buffett's friend Bill Ryan replaced him on the board of the Post. Metropolis had to sell its cable system if it wanted to merge .It was sold to The Post on Buffett's proposal.) But negotiations with ABC ran into trouble.In charge of the network is Bruce, the vice president at First Boston.Wasa too.The stocky banker with disheveled hair wanted a higher price.He is shrewd when it comes to selling.Cosmopolitan's first offer was $110 a share; Murphy and Burke reluctantly raised the price to $118—twice ABC's recent market price, thanks to Worthy's haggling.Wo Shatai is still not greedy enough. On March 12, Murphy came to Skadden on Third Avenue with heavy steps.Apslet's skyscraper told the ABC's lawyer Joseph.Fran, the Metropolis is about to give up.But Franc wouldn't let him go, saying the situation could be saved. That afternoon, the two sides negotiated again in Skadden.The opponent is a group of well-known figures in the 1980s: Furlong started playing small stocks in the 1950s, and now every merger is inseparable from him.His friend, the defensive specialist, now represents the Mets -- they're old rivals in the merger field.Warsaw brought in a group of bankers from ABC. (Metropolis does not have an investment bank because of the objections of Buffett and Munger.) The two sides engaged in lengthy negotiations. But the negotiations were mostly between two people: Buffett versus Warsaw.Mike.Maradi, ABC's treasurer, was struck by the contrast between the two men: a gentle, rustic Midwesterner; a younger, brighter, self-assured Brooklyn-born.Warsha too found that negotiating with Buffett was not like in the movie. He joked and made the atmosphere look very relaxed.But the difference between the two sides is still 100 million US dollars.Warshata's tone became tougher. He emphasized that in addition to collecting cash, he must also ensure that ABC's shareholders Has the power to buy Metropolitan stock.In other words, Warsha too wanted the right to keep some of the company's shares. “We thought, if Buffett is so smart—why should we sell it when he buys it?” Mrs. Warsha recalled, “We didn't want to agree.” Buffett totally disagrees.He doesn't say much, to the effect that he, too, hates selling stocks, a practice he's been criticizing in his annual reports and which has become a Berkshire habit.Warsaw countered that ABC shareholders were still entitled to some benefits.He left the room with the ABC guys, and the negotiations hit a dead end. When they came back, Buffett said, "I think I'll regret it in the future." He announced that Warsaw was too entitled to the power. The ABC side was stunned.Now both parties have to figure out how much that right is worth. Watson and the others began to use computers to process a lot of data; Metropolitan Corporation was counted by Buffett.He just did a mental calculation. Buffett has already saved a sum of bank investment fees, and Warsaw has saved even more.Unlike Munger, who is less interested in this, Buffett is not.He expected a little more from ABC - he wanted to be the largest shareholder. He predicted well, and he did regret it later. Buffett priced the Met at 16 times profits, which in Graham's eyes was unattainable."Ben didn't approve of the decision either," he admitted to BusinessWeek. Buffett was betting that Murphy and Burke would be able to squeeze money out of ABC's network and increase profits.But in fact he had no chance.Stocks keep rising, Berkshire wants to grow, and Buffett wants big investments; small investments are useless.Outside of oil, the $3.5 billion deal with ABC is the largest merger ever. This record did not last long.Several more transactions followed, many with malicious intent.Investment banks have also abandoned traditional approaches, emulating past clients.Enterprises have also grown from small sardines to big whales.Wall Street has become a battlefield. Arbitrageurs get their fair share of credit, too.They see themselves as little big guys, or at least small shareholders. The same week that Buffett made the big deal, T. Bohm was on the cover of Time magazine.A photo of Biggens, who described himself as the "entrenched" entrepreneurial antagonist.A newspaper entrepreneur like himself has no clear purpose; he cannot buy a business and reinvent it.He just bought enough stock that the business couldn't survive and was acquired -- and profited from it himself. The president of the merging party is also not noble.Many CEOs bribe arbitrageurs (with shareholders' money) to leave and then work in peace.Even some big companies like Walter.Disney (cracked by Thon Steinberg), too, was forced to overpay.There are also some companies such as Philips Petroleum Company that were taken over by Karl.Icahn's on it, and they're trying to keep themselves from being unremarkable, borrowing heavily, and messing up their balance sheet before they really get screwed by the bad guys. This odd game presents an opportunity for Buffett.He heard several presidents say that they are besieged on all sides.So he suddenly had the idea of ​​wanting Berkshire to be a nursery aunt, because its boss has a reputation for stability and undisturbed command.It can act without financing it, because a desperate CEO who wants neither to be led by arbitrageurs nor to resort to the suicidal act of bribery is likely to take the third path—selling the company to Buffett.With that in mind, Buffett often refers to Berkshire as a safe haven in his reports: "We're a safe home for the right industries and the right people." In the autumn of 1985, the opportunity came.Scott & Fitz is an obscure but not small Ohio conglomerate with businesses ranging from world encyclopedias to Kirby vacuum cleaners.It remained largely unknown on Wall Street until 1984, when Chairman Ralph.Gerby wanted to buy a controlling stake in it for $50 a share.This price is only $5 higher than the market price.Speculators bid $53, thinking that was the highest price.Two weeks later, speculator Ivan.Boyarski asked $60.The devil had made a fortune from his connection with Jack Sey.Of course people don't know that Boyarski played illegal (He will be in jail because of this.) This is just a microcosm of the phenomenon of Wall Street nouveau riche. Shia, with his big head and small stature, hated working for Boyarski, but Boyarski insisted on a $4 million "waiver fee."Shia refuses—and the problem is tricky.Boyarsky now holds 7% of his stock, which may be sold to another buyer. Shia cobbled together another sum and offered $62, but the plan fell through.Worse, the stock went to short-term investors like Boyarski.Their sole purpose is to sell the company.All Shiya can do now is to find a buyer ahead of them.He was lucky enough to learn in the summer of 1985 that the Lear brothers—brother Stephen, 34, and younger Juchel, 29—held 6 percent of the stock.The brothers were representative of a new generation of speculators who had bought a string of small companies with little stock and lots of debt.Now Shi Ya persuaded them that the controlling stake had endless power.So the brothers also paid attention to the prospects of Scott & Fitz.ralph.Shi Ya really hit the 80s. Buffett is also coveting Scott & Fitz -- and he's bought quite a few shares, too.The company is now well funded, and Wikipedia is exactly the kind of publishing Buffett craves. (He'd grown up reading its publications.) After seeing Shia's ads pop up in newspapers, Buffett thought the time had come. In October he sent a text message: "We now have 250,000 shares. We have always had a good impression of your company and will not do unfriendly transactions. If you are interested in seeking a buyer, please call me." For Shi Ya, this is the gospel from heaven.He agreed to meet with Buffett and Munger in Chicago. They have dinner together.On the third morning, October 23, Buffett offered $60 per share, payable in cash.Shi Ya put forward two requirements: 1. This is a firm offer; 2. There is no "waiver fee".In formal transactions, this requirement is for investment banks, but Buffett does not have investment banks.He just shrugged his shoulders and let Shi Ya draft the contract.A week later, Buffett bought another cash cow for $315 million. Buffett's cash came from another deal.That was also in October: Philip.Morris bought General Foods at a premium.As the largest shareholder, Berkshire earned $332 million. "I'm not happy," Buffett sings.His stock hit another record, $2,600 a share. That month, Forbes included Buffett on its list of the billionaires, along with Sam.Walton, Rose.Berrot and Harry.Hamsley. Taking over other companies has clearly increased Buffett's wealth.But as lucrative as he was, he wasn't quite the face of this era of trading.With the representative Ronald. Compared with O. Belloman, he still seems out of tune with this era. Both of them have a strong desire to buy, and they are also very keen in judging the company.As investors, their qualities are also very similar.Belloman uses less skill, he paves the way with money.He had a long-term vision, but was also at heart a financier rather than a manager.In an interview with Forbes, he said that he reads ten annual reports a week. The aggressive Beloman, on the other hand, doesn't make less friendly deals; Buffett doesn't.Belloman is only interested in a controlling stake, which is also different from Buffett.The biggest difference between them is that Buffett only participates in transactions as a shareholder of a public company, while most traders make money from internal channels (such as various fees). Bellman made his fortune by excluding Electronic Colors, Mike Andrews, and other Forbes shareholders.His asking price is very unfair, and every transaction has to be litigated.Buffett agreed to serve as an expert for the prosecution (his friend Bill Ryan) to incriminate Bellowman.Bill owns some stock in MacAndrews and Forbes.A lawyer involved in the lawsuit at the time said Buffett said Beroman was "cracking shareholders," which Beroman vehemently denied.At last The lawsuit is settled, avoiding a possible interesting conflict. At the same time that Buffett bought Scott & Fitz, Bellman invented a Wall Street game rule that, if used, could kill an independent company.Coney.Blanche commented on "The Hunter's Ball" that Belloman's attack on Lavron was like class warfare.Mike, the aristocratic manager of the cosmetics company.Boglis believes that the cigar-smoking Belloman and its jackse capitalists are "pawn shops."He rudely declined, saying the company was not up for sale.Belloman shot back that Boglis was typical corporate waste. (Boglis had a house in Paris, and a steward, which Belloman called the Castle Boglis.) Normally the war seemed strange.Beroman's ace is worth only $145 million, while Lavron is worth $1 billion.However, because of the large amount of bond financing, Belloman has an advantage.He bought Lavron, and Boglis was out of a job.It turns out he was wrong about not selling Lavron. - Everything can be bought and sold. A week after Beroman bought Lavron, (he kept the butler and the castle), Buffett gave a presentation on hostile takeovers at a Columbia Law School seminar.There were corporate presidents, bankers, mergers, buy-side lawyers—Marty.Among them was Lipton, still recovering from the injury he sustained in defense of Lavron -- and a group of academics.For them, takeovers are the order of the day.The Met-ABC deal was only eight months old and not yet finalized, and five larger takeovers have occurred.The day before, Henry.Kravis stood on Beatrice's board of directors and threatened to buy the company. One of the directors knew it was inevitable and burst into tears on the spot.Wall Street money changes hands so fast (Lavron's attorneys and bankers' fees totaled $120 million.) People often run uptown, not to eat dinner in the ivy-filled garden, but to I want to meet Buffett. No doubt everyone was thinking about LaFron, but Buffett didn't mention it.He didn't write the speech, it was about See's Sugar and himself.He has been investing for over 40 years, ever since he bought 3 shares of City Utilities at the age of 11.From those distant memories, he recalled, at that time, of course, the shareholders were "the rightful bosses" to him. I want to read a little report in the paper that I'm the owner of a city utilities company and think the managers are doing what I and the other shareholders say.If anyone wants to buy that company, they have to talk to me. He still thinks so when he grows up.If someone made an offer to a See's manager and he wasn't notified, he would feel "ignored".If someone has to decide whether to sell, it has to be the shareholders, it's their money.See's absolutely cannot have a president like Boglis. He did not deny that shareholders would benefit from a takeover.Buffett himself made a fortune from General Foods."My mother isn't here tonight, so I admit I've played stocks too," he said. So he, too, has been profiting from it.He has ridiculed in the past that CEOs "beyond the moat" are nothing more than arbitrageurs. But now there are more and more players, and he is deeply embarrassed about this.Corporate CEOs are now on his side — and in many cases friends.He is sincerely worried about the sabotage style of stock players. I think economic Darwinism is at work.As long as a bid is made, the invisible hand will act, and the end result may improve the quality of managers.I've been bothered by two things for several years - I don't know why - and I'll just tell you which two things are.Number one: I know companies that have been doing well are often sold for a lot more than they are worth... Theoretically speaking, takeover has a therapeutic effect. This kind of system can cut off the dead branches on the corporate tree.In an ideal economy, assets would go to the highest bidders because they could theoretically make the best use of them. But the stock market is not ideal.Even a good company's stock, like Metropolitan, is often cheap.Stock players will seize this opportunity-not because Murphy and Burke are dead branches, but because their stocks are unfortunately at a low point.Even Boone.Bigens also complained that when oil took over, "it was much cheaper to control oil on the New York Stock Exchange than to dig in the ground."Wall Street speculates on oil today, and tomorrow it will speculate on other things.In Buffett's view, this is not corporate Darwinism but a game of roulette.like tom.It's not good for someone like Murphy to be bankrupted by others using money. Also disturbing to Buffett is his discovery that takeovers can mess with prices.Businessmen, like politicians, spend more generously with other people's money than with their own.Several CEOs have told Buffett that when the company reimburses them, they fly first class and live in luxury hotels. I also find that when they buy companies, they don't treat shareholders' money the same way they treat their own money. If they could use other people's money, stock players would buy companies for far more than they were actually worth.Wall Street's voracious appetite for big bonds also provides this easy money.Large bonds have become a kind of "fool's currency". (It's stupid because buyers have no brains and naively provide financing in the form of lenders.) Whoever borrows the most will end up saving it.Buffett was furious about this.The problem with bonds is that someone is always hooked and kept in the dark for a long time.He allowed lenders to quote him: "My personal belief is that the big bonds are going to be there until it's all over." This passage greatly stimulated the economic circles in 1985.Big bonds are booming, and defaults are rarely heard of.Investors lined up at the gates of Allied, Continental, Macy's and Trump's Castle, thinking they would surely deliver. (But then many companies went bankrupt.) Mike is a professor of finance and law at the University of Michigan.Bradley protested at the Columbia Symposium: "I really don't understand the use of the word big (another meaning of waste) to call this hugely profitable security." Bradley's point is: this bond The risk has actually been its (high) Interest rates offset that, as with AAA credit rating bonds, they don't issue bad bonds. In theory, Buffett agrees with this view.A year ago Berkshire made a fortune buying bonds in the Washington Public Power System. (At the time it was not very creditworthy and cheap.) A near-bankrupt lender was also attractive on a price-to-value basis; Mike.The large bond brokers of Milgen and Jack Sai started their business by operating this kind of bonds.The big-ticket stocks of the recent period have been characteristic: they have remained high, and despite the creditworthiness of their lenders at par, their prices have lingered for a long time and rarely recovered. Buffett pointedly pointed out that such issuers are just as rich as salesmen.He believes that taking over the game is like a drug addiction, and Wall Street is being numb by the "needle" of large bonds.It won't go away unless there's a huge setback, Buffett predicted, "and the margins are so good." All of these were questions Buffett ruminated about in January 1986—right after the MetLife merger had wrapped.He posed the startling question during the customary annual vacation of Metropolitan executives to Phoenix.He said that many investors are now deciding whether to be loyal to Metropolis based on "stocks that change over time."Buffett swore his investments would stay the same until his death—indeed, not even for a while after his death. When people ask me what happens if I get run over by a truck, I generally reply that I feel sorry for the driver.I have arranged everything so that if I die, Berkshire will not sell a single share.I will keep my word. Buffett's pledge was to guard against the likes of Bellowman, Cosmopolitan Bigens, or Kravis.He not only gave Murphy and Berk the right to represent his stock, but guaranteed them the right to restrict Berkshire from selling it.He didn't even have the freedom to change his mind. Buffett explained the unusual economic arrangement so Murphy could focus on running the business without fear of being attacked.But Buffett also has personal and professional motivations. "Personal relationships" are also important in this investment.Buffett commented to a reporter: I would like to stay with the Metropolitan Corporation for the rest of my life.It's like when you have a sick child, you don't sell him after 5 years because we are his parents. There are indeed problems with this deal.This showed up even before the deal was fully closed.TV's advertising revenue plummeted, and ABC was in freefall; the network was rated only third, old and new.It faced losses in softball, football, the Winter Olympics and two poor specials.Its costs are out of control. A friend of Buffett said: "I think Buffett doesn't know how wasteful ABC is and how messy its management is." Peter.Buffett recalls his father checking expenses and being surprised to find that ABC paid $60,000 to the gardener alone.Burke was also taken aback by its imposing building during the negotiations.The walls are covered with Jacksons.Pollack and Willem.Oil painting by de Kooning.The network bought the paintings to meet its annual balance sheet. One year after ABC changed hands, its profit changed from a profit of 130 million yuan to a loss of 70 million yuan.It would have been worse if Murphy and Burke hadn't cut back a lot of money.The first time Murphy went to Los Angeles, the hostel sent a white limousine to pick him up.Since then, Murphy has only taken taxis.He closed his private dining room at his New York headquarters.A few months later, Murphy and Burke sold the entire building to a Japanese speculator for $165 a square foot.They also laid off 1,500 employees. Buffett followed developments closely, but stayed out of the way.At one point, he was in New York when ABC reopened negotiations for Monday Night Football.Burke estimates the ABC will lose $40 million. He didn't want to miss any more NFL games as they had lost coverage of many glamor events including sports. "Warren stuttered and didn't explain it," Burke recalls, "but it was clear he wanted us to take this opportunity." Buffett didn't talk much, he just watched from the sidelines.He was like, in Burke's words, "smelling it."As they waited for an affirmative answer from the NFL, Buffett said gloomily, "Maybe they lost our phone number." (They didn't. Losing the contract was unexpected.) Murphy and Burke's ability to squeeze spending is amazing.But the competition in the entire media industry has become more intense, because there are so many TV programs and newspapers now.Fewer people are watching cable programming and home videos on the three major networks.Once, when Buffett and Murphy watched Monday's football game on a big-screen color TV, Buffett said: "The picture is good!" Murphy said: "I prefer to watch 8-inch black and white TVs. At that time, there were only three major TVs. network." Needless to say, Buffett would be happier if there was only one network.While he has become increasingly rude to his media rivals, he doesn't intend to stop there.A few years after the merger, Walter.Annenberg flies to Omaha to ask Buffett on whether to sell his magazine kingdom to Rupert Murdoch See.Buffett suggested that although the media industry is still a good industry, there is a downward trend.Annenberg had withdrawn from the fray at the best possible time.But Buffett himself doesn't want to be left alone. According to Burke, Buffett paid the price.The Metropolitan stock shot up to $630 and held there for some time.Buffett knew very well that the price was too high. "He could have sold it." Burke said.A year later, the stock price plummeted to $360. A brilliant young financier thinks Buffett has failed in a sense. "Warren has had three careers," said the investment critic. "He used to be a scavenger looking for value. When things went badly, he became a corporate investor and bought a lot at the right price." Good company. He said: "If I can't buy a good company at a reasonable price again, I will make a profit on my own scale and let the whole world see the power of long-term investment. 'I think it's getting worse now.This is so silly. " 巴菲特和芒格怀疑自己是否还能做得更好些。其一，只买不卖的投资人交税少——时间一长就是一笔可观的钱。其二，长期持股能创造不少机会，像B夫人和拉尔夫。施亚这样的人都愿与巴菲特这样的老板合作。巴菲特知道分手不是个好方法，因此他在选择合作伙伴时非常谨慎。他和所有投资者一样不会考虑什么时候撤回投资，因此他在投资时非常挑剔。这与婚姻一样，多选选结果会更好。 巴菲特这么做是因为他认为卖出会使他空虚乏力（不管傻不傻），因此他对与默菲合作感到十分满意。他对《商业周刊》说，卖掉熟悉的股票就像“对妻子喜新厌旧”。这话十分有力，他的妻子早已与他分居，但他对她仍然忠诚。他在一份报告中再次使用了这个比喻：卖掉好股票就像与钱结婚——这种错误时有发生，他认为这“对一个有钱人来说，真是疯了”。 只买不卖在金融上是有道理的，但别人认为只是巴菲特的个人性格，是他“个人和经济上的考虑”。他有保持的癖好——股票、合作伙伴和一切可以长期保持的东西。他只在有人“发疯似地”出两倍或三倍的价格时才卖。 其他投资者，如那位年青的评论家认为巴菲特是个疯狂的家伙。但他总是靠保持连续性来赚钱：同一个合作伙伴、同样的股票和同一种事业。他的一生向来如此。 巴菲特还有个性格特点，就是尽量避免借债。1986年资产评级为AAA的爱克森公司的资产债务比为4：1，伯克希尔是25：1（一个可让清教徒安心睡觉的比例）。当时过多的债务有时不能保证经营的连续性，这可能比“喜新厌旧”还要痛苦——他将不能控制伯克希尔。巴菲特在凤凰城时说过，债务是金融界的狐狸精，是个致命弱点。 这可太悲惨了。如果某人的经营非常成功，但他有点小毛病，或者贪杯或者爱占小便宜，这就是他的弱点。金融市场的弱点常常是这种借来的钱。 从自己的经验出发，他一直对债务不屑一顾。因此他对LBO的推销商也颇有微词。他们在交易一开始时就计划退出的办法，并急着要把债务转移给别人（通常是公众）。他说这是个“奇怪”的方法。巴菲特对投资的定义是从企业的经营结果中收益，而不是赚差价。LBO的推销人其实不能算真正的“投资者”，他们只是把资产从一个口袋转移到另一个口袋。他们不创造价值——为社会提供必需的和有用的产品和服务。他们的利润常常只是靠把资产变成债务后能节省一笔巨大的税收。 （而要付的利息是有数的。） 巴菲特对此表示异议。因为这种人不配获得如此大的利润，而社会会因 为少了税收而变穷。他的观点很传统，在他的评论中他更欣赏B夫人的工作而不是在美林发生的那种活动——烤大饼比分大饼更有价值。他在大都会公司的另一座办公楼里说，LBO的人既不能“让牛排更美味”，也不能“让衣服更保暖更耐穿。” 你们别看伯姆。比根斯和吉米。戈德史密斯这些人一直说为股东创造价值，其实他们没有。他们只是把社会的钱转到股东手中。这样做是否合适姑且不论，它的确没有创造价值；没有像亨利。福特那样发展汽车业，也没有像里克。格拉克那样做出更美味的汉堡包来……就在过去的几年里……公司一个接一个地被熟悉这种游戏的人换了招牌。这就意味着每个公民都要为政府提供的服务和财产多付一点钱。 在大都会公司的ABC，巴菲特试图组织一群不会研究这种“退出战略” people. ABC曾是个最动荡的电视网，在这次交易后它成了财政稳定、业务过硬的电视网。它白天播放肥皂剧，晚上放新闻，而且都是在黄金时间。与之相比，加拿大广播公司和全国广播公司则由于管理班子动荡和对主人拉里。茨克和通用电气公司的不信任而苦苦挣扎。伯克认为巴菲特的投资使他感到放心舒服，要没他“感觉就完全不一样了”，尤其是在那么严重的衰退时期，公司可能被削权而不能正常运作。它本来很可能会遭到与《时代》杂志同样的命运。现在默菲和伯克不断获得巨额利润，而且巴菲特对它的支持也使大都会公司的股价急剧反弹。