Chapter 23 20 money phobia

As the effects of Black Monday wear off, Wall Street is basking in the balmy sunshine of late autumn.Stocks rose to new heights, and traders created new waves of LBOs, compared to which previous waves were nothing more than a drizzle. Arithmetic in the 80s was simple.Thanks to the policy of paying national taxes, as long as any company converts its stocks into bonds, its value will immediately rise.And it is believed that all companies are capable of this transformation. Investment banks become "commercial banks" when greed clearly wins over fear.They not only operate LBOs, but also buy companies themselves regardless of capital risk.Salomon Brothers Conservative John.Godfrey also joined the ranks of the adventure.This reinforces the trend and gives Buffett and Munger a chance to take a closer look at the latter half of this trading period.

These two always have one singing the red face and the other singing the bad face.Good Director Buffett asked Solomon's bankers tactful questions when someone wanted to do business with them, and Munger tried to cut the business into small pieces.At one point, when the board rejected a proposal to buy several gas-station chains, a senior executive said Buffett and Munger were "too far out of line." Solomon's Head of Merchant Banking Mike."Warren's attitude is that if a deal isn't worth doing in stocks, then it's not worth doing in bonds," Zmaman said. Buffett believes that bankers should focus on finding good business rather than trying to reinvent the wheel. Arrange the balance sheet.But he never objected to any deal.

On a Sunday evening in October 1988, Buffett got a call from Godfrey at his home in Omaha.He was with some of Solomon's bankers in his apartment on Fifth Avenue.Last Wednesday, F. Rose, the seasoned boss of the Reynolds Tobacco Company, which makes Winston and Salon cigarettes, Ritz biscuits and Orno biscuits.Johnson, offering to buy his company separately.Johnson's business bank was Hilson, which was affiliated with Amtrak.Lyman.Hatton Co.As soon as news of the big deal broke, every other bank on Wall Street was going to take a piece of it.Salomon Brothers is also nervously researching competitive bids, but what Godfreud and the others want to know is, will Buffett, who is a director and major shareholder of Salomon, support it?And is Berkshire willing to contribute $100 million to participate in this transaction as an ordinary partner?

But the bankers didn't know that Buffett was in Rose a few days ago.Johnson had asked to buy Reynolds stock when he made the announcement.When Solomon's senior investment banker Jiye.As Higgins began to explain the company's virtues to him, Buffett's snappy Midwestern accent came over the microphone: Don't talk to me about economics.I know it's fine.You can sell a product for a penny and sell it for a dollar, and the buyers are addicted.They also have a soft spot for this brand. Buffett and Munger finally came close to buying the Memphis-based Cornwood Company, which makes chewable tobacco.They decided not to be a protagonist in the tobacco industry.Buffett also expressed this idea in discussions with other bankers.

"This product -- there's something wrong with it," he said bitterly. "I don't want my tombstone to say I'm one of the partners." Solomon could let go of the RJR Nabisco thing, but Buffett didn't want to be directly involved. The next day, Cowberg.claves.Roberts made its own bid, Solomon & Rose.Johnson's Hilson became a Confederate and entered a bidding war.Wall Street has never made such a bid so publicly before.When the main part of the deal was coming, many competing banks came up with The price was higher than that of the opponent, and as a result, this merger frenzy has risen to its peak.It's not too high a price to pay for Renault now.

After 11 hours, KKR proposed a favorable condition. It promised to "readjust" the interest rate of large bonds to finance the LBO after the transaction was successful.The worse Reynolds got, the higher its interest rate. (Like buying an adjustable mortgage, the interest on it doubles when you lose your job.) There is no secret that KKR is doing this.Whatever the consequences for its investors, it stands to reap $74 million right now. Godfreud had the opportunity to imitate this "readjustment" approach, but he declined out of consideration for his own credibility.Because it will cost him more in the transaction.

After KKR made this decision, Buffett bought more Reynolds shares—a short-term spread (also to prevent the deal from falling through) that would quickly net Berkshire $64 million.Buffett has always been known to criticize this kind of practice, but this time he also suddenly intervened in other people's business, which seems a bit hypocritical.But he himself doesn't see it that way.Whenever an asking price is on the table, he does nothing but analyze risk and gain, profit or loss.He also made short spreads from Beatrice, Union, Kraft, Interco, Southern District, and a few others. Buffett is from Ben.Graham learned this method, but he is different from Wall Street arbitrageurs in that he has Graham's characteristics.His enthusiasm for involvement fades as the deal heats up.

A few years ago, at a Columbia University takeover seminar, he warned that bankers using such deceitful monetary policy would one day bring bids to a point of instability.After the $25 billion Reynolds deal closed, he decided that was no longer just a prophecy. Traders financed such LBOs with "zero-coupon bonds," ridiculous bonds that allowed buyers to borrow large sums of money and defer repayments for years.Given the ease of issuing such bonds and the blind confidence of investors, it is no surprise that trading prices skyrocketed.In Buffett's words: There has been a lot of excess in the takeover market.Dorothy said, "Jesus, I don't think we're in Kansas anymore."

This was written by Buffett in February 1992 as the Reynolds Tobacco deal was closing.He's made money out of it, and now he wants nothing more than to make the spread because he doesn't think it's a safe trade. Berkshire's profits were so good in 1988, you probably all thought we'd be doing big carry trades in 1989.But we want to sit on the sidelines. The stock market is also bullish.Buffett also does nothing but buy Coca-Cola one last time.But he needs somewhere to invest.The task becomes more difficult as Berkshire grows larger.As early as the establishment of Buffett Partners, he predicted that sooner or later he would be constrained by the law of averages - he said so, but he thought it was too early."High growth rates will eventually bind themselves," he warned shareholders. In order to continue hunting for possible opportunities resignedly, he had to invest his money.

This investment drive is dangerous.It is vividly called phobia syndrome - investors are "fearful of owning cash".Buffett admits he feels that way, and having cash everywhere "is a huge temptation." I admit, I have a craving as much as anyone else.A desire to do something, especially when there is nothing else to do. Like a sudden explosion, he made three big deals.It was the second half of 1989, and his deals with Gillette, American Airlines and the international champions totaled $1.3 billion.But overall, they don't meet his general standards.The investment in Gillette, the world's leading razor seller, is typical of Buffett's style, while the international champions of American Airlines and Paper Company are completely different from his past successful investments because they are capital-intensive enterprises. (While international champions bear similarities to his past failed investments, Buffett sees them as avoiding inflationary losses.)

In each case, Berkshire bought some convertible stock, as it did with Salomon Brothers. With the exception of Gillette, which has a brand name as famous as Coca-Cola, Buffett doesn't have much in mind for companies, which is why he chooses convertible stocks with fixed dividends.In fact, he says somberly: "If I could still buy 40 Coca-Cola-like companies, I wouldn't buy these." Once again, the danger of a takeover lurks behind these deals.Gillette is at Ronald.Bellowman's Tiger Watch was delayed; American Airlines was taken by Mike.Steinhard is in the palm of his hand; the international champion will also be in the limelight. "When you have competent management," Buffett said in The Washington Post, "you give them time to accomplish their goals." Now these companies use Buffett as a shield.In return, Buffett received an average fixed coupon of 9% and reserved the right to exchange for common stock (a kind of "lottery"). But Buffett's latest move is special.Like everyone else, he bought Cosmopolitan common stock, but in the most recent deal he negotiated for special risk protection just for him.Linda.In The Wall Street Journal, Sadler accused Buffett of making big money for Berkshire on the condition that other general manager jobs be guaranteed. Many investors on Wall Street say that Mr. Buffett's special deal is playing a gentleman's game of protection.Sol before.Corporate arbitrageurs like Steinberg took the "green notes" and left, but Mr. Buffett insisted on the clean "white notes" and held the management's hand tightly. This controversial special deal with managing directors deprives shareholders of the freedom to sell in the event of a takeover. The Forbes article says: Buffett got a special deal, and so did management...but look at it another way, Warren.How much did Buffett charge to avoid being taken over? Buffett certainly has no responsibility to the shareholders of Gillette, American Airlines, and International Champions.He just needs to do good business for Berkshire.Moralists are always held to stricter standards, and Buffett, suddenly on the defensive, seems anxious to protect his high ground.After this "clean blackmail" deal, he argued in a letter to shareholders: …shareholders of other investee companies benefit from our preferred stock purchases for several years.The proof is this: Every company now has major, stable and interested shareholders... The problem with that argument is that it assumes that every GM (or GM in Buffett's eyes) needs this protection and does justice to long-term conflicts of interest.But not every general manager is Tom.Murphy.Buffett himself argued at the Columbia Forum that this is as unreliable as the takeover itself, and that the ultimate decision rests with those with the "small paper tickets" (shareholders). The international championship is even more of a leftover situation.Its general manager Andrew.Siegler is a He is a fierce takeover opponent and a member of the BCC, a big business lobby group.He poured a lot of money from world champions into factory production and very little to shareholders.In the past 10 years, as a big stock in the market, Berkshire's annual growth rate is only a measly 3%. Even among the ranks of paper companies, its profit ranking is also ranked in the bottom tier. The only thing that can explain Siegler's poor record is Andrew.Siegler itself.In the bad year of 1989, Siegler paid himself $800,000 plus a $425,000 "incentive bonus."In addition, he rewarded himself with 31,000 optional shares when the share price of the international champion was very low.The following year, the international champion's profit was cut in half, but Schiller added his salary to $1.2 million, plus a bonus of $28,000, so that he would not have to pay consulting fees for personal adjustment taxes, and at the same time he did it again. Took 47,000 optional shares. Of course, Buffett strongly criticizes optional stocks, especially the award to the general manager who does nothing makes him disgusted.If someone is interested in taking over the international title, we see no reason for Buffett to object. The management of Gillette and American Airlines is another story.The US has a national system with centers in middle-market cities, but it still has to consolidate.Its strategy seems to require guaranteed time and a little "protection".Gillette is very simple, is to make money. Although Buffett's approach is to make more money in the public market than ordinary stockholders, business is not as good as his critics say.Berkshire will be locked into these stocks for the next 10 years, which is no date in the eyes of Wall Street.In fact, most managers will not agree with Buffett's "sweetheart" approach. But there is still an incomplete side to the deal.It smacks of insider trading—Buffett gets too close to a few guys on the corporate board.It may not be a coincidence that he paid $6.7 million for an airplane that year.In his annual report, Buffett spends a lot of time poking fun at himself about the benefit, (without mentioning his ridiculously low $100,000 annual salary.) If it grows at that rate, it won't be long before all of Berkshire's assets are spent on airplanes."He deftly says buying the plane is irrefutable, which means he spends more time out of town and with other good companies. By the late 1980s, the aging Warren.Buffett seems to know everyone.He flies away from home to attend a board meeting, watch the Super Bowl or go to a gala and bumps into Bao.Newman, Edward.Senator Kennedy.He played bridge with celebrity managers of corporate America, and one of those matches was with MPs at Old Battlesea, Malcolm.Forbes' home in London in the 17th century.If someone asks if he has any economic advice for the president?He might say he just had dinner with Bush last weekend. His wife insisted to her daughter that it was time to get him some "decent clothes".When Susie Sr. was in Omaha, she and her daughter dragged Warren to the mall and bought him a $1,500 Zegna suit. This set of Zegna, made in Italy, became his uniform as much as he needed Cherry Coke and an airplane. (But he turned down an offer from a salesman to get him made-to-measure. He preferred to stop by the Zegna store in New York and grab a few suits off the rack.) His new circle was astonishingly large.In Boston, he and John.Kenneth.Galbraith and Thomas, editor of Globe magazine.People like Windsor associate."Warren has so many friends," says Windsor, an interesting comment for someone looking for and holding stocks.Buffett has a gang in Washington and a gang in California.When Susie and he went to the Big Apple "the plan"—in the words of a friend—was to squeeze someone in. "They're different from other people," she said. Buffett's inner circle -- which includes Graham, Loomis, Murphy, Munger and Ryan -- is still the same as before.But his dick.Omaha friends like Holland find he's not what he used to be It's always there.Wayne.MacKenzie reckons his boss is out of Omaha one or two days a week. But Buffett is different in other ways.He flies from coast to coast like an albatross.He was with Dolly at the Oscar party.Parton dined together, then flew to Martha's Vineyard to join Nancy.Reagan and 60 Minutes correspondent Mike.People like Wallace attend Kay.A party at Graham's.Another time he took his wife straight at Walter.Annberg's Villa in Fountain Palms, California.It is like a strange flower in the desert, surrounded by tamarisk trees and bushes with different looks.sam.Walton came too. Buffett is very popular with them because he doesn't have the air of being rich or powerful.The way he talks as if he's at home reminds people of the 30s. (Though the catchphrase is now "I'm holding the line!" instead of "I'm on the phone.") Buffett was a guest of Murphy and ABC at the 1988 Winter Olympics in Carrari, but he dodged the invitation. His invitation to lunch by the clear shores of Lake Louise, hiding in the city alone for work. ABC soap opera writer Agnes.Nixon met Buffett in Carary, and she thought he was "the new incarnation of Will Rogers." She asked him to come to New York to be a cameo on a daytime soap opera.After the taping was over, Nixon and the rest of the ABC crew went to dinner at Bravo Gianni, a northern Italian restaurant on the east side of town.When they first set off, Nixon spotted another billionaire, John.Kruger was also excited.Kruger got into a waiting limousine, and Buffett stepped off the sidewalk and hailed a taxi. Buffett likes to present himself as a country bumpkin into the upper class.There are many stories about his feigned ignorance.One of them was when he sat Henry at a party.Claves' wife, the stylish Caroline.Beside Luo Yin.Royne said, "Can you cut the food for me?" Buffett didn't know if this was the latest way of showing affection in high society, which means "come on" at worst, so he ignored her all night.It wasn't until the waiter took away the barbecue she hadn't eaten that he was surprised to find that she had a plaster cast on her wrist. Buffett likes the image of simplicity.He doesn't like his current reputation.When he appeared on the TV show "Lifestyles of the Rich and Famous," he was so embarrassed that he hastened to tell others that the producers had edited the film together without letting him know.What actually happened was that he was officially interviewed with a microphone. In 1989, Buffett appeared in the news center in Omaha.The authority of Mrs. B, the rug seller, is taken away by her two grandsons, Ronald and Irwin, and the world of furniture falls into their hands. Mrs. B left the mall in a rage.She accused Buffett of betraying her and publicly called her two grandchildren "Hitlers." The scandal has drawn as much attention in Omaha as it has in other cities for Prince Charles and Princess Diana. Mrs. B accuses her grandson of being a worthless piece of shit who just flatters and spends his time "in meetings" while living like a "millionaire."She also sadly added: "It really hurts when you're useless." The 95-year-old lady is still full of energy.She stayed at home for only a few months before opening a new mall, "Mrs. B's Home," near Furniture World.They are now deadly opponents. "It really breaks my heart," exclaimed Mrs. B as she drove past a sea of ​​carpets in the mall one Sunday.Her current job is "purely revenge; when my mother became ill at 91, I took her home to take care of her as if I were the only child she had". Buffett is very worried about this. On Mrs. B's birthday, he brought two dozen red roses to reconcile with her.But in business, he still insisted on his choice.Reporting the unhappiness to shareholders, he praised Mrs B's son Louis and two grandchildren as "excellent businessmen". Maybe Mrs. B is smarter than all Americans in making business decisions, but I believe the rest of the family is absolutely right on this one.In the past 3 years, sales in other parts of the mall have increased by 24%, only carpet sales have declined. But people think that even if Buffett himself were in Mrs. B's place, he would have ended up like this, kicking and screaming.So Mrs. B still deserves to be respected to some extent.Not long after her failure, Buffett spoke sympathetically of her: She has not lost her strong character.But she treats 2 grandkids who work in the mall very badly, which I don't think is right. They are sometimes reluctant to work with the family.Believe me, they are all great lads, but they can't give their all like Mrs. B... She can't have a better family, it's a human tragedy.But what they want is a lighter home - and there's not much we can do about it. Mrs. B's departure didn't hurt Berkshire, which rose to $8,750 in September 1989.But it's strange that Buffett is always restless in a bull market situation.He was melancholy about the lack of opportunity, even about Berkshire. His reaction was not without reason.In his deals with Gillette, American Airlines, and others, he sold bonds convertible into Berkshire stock, scraping together $400 million.People who buy this bond can get a fixed income and the possibility of "winning the lottery" in Berkshire stock. Buffett's approach this time is sweeter than sugar. His interest rate is only 5.5%. The low interest rate means that investors believe that Berkshire will still appreciate. (They were playing the "lottery.") What's more, because it's a "zero-coupon" bond, Berkshire owes interest, but it doesn't actually pay it off until the bond matures 15 years from now.But by some strange quirk in the tax code, Berkshire can keep deducting interest rates as if it were actually paying. What's more, Berkshire can redeem these bonds within 3 years.So investors are betting not only that Berkshire's stock price will rise, but that it will rise soon.Buffett is betting just the opposite. Two weeks later, American's expected LBO failed.The spread earners suffered huge losses - and Buffett was out of the game months ago.The stock market fell 191 points in one day.The big bond market crashes; the takeover game is over.A few months later, Jack Se.Benman is dead.Wall Street's long love affair with bonds has come to an end. In the early 1990s, Wall Street was dull, and Berkshire's stock price remained below $8,000. In the annual report, Buffett confirmed his concerns.He predicts that Berkshire's network value will "almost certainly" decline within three years (the first time he has said that).He naively connects Berkshire's recent performance to Wall Street's currency crisis with a thread: many faltering LBOs, such as Bloomingdale's joint parent company, are also financed with zero-coupon bonds.Of course he had more than that on his mind.It's often good business that gets you in trouble on Wall Street.Smart people do it first, and "fools become followers last". This is the case with LBOs and zero-coupon bonds. His usual style in these kinds of essays is to write small, distant things first.He invites readers to "go back to the time of Adam, before Adam even bit an apple". If you are around my age and bought your first zero-coupon bond during World War II, it was the famously most issued SeriesE US Savings Bond in history. Nobody calls it zero coupon, but that's the case with series securities.The total interest is then paid when due. People who buy serial securities are not fools.Because the Treasury has a solid reputation, buyers can sleep peacefully with their money growing steadily at a rate of 2.9% a year. In the 80s, investment banks invented a zero coupon for big lenders.These lenders were AAA credit-rated like Berkshire, and it didn't take long for the bankers to figure out that the zero-coupon bonds, as well as the nearly paid-off final (PIK) bonds, could be used to finance the LBO.The reasoning is clear: Bidders want to borrow all the money at once, since they can go years without paying it off.Buffett's explanation immediately exposes the game of peek-a-boo: For these issuers, zero-coupon bonds (or lump sum bonds) have a huge benefit: You don't break your promise to pay nothing.If the governments of less developed countries like Mexico and Brazil issued long-term zero-coupon bonds instead of borrowing in the 1970s, they are now clean borrowers. Buffett advises investors to give bankers a taste of their own medicine. He believes that everyone in the United States knows that Wall Street is trading with ridiculous money. We recommend that you lock your wallet, let the issuer and those who follow the money pay for the zero coupon fee, and prevent them from getting it until they are fully paid.See how interested they are. While these articles are broadly instructive, they do not reveal Buffett's strategy.He's a real secrecy expert. Buffett was slamming big bonds in the newspapers, but he himself made one of the biggest deals ever — buying Reynolds securities for $440 million.Reynolds Tobacco Co.'s big bonds fell sharply, along with other issuers.Buffett thinks the market has gone too far because reliable cash flow is like a nicotine addiction.But he bought a large amount of bonds again, which seems a bit duplicity.Actually not.Buffett felt that it was a moral crisis to sell a large amount of bonds that could not be accepted. But buying bonds is different.No financial instrument is "evil in itself" to investors, only the price matters. When the news of the purchase became public, Benjamin, the son of Buffett's mentor and Berkshire shareholder.Graham signed a protest against Berkshire's investment in the tobacco industry.Buffett said he wouldn't make cigarettes, but he's justifiably holding tobacco stocks because there are cigarette ads in newspapers. "I'm not sure it's logically rigorous," he admits.But he thinks it's still a good way to draw a line in this complicated world. After Iraq invaded and occupied Kuwait in August 1990, the "shaky credit" snowballed backwards.A new decade doesn't herald a new era, but this time is different. In the late 1980s, everyone was in high spirits, but Buffett was unusually cautious.In the 1990s, Wall Street was in a panic again. Those who lent money wanted to get their money back, and companies that could have borrowed millions also found their windows tightly closed. Businesses are closing down, and large bond defaults are frequent, (as Buffett predicted at Columbia University in 1985 as "the big hit.") Fred is full of large bonds.Carl's insurance company became the largest insurance company to fail in history.And major banks, which have just recovered from the foreign debt crisis, find themselves having to face many domestic fatal blows, such as LBO and commercial real estate.Bank failures spread like an epidemic from Texas to Florida, New England, and the mid-Atlantic states.Distraught people gather at investment seminars to discuss Citibank or Chase.Will Manhattan Bank fail. But Buffett thinks -- he's always with Fred.Carl is in reverse—this is a great time to take a risk.Berkshire stock has fallen like the others, (the low that year was $5,500, down nearly 44% from the high.) But Buffett is always on top of the situation.If the price is too high, he will become a money phobia; but when the world looks dark, he has a deadly instinct. In 1990, the worst year in the banking industry since the Great Depression (the Great Depression from 1929 to 1933), Buffett bought 10% of the shares of Wells Fargo, a giant in the San Francisco banking industry.The real estate industry in California began to decline, and the banks had to suffer, and the pain was widely believed to be long and deep. And Wells Fargo happens to be the bank that lends the most to the California real estate industry in the country. Buffett certainly knows this.In general, Buffett dislikes banks because outsiders don't know how loans are being utilized until it's often too late.But he persisted in this bank for several years.Wells Fargo had many privileges in California, and its profits were among the first among the major banks in the country.Its director Carl.Richard is also like Tom.Murphy is also good at cutting costs.In past troubled times, Richard sold the company's planes -- a sacrifice Buffett appreciates -- and froze the salaries of senior leaders.He has steered clear of many fads, such as lending to Latin America, which have caused huge losses for other banks.Buffett also knows that Richard and the bank's second-in-command Paul.Hansen clung to real estate loans in the 1970s and survived the real estate crash of the time. These developments don't mean Wells Fargo's prospects are rosy for the next year or two.But Buffett is thinking far beyond the next year or two.The bank is well-funded, and it should be able to weather this storm. A bad year "doesn't torture us," Buffett said in the report. With other companies suffering, Buffett was able to buy $290 million in stock at an average tear-off sale price of $58.Its most recent price was $84, and Buffett made a $500 million profit on it. Not long after Buffett invested, Wells Fargo's various securities began to sink. WSJ writes it off; Morgan.Stanley's chief strategist, Patton.Biggs also said he doesn't see Wells Fargo surviving, and Buffett's fate will be the same. In the spring of 1991, Wells Fargo set a high floor price to prevent loan defaults, and its stock profit fell to 21 cents a share; it was $4.40 a year earlier.Buffett responded calmly.In fact he asked for legal support to double his investment. Back then Wells Fargo became a short-term trader's darling.Its real estate loans amount to $15 billion, 2.5 times that of its neighbor Bank of America, and half of them are in Southern California, the most credit-worsened area in the United States.In Los Angeles, where a booming economy has taken a turn for the worse, developers have scrambled to complete skyscrapers that are now out of lease.In Orange County, 22 percent of offices are vacant.Describing the bear market in Wells Fargo, Barron sneered that "Warren Buffett, the smart guy in Omaha," couldn't escape either. Even some of Buffett's associates considered the Wells Fargo betting a betrayal.Scott, a financial manager of the Graham and Dodd type."It makes me uneasy that Buffett made a mistake," Black said, as if it was in the Bible.Anyone who shuddered at the excessive speculative borrowing of the 80s will be delighted to see that the wicked get what they deserve—the ones who lend money to real estate are the evil ones. Buffett is also opposed to big speculation in borrowing, but his calculations have the upper hand over emotional factors.He is happy to buy banks at a certain price, even big stocks.At the worst possible time, a friend in Manhattan called to "warn" Wells that Wells could be hit with a large fine.Buffett said calmly: "You will know who is right and who is wrong." To Buffett's displeasure, the depression ended too quickly.When the US went to war in Iraq in early 1991, the stock market rallied.The war only lasted 6 weeks, but the stock market revival was more than that.Road to July.Jones broke through 3000 points.More cash in hand and fewer investment opportunities made Buffett feel fear of money again.James, chairman of the American Express Company. He listened very carefully when D. Robinson called him. Robinson, from an Atlanta banking family, is a humble Coca-Cola director and a close friend of Buffett's.He is a permanent member of the 13 directors, and he chooses his words carefully, like a statesman.Buffett liked Robinson personally, but didn't know much about him as general manager of Amtrak. Judging from the company's price cards and traveler's checks, its operation is very successful.For nearly 10 years, their profits have been as high as 18% per year.But Robinson shareholders never saw that 18%. Robinson lost the profits of this good industry to bad industries, such as insurance, banking, acting as a broker, and even an art gallery specializing in the collection of 19th-century American oil paintings.Eager to keep up with the "financial supermarket" boom of the 1980s, Robinson spent $4 billion betting on Shearson Bank.But his oversight was sloppy (Hirson "invested" $26 million in to the "Convention Center" in the ski resort of Colorado), investment banks had to repeatedly move positions to solve difficulties.To make matters worse, Amtrak has a habit of not acting on bad news until it becomes fact. Robinson has managed to escape blame for these failures, partly because of his busy social relations department and partly because his board is filled with money-captured directors.Among them, Henry.Kissinger can get an imaginary management supervision consulting fee of 350,000 a year. Despite Robinson's good publicity, it's impossible for Buffett to be unaware of Robinson's record. In 1985, Buffett participated in a board meeting of Amtrak when the company was considering selling the fire fund insurance policy to a group Buffett belonged to.Buffett made a suggestion: the company should sell the fire fund and concentrate on its own good business.Soon GEICO bought a large amount of stock in the American Express Company, and Buffett called and asked GEICO to talk about his purpose.While Buffett didn't spell it out, in his report he lamented Robinson's rough track record of operating missteps. When Robinson called this time, all was forgotten.Buffett was apparently obsessed with an idea: His 25-year-old investment in American Transit, the first gushing well he's drilled in his career, reports New York's Indifinse Magazine.Now the company is in trouble again. Its credit was downgraded just a few weeks ago.When Robinson asked for $300 million in funding, Buffett quickly agreed. 这次巴菲特说，市场升到这个地步，他正在找他喜欢干的事，而美国捷运的基本业务正是他喜欢的。这仍不能解释他“我们购买是为了与吉姆（罗宾逊）在一起”的话。他的朋友们目瞪口呆。他甚至同意了——虽然有些勉强——一种会限制伯克希尔未来发展的方式。美国捷运的一位董事杰克。拜恩对《商业周刊》说，他原以为巴菲特的“聪明基因”会阻止他这么干的。 在与巴菲特当面交谈之后，拜恩才知道巴菲特把上次对美国捷运的投资看作自己职业生涯中的里程牌，现在他急于参与公司复兴，巴菲特对他说：“我这是又要回家了。”当然他已回到了GE-ICO和《华盛顿邮报》。他喜欢这些旧鞋子，就像喜欢投资于儿时分送过的软饮料一样。重新进行这种商业冒险使他回到了年轻时的美好时光。 芒格也认为他的伙伴的职业中充满了“奇妙的巧合”。“沃伦很怀旧。” he admitted.但他不愿进行进一步讨论，只说：“我可不想做心理动机的分析。” 到1991年8月，巴菲特证券组合中的许多新成员遇上了麻烦。韦尔斯法 戈处在灾难的边缘。美国捷运遇到的麻烦则是：各大饭店叛变，持卡人数持续减少和利润锐减。 在饱受批判的“白钱”交易中，吉列脱颖而出，它被伯克希尔转成了普通股票。吉列的其他持有人情况也不错，因为现在的股价已是贝罗曼开价时的两倍。共同基金经理和吉列公司股东彼得。林奇说：“与巴菲特做生意人人有利。” 但巴菲特与国际冠军的生意可得不到同样的评价。它的利润下降了85％，但伯克希尔却不受其害，因为它的红利是固定的。同时总经理西格勒又以远低于公司账面值的价格赏了自己25万多股的选择权。 美国航空的情况最糟。几乎就在巴菲特投资的同时，一场乘客大战已经爆发。当波斯湾战争爆发时，民航业垮了。美国航空当时的雇佣成本极高，在巴菲特投资后的一年内，它损失了4亿5400万美元，而且大出血不是很快就能止住的。 有一次，总裁萨斯。沙菲尔德给巴菲特打电话，对投资结果表示道歉。 “萨斯，希望你记住，”巴菲特反驳说，“是该我给你打电话而不是你给我打。之所以投资不好我只能怪自己，现在只有顺其自然了。” 巴菲特对自己的责怪更深刻得多。他本知道航空业的动态的——竞争激烈，固定成本高——但他还是投资了。因此公众对错误的焦点首当其冲地落到了巴菲特身上。带点威尔。罗杰斯的味道，他向股东们写道：“没人逼我；用网球术语说，我是'失误'了。”这显然是他最糟的一次投资，但具有讽刺意味的是，这对美国航空的其他股东来说是件好事，因为它给困难重重的航空公司注入了急需的资金。 虽然巴菲特的证券组合中有几处败笔，但它轻易地就被其他股票弥补了，比如说可口可乐、吉列和雷诺烟草公司大额债券，他很快就从中获得了约2亿美元的利润。伯克希尔的资产净值不顾巴菲特的预言继续上升；它的股价也迅速反弹，到8月时达到了8800美元。最好的是，他下属各公司的问题与他无关。他爱说他对生活“作了安排”，这样就不用干不喜欢干的事了。 1990年夏，此话成真了。他说他最担心的就是内布拉斯加和科罗拉多即将到来的比赛。 巴菲特对所谓“白钱”交易的辩护——即公司可以因“拥有大量的、稳定的和感兴趣的股东而获益”——也有待验证。也许这永远不成立，但矛盾渐渐消失了。就连常常遇到麻烦的所罗门兄弟公司那年的纪录也很可观。