Count another young man as fascinated when he read Benjamin Graham's 1949 book, “The Intelligent Investor.”
Not once, but five times so far, said Tarron Hecox. He graduated this month with a finance degree with highest distinction after three years at the University of Nebraska-Lincoln, is taking CPA exams this summer and plans to get his master's degree in accounting in December or in June 2013.
Warren Buffett was 19 when he read the book and cites it as a turning point in his understanding of investing.
Hecox, who just turned 22, started reading about Buffett when he was in high school. The two met recently when the Omaha Press Club honored Jeff Raikes, a former Nebraskan who is now CEO of the Bill & Melinda Gates Foundation.
Hecox heard about the event from a friend and came in hopes of meeting some interesting people. “My eyes just lit up when I realized he was there.” He managed a brief conversation with Buffett, who has pledged most of his fortune to the Gates Foundation.
“I told him I'd read the (Graham) book multiple times,” Hecox said. “He was really intrigued by that. He seemed to think my accounting background was a good idea.”
Hecox, a 2009 graduate of Cozad (Neb.) High School, said he picks up different things as he re-reads the Graham book. “The more you gain outside knowledge, you have a different perspective each time you read it.”
He might not have met Buffett, the chairman and CEO of Berkshire Hathaway Inc., if his dream of attending the U.S. Air Force Academy had come true. He was an inside linebacker on the football team when a collision ruined his knee, interrupting his plans to attend the service academy.
He had always pictured himself as a high-level athlete, so the injury changed his perspective.
“All of a sudden I just completely switched my entire outlook to gaining knowledge,” he said. He enrolled at UNL, resolving to graduate as soon as possible. His lowest grade, an A-, came when he mistyped a paper during a semester when he was taking 25 credit hours, about twice what's considered a full-time course load.
What's the hurry?
“I'm ready to get out there and start doing something with the knowledge and experience I've gained,” he said. “I've always wanted to be a part of big things. I would love to get into something in the investment side, not the accounting side. I'm just kind of using that as background.”
‘Runs in the family'
Warren isn't the only Buffett who likes newspapers.
His sister Bertie read the letter that Buffett sent last week to editors and publishers of Berkshire's growing list of newspapers, setting out his “hands off” principle on public policy issues and discussing the challenges and strengths of the business. He confessed to being a newspaper “addict,” reading five a day.
“HI Warren!” Bertie wrote. “I liked your letter very much.
“By the way, I think I qualify as a newspaper addict, too. I get five newspapers delivered to my house every day (except only three on Sundays as the other papers don't have Sunday editions). They are my local paper, The Monterey Herald, and The San Francisco Chronicle, The New York Times, The Wall Street Journal and The Financial Times. I enjoy them all!!”
Buffett commented: “It runs in the family.”
Peek inside a trade
Byron Trott was known as “Buffett's broker” during his days at Goldman Sachs Group because he carried out transactions for Berkshire Hathaway, such as the $5 billion that Berkshire invested in Goldman in September 2008.
Trott rarely, if ever, talks about those trades, but last week he was a witness in the insider trading trial of Rajat Gupta, a former Goldman director who is accused of leaking Buffett's investment plan to outsiders.
The testimony gives a rare peek into Buffett's secretive trading style and his relationship with Trott, who opened his own investment firm in 2009. Buffett is listed as a potential witness in the trial but is not expected to be called, the Wall Street Journal reported.
The Financial Post reported Trott told the New York jurors that Buffett's investment was “a major, major event to Goldman Sachs and to the markets. Five billion dollars was not easily found at that time” because of a nationwide credit crisis.
Goldman needed that much to “continue to exist,” Trott said. The Berkshire investment was “like getting the Good Housekeeping seal of approval.”
“Our entire foundation was built on confidential information, and it could never be breached,” Trott said, with pending transactions revealed on a “need-to-know basis.”
Trott asked Buffett twice about investing in Goldman. Buffett turned him down the first time, but the second proposal carried a 10 percent interest rate and other terms that Buffett liked. They reached a tentative agreement in a 20-minute phone call, and then Buffett told Trott not to call again until later in the afternoon.
“He told me he promised his grandkids to take them to Dairy Queen, and he was not to be interrupted,” Trott said.
When the deal was approved, Buffett asked Trott to inform Marc Hamburg, Berkshire's chief financial officer, who had been told only that Buffett had arranged “a deal.”
“Marc Hamburg didn't know the details until well after the close of the market,” Trott said.
A job for life?
Still no reaction from Buffett on Al Neuharth's online column saying Buffett should retire because of his age.
Buffett has “hangonitis,” wrote Neuharth, the founder of USA Today, who announced “well in advance” that he would retire at 65.
“Anyone running a major company — public or private — should pick a successor and train him or her before the time comes,” Neuharth wrote. Buffett and Berkshire's board have picked a successor and two backups but haven't named them publicly, and Buffett has said the three men could handle his job tomorrow if needed.
“At age 88, I'm still hanging around on the sidelines, doing this column and other things when asked,” Neuharth wrote. “But current bosses know I won't get in their way and we're all better off for it.”
In an online response, Berkshire shareholder Robert Miles, who has written books about Buffett, said, “Let him be. Berkshire Hathaway's management culture is like the U.S. Supreme Court — a job for life. Buffett is in a business where a few gray hairs help attract the best acquisitions.”
New at NetJets Europe
Berkshire's NetJets division plans to start an aircraft management business in Europe later this year.
Services will include crew recruitment and training, flight and crew planning, hangaring and maintenance. Owners also can raise extra revenue by letting NetJets use their aircraft for its fractional ownership business.
Eric Connor, CEO of NetJets Europe, added, “With the backing of Berkshire Hathaway, we can provide unparalleled financial security and scale for our customers.”
The Omaha World-Herald Co. is owned by Berkshire Hathaway Inc.
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