Warren Buffett recalls that there were some people around Omaha who thought he was running a Ponzi scheme back in the late 1950s, when he was just starting out as a money manager.
In her New York Times bestseller Buffett biography The Snowball, Alice Schroeder writes that Buffett wanted absolute control over the money he managed and would "tell his partners nothing about how it was invested." They got only an annual summary of the partnership's performance.
Given that secretiveness, I'm not surprised some potential investors were suspicious at the time.
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In a post last week, (Warren Buffett: People Thought "I Was Doing Some Sort of Ponzi Scheme"), I noted that those who did trust Buffett got rich, while years later, those who trusted Bernard Madoff got burned.
Ultimately, I suggested, faith plays a major role as we humans struggle to distinguish reality from illusion.
Schroeder, however, says "knowing the difference between the Madoffs and Buffetts is more than 'a matter of faith.'"
Her publicist sent an email listing some "key differences" as outlined by Schroeder:
- Buffett used Peat, Marwick, a major firm, as his auditor
- Buffett stressed in writing to partners that he did not run his own broker-dealer, thus no conflict of interest nor opportunity for mischief
- Buffett spent a lot of time educating them about investing and what he was doing, treating them as real partners
AP
Patrick Stewart as Macbeth in the recent Chichester Festival Theatre production of the play, directed by Rupert Goold
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And in another email, reader Harry S. offered this alternate ending to last week's post. It's Duncan speaking in Shakespeare's Macbeth, Act 1, Scene 4.
There's no art
To find the mind's construction in the face:
He was a gentleman on whom I built
An absolute trust.-----------------
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