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Quote of the Day
“One question I always ask myself in appraising a business is how I would like, assuming I had ample capital and skilled personnel, to compete with it.
I’d rather wrestle grizzlies than compete with Mrs. B and her progeny. They buy brilliantly, they operate at expense ratios competitors don’t even dream about, and they then pass on to their customers much of the savings. It’s the ideal business – one built upon exceptional value to the customer that in turn translates into exceptional economics for its owners.”
-Warren Buffett in his 1983 Letter to Shareholders. Today marks the anniversary of Buffett’s purchase of Mrs. B’s Nebraska Furniture Mart in 1983 (See below).
August 30th – This Day in Stock Market History
August 30th, 1930 – Warren Buffett is born in Omaha, Nebraska.
The Dow Jones Industrial Average was at 237.79!
Many other have done better than I can ever do writing about Buffett’s life. Read our ‘Read of the Day’ section below for some of my favorite Buffett Biographies.
August 30th, 1983 – Warren Buffett’s Berkshire Hathaway purchases Nebraska Furniture Mart for $55,350,000.
Nebraska Furniture Mart was founded in 1937 by Russian immigrant Rose Blumkin with $500 – That means Mrs. B achieved a near 29% compound annual return during her rein of Nebraska Furniture Mart!
She began buying and selling furniture out of her garage at home and eventually moved into today’s iconic 200,000 square foot showroom. Buffett had the follow to say about Mrs. B in his 2013 shareholder letter:
“I think back to August 30, 1983 – my birthday – when I went to see Mrs. B (Rose Blumkin), carrying a 1 1⁄4-page purchase proposal for NFM that I had drafted. (It’s reproduced on pages 114 – 115.) Mrs. B accepted my offer without changing a word, and we completed the deal without the involvement of investment bankers or lawyers (an experience that can only be described as heavenly). Though the company’s financial statements were unaudited, I had no worries. Mrs. B simply told me what was what, and her word was good enough for me.”
Here is the agreement for Berkshire Hathaway’s purchase of Nebraska Furniture Mart, signed August 30th, 1983:
Best August 30th in Dow Jones Industrial Average History
1974 – Up 3.31%, 21.74 points.
Worst August 30th in Dow Jones Industrial Average History
2001 – Down 1.71%, 172.32 points.
Read of the Day
Buffett’s life can not be summed up in a single blog post, and I certainly won’t try to add much to the tale as there has been some truly remarkable works done on the life of Warren Buffett. There are 2 biographies that stand out for me:
Buffett also has much more to say about Nebraska Furniture Mart’s Mrs. B in his 1983 and 2013 shareholder letters – well worth a (re)read.
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