Warren Watch: Buffett cousin preserves homestead history

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Posted: Sunday, February 16, 2014 12:00 am

Books upon books have been written about Warren Buffett's family, but here's one about the maternal side of another Buffett's family, namely Warren's cousin Bill.

William Norris Buffett put together a 272-page coffee table-size collection of photos, letters, remembrances and history of his mother's family, pioneers during the state's land-rush days.

Katherine A. Norris married Omaha grocer Frederick W. Buffett, Warren's uncle, in 1929. The book is mostly about the people connected to the family farm along the Republican River in south-central Nebraska, where she was born and close to where author Willa Cather grew up.

The farm, homesteaded by her grandfather, Daniel Gibbon Norris of Kentucky, in 1871, remained a family touchstone for 140 years.

Photos from the Durham Museum in Omaha, the Nebraska State Historical Society, the Library of Congress and private collections, including Bill Buffett's, accompany the text.

The self-published book, titled “Grubbed Stumps — Fixed Fence — Pa To Town,” isn't for sale, but is intended for family, friends and some Nebraska libraries.

Although there was a George Norris in the family, his middle initial was “M,” not the “W” that the famous Nebraska senator carried.

Bill now lives in Massachusetts but professes strong attachments to Nebraska. “This book allowed me to get close to a cherished part of my past and I hope will give those who come after me a better sense of their roots.”

The farm, devastated by a tornado in 1993, is still operating, purchased by another family in 2010.

He also wrote a book about the Buffett grocery store in Omaha called “Foods You Will Enjoy: The Story of Buffett's Store.”

You'd hardly expect Buffett to show up in one of those “Dummies” books, but there are 16 references to him in “Investment Banking for Dummies” (John Wiley & Sons, 370 pages, $26.99) by Creighton University finance professor Robert Johnson and USA Today finance writer Matthew Krantz.

The book cites Buffett's financial backing of investment bank Goldman Sachs, the criteria for acquisitions by Buffett's Berkshire Hathaway Inc. and his view of bond investments at a time of low interest rates (he doesn't like them).

One chapter on determining the financial strength of a company lists the annual return on equity, or ROE, for Coca-Cola, Berkshire's biggest long-time investment.

Return on equity is a percentage calculated by dividing the annual profit of a company by the value of the shareholders' combined stock. A 10 percent return is considered good.

Why does Buffett like Coke? “Dummies” lists Coke's annual ROE since 2003 to answer that question: 30.8, 30.3, 29.6, 30.8, 27.5, 28.4, 27.5, 37.8, 27.1 and 27.4.

That's an average of 29.72 percent, a huge number for a company with shareholder equity approaching $170 billion.

What's Berkshire's latest ROE? 9.71 percent, according to Yahoo Finance.

Berkshire's stock price had outgained the rest of the market last year, peaking at $118.94 per share in July, but since then it has fallen back in line with the two biggest market indicators, the Dow Jones industrial average and the index of 500 Standard & Poor's stocks.

As low as $109.78 recently, the 5 percent stock market “correction” drew comment from Mitchell Tuchman at MarketWatch, who wrote that panic-mongering and fake shock have affected the market, stimulated by dire headlines from abroad.

He cited comments Buffett made to Fortune magazine in 2001:

“I'm going to buy hamburgers the rest of my life. When hamburgers go down in price, we sing the 'Hallelujah Chorus' in the Buffett household. When hamburgers go up in price, we weep.

“For most people, it's the same with everything in life they will be buying — except stocks. When stocks go down and you can get more for your money, people don't like them anymore.”

Tuchman said that a “serious, long-term retirement portfolio” should add to its holdings when prices are falling.

“To do otherwise is to put off buying your hamburger until prices are high again,” he wrote. “Buffett would just laugh, and then buy.”

Former Berkshire investment manager Louis Simpson plans to give his alma mater, Ohio Wesleyan University, $8 million toward creating a new fitness center, the Columbus Business Journal reported.

The donation by the 1958 graduate and his wife, Kimberly Querrey, will help transform the Pfeiffer Natatorium, a competitive swimming venue, into a 13,000-square-foot center with cardiovascular and fitness equipment, wellness education rooms and a dance studio with spectator seating.

Construction on the Simpson Querrey Fitness Center will begin in the fall.

Earlier, Simpson donated $2million to create an endowed professorship in economics, business and entrepreneurship at the college.

The Omaha World-Herald Co. is owned by Berkshire Hathaway.

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