Becoming Warren Buffett Page #5

"You're not going

to Harvard."

And so now I'm thinking,

"What do I tell my dad?

Oh, this is terrible."

And it turned out to be

the best thing

that ever happened to me.

Later that summer,

I was looking

through a catalog

and in the catalog, it had these

names of people that were teaching,

and one was Graham

and another was Dodd.

I had read this book

by the two of them,

so I wrote him a letter

in mid-August,

and I said,

"Dear Professor Dodd,"

I said, "I thought

you guys were dead."

"But, now that I found out

that you're alive

and teaching at Columbia,

I would really like to come."

And he admitted me.

So, you know what?

That... it just shows,

you never can tell.

Man:
Gentlemen,

Professor Graham.

Warren:

Ben was this incredible teacher.

I mean he... he was a natural,

and he drew us all in.

Are Wall Street professionals...

they more accurate in the shorter

term than the long term forecast?

Well, our studies indicate that you have

your choice between tossing coins...

and taking the consensus

of expert opinions,

and the results are just

about the same in each case.

Warren:

It was like learning baseball

from a fellow

who's batting .400.

It really... it shaped

my professional life.

There are two rules of

investing according to Warren,

and he learned this

from Ben Graham.

Rule number one,

never lose money.

Rule number two,

never forget rule number one.

Ben Graham basically coined

the term "value investing."

He believed

in careful scrutiny

of a company's

financial statements,

and that if you bought value,

it would eventually prove out.

A few years ago,

I went to Amazon,

and sure enough,

they had this manual there,

so while reliving my youth...

other guys were going to Amazon

and probably buying

old "Playboys" or something,

but I bought old

Moody's manuals instead,

and when I got out of school,

I started selling stocks,

I was 20 years old at the time,

looked about 16,

and acted about 12,

so I was not the most impressive

salesperson anybody ever met.

But what I would do was I went

through, page by page,

looking for possibly

undervalued stocks.

Peter Kunhardt:
Is this like going

through an old family album?

Better!

When I got out of business

school at Columbia,

I developed pretty decent

skills in terms of business,

but I hadn't really come to

terms with the world exactly.

Kunhardt:

What were you like around girls back then?

Bad. I was... I was sort of out of the

swing of things there for a while.

I went to my 60th reunion,

and there was a girl there.

I took her out one time to the

Uptown Theater in Washington,

and I asked her whether she

remembered what movie we saw,

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