More Praise for The Warren Buffett Way, First Edition

New Yorker.
Hearing that the magazine might be
for sale, he asked Katherine Graham whether the 
Washington Post
would be interested in purchasing it. Although the sale never materi-
alized, Buffett came away very much impressed with the publisher of
the 
Washington Post.
That same year, Katherine Graham decided to take the 
Washington
Post
public. Two classes of stock were created. Class A common stock
elected a majority of the board of directors, thus effectively controlling
the company. Class A stock was, and still is, held by the Graham family.
Class B stock elected a minority of the board of directors. In June 1971,
the 
Washington Post
issued 1,354,000 shares of class B stock. Remark-
ably, two days later, despite threats from the federal government, Kather-
ine Graham gave Ben Bradlee permission to publish the Pentagon Papers.

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5 6
T H E W A R R E N B U F F E T T W AY
For the next two years, while business at the paper was improving,
the mood on Wall Street was turning gloomy. In early 1973, the Dow
Jones Industrial Average began to slide. The 
Washington Post
share price
was slipping as well; by May, it was down 14 points to $23. That same
month, IBM stock declined over 69 points, gold broke through $100 an
ounce, the Federal Reserve boosted the discount rate to 6 percent, and
the Dow fell 18 points—its biggest loss in three years. And all the while,
Warren Buffett was quietly buying shares in the 
Washington Post
(see
Figure 4.3). By June, he had purchased 467,150 shares at an average
price of $22.75, worth $10,628,000.
Katherine Graham was initially unnerved at the idea of a nonfamily
member owning so much Post stock, even though the stock was non-
controlling. Buffett assured her that Berkshire’s purchase was for invest-
ment purposes only. To further reassure her, he offered to give her son
Don, slated to take over the company someday, a proxy to vote Berk-
shire’s shares. That clinched it. Katherine Graham responded by invit-
ing Buffett to join the board of directors in 1974 and soon made him
chairman of the f inance committee.
Katherine Graham died in July 2001, after a fall in which she sus-
tained severe head injuries. Warren Buffett was one of the ushers at her
funeral services at Washington’s National Cathedral.
Figure 4.3
The Washington Post Company price per share, 1972–1975.

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B u y i n g a B u s i n e s s
5 7
Donald E. Graham, son of Phil and Katherine, is chairman of
the board of the Washington Post Company. Don Graham graduated
magna cum laude from Harvard in 1966, having majored in English his-
tory and literature. After graduation, he served two years in the army.
Knowing that he would eventually lead the 
Washington Post,
Graham
decided to get better acquainted with the city. He took the unusual path
of joining the metropolitan police force of Washington, DC, and spent
fourteen months as a patrolman walking the beat in the ninth precinct.
In 1971, Graham went to work at the 
Washington Post
as a Metro re-
porter. Later, he spent ten months as a reporter for 
Newsweek
at the Los
Angeles bureau. Graham returned to the 
Post
in 1974 and became the
assistant managing sports editor. That year, he was added to the com-
pany’s board of directors.
Buffett’s role at the 
Washington Post
is widely documented. He
helped Katherine Graham persevere during the labor strikes of the
1970s, and he also tutored Don Graham in business, helping him un-
derstand the role of management and its responsibility to its owners.
“In f inance,” Don Graham says, “he’s the smartest guy I know. I don’t
know who is second.”
15
Looking at the story from the reverse side, it’s also clear that the 
Post
has played a major role for Buffett as well. Finance journalist Andrew
Kilpatrick, who has followed Buffett’s career for years, believes that the
Washington Post Company investment “locked up Buffett’s reputation
as a master investor.”
16
Berkshire has not sold any of its