Berkshire Hathaway 2013 Annual Meeting Audience Question # 18

Berkshire haven’t bought anything from unwilling sellers

Warren Buffett:

OK. Station 6?

Audience Member:

Hi. My name is Andre from Beverly Hills, California.

During very key events, like the Sanborn incident, when you were buying See’s, or when you were buying Berkshire stocks, you persuaded people to sell you their shares when they really didn’t want to.

What were your three keys to influencing people in those specific situations?

Warren Buffett:

Yeah. I don’t think… you brought up Sanborn and you brought up See’s and— I don’t think…the See’s family, there had been a death in the See’s family— it was Larry See, wasn’t it, that died?

Charlie Munger:

Yeah.

Warren Buffett:

And he had been the instrumental, I guess, grandson of Mary See, and the operator, and there was a… the rest of the family really didn’t want to run the business.

So it was put up for sale, and I didn’t even hear about it until they’d had one other party… I don’t know even know who it was… but that they negotiated a deal with and that it didn’t go through.

Charlie probably remembers this better than I do. We certainly… the See family… and Charlie persuaded me to buy it. We didn’t persuade them to sell it. Charlie?

Charlie Munger:

Yeah. We didn’t buy anything from any unwilling sellers.

Warren Buffett:

No. And Berkshire, we started buying that in 1962 in the open market. It had quite a few shareholders. It was a… it traded fairly actively, and we bought a lot of stock, and we did buy a couple of key pieces.

We bought one from Otis Stanton, who was Seabury Stanton’s brother, but Otis wanted to sell.

It wasn’t the most attractive business in the world. I mean, here was a textile company that lost money in most of the previous years, and over a ten-year period, that had significant losses.

And it was a northern textile company.

So, we bought stock in the market, a lot of stock in the market. We had two big blocks from Otis Stanton and from some relatives of Malcolm Chace, but they were happy to sell.

I never met… at the time I bought the stock from Otis Stanton… I had never met him, and so I delivered no personal sales talk to him.

And the same thing is true of the Chase family, not Malcolm himself, but some relatives, they sold us a block of 100,000 shares. But we were not out convincing anybody to sell their stock.

So there’s been very little that I can remember where… we talked to Betty Peters about avoiding a transaction we thought was dumb, when Wesco was considering merging with

Financial Corp of Santa Barbara.

I flew out to see her in San Francisco. But she stayed with us. She did not sell her stock and remains a shareholder to this day, 30-plus years, almost 40 years later.

Charlie?

Charlie Munger:

Well, I’ve got nothing to add to that at all.

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