202 AFTERWORD
All the while, I continued to collect Buffett data. Annual reports,
magazine articles, interviews—anything having to do with Warren
Buffett and Berkshire Hathaway, I read, analyzed, and f iled. I was like a
kid following a ballplayer. He was my hero, and each day I tried to
swing the bat like Warren.
As the years passed, I had a growing and powerful urge to become a
full-time portfolio manager. At the time, investment brokers were com-
pensated on their purchases and sales; it was largely a commission-based
system. As a broker, I was getting the “buy” part of the equation right,
but Buffett’s emphasis on holding stocks for the long-term made the
“sell” part of the equation more diff icult. Today, most f inancial service
businesses allow investment brokers and f inancial advisors to manage
money for their clients for a fee instead of a commission—if they choose.
Eventually I met several portfolio managers who were compensated for
performance regardless of whether they did a lot of buying or selling.
This arrangement appeared to me to be the perfect environment in
which to apply Buffett’s teachings.
Initially, I gained some portfolio management experience at a local
bank trust department in Philadelphia, and along the way obtained the
obligatory Chartered Financial Analyst designation. Later, I joined a
small investment counseling f irm where I managed client portfolios for a
fee. Our objective was to help our clients achieve a reasonable rate of re-
turn within an acceptable level of risk. Most had already achieved their
f inancial goals, and now they wanted to preserve their wealth. Because of
this, many of the portfolios in our f irm were balanced between stocks
and bonds.
It was here that I began to put my thoughts about Buffett down
on paper, to share with our clients the wisdom of his investment ap-
proach. After all, Buffett, who had been investing for forty years, had
built up a pretty nice nest egg; learning more about how he did it cer-
tainly couldn’t hurt. These collected writings ultimately became the
basis for The Warren Buffett Way.
The decision to start an equity mutual fund based on the principles
described in The Warren Buffett Way came from two directions.
First, our investment counseling f irm needed an instrument to manage
those accounts that were not large enough to warrant a separately man-
aged portfolio. Second, I wanted to establish a discretionary perfor-
mance record that was based on the teachings of the book. I wanted to