Buying a Business 57Donald 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 Postas a Metro re-
porter. Later, he spent ten months as a reporter for Newsweekat the Los
Angeles bureau. Graham returned to the Postin 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 Postis 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 Washington Post
stock since the original purchase in 1973. In 2004, the Class B stock was
selling for more than $900 a share, making it the second most expensive
stock on the New York Stock Exchange. Berkshire’s holdings are now
worth more than $1 billion, and Buffett’s original investment has in-
creased in value more than f iftyfold.^17
Wells Fargo & Company
In October 1990, Berkshire Hathaway announced it had purchased 5
million shares of Wells Fargo & Company at an average price of $57.88
per share, a total investment of $289 million. With this purchase, Berk-
shire became the largest shareholder of the bank, owning 10 percent of
the shares outstanding.
It was a controversial move. Earlier in the year, the share price
traded as high as $86, then dropped sharply as investors abandoned