FOUR OF THE MANY: WARREN EDWARD “THE ORACLE” BUFFETT AND THE BANK OF AMERICA
Warren Edward “the oracle” Buffett (1930-present) is an American business magnate (from the Latin
word, magnas, meaning “a great man”), investor, and philanthropist. He is the primary shareholder,
chairperson, and CEO of Berkshire Hathaway. He is consistently ranked as one of the “world’s
wealthiest people” with a reported, net worth of 50 billion dollars for 2011.
(Berkshire Hathaway, Inc. [BHI] is an American conglomerate, holding company which was founded in
1839 [as the Valley Falls Company].
[A “conglomerate” is a large company that consists of “diverse divisions that produce and sell unrelated
goods and/or services.” Typically, “conglomerate” companies tend to be large, “multinational”
organizations.]
In the case of “the oracle”, his source of investment monies was the “float” [It is the available funds that
an insurance company has “on hand” which is not held in reserve for projected liabilities.] of his
property and casualty, insurance company. In the beginning, “the oracle” focused upon long-term
investments in “publically quoted stocks.” But, and more recently, he has “turned to buying whole
companies.”
Currently, BHI owns a “diverse range of businesses including confectionary, retail, railroad, home
furnishings, encyclopedias, manufactures of vacuum cleaners, jewelry sales; newspaper publishing;
manufacture and distribution of uniforms; as well as several regional electric and gas utilities.”
BHI has averaged an annual growth [in book value] of 20.3% to its shareholders for the last 44 years: its
stock has produced a total return of 76% from the years 2000 through 2010. [The average return for the
S&P 500, in comparison and for the same timeframe, was a -11.3%: a difference of 31.6%.
BHI is the eighth largest, publically, traded company in the world as of 2011. Charles Thomas Munger is
the “vice chairperson” of BHI as well as “the oracle’s” longtime friend and “partner.” “Charlie’s” net
worth is, approximately, 2 billion dollars (as of 2011). As of January of 2010, he was 96 years old.
The company is headquartered in Omaha, Nebraska. It has over 260,519 employees. And, its total
assets are over 372.2 billion dollars [as of 2010].)
The “Sage of Omaha” is considered as one of the most successful investors in the world. He adheres to
the philosophy of Graham-Dodd’s “value investing” (This method of investing involves buying securities
whose shares appear undervalued by some form of “fundamental analysis.” That is, the essence of this
approach to investing is buying stocks at “less than their intrinsic value” (Security Analysis, 1934).
A number of investors “watch and follow” the patterns of the “oracle’s” investments: he is the most
“influential” and most “imitated” investor in the world.
The “oracle” is one of the American few, but he refuses to define himself as such. Rather, his word view
(of himself) is that of a philanthropist. He has pledged to “give away” 99% of his “acquired wealth” to
philanthropic causes (primarily, through the Gates Foundation).
(Etymologically, “philanthropy”, is the combination of two Greek words meaning “the love of humanity.”
In “modern terms”, it is private initiatives for the public good which focuses upon improving the quality
of life of others who are less fortunate. This formulation would distinguish, philanthropy, from business
initiatives for the private good [focusing upon material prosperity] and from government initiatives for
the public good [focusing upon law and order].)
The “oracle” was born in Omaha on August 30, 1930. He was the second of three children. His father,
the “oligarchic” Howard Homan “to hell with the New Deal” Buffett (1903-1964), was an Omaha
businessperson, investor, and four-term, Republican U. S. Representative from Nebraska.
(The Buffetts religious ancestry is French protestant: the Huguenots. The Huguenots were driven from
France, approximately 200 thousand people, due to severe, religious persecutions. Some of them
immigrated to North America: their church was called the Protestant Reformed Church of France, and
they were inspired by the writings of John Calvin [1509-1564].)
The “oracle” displayed an interest “in making and saving money” even as a child. At the age of 11 yearsold, he bought three shares of Cities Services Preferred for himself and three shares of the same for his
sister. By the time he graduated from college (University of Nebraska: B. S. in Business Administration),
he had accumulated over $90,000.00 (in 2009 dollars).
The “oracle” received his M. S. degree in 1951 from the Columbia Business School (CBS) of New York
City. He chose this graduate school for study because Benjamin Graham and David Dodd were part of
CBC’s faculty.
The “oracle” married Susan Thompson in 1952. They had three children together: Susie, Howard, and
Peter. The couple “separated” in 1977. Susan passed away in July of 2004. The “oracle” re-married in
2006 to Ms. Astrid Menks, his longtime-companion: they have been living together since his
“separation” in 1977.
The “oracle” is passionate about the card game of “bridge” which he learned from Sharon Osberg.
Along with Sharon, he plays “bridge” with his friend Bill Gates. He is an avid Nebraska football fan.
Finally, he is a strong, political supporter of the “oligarchic” politician, President Barack Hussein Obama
II (2009-present).
It was announced in August of 2011 that “the oracle” would be taking a 5 billion dollar stake (at 6%) in
Bank of America in exchange for preferred stock plus “warrants” to purchase additional shares (several
million): “the oracle” is a really, really “wise” investor.
(The Bank of America Corporation [BAC] is an American, multinational banking and financial services
corporation. It is the largest, bank holding company in the United States [by assets], and it is the second
largest bank [by capitalization].
The BAC offers banking and financial services. Its products are “credit cards, consumer banking,
corporate banking, finance, insurance, investment banking, mortgage loans, private banking, private
equity, and wealth management.” Its total assets are 2.3 trillion dollars [2010]. It has over 288
thousand employees. And, it is headquartered in Charlotte, North Carolina.
Charles “Chad” O. Holliday Jr. is the current Chairperson, and Brian Thomas Moynihan is the current
President and CEO.)
The BAC was founded on October 17, 1904 in San Francisco, California (as the Bank of Italy) by Amadeo
Pietro “A. P.” Giannini (1870-1949). Across the street from the Columbus Savings & Loan, the Bank of
Italy’s mission was to lend funds to working immigrates (which other “banks” would not serve). His
basis for loaning money was the “perceived” character of the potential customer rather than their “net
worth.” It was a bank for the “little follows.”
Within a year, the bank’s deposits exceeded 700 thousand dollars.
Then, at 5:12 AM on Wednesday, April 18, 1906, a large earthquake struck San Francisco and the
Northern Coast of California (Mw: 7.9). The death toll from the earthquake (and resulting fires) was
estimated at 3,000 human beings.
In the face of this catastrophe, “A. P.” moved his vault deposits to his home in San Mateo, California
(outside of the fire zone). He “set up” a temporary bank: collecting deposits, making loans (based upon
a handshake), and proclaiming that San Francisco would “rise again.” The large, “oligarchic” banks “shut
down”: they claimed that could not “due business” because of their “over heated vaults.” The story
that they offered to their customers was that the “contents of the vaults would burn if they were open
them too soon”: apparently, “oligarchs” would believe anything.
By 1928, “A. P.” had over 500, bank branches throughout California. He believed in a branch banking
system because he felt that such a system would be more stable in “difficult times” (as well as a way of
expanding his capital base). Also, in the same year, he approached Orra E. Monnette, president and
chairperson of Bank of America of Los Angeles, about a “merge agreement.”
Upon finalizing their agreement, “A. P.” and Orra, agreed to a “new” name for their bank, the “Bank of
America.” They felt that the “new” name “better described the mission of the resultant institution.”
The BAC continued under “A. P.’s” leadership until his retirement in 1945. He was 75 years-old.
“A. P.” died on June 3, 1949. He is buried at Holy Cross Cemetery in Colma, California. He was the son
of Italian immigrant parents (from Favale di Malvaro, neat Genoa, Liguria in Northern Italy). He was a
very great American, and he was a supportive friend to the American many.
Some say that the “secret” of Giannini’s success was his creative abilities. After all, he did invent a
number of “modern”, banking practices, and he did create the “holding company” structure for financial
institutions (as well as establishing one of the first, modern, trans-national institutions). Others say that
it was his ability to know “to whom to finance”: for example, Walt Disney, Henry Kaiser, Fiat, and
William Hewlett (and David Packard). And, still others say that it was his ability to create holding
companies such as Transamerica Corporation which was the holding company for Occidental Life
Insurance Company and other various interests.
The truth is that “it was some of these things and it was none of these things.” The “genius” behind his
success was that he was “one of the many” who serviced “the many.” Prior to Giannini’s Bank of Italy,
financial institutions lent funds to the “upper class”, not to the “middle class.” Those “little fellows”
were not worthy of their financial services.
Giannini was wise enough to stay close to his middle class values: hard work, supportive of the
American social and American political systems, and always, always taking opportunities to help the
helpless and/or disenfranchised.
In summary, while Warren Edward Buffett is a great person, Amadeo Pietro Giannini was a much greater
one: the “oracle” practices philanthropy, but “A. P.” lived it. And, “A. P.” would never have financed or
have invested in a corporation which routinely commits criminal fraud.
Since 1945, BAC (along with a number of other American financial institutions) has really, really lost its
way: it has become a criminal enterprise which feeds on the existence of the American many. To invest
in such a company like BAC, is “ethically and morally” wrong.
The “oracle” should be ashamed: good behavior towards others is the only path to the Christian
heaven. But, he (and some of the other “oligarchs” like Bill Gates) thinks that he can buy his way into
the presence of God.
“A. P.’s” way to salvation was to give loans to people in the aftermath of an earthquake: within the
presence of the “pain and the suffering” of the San Francisco many. Or, to go to Italy after World War II
(1939-1945) in order to see what he could to help the victims of the Italian monster Benito Amilcare
Andrea Mussolini (1883-1945).
Post Script:
Rick “the veto” Perry will be “campaigning” as Texas continues to burn!
A few years ago, this “Nero” (AD37-AD68) cut the Texas, volunteer, fire fighter budget by 75% in order
to “funnel” more funds to his corporate masters.
At this point in time, four Texans are dead, and a thousand homes have burned because of Perry’s
“limitless” greed. And, this criminal, egocentric, uncaring, radical, conservative Christian thinks that he
can be elected the President of the United States?
Perry’s arrogance and stupidity have no “bounds.”
Thankfully, the American many will always “outnumber” the American few. The American many must
remember the level of Perry’s historic ignorance: he is the politician who thinks that the great Galileo
Galilei (1554-1642), the “father of modern observational astronomy”, was “out veoted” by other
scientists of his time.
(Galileo’s observations were empirically supporting the scientific “views” of Nicolaus Copernicus [14731543], the great, Polish, Renaissance astronomer. Copernicus’ theory was designated as the
heliocentric, cosmological view of the universe because it, erroneously, postulated that the earth’s sun
was the “center of the ‘known’ universe.” In truth, Galileo was “out veoted” by exclusive, Christian
“thinkers” like “the veto”: in Galileo’s case, it was by the fundamentalist, Roman Catholic Church [who
believed that the earth was the “center” of the “known” universe].)
Relative to the process of science, they were all incorrect: the earth and/or the earth’s sun were not the
“center” of anything. Science is not a process of truth. It is a process of continuously seeking “the
possibilities of order and consistency” in human reality.
In addition, “the veto” does believe that he is the center of God’s creation: he is a self-proclaimed
“prophet” of his Christian God.
Fanatics like Perry belong in a “place” for dangerous entities. And, his cage should be marked: “a
danger to mankind”: Perry and his kind should be placed in the deepest, deepest part of their Christian
hell in order to keep humanity safe.
To hell with the “oligarchs” (BHI, BAC, and the Roman Catholic Church of Galileo) and their “familiars”
(the U. S. Congress, Rick “the veto” Perry, and the past and the present, “oligarchic”, U. S. presidents),
Fromoneofthemany