Warren Buffett Keeps Praising This Person Over and Over. The Reason Why Is Fascinating

Recently, I’ve been going back and reading all of Warren Buffett’s annual letters to shareholders.

It’s part of a project for my new ebook, Warren Buffett Predicts the Future (Preview Edition), which you can download here for free. Because I realized something obvious (in retrospect) that Buffett himself didn’t know when he wrote many of these letters.

In those pre-consumer Internet days, could he have expected how massive the audience for these would one day be? Certainly, he couldn’t have expected people to download them all at once, and read them start to finish.

(Some people binge-watch The Queen’s Gambit or old episodes of The Office during a pandemic; others read the entire 500,000-word text of Buffett’s letters.)

The fact that we can look at these letters now, in this way, provides some really fascinating insights. Here’s my favorite example so far. It starts in Buffett’s 1983 letter. 

On his birthday that year, Buffett met with an 89-year-old businesswoman named Rose Blumkin (known to all as ‘Mrs. B’), in order to acquire her company: $55 million for a 90 percent stake.

Buffett was effusive in his praise of Blumkin and her children and other family — both in the 1983 letter, and in the years that followed. 

They’d all grown up to work in the business, Nebraska Furniture Mart (NFM), which Mrs. B had started with just $500 in 1937. By the time Berkshire Hathaway bought NFM, it was generating $100 million a year in sales.

“I’d rather wrestle grizzlies than compete with Mrs. B and her progeny,” Buffett wrote in introducing her to shareholders.

The next year, Buffett revealed that he trusted her so completely that when he bought the company, he didn’t even audit the inventory or check the accounts receivable.

“We gave Mrs. B. a check for $55 million and she gave us her word,” Buffett wrote. “That made for an even exchange.”

She comes up, over and over — again, in letters that I don’t think Buffett would have expected people to read all at once, 30 or more years later. They’re instructive, but also quite funny when we can see how everything unfolded.

In 1985: “I am also happy to report that NFM’s chairman, Rose Blumkin (the legendary ‘Mrs. B’), continues at age 92 to set a pace at the store that none of us can keep up with.”

In 1987: “[T]oday NFM is far and away the largest home furnishings store in the country … Mrs. B continues to work seven days a week. … It’s clear to me that she’s gathering speed and may well reach her full potential in another five or ten years.  Therefore, I’ve persuaded the Board to scrap our mandatory retirement-at-100 policy.”

In 1989: “The Nebraska Furniture Mart had record sales and excellent earnings in 1989, but there was one sad note. Mrs. B … quit. … At age 96 she has started a new business selling — what else? — carpet and furniture. And as always, she works seven days a week.”

In 1992:   “At the end of last year, Mrs. B decided to sell her building and land to NFM. … I am delighted that Mrs. B has again linked up with us. … This time time around, Mrs. B graciously offered to sign a non-compete agreement — and I, having been incautious on this point when she was 89, snapped at the deal.”

Of course, Buffett sang Mrs. B’s praises in other places too. One random fun example that I found is this TV interview from sometime in the the late 1980s. (“If I could start a business, and I had first draft pick like in the NFL,” Buffett said, “I’d take Mrs. B. There aren’t any other Mrs. Bs.”)

Mrs. B continued to work, and to be lavished with Buffett’s praise, until shortly before her death in 1998, at age 104. 

Asked once to explain what secrets she and her family had that made them so successful, Buffett said there were four simple points:

First, they “apply themselves with [intense] enthusiasm and energy.”

Second: they “define with extraordinary realism their area of special competence and act decisively on all matters within it.”

Third: they “ignore even the most enticing propositions failing outside of that area of special competence.”

Finally: they “unfailingly behave in a high-grade manner with everyone they deal with.”

A final detail I noticed: On his birthday that day when Buffett met with Mrs. B to buy her company, he was 53. She was just about to turn 90, which is the age Buffett is now.

This means that by Mrs. B’s standards, Buffett should be running Berkshire well into the 2030s at least. But I have to ask: Has anyone thought to get him to sign a non-compete agreement?