Partners Summary and Analysis

Buffett began to stray from the strict teachings of Graham and looked at businesses beyond just those having under-valued stock. He decided that the quality of a company's business and its management bore analysis as well. Accordingly, he bought stock in a suit lining manufacturer that was doing poorly but which had assets and took a big risk on another company that was actually in trouble—American Express. American Express had been on the financial scene for some time already, and was transforming purchasing and traveling activities with its credit cards, traveler's checks and money orders. However, in 1963, the company had major problems. A small subsidiary, actually a warehouse, had been defrauded by Anthony DeAngelis, who sold it salad oil that was really mostly seawater. DeAngelis used the receipts for the salad oil to obtain loans and then declared bankruptcy...