Warren Buffett on Business : Principles from the Sage of Omaha

Chapter 6

Acquisition of Nebraska Furniture Mart

“The Amazing Mrs. B”

 

Sell cheap and tell the truth.¹

—ROSE BLUMKIN

 

I’d rather wrestle grizzlies than compete with Mrs. B and her progeny.²

—WARREN BUFFETT

A Business Story Like No Other

Charlie Rose: In 1983 you purchased Nebraska Furniture Mart for $60 million. Tell me about her.

Warren Buffett: This is a woman who walked out of Russia, got on a peanut boat and landed in Seattle with a tag around her neck. She couldn’t speak a word of English. The Red Cross got her out of Fort Dodge, Iowa. That’s what the tag said. She couldn’t learn the language. She moved to Omaha because there were more Russian Jews there who she could talk with. Her oldest daughter started school. She came home and taught her words that she learned. She took 16 years to save $500 so she could start this company. Selling used clothing, she brought her siblings and her mother and father over at $50 a crack. In 1937, for $500, she went in business competing against people with all kinds of advantages in every way and she killed them.

Charlie Rose: How was she able to kill them?

Warren Buffett: She cared and she was smart. She knew her limitations of her knowledge and she was confident in the circle of her competence. She didn’t get outside of it and she took care of her customers. She sold cheap and it took her a long time but she built the largest home furnishing store in the country in a town like Omaha, a town of 700,000 people.

Charlie Rose: How did you ...