Explore every episode of the podcast Becoming Berkshire

In 1967, Warren Buffett’s partnership returned 35.9%, yet he was finding it harder to put money to work. In this episode, I look at the go-go years on Wall Street, the new generation of money managers, and the changing market that had Buffett rethinking his goals. I also take a look at Berkshire’s struggling textile business and the decision that would begin to change the company’s future: buying National Indemnity.

In 1966, Warren Buffett, Charlie Munger, and Sandy Gottesman joined forces to purchase Hochschild-Kohn, a respected Baltimore department-store chain, for approximately $12 million.

In this episode, we explore the history of Hochschild-Kohn, its expansion from downtown Baltimore into the suburbs, and why the company initially appeared to be another classic Buffett bargain. We also examine the enormous changes reshaping American retail after World War II, including suburbanization, rising car ownership, the disappearance of streetcars, and the emergence of regional shopping malls.

Buffett and Munger believed they were purchasing a second-class department store at a third-class price. Instead, they acquired an aging retailer whose competitive position was being attacked from every direction. Just three years later, they sold the business.

Hochschild-Kohn became an important early lesson in the difference between buying a business simply because it appears cheap and buying a wonderful company with a durable competitive advantage.

In Episode 7, we travel back to 1966, when semiconductor stocks were booming, the Dow crossed 1,000 for the first time, and Buffett was struggling to find investments he could understand at attractive prices.

We explore the rise and fall of Fairchild Semiconductor, the go-go years of the 1960s, Buffett’s refusal to chase “fashionable” stocks, and why being right about the future of an industry does not mean knowing which company will win. We also look at Berkshire Hathaway’s struggling textile operations, its return to profitability, and the shrinking share count that helped increase book value per share.

In Episode 6, I revisit Warren Buffett’s 1965 partnership letter and the year he took control of Berkshire Hathaway.

What began as a cheap cigar-butt investment became personal after Seabury Stanton offered Buffett 12½ cents less per share than they had agreed upon. Buffett responded by buying more stock, taking control of the company, removing Stanton, and placing Ken Chace in charge.

I also explore Buffett’s evolving views on control, valuation, diversification, and his willingness to concentrate heavily in his best investment ideas.

It was one of the worst investments Buffett ever made, and the beginning of Berkshire Hathaway as we know it today.

In Episode 5 of Becoming Berkshire, we look at Warren Buffett’s 1964 Partnership Letter and Berkshire Hathaway’s 1964 annual report.

Buffett explains why so many smart investment firms fail to beat the market, why “a public opinion poll is no substitute for thought,” and why the goal is not to minimize taxes but to maximize after-tax compounding. We also look at Berkshire’s struggling textile business, Seabury Stanton’s share repurchases, and how Buffett was moving closer to control.

In Episode 4 of Becoming Berkshire, we are still in 1963.

This episode covers one of the strangest and most important investments in Warren Buffett’s early career: American Express and the salad oil scandal.

At the time, Buffett was still running Buffett Partnership Limited and was building his position in Berkshire Hathaway. American Express was caught in a major scandal involving fake soybean oil inventory, warehouse receipts, margin calls, failing brokers, and a fraudster named Anthony “Tino” DeAngelis.

The stock collapsed because investors feared the American Express name had been permanently damaged.

Buffett saw something different.

He looked past the scandal and focused on the core business. Customers were still using American Express cards. Traveler’s checks were still growing. Merchants were still accepting the brand.

The scandal was real, but the franchise was not broken.

This investment became a major turning point in Buffett’s evolution from Ben Graham style cigar butt investing toward buying great businesses with durable competitive advantages.

Most past episodes can be found in the Berkshire History playlist on YouTube.

In Episode 3 of Becoming Berkshire, we enter 1963, the year Buffett’s partnership letter and Berkshire Hathaway’s annual report start to feel like two parts of the same story.

Buffett was still running the Buffett Partnership, but Berkshire Hathaway was now in the picture.

The partnership letter shows Buffett’s investing playbook: generals, workouts, and controls. The annual report shows the struggling textile company he was buying.

One document shows the investor.

The other shows the problem.

This episode looks at the early Berkshire story before insurance, float, See’s Candies, GEICO, Apple, and the modern Berkshire Hathaway.

In 1962, Warren Buffett began buying shares of Berkshire Hathaway, a struggling New England textile mill selling far below book value.

On paper, it looked like a classic Ben Graham cigar butt: cheap, asset-heavy, and ignored. But the annual report showed a much harder reality — losses, mill closures, overproduction, falling prices, and constant capital needs.

This episode looks at Berkshire Hathaway’s 1962 annual report and the early mistake that eventually became the vehicle for one of the greatest compounding stories in history.

In this episode, we look at Warren Buffett’s 1962 partnership letter and the early framework behind his investing style.

Buffett was still deeply influenced by Ben Graham, but you can already see him evolving. He breaks down the partnership’s investments into generals, workouts, and controls, discusses the power of compounding, and explains why true conservatism comes from facts, reasoning, and price — not from simply owning blue-chip stocks.

This episode also covers Dempster Mill, one of Buffett’s key control investments, and how it helped teach him the power of capital allocation.