Warren Buffett Took Doctor's Orders

“Most assuredly, America’s best days lie ahead.”

—Warren Buffett

2014 Berkshire Hathaway Shareholder’s Letter

It seems like it’s the "all things Warren Buffett" time of year.

His annual shareholder’s letter is out (42-pages of peerless investment wisdom), the 2015 Forbes Billionaire’s List is out (Buffett comes in at #3 with a $72.7 billion net worth), and my daughter Lauren is going out to meet him in Nebraska this month (thanks to her membership in Fordham University’s Smart Woman Securities group).

Buffett’s Berkshire Hathaway company (a single share costs about $220,000) is celebrating its 50^th anniversary. All great things have a beginning (I’m real excited about my Lauren’s) and Buffett’s start was helped along by a young physician, Carol Angle, MD.

The Nebraska natives first met in 1957 when Dr. Angle (and her husband Bill, also a doctor) attended an investor class conducted by the 27-year-old Buffett. The 2 doctors, worried about their financial future, liked what they heard. The rest is history—very rich history.

Buffet, then a young husband and father, had recently struck out on his own after working for the legendary value investor, Benjamin Graham. The story goes that the Angles pledged $10,000 to Buffett’s investment partnership fund that very evening and urged all the 20 others in attendance to put in too. In those early days, Dr. Angle would invest $30,000 with Buffett, about half of her total savings.

“Warren had us calculate how money would grow, using a slide rule,” said Dr. Angle, as quoted by Forbes. “He brainwashed us to truly believe in our heart of hearts in the miracle of compound interest.”

As time went by, the Angles would tell many of their physician colleagues about Buffett and after a dinner meeting with 11 other doctors in 1960, they all anted up (each giving $10,000). I once read that Buffett was very grateful for the early investment support from the group of physicians. Many of them became massively wealthy just by holding on as he built up Berkshire Hathaway (its 50-year compounded annual gain is 19.4%).

The Angles also followed the Buffett modest lifestyle approach. According to Forbes, they didn’t use “their new wealth to finance jet-set living. Dr. Angle doesn’t fly first class; she wouldn’t dream of buying a Mercedes. ‘There isn’t that much to spend money on in Omaha, and if you do, you’re highly suspect,’ she said.”

Born in December 1927, Dr. Carol Angle graduated from Cornell Medical School. Now retired, she had a varied and distinguished medical career—friends called her “a waking library.” She chaired the pediatrics department at the University of Nebraska Medical Center for many years and was considered a top national toxicologist and expert on lead poisoning. Two of her children are doctors. Today, Dr. Angle is worth more than $300 million.

And further adding to the Buffet-Doctor link, it was through a physician that Buffet first learned about his future partner, Charlie Munger. During a 1957 meeting with Dr. Edward Davis and his wife (where the couple agreed to invest $100,000), Buffet heard about their childhood friend and Harvard-trained lawyer. Dr. Davis introduced the men 2 years later. Today, Buffett’s “right-hand man” is vice-chairman of Berkshire Hathaway and has a net worth of $1.3 billion.