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Portland Gas Co - Buffett's first board seat?


Dempster Diver
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Hi All,

 

I am the author of Warren Buffett's Ground Rules, which is a book about the pre-Berkshire partnership era.  This is my first post.   

 

First let me say a BIG THANK YOU to all who have contributed to this site - its a treasure trove. 

 

I recently had a chance to meet Mr. Buffett and brought a copy of the 1959 annual report for Sanborn Map, where he is listed as a member of the board of directors, which I asked him to sign (this was one of the earliest concentrated BPL investments).  I thought this was also the first board he sat on but when I asked him about it, he said that Portland Gas Co. was first.  There wasn't time to follow up from there ... 

 

Nothing in Lowenstein or Schroeder about Portland Gas ... anyone ever hear of Buffett's involvement in this company?       

 

Thanks!

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Hi Dempster Diver

 

This is the first I've heard of Portland Gas as well.  If you haven't already looked, I would recommend browsing the footnotes to Snowball.  The footnotes have fairly comprehensive information regarding BPL.  Another option, of course, would be to contact Alice Schroeder directly.

 

Would you mind sharing the Sanborn Map ARs you've found?  I've been trying to track down the Sanborn ARs (as well as some others - Reading, Investor's Diversified Services, Disney, Dempster, Crane, Eltra, Blue Chip) but haven't had much luck.  Thanks!

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Hi Dempster Diver

 

This is the first I've heard of Portland Gas as well.  If you haven't already looked, I would recommend browsing the footnotes to Snowball.  The footnotes have fairly comprehensive information regarding BPL.  Another option, of course, would be to contact Alice Schroeder directly.

I haven't heard of it either.

 

 

Would you mind sharing the Sanborn Map ARs you've found?  I've been trying to track down the Sanborn ARs (as well as some others - Reading, Investor's Diversified Services, Disney, Dempster, Crane, Eltra, Blue Chip) but haven't had much luck.  Thanks!

I'd like to see them too!

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Thanks for the comments.  I'll keep digging ...

 

Here are the Sanborn annual reports from `58, `59 and `61.  I was not able to find `60, but at least you can see the financials before WEB joined the board (`58), the year he was on the board (`59) and then what they looked like post the stock for securities swap (`61).

 

I was able to find these at the NY Public Library, working with a librarian.  They have a lot of pre EDGAR annual reports and all the Moody's manuals and are terrifically helpful - a great resource for those that are interested. 

 

With my best regards ...       

Sanborn58ann_report.pdf

Sanborn59ann_report.pdf

Sanborn61ann_report.pdf

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Nothing in Lowenstein or Schroeder about Portland Gas ... anyone ever hear of Buffett's involvement in this company?       

 

 

I did a little digging.  Portland Gas & Coke Company was spun out of American Power & Light Company in 1952.  They changed their name to Northwest Natural Gas in 1958 which is still in operation.

 

I couldn't find the specifics, but according to this page: csinvesting.org/wp-content/uploads/2012/09/stubs-final.doc there was some type of tax ruling related to the spinoff that allowed a cost basis of $69.87 per share to be applied to the shares even though the market was under $20.  Perhaps there was some type of tax special situation behind his involvement.

 

Perhaps due to the timing this was a Graham investment and he put Buffett on the board, although from his hands off approach that may be unlikely.

 

 

 

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I haven't read much on Graham specifically.  What I read on Buffett gave me an impression of Graham's strategy as making a great number of very small investments in a large variety of net-nets, and that he preferred not to talk to management as he felt it gave him an unfair advantage over smaller investors who didn't have that option.  I thought concentration and activism were areas Buffett differed from Graham, but I can't recall where I read that and it might be unfounded.

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I haven't read much on Graham specifically.  What I read on Buffett gave me an impression of Graham's strategy as making a great number of very small investments in a large variety of net-nets, and that he preferred not to talk to management as he felt it gave him an unfair advantage over smaller investors who didn't have that option.  I thought concentration and activism were areas Buffett differed from Graham, but I can't recall where I read that and it might be unfounded.

 

I don't really know. But I was surprised by how active Graham and Buffett were in their "cigar butt" investments:

http://www.businessinsider.com/benjamin-graham-was-the-first-shareholder-activist-2016-6

 

 

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