How Warren Buffett's Daughter-In-Law Learned His Investing Secrets

What does Warren Buffett talk about in the privacy of his own home? Investing, investing, investing. That’s what Mary Buffett, his former daughter-in-law who was married to son Peter Buffett, tells ThinkAdvisor in an interview.

Lucky for Mary that the senior Buffett discussed investing nonstop: She picked up a trove of information on his techniques and approach to the market — not only to render her a savvy value investor but to carve out a career based on what she learned.

A bestselling author, international speaker and entrepreneur, her newest book is “7 Secrets to Investing Like Warren Buffett,” a basic guide written with Sean Seah (Scribner – Oct. 22, 2019). The first of her eight other Buffett-based bestsellers, “Buffettology,” co-authored with David Clark, collaborator with her on seven others, was published in 1997, three years after she and Peter split.

In the interview, Mary, 67, discuses five chunks of investing advice from the Oracle of Omaha, including what to look for in a company, to never invest in an initial public offering and to shun companies that need research and development “to survive.”

She also examines why the chair and CEO of Berkshire Hathaway invested in Apple after years of avoiding tech stocks and why Wells Fargo remains one of his biggest holdings despite the bank’s scandals.

A former professional singer, Mary already was an experienced business executive — at Columbia Records and running Hugh Hefner’s music publishing companies — when she married into the Buffett family. During their 1980-1993 union, she and Peter owned a music company together.

After they divorced, Mary went on to become a consultant to Fortune 500 companies, launch the Sanford DeLand UK Buffettology fund (with David Clark) and found the Buffett Online School. She has also taught business and finance at UCLA and other California State Universities.

ThinkAdvisor recently interviewed Mary Buffett, speaking by phone from her Santa Monica, California, office. In addition to chatting about Warren Buffett’s investing habits, she revealed his munificent Christmas-giving habits during her marriage to his son.

Here are highlights of our conversation:

THINKADVISOR: When you were married to Peter, under what circumstances did you hear what his father Warren Buffet said about investing?

MARY BUFFETT: That’s all he talked about! A couple of times a year we’d go to Omaha, and he’d come home and get right on the phone, talking to either Mrs. [Katharine] Graham of the Washington Post or Stan Lipsey [publisher] of The Buffalo News [which Buffett bought in 1977]. He’d be on the phone when you were in the den with him. Or when there would be something [relative to investing] on television, he talked about it.

I see!

And when the family got together in Laguna over Christmastime, all the titans of industry would be there: We’d have lunches and dinners, and they’d all talk about companies. Investing was the only thing Warren ever talked about!

So you used to sit there and take it all in?

Yes, it became more and more interesting to me because Peter and I had a business — a music company. When I married him, the only thing I knew was that his father owned See’s Candies. I grew up in Beverly Hills, so all my friends’ fathers owned companies — Hamburger Hamlet, Serta Mattresses [etc.].So when we got married, I was like, great — free candy! Never knowing that there was no free candy with Warren.

What did you give him for Christmas?

The first year we were married, I realized, “Warren is very rich. Therefore, he doesn’t want anything.” I didn’t know what to get him, so I put together our music company’s balance sheet to show him that we were making money.

Did you want him to invest in it or buy it?

No, I just wanted to show him, “Look, we’re doing good.” By that time, I would go downstairs in the basement where Warren kept a lot of letters he’d written, which were very interesting to me — I got to know his psychological thinking.

What was the most important thing you learned?

The biggest part was watching his discipline and patience and not doing things quickly. He’d conduct research and understand the people who were running a company. All of that mattered so much to his success.

What did he give family members for Christmas?

He would always give each of us $10,000 in hundred-dollar bills. As soon as we got home, we’d spend it — whooo! Then, one Christmas there was an envelope with a letter from him. Instead of cash, he’d given us $10,000 worth of shares in a company he’d recently bought, a trust Coca-Cola had. He said to either cash them in or keep them. I thought, “Well, [this stock] is worth more than $10,000. So I kept it, and it kept going up. Then, every year when he’d give us stock — Wells Fargo being one of them — I would just buy more of it because I knew it was going to go up.