Intrigue at Berkshire: The Pilot Saga
Excerpt from the 2nd edition of The Complete Financial History of Berkshire Hathaway.
Yesterday, the second edition of The Complete Financial History of Berkshire Hathaway was released.
One of the more unusual additions is the story of Berkshire’s acquisition of Pilot Flying J: a staged purchase, pushdown accounting, litigation, a countersuit, and a settlement before trial. Oh, and incredible insight into Berkshire’s purchase framework.
Below are two pages from the new edition.
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Praise for the 2nd Edition
“If you want to understand how Warren Buffett built Berkshire Hathaway into one of the most valuable businesses in the world, you have to read this book. This is your opportunity to stand beside Picasso as he paints each brush stroke. A must read for all Buffett and Berkshire groupies.”
- Bill Ackman, Founder and CEO of Pershing Square
“I and my teammates at the Gabelli Organization have been tracking Warren’s success for some 50 years. Adam’s book captures the work and highlights the history of Berkshire and the hard and diligent work of Buffett and Munger, Jain and Abel, and Combs and Weschler.”
- Mario Gabelli, Chairman and CEO, Gabelli Funds
“Adam Mead’s discussion of the values and virtues which have shaped Berkshire Hathaway over 50 years is a must read for those investors in search of the forces that have delivered such investment value over time.” – Thomas A. Russo, Gardner Russo & Quinn LLC
“Few activities can be more rewarding for any value investor than studying the history and evolution of Warren Buffett and Berkshire Hathaway. Adam has done us a huge favor with his yeoman efforts in producing this treatise. Since it is chronologically ordered, it is an invaluable reference guide for all things Berkshire.” — Mohnish Pabrai
“Adam continues to deliver a resource very valuable to both Berkshire fans and the investor community as a whole, his depth of knowledge is clearly demonstrated here again. I thoroughly enjoyed this latest addition.” - Dan Calkins, Chairman & CEO, Benjamin Moore
“The question must be asked, ‘Why another Berkshire book?’ When you read this monumental effort by Adam Mead, the answer will be obvious. Read cover to cover, both the uninitiated to Berkshire and its most ardent followers will derive enormous utility and satisfaction from it. I learned so many new and important things about Berkshire and its history. It is my pleasure to encourage you to enjoy this gem.”
- Christopher P. Bloomstran
“Whatever Adam writes is always first-class - guaranteed.
-Andy Kilpatrick, Author, Of Permanent Value: The Story of Warren Buffett
“With this project, Adam has done a wonderful job extending the Berkshire Classroom by providing a comprehensive analysis of the rich corporate history and unique entrepreneurial leadership.” — Mac Sykes, Gabelli Funds
“Adam Mead’s The Complete Financial History of Berkshire Hathaway is the definitive history of Berkshire. While there have been countless books written about Warren Buffett’s investment approach, none have so meticulously documented Berkshire’s capital allocation decisions from the very beginning. The depth of research is staggering, transforming the complex and sometimes chaotic story of how a small textile mill became a financial conglomerate into a clear, year-by-year narrative of every significant investment and acquisition. In this updated edition, Adam carries the narrative through Berkshire’s sixth decade and the methodically planned leadership transition to Greg Abel. For students of business history, this is an indispensable resource.”
-Patrick Gaughen, President and Chief Operating Officer, Hingham Institution for Savings
“The definitive story of Berkshire Hathaway—how Buffett and Munger turned a failing textile mill into one of history’s greatest wealth-creating enterprises, with timeless lessons in business, investing, and leadership.”
-Vitaliy Katsenelson, CEO of IMA, Author of Soul in the Game
“Berkshire Hathaway is a company with few, if any, parallels in business history. Under the leadership of Warren Buffett, it was transformed from a New England textile mill that would ultimately be shuttered to a sprawling conglomerate with a market valuation of more than $1 trillion. With this updated edition of “The Complete Financial History of Berkshire Hathaway”, Adam provides a thorough review of the key decisions that created the modern Berkshire Hathaway, an outcome inextricably tied to the investment and business wisdom of Warren Buffett and his business partner, Charlie Munger. In a few hundred pages, Adam adeptly runs through six decades of Berkshire’s history. For Buffett and Munger fans who want to truly understand how Berkshire was created, this book is a must read.”
- Alex Morris, Founder of TSOH Investment Research and the Author of Buffett & Munger Unscripted
“A meticulous chronicle of Berkshire Hathaway’s remarkable final act under Buffett’s leadership. Mead’s granular analysis of Buffett’s capital allocation decisions—from the $78 billion in share repurchases to the masterful Apple investment—provides unmatched insight into how the world’s most successful conglomerate navigated unprecedented scale and succession challenges.”
-Tobias Carlisle, Portfolio Manager, Acquirers Funds®
“This exceptional history of Berkshire Hathaway will appeal to history buffs, finance enthusiasts, and investing professionals alike. Mead combines rigorous research with remarkably clear storytelling, tracing the company’s ascent from a struggling textile mill to one of the world’s most admired conglomerates. The book is impressively detailed yet fully accessible—equally valuable for students learning the foundations of investing and for seasoned professionals looking to deepen their understanding of Berkshire’s evolution.”
-Gillian Zoe Segal
“With his ability to make complex things seem simple, Warren Buffett made the difficult work of building Berkshire Hathaway look easy. With this excellent history, Adam Mead takes us behind the scenes to see the details of how that work happened and was so successful. For anyone interested in Berkshire Hathaway, or the development of American capitalism, this is essential reading.”
- Bryan Lawrence, Founder, Oakcliff Capital
“There is simply no book that details the economic lore of Berkshire Hathaway better. A true exposé that every intelligent investor should read.”
- Gwen Hofmeyr, Founder, Maiden Financial
“The most comprehensive book on Berkshire Hathaway that has ever been written. It belongs on the shelf of every business enthusiast!”
-Andrew Wagner, Author of the Economics of Online Gaming and Founder & Chief Investment Officer of Wagner Road Capital Management
“Adam’s accounting of the Financial History of Berkshire is like candy for Finance and Business Junkies alike. It’s a must read if you’re interested in studying the greats.”
- Carter Johnson, Managing Partner, Singleton Valuations
“I thought nothing else of value could be written about Warren Buffett. I was wrong. Adam’s detailed chronology of Berkshire’s evolution reveals the successes and failures of Warren in a unique and digestible way. A worthwhile read for every Buffett scholar, amateur and professional alike.” — Drew Estes, Banyan Capital
“Mead has done the Berkshire faithful an incredible service by stitching together the narrative and numbers so tightly, you can see the compounding in action—updated and genuinely useful.”
-Jacob Taylor, CEO of Baserate
“Adam Mead’s work reminds us that true value is found not just in numbers, but in the lasting quality where few care to linger. By doing exceptional due diligence his book clones the lessons of Warren and Charlie.”
-Jeff Gilbert
Adam Mead’s updated “Complete Financial History of Berkshire Hathaway” is a book like no other—chronicling six decades of evolution while reminding us that Berkshire, though Buffett’s masterpiece, remains subject to constant change—an indispensable addition to any serious investor’s bookshelf.
-Bogumil Baranowski, Founder of Blue Infinitas Capital, Author of “Money, Life, Family”, Host of Talking Billions Podcast
I am probably more aware of the Haslam family than most. I grew up (and am still) a huge University of Tennessee football fan. I won't bore you with all the details, but each Haslam generation is peppered with UT grads. Their names are on a bunch of buildings, the school of business, etc., they are major players.
Anyway, "Big Jim" played football at UT and built the family fortune through his hard work and talent. His kids have largely been the beneficiaries of his work without having the same acumen. Because they are large donors, for a time they controlled the Athletic Department and the football team. Jimmy, Jim's son, capitalized on a power vacuum (in-between the terms of two strong-willed directors) to seize control. Jimmy's reign controlling the department was filled with chaos. 5 head coaches fired in ~15 years. He has since moved on to the Cleveland Browns and Milwaukee Bucks... I'll let those results speak for themselves.
Anyway, it was wholly unsurprising to me they tried to sneak one past Berkshire on the way out. I knew many folks who worked at Pilot when the company was raided by the FBI in 2013 for defrauding their truck drivers.
Staged minority-to-majority acquisitions reliably surface the disagreement about how value got measured between stage one and stage two. Pilot Flying J is the classic illustration, and the trust-based versions of these deals rarely document well enough to survive the litigation. Berkshire's process is famously light. That works until it doesn't.