A Man for All Markets: From Las Vegas to Wall Street, How I Beat the Dealer and the Market

by Edward O. Thorp

Warren was a high-speed talker with a Nebraska twang and a stream of jokes, anecdotes, and clever sayings. He loved to play bridge and had a natural liking for the logical, the quantitative, and the mathematical. As the evening went on, I learned that he focused on finding and buying into undervalued companies. Over a period of several years, he expected each of these investments to substantially outperform the market, as represented by an index such as the Dow Jones Industrial Average (DJIA) or the Standard & Poor’s 500 (S&P 500). As his mentor Ben Graham did before him, Warren also invested in warrant and convertible hedging and merger arbitrage. It was in this area that his and my interest overlapped, and where Buffett, unknown to me, was vetting me as a possible successor to manage investments for the Gerards.