From AliceSchroeder.com: Why did Buffett depart from his traditional investing practices to invest in NetJets? He had a business rationale that was not entirely off the reservation, but it got a push from several other factors. Here is my very condensed take.
> Number one, Susie Buffett switched him onto NetJets; her adoration of it convinced him of the customers’ loyalty; his own positive experiences with the brand did the rest. The product is so good that he thought the business had a bigger moat (i.e., pricing power) than it really does.
> Number two, he fell in love with Santulli, a former Goldman Sachs quant dude. (Recall that until recently, Buffett’s gushing over Santulli caused Santulli to be often mentioned as a potential successor, although not by me.) Buffett was so infatuated with Santulli for a while that it was cute, or would have been if it hadn’t clouded his business judgment a bit.
> Number three, there was a Goldman Sachs connection. No conspiracy theory or anything like that, but Buffett is nostalgic, and returns to safe, familiar themes. Goldman Sachs has been a talisman for him since he was 10 years old.
> Number four, NetJets moved Buffett up many notches in the celebrity elephant-bumping world. This is how he met Arnold Schwarzeneggar and also his mancrush of all time, Tiger Woods (!). Santulli also got him into the legendary restaurant Rao’s, and introduced him to Damon Runyonesque characters like Bo Dietl.
> Number five, [NetJets owner Rich] Santulli, who is quite a decent guy by the way, knew how to market to the polo-playing crowd. For example, he set up the celebrity poker tournament with Buffett, which Buffett thoroughly enjoyed because it meant his fans could come and worship him. It was a nice synergy that made everyone happy.
Business Insider Emails & Alerts
Site highlights each day to your inbox.