It may be odd to start a book about one man – Warren Buffett – with an article about another – Alfred Winslow Jones. But this 1966 piece about Jones deserves the lead-off position. To begin with, this is the first time that Fortune mentioned the name Buffett, except that we embarrassingly spelled it “Buffet,” with only one t. I made that mistake: yours truly, Carol Loomis, the editor of this book and the author of many of the articles in it, including this one. Later my husband, John Loomis, then an institutional securities salesman, met Buffett, who shortly after called me up to kid me a bit about the misspelling. Further on, he and his wife, Susie, asked John and me to have lunch in New York, and they and we began a friendship that in time, you might say, led to this book.
A second point about the article is that is rather famously introduced A. W. Jones and his concept of a “hedged” fund to the world. Not that Jones was the first Wall Streeter to establish such a fund: Benjamin Graham, for one, had earlier run a partnership that used hedging strategies. But Jones’s rocketing success was a revelation to most Fortune readers, and this article took on a life of its own, becoming an unofficial prospectus for many people who hastened to start “Jones-type” funds of their own. Histories of the hedge fund industry almost always refer to this article as a milestone in that world’s development.
– Carol J. Loomis