Warren Buffett Bought Nebraska Furniture Mart For $60M With A Handshake Deal In 1983. He Relied On His Shopping Experience Instead Of Audits

Core Insights - Warren Buffett made a significant investment in Nebraska Furniture Mart (NFM) in 1983, acquiring 90% of the company for $60 million without an audit or legal team, relying solely on trust and a handshake [1][4]. Company Background - Nebraska Furniture Mart was founded by Rose Blumkin, an immigrant from Belarus, who started the business in 1937 with a $500 loan and grew it into one of the largest furniture retailers in the U.S. [2]. - Blumkin, known as Mrs. B, continued to work at NFM after the sale, putting in 70-hour weeks until her retirement at age 95, after which she opened a competing store due to the absence of a noncompete clause in the sale agreement [5]. Investment Approach - Buffett's decision to purchase NFM was based on his personal shopping experience and the value he perceived in the customer service and pricing, rather than traditional financial metrics or investment banking advice [4]. - The deal was characterized by its unconventional nature, as it was completed without any audit of the company's financials, which Buffett noted was "unheard of in business" [4][5]. Business Acumen - Buffett praised Blumkin's business instincts, suggesting that she could outperform top business school graduates and Fortune 500 executives if given the same resources [6].