2003: Buffett explains how he bought National Indemnity from Jack Ringwalt.

CHARLIE MUNGER: Warren, you chased down Jack Ringwalt. Didn’t you go to him?

WARREN BUFFETT: Well, Jack Ringwalt, who ran National Indemnity, and some of you here in the room knew, Jack was a very interesting guy and a friend.

And Jack, for 15 minutes every year, would want to sell National Indemnity. Something would make him mad. A claim would come in or something of the sort. (Laughs)

So, for 15 minutes every year he would want to sell. And a friend of mine, Charlie Heider — who may be here today — and I had discussed this phenomenon of Jack being in heat once a year for 15 minutes. (Laughter)

And I told Charlie if you ever caught him in this particular phase to let me know.

And there was a day that Charlie called and said, “You know, Jack’s ready.” And I said — (laughter) —“Well, get him over here.” So, he came about 11:30 and we made a deal in that 15-minute zone. (Laughter)

And this is absolutely true. It’s a fascinating story, because Jack, having made the deal — and we really did make it in 15 minutes — Jack, having made the deal, really didn’t want to do it, and — but he was — he wouldn’t have backed out of a deal.

But he said to me after we’d shaken hands, he said, “Well,” he says, “I suppose you’ll want audited financial statements.” And if I’d said yes, he would’ve said, “Well, that’s too bad then. We can’t have a deal.” (Laughter)

So, I said, “I wouldn’t dream of looking at audited financial statements. They’re the worst kind,” you know. (Laughter)

And then Jack said to me, he says, “I suppose you’ll want me to sell my agencies,“ and, “— to you as well.” And I said, “Jack, I wouldn’t buy those agencies under any circumstances.”

If I’d said yes to that, he would have — that I wanted him to sell the agencies — he’d say, “Well, yeah, I wouldn’t be able to do it, Warren. We must have misunderstood each other.”

So, we went through about three or four of those. And finally, Jack gave up and sold me the business.

He was an honorable guy, because he really, I don’t think, wanted to do it, but we met down at Charlie’s office at 19th, I think, and Douglas, and Jack was about 10 minutes late picking up this 7 million for National Indemnity.

He was about 10 minutes late, because he was looking for a parking meter with a few minutes left on it. (Laughter)

And that’s when I knew he was my kind of guy. (Laughter)

CHARLIE MUNGER: But at any rate, this process is not easy, and practically anything where you sit behind that desk and this wonderful deal flow is just coming by, you’re in a very dangerous seat.