The Sequoia Fund’s Secret Sauce

In the late 1960s, Warren Buffett decided that he was going to shut down the investment partnerships he had been managing since he returned from working with Benjamin Graham in New York.

Buffett had run out of ideas, and he believed that it was better to return investors' money than try and beat the market with sub-par ideas.

At the time, he was also spending more of his time managing his fledgling business empire after acquiring the struggling textile concern, Berkshire Hathaway, after falling out with the company's management.

Buffett exited the money management business, but he...