At the end of 2013, Grinnell College had an endowment of $1.5 billion. Not bad for a student body of 1,700 situated on a 120-acre campus in Iowa. The endowment has reached such a blessed size because the Trustees of the school had done two things intelligently in the 1960s: they bought shares of Berkshire Hathaway, and they made a very large investment in (what was then) the very small tech startup Intel [Grinnell College was the principal capital source for Intel in its formative years].
What I find interesting about the story is this: Even though the Grinnell Trustees were around the most successful compounders of the 20th century, they couldn’t resist the urge to sell once the investment had grown to be a very large component of the portfolio. If you visit a library and dig up old Grinnell University magazines on the microfilm, you will see them talk about how much they were thankful for Buffett’s leadership (he became a trustee of the school in 1968) for recommending Multimedia stock to the Board and purchasing AVCO’s television station (WDTN) in Dayton for $13 and then helping the school sell the station five years later for $50 million. Buffett’s association with the school led to a quadrupling of the endowment over the course of eight years, if you tally up the effects of the Berkshire stock and Buffett’s recommendations. The Board was also thankful for Bob Noyce, the son of an Iowa minister that founded Intel with Gordon Moore. Grinnell’s magazines and public releases about both Buffett and Noyce spoke glowingly about the two men.