TL;DR: We live in a "Cover Your Ass" economy. We mistake complexity for professionalism and thickness of contracts for safety. But in 1967, Warren Buffett bought a company for $8.4 million using a two-page letter and closed the deal in 24 hours. This isn't just history; it is a lesson in the "Trust Algorithm." Speed comes from judgment, not paperwork.
James here, CEO of Mercury Technology Solutions. Tokyo - February 9, 2026
We operate in a "Defensive" world. Every document you sign, every compliance report you review, and every term sheet you draft usually has one hidden purpose: Liability Shielding. Modern business logic dictates that the thicker the contract, the lower the risk. We wrap simple transactions in a maze of legalese, believing that the weight of the paper can offset the uncertainty of human nature.
But today, I want to look at an anomaly from February 22, 1967. It is a document that proves our modern "sophistication" might actually be a massive regression.
The Two-Page Empire
This yellowed piece of paper is the official Offer Letter from Warren Buffett to acquire National Indemnity. In less than 500 words, Buffett locked in a deal worth $8.4 million (a massive sum in 1967).
The Shocking Details: There were no months of Due Diligence. There were no "Earn-out" clauses. There were no 100-page defensive stipulations. Buffett simply wrote:
"You have further stated that in your opinion these financial statements fairly represent the condition of the companies... and that no major adverse factors, not common to the industry, are known to you at this time. Based upon these representations, Berkshire Hathaway Inc. will buy..."
To a modern lawyer, this is suicide. Buffett committed millions based on one sentence from the seller, Jack Ringwalt.
The Speed: The letter is dated February 22. The closing date was set for February 23. 24 Hours. From offer to ownership in one day.
1. Complexity is a Mask for Fear
Why was Buffett so reckless? He wasn't. This is First Principles thinking applied to M&A. Buffett knew two things:
- The Business: He understood the math of insurance (Combined Ratio) better than anyone.
- The Man: He trusted Jack Ringwalt’s character.
If you have those two things, Time is the enemy. Any extra waiting period is just a tax you pay to soothe the fears of mediocre managers.
Look at how he handled the retention of the founder:
"You will agree to continue your association with the companies as long as mutually acceptable terms of employment can be made."
No complex KPI formulas. No Golden Handcuffs. Just "mutually acceptable." Buffett understood a truth that modern HR has forgotten: For top-tier operators, external constraints are an insult. He wasn't buying a balance sheet; he was buying Ringwalt's brain and integrity. If Ringwalt was the kind of person who needed a 100-page contract to keep him honest, the deal shouldn't happen in the first place.
2. The High Cost of Low Trust
Look at your own company today. Why are our contracts getting longer? Because we assume everyone is a liar. Why do we have so many approval layers? Because no one wants to take responsibility.
We have built a massive "Distrust System" and we pay a heavy "Trust Tax" for it every day. The meetings, the forms, the legal fees—these are the costs of societal credit bankruptcy. This environment doesn't just waste time; it castrates creativity. It turns you into a cog trying to avoid errors, rather than a player trying to win.
3. The Bifurcation of the Future
This 1967 letter mocks us. It shows us that while we use AI and Big Data to calculate risk to the fourth decimal point, we have lost the instinct to look someone in the eye and judge their character.
The business world is splitting into two:
- The Low-Trust Red Ocean: Companies drowning in compliance, audits, and internal friction. Their efficiency trends toward zero.
- The High-Trust Elite: Small circles of operators (like Buffett and Munger) who operate on handshakes and speed. They restructure resources instantly because they stripped away the "Fake Complexity."
Conclusion: The Ultimate Filter
That 1967 document isn't a relic; it's a ticket to freedom. But the price of that ticket isn't $8.4 million anymore. The price is Courage. The courage to strip away the false safety of complexity and trust your own judgment again.
If you need a 50-page contract to protect yourself from your partner, you don't need a better lawyer. You need a new partner.
Mercury Technology Solutions: Accelerate Digitality.
