Over the previous couple of a long time, Warren Buffett has made A LOT of individuals A LOT of cash. Buffett’s holding firm, Berkshire Hathaway, at present sports activities a $1.1 trillion market cap. For example you purchased 10 shares of Berkshire roughly 40 years in the past, in say… 1993. On the time, Berkshire A Class shares traded for round $17,500 per share. So 10 shares would have value you $175,000. If you happen to merely held onto these shares for the subsequent 30+ years and did completely nothing else, in the present day you would be sitting on roughly $7.56 million.
Now, think about as a substitute of shopping for 10 shares, you had been in some way in a position to purchase 25,203 shares of Berkshire Hathaway inventory in 1993.
Harold Alfond doesn’t must think about that situation. That was his actual life. Who was Harold? Was he a high-flying, elite East Coast company raider? Nope. He was a shoe salesman who began out with a $1,000 funding. An funding that Warren Buffett would later describe as “the worst deal I’ve ever made.”
Humble Beginnings
Harold Alfond was born on March 6, 1914, in Swampscott, Massachusetts, to a household of Russian-Jewish immigrants who knew the which means of onerous work. His mother and father, like many working-class households of the period, had been scraping by, grinding by way of lengthy days simply to maintain meals on the desk. Training took a backseat to survival, particularly as soon as the Nice Despair hit.
As a teen, Harold joined his father on the manufacturing facility ground of the Kesslen Shoe Firm in Kennebunk, Maine. He wasn’t handed any favors. He began on the very backside, doing the type of menial jobs nobody else needed—sweeping flooring, fetching provides, repairing scraps. However he paid consideration. He discovered the enterprise from the bottom up. By his early 20s, he had risen to the rank of manufacturing facility superintendent, managing operations and gaining a firsthand training in manufacturing, logistics, and labor expertise that will at some point make him a fortune.
He by no means went to school. In actual fact, when requested about it later in life, Alfond would say merely, “In 1934, we did not know what faculty was. We went to work.” That blue-collar ethos, present up, work onerous, take dangers, would outline the remainder of his life.
A Fateful Hitchhiker
In 1939, on the age of 25, Harold Alfond was driving to a county honest in Skowhegan, Maine, when a random encounter modified the course of his life. Alongside the best way, he picked up a hitchhiker. Throughout their drive, the 2 made small discuss, and the hitchhiker casually talked about that an previous, deserted shoe manufacturing facility within the close by city of Norridgewock was on the market. The asking worth? $1,000.
To most individuals, that will’ve been an fascinating tidbit and nothing extra. However Harold wasn’t most individuals.
He dropped the hitchhiker off at his vacation spot, skipped the honest altogether, and drove straight to Norridgewock to see the manufacturing facility for himself. What he discovered was a worn-down however promising facility, one thing solely somebody with a shoemaker’s eye and an entrepreneur’s creativeness might get enthusiastic about.
There was only one downside: Harold did not have $1,000. In 1939, that was some huge cash, roughly $21,000 in in the present day’s {dollars}. However the concept caught with him. Over the subsequent yr, he scrimped and saved and finally offered his automotive to give you the capital. In 1940, with assist from his father as a enterprise accomplice, Harold purchased the manufacturing facility and formally launched the Norrwock Shoe Firm.
The enterprise took off. By specializing in high quality and environment friendly manufacturing, the father-son group shortly turned Norrwock right into a worthwhile operation. Simply 4 years later, in 1944, they offered the corporate to the Shoe Company of America for $1.1 million, equal to greater than $19 million in the present day. Harold stayed on as president of the corporate after the sale, gaining precious govt expertise and setting the stage for a fair larger chapter to return.
The Dexter Shoe Firm
In 1958, Harold spent $10,000 of his personal cash to buy an deserted wool manufacturing facility in his hometown of Dexter, Maine. His aim wasn’t simply to construct one other firm, he needed to create jobs and revitalize his struggling hometown.
From that previous mill, he launched what would turn out to be the Dexter Shoe Firm.
At first, Dexter targeted on producing private-label sneakers for main shops. If you happen to purchased a pair of “Sears model” sneakers within the early Sixties, chances are high they had been made by Harold’s manufacturing facility. His earliest accounts included giants like Sears, JCPenney, and Montgomery Ward. However Alfond finally grew weary of being depending on a handful of retail purchasers. So, he pivoted. He launched Dexter as its personal model, employed aggressive gross sales and advertising and marketing groups, and started pushing product into impartial retailers throughout the nation.
Then got here a collection of improvements that did not simply rework Dexter—they remodeled retail.
Innovation #1: The Manufacturing facility Outlet
Earlier than the mid-Sixties, factories usually offered broken or faulty sneakers to native resellers for round $1 a pair. The resellers would clear them up and flip them for $6—a 600% return. Alfond realized he might hold that margin for himself. So, he opened a retailer proper behind his manufacturing facility to promote the flawed sneakers on to shoppers. The “manufacturing facility outlet” was born.
There was only one downside: The higher Dexter bought at making high quality sneakers, the less defects they produced. Quickly, there weren’t sufficient “broken” pairs to maintain the outlet cabinets stocked.
Innovation #2: The Energy of Unsold Stock
To unravel the availability challenge, Alfond made a daring transfer—he started promoting completely good, first-quality sneakers that had gone unsold at shops. These had been usually types from earlier seasons or fashions that merely did not transfer at retail. This mixture of high quality and affordability proved to be a large draw, and Dexter’s manufacturing facility shops exploded in reputation.
Innovation #3: The Outlet Mall as a Enterprise Mannequin
As Dexter shops turned extra fashionable, different manufacturers started opening outlets close by to piggyback off their site visitors. Alfond observed the pattern and determined to get forward of it. Slightly than simply opening extra standalone shops, he started growing full-scale outlet malls, leasing area to the exact same opponents who had been chasing him. In doing so, he successfully invented the fashionable manufacturing facility outlet mall.
Warren Buffett Comes Calling
By the early Nineties, Dexter Shoe Firm was booming. With almost 4,000 staff, 80 shops, and annual revenues of $250 million, Harold Alfond had turned a Maine-based shoe operation right into a nationwide success story. And in 1993, it caught the attention of Warren Buffett.
Buffett supplied to accumulate Dexter by way of his holding firm, Berkshire Hathaway. The provide was $433 million in money. Adjusted for inflation, that is the equal of about $983 million in the present day—a large payday by any measure.
However Harold had a counteroffer. As a substitute of money, he requested to be paid in Berkshire Hathaway inventory. Buffett agreed.
On the time, Berkshire shares had been buying and selling at round $17,000 apiece, so Alfond obtained 25,203 shares in alternate. That stake represented roughly 1.6% of all excellent shares of Berkshire Hathaway. And since Berkshire has by no means break up or diluted its Class A shares, it nonetheless represents about 1.6% of the corporate in the present day.
In 1993, Berkshire’s whole market cap was about $27 billion. Right this moment, it’s over $1.1 trillion.
When Harold Alfond handed away in 2007, Berkshire shares had been price $140,000 every, giving him a internet price of $3.5 billion.
What Occurred to the Shares?
Harold by no means offered a single share throughout his lifetime. If he had been nonetheless alive in the present day, his 25,203 shares could be price $19 billion.
After his loss of life, a good portion of the shares had been transferred to the Harold Alfond Basis, which helps training, well being care, and youth packages throughout Maine. As of 2025, the inspiration manages round $1 billion in belongings, down from a excessive of $1.6 billion in 2022.
The remaining shares had been divided equally amongst his 4 youngsters: Susan, Ted, Peter, and Invoice. Sadly, Peter handed away in 2017. The remainder of the household nonetheless controls a significant Berkshire stake. For context, in the present day, Susan Alfond is the richest particular person in Maine with a internet price of $3.6 billion.
Susan Alfond (Picture by Avery Yale Kamila/Portland Press Herald by way of Getty Pictures)
Warren Buffett’s “Worst Deal”
Whereas Harold Alfond’s resolution to take inventory made him and his household fabulously rich, the deal did not prove almost as properly for Warren Buffett. In actual fact, he would later describe it because the “worst deal I’ve ever made.”
Quickly after buying Dexter, the shoe trade started to break down underneath the burden of low cost abroad competitors. Dexter could not compete. By the early 2000s, the corporate was shuttered, and its operations had been absorbed into one other Berkshire subsidiary. Dexter Shoe, as a model, was lifeless.
Had Buffett paid in money, the injury might need been restricted to some hundred million. However through the use of inventory—inventory that will go on to skyrocket in worth, he magnified the loss exponentially.
In his 2007 shareholder letter, Buffett did not mince phrases:
“Up to now, Dexter is the worst deal that I’ve made. By utilizing Berkshire inventory, I compounded this error massively. That transfer made the associated fee to Berkshire shareholders not $400 million, however moderately $3.5 billion. In essence, I gave away 1.6 p.c of an exquisite enterprise to purchase a nugatory one.”
Even Buffett, the grasp of long-term worth, could not have predicted what that 1.6% stake would turn out to be. However Harold Alfond guess on Berkshire—and it paid off like nothing else.
Harold Alfond: Philanthropist
Regardless of how a lot wealth Harold Alfond collected, he by no means overlooked the place he got here from—or what he believed in. Lengthy earlier than the Berkshire windfall, Alfond had already begun giving again. In actual fact, he established the Harold Alfond Basis in 1950, when he was simply 36 years previous. Over the subsequent 5 a long time, he quietly turned one of the beneficiant philanthropists in New England.
Between 1950 and 2003, the inspiration donated greater than $100 million to a variety of causes, with a robust deal with training, well being care, youth growth, and sports activities. He believed deeply within the energy of athletics to show teamwork and self-discipline, and within the worth of training to unlock alternative. That perception was mirrored in how and the place he gave.
By the point he handed away in 2007, greater than 30 buildings, hospitals, and sports activities services throughout Maine and Massachusetts bore his title. Certainly one of his ultimate presents was a $7 million donation to determine the Harold Alfond Heart for Most cancers Care in Augusta, which opened shortly after his loss of life.
However maybe his most visionary legacy is the Harold Alfond School Problem. Right this moment, each single child born in Maine robotically receives a $500 faculty scholarship from the inspiration. No functions. No strings hooked up. Only a head begin and a message to households: begin planning early, as a result of your kid’s future issues.
That is not simply generosity. That is long-term pondering—one thing Harold Alfond had mastered in each enterprise and life.
Legacy
Along with his philanthropic efforts, Harold Alfond was additionally a lifelong sports activities fan. In 1978, he turned one of many authentic minority buyers within the Boston Purple Sox, a stake that is still within the Alfond household to today by way of his most glorious sons, Invoice and Ted.
Whether or not it was constructing a nationally identified shoe firm, making one of many savviest funding selections in fashionable historical past, or quietly reshaping communities throughout Maine, Harold Alfond lived with a transparent goal: construct, give, and uplift others. He did not chase headlines. He did not crave recognition. However the outcomes communicate for themselves.
From a $1,000 funding in a forgotten manufacturing facility to one of many biggest fortunes ever constructed off a single deal, Harold Alfond’s life was a masterclass in imaginative and prescient, humility, and lasting influence.