In a phone interview on Thursday, Mr. Buffett said that deal proved decisive for both of their careers.
Mr. Gottesman, Mr. Buffett and another partner, Charlie Munger, soon decided that they had made a “terrible mistake” with Hochschild Kohn, Mr. Buffett said. Mr. Gottesman, long known as Sandy to his intimates, took charge of reselling the company, which he managed to do at only a small loss.
“Sandy made the sale for us — I didn’t know who to sell it to,” Mr. Buffett said.
With the money from that sale, Diversified bought more shares in Berkshire Hathaway, which went on to thrive. The two companies later merged. Berkshire Hathaway is now a sprawling conglomerate with a market capitalization of more than $590 billion.
“He saved our asses in Diversified — me, Charlie and himself,” Mr. Buffett said of Mr. Gottesman. “He kept that stock, and now it’s worth a lot of money — billions.”
Mr. Buffett fondly recalled many years of trips and long conversations with Mr. Gottesman. “Absent Sandy doing anything financially for me, we would have been the best of friends,” he said.
David Sanford Gottesman was born in Manhattan on April 26, 1926. His family moved to New Rochelle, N.Y., when he was a child. His father, Benjamin, was a banker and investor. His mother, Esther (Garfunkel) Gottesman, a supporter of Jewish and Zionist causes, helped arrange the acquisition of the Dead Sea Scrolls for Israel.
“I was not a good student, more interested in making money,” Mr. Gottesman said. He peddled Collier’s magazine door to door, hiring neighborhood children to help, and hawked beetle traps at a hardware store.