Sequoia Fund, Inc. 767 Fifth Avenue, Suite 4701
New York, NY 10153
(800) 686-6884

QUARTERLY REPORT
For the Period Ended March 31, 2006

To the Shareholders of Sequoia Fund, Inc.:


Dear Shareholder:

Sequoia Fundís results for the first quarter of 2006 are shown below with comparable results for the leading market indexes:

March 31, 2006
Sequoia
Fund
Dow Jones
Industrials
Standard &
Poor's 500



First Quarter 2.65% 4.25% 4.21%
1 Year 11.76% 8.27% 11.73%
5 Years (Annualized) 8.75% 4.60% 3.97%
10 Years (Annualized) 12.34% 9.20% 8.95%
 
The S&P 500 Index is an unmanaged, capitalization-weighted index of the common stocks of 500 major US corporations. The Dow Jones Industrial Average is an unmanaged, price-weighted index of 30 actively traded blue chip stocks. The performance data quoted represents past performance and assumes reinvestment of dividends. The investment return and principal value of an investment in the Fund will fluctuate so that an investorís shares, when redeemed, may be worth more or less than their original cost.

We are enclosing our Privacy Notice describing our policies relating to personal client information as required by the Gramm-Leach-Bliley Act.

Sincerely,

Richard T. Cunniff
Vice Chairman
Robert D. Goldfarb
President
David M. Poppe
Executive Vice President


May 15, 2006

SEQUOIA FUND, INC.

STATEMENT OF INVESTMENTS

MARCH 31, 2006 (UNAUDITED)

 

COMMON STOCKS (91.61%)

Shares
 
 
Value (a)


  AUTO & HOME SUPPLY STORES (1.72%)    
1,699,801 O'Reilly Automotive Inc. (b)   $62,144,724

  CASUALTY INSURANCE (15.31%)    
5,309,537 Progressive Corporation   553,572,328
     
  CHEMICAL DIAGNOSTIC SUBSTANCES (3.65%)    
1,528,838 Idexx Laboratories Inc. (b)   132,030,450
     
  DIVERSIFIED COMPANIES (33.35%)    
13,338 Berkshire Hathaway Inc. Class A (b)   1,205,088,300
291
Berkshire Hathaway Inc. Class B (b)
  876,492
     
      1,205,964,792
     
  ELECTRONIC COMPUTER MANUFACTURING (2.58%)    
2,647,940 International Game Technology   93,260,447
     
  FREIGHT TRANSPORTATION (4.24%)    
1,776,404 Expeditors International Inc.   153,463,541
     
  INDUSTRIAL & CONSTRUCTION SUPPLIES (5.31%)    
4,053,871 Fastenal Company   191,910,253
     
  INSURANCE AGENTS & BROKERS (2.65%)    
2,888,617 Brown & Brown Inc.   95,902,084
     
  MEDICAL & HOSPITAL EQUIPMENT (0.12%)    
120,083 Patterson Companies Inc. (b)   4,226,922
     
  PROCESS CONTROL INSTRUMENTS (0.68%)    
384,112 Danaher Corporation   24,410,317
     
  RETAILING (14.69%)    
39,799 Costco Wholesale Corporation   2,155,514
1,145,642 Tiffany & Company   43,007,401
11,411,433 TJX Companies, Inc.   283,231,767
2,119,845 Walgreen Company   91,428,915
2,359,150 Wal-Mart Stores, Inc.   111,446,246
     
      531,269,843
     
  TEXTILE - CARPETS (7.31%)    
3,274,126 Mohawk Industries Inc. (b)   264,287,451
     
  TOTAL COMMON STOCKS   $3,312,443,152
     
 PREFERRED STOCKS (2.52%)    
       
  AUTOMOTIVE MANUFACTURING (2.52%)    
95,034 Porsche AG Ė Preferred (Germany)   $90,970,631
     
  TOTAL PREFERRED STOCKS   $90,970,631
     
Principal
Amount
   
Value (a)


U.S. GOVERNMENT OBLIGATIONS (5.81%)    
$211,000,000 U.S. Treasury Bill due 4/27/06 through 5/4/06   $210,273,630
     
  TOTAL U.S. GOVERNMENT OBLIGATIONS   $ 210,273,630
   
SUMMARY    
Common Stocks  91.61% $3,312,443,152
Preferred Stocks 2.52% 90,970,631
U.S. Government Obligations  5.81% 210,273,630
Net Cash & Receivables 0.06% 2,348,438
     
Net Assets    $3,616,035,851
     
Number of Shares Outstanding    22,660,533
     
Net Asset Value Per Share    $159.57


(a)

Securities traded on a national securities exchange or on a foreign exchange are valued at the last reported sales price on the principal exchange on which the security is listed on the last business day of the period; securities traded in the over-the-counter market are valued in accordance with NASDAQ Official Closing Price on the last business day of the period; securities traded in the over-the-counter market and listed securities for which no sale was reported on that date are valued at the mean between the last reported bid and asked prices; U.S. Treasury Bills with remaining maturities of sixty days or less are valued at their amortized cost. U.S. Treasury Bills that when purchased have a remaining maturity in excess of sixty days are stated at their discounted value based upon the mean between the bid and asked discount rates until the sixtieth day prior to maturity, at which point they are valued at amortized cost.

  Purchases and sales of foreign portfolio securities are translated into U.S. dollars at the rates of exchange prevailing when such securities are acquired or sold. Income and expenses are translated into U.S. dollars at the rates of exchange prevailing when accrued.
(b) Non-income producing.

Other information

The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Form N-Q is available on the SECís web site at http://www.sec.gov. The Fundís Form N-Q may also be reviewed and copied at the SECís Public Reference Room in Washington, DC. For information regarding the operation of the SECís Public Reference Room, call 1-800-SEC-0330. For a complete list of the Fundís portfolio holdings, view the most recent quarterly, semiannual or annual report on Sequoia Fundís web site at http://www.sequoiafund.com/fund_reports.htm.

You may obtain a description of the Fundís proxy voting policies and procedures, and information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, without charge. Visit Sequoia Fundís web site at www.sequoiafund.com and use the ďShareholder InformationĒ link to obtain all proxy information. This information may also be obtained from the Securities and Exchange Commissionís web site at www.sec.gov.

SEQUOIA FUND, INC.
767 Fifth Avenue, Suite 4701
New York, New York 10153-4798
Website : www.sequoiafund.com

DIRECTORS

Richard T. Cunniff
Robert D. Goldfarb
David M. Poppe
Vinod Ahooja
Roger Lowenstein
Francis P. Matthews
C. William Neuhauser
Sharon Osberg
Robert L. Swiggett

OFFICERS

Richard T. Cunniff ó Vice Chairman
Robert D. Goldfarb ó President
David M. Poppe ó Executive Vice President
Joseph Quinones, Jr. ó Vice President, Secretary, Treasurer & Chief Compliance Officer

INVESTMENT ADVISER

Ruane, Cunniff & Goldfarb Inc.
767 Fifth Avenue, Suite 4701
New York, New York 10153-4798

DISTRIBUTOR

Ruane, Cunniff & Goldfarb LLC
767 Fifth Avenue, Suite 4701
New York, New York 10153-4798

CUSTODIAN

The Bank of New York
MF Custody Administration Department
1 Wall Street, 25th Floor
New York, New York 10286

REGISTRAR AND SHAREHOLDER SERVICING AGENT

DST Systems, Inc.
P.O. Box 219477
Kansas City, Missouri 64121

LEGAL COUNSEL

Seward & Kissel
One Battery Park Plaza
New York, New York 10004

This report has been prepared for the information of shareholders of Sequoia Fund, Inc.