Sequoia Fund, Inc.

767 Fifth Avenue, Suite 4701

New York, NY 10153

(800) 686-6884

 

 

QUARTERLY REPORT
For the Period Ended September 30, 2004

 

To the Shareholders of Sequoia Fund, Inc.:

 

Dear Shareholder:

 

Sequoia Fund's results for the third quarter of 2004 are shown below with comparable results for the leading market indexes:

 

September 30, 2004

Sequoia
Fund

Dow Jones
Industrials

Standard &
Poor's 500

3 months

   -2.32%

  -2.90%

  -1.87%

9 months

    0.80%

  -2.06%

   1.51%

1 Year

   11.28%

 10.98%

 13.87%

5 Years (Annualized)

     9.11%

   1.43%

  -1.31%

10 Years (Annualized)

  15.46%

  12.37%

  11.09%

 

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 investor's shares, when redeemed, may be worth more or less than their original cost.       


       We would like to take this occasion to announce that Sharon Osberg has graciously agreed to join the Board of Directors of Sequoia Fund.  Sharon brings a wealth of experience and knowledge about information technology from her days at Wells Fargo, where she ran the bank’s online business as Executive Vice President of the Online Financial Services Group.  She is also a two-time world bridge champion.

 

       Enclosed is a copy of a recent article about Progressive.  We are proud that the clients of Ruane, Cunniff & Goldfarb Inc., including Sequoia, are one of the top shareholders of this unique company.

 

Sincerely,

 

Richard T. Cunniff
Vice Chairman

Robert D. Goldfarb
President

David M. Poppe
Executive Vice President

William J. Ruane
Chairman

 

 

SEQUOIA FUND, INC.

STATEMENT OF INVESTMENTS

SEPTEMBER 30, 2004 (UNAUDITED)

 

COMMON STOCKS (93.37%)

Shares

 

Value (a)

 

AUTO & HOME SUPPLY STORES (2.23%)

627,658

Autozone Inc. (c)

$     48,486,581

917,344

O’Reilly Automotive Inc. (c)

35,125,102

 

 

83,611,683

 

BANK HOLDING COMPANIES (9.06%)

 

6,845,968

Fifth Third Bancorp

336,958,545

60,146

Mercantile Bankshares Corporation

2,884,602

 

 

339,843,147

 

BUILDING MATERIALS (3.42%)

 

2,224,609

Fastenal Company

128,137,478

 

COMPUTER PROGRAMMING (1.52%)

 

2,254,077

GTECH Holdings Corp.

57,073,230

 

CHEMICAL DIAGNOSTIC SUBSTANCES (1.12%)

 

824,794

Idexx Laboratories Inc. (c)

41,850,048

 

DIVERSIFIED COMPANIES (35.71%)

 

15,448

Berkshire Hathaway Inc. Class A (c)

1,338,569,200

130

Berkshire Hathaway Inc. Class B (c)

373,230

 

 

1,338,942,430

 

ENGINEERING SERVICES (1.73%)

 

1,697,513

Jacobs Engineering Group Inc. (c)

64,997,773

 

FREIGHT TRANSPORTATION (2.69%)

 

1,948,936

Expeditors International Inc.

100,759,991

 

HOME FURNISHINGS (1.76%)

 

1,897,312

Ethan Allen Interiors, Inc. (b)

65,931,592

 

INSURANCE AGENTS & BROKERS (1.90%)

 

1,558,924

Brown & Brown Inc.

71,242,827

 

CASUALTY INSURANCE (12.95%)

5,730,879

Progressive Corporation

485,691,995

 

MANUFACTURING (0.51%)

321,695

Harley Davidson, Inc.

19,121,551

 

MEDICAL & HOSPITAL EQUIPMENT (0.13%)

 

64,806

Patterson Companies Inc. (c)

4,961,547

 

TEXTILE - CARPETS (7.48%)

3,533,947

Mohawk Industries Inc. (b) (c)

280,560,052

 

PROCESS CONTROL INSTRUMENTS (0.57%)

 

414,593

Danaher Corporation

21,260,329

 

RETAILING (10.59%)

 

42,958

Costco Wholesale Corporation

1,785,334

99,475

Petsmart Inc.

2,824,095

1,257,597

Tiffany & Company

38,658,532

12,317,002

TJX Companies, Inc.

271,466,724

2,288,068

Walgreen Company

81,981,476

 

 

396,716,161

 

TOTAL COMMON STOCKS

$3,500,701,834

 

Principal
Amount

 

Value (a)

U.S. GOVERNMENT OBLIGATIONS (6.54%)

$246,000,000

U.S. Treasury Bill due 11/26/04

$245,418,347

 

TOTAL U.S. GOVERNMENT OBLIGATIONS

$245,418,347

SUMMARY

Common Stocks

93.37%

$3,500,701,834

U.S. Government Obligations

6.54%

245,418,347

Net Cash & Receivables

0.09%

3,824,766

Net Assets

$3,749,944,947

Number of Shares Outstanding

25,239,363

Net Asset Value Per Share

$148.58

 

(a)  Securities traded on a national securities 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.

 

(b)  Affiliated Companies: Investment in portfolio companies 5% or more of whose outstanding voting securities are held by the Fund are defined in the Investment Company Act of 1940 as "affiliated companies."

 

(c)  Non-income producing.


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

 

DIRECTORS
William J. Ruane
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
 

William J. Ruane  

—  

Chairman of the Board

Richard T. Cunniff  

—  

Vice Chairman

Robert D. Goldfarb  

President

David M. Poppe  

Executive Vice President

Joseph Quinones, Jr.  

Vice President, Secretary & Treasurer

 

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
One 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.