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

QUARTERLY REPORT
For the Period Ended September 30, 2009

To the Shareholders of Sequoia Fund, Inc.:

As of this writing, the Sequoia Fund is up 15.87% year-to-date versus an increase of 23.89% for the S&P 500.

As a result of realized capital losses, we will not have a capital gains distribution during the year ended December 31, 2009. We will be distributing an ordinary dividend of approximately $0.02 per share on December 29th. The record date will be December 28th.

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

November 20, 2009

FUND PERFORMANCE

Sequoia Fund's results for the third quarter of 2009 are shown below with comparable results for the leading market indexes:

To September 30, 2009
Sequoia
Fund
Dow Jones
Industrials
Standard &
Poor's 500



3 Months

12.23%

15.82%

15.61%

9 Months

14.66%

13.49%

19.26%

1 Year

-8.22%

-7.38%

-6.91%

5 Years (Annualized)

1.92%

1.85%

1.02%

10 Years (Annualized)

5.45%

1.62%

-0.15%


The performance shown above represents past performance and does not guarantee future results. Current performance may be lower or higher than the performance information shown.

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. Year to date performance as of the most recent month end can be obtained by calling DST Systems, Inc. at (800) 686-6884.


FEES AND EXPENSES OF THE FUND
(UNAUDITED)

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.

Shareholder Fees (fees paid directly from your investment)

The Fund does not impose any sales charges, exchange fees or redemption fees.

Annual Fund Operating Expenses (expenses that are deducted from Fund assets)

Annual Fund Operating Expenses

Management Fees

1.00%

Other Expenses

0.04%

Total Annual Fund Operating Expenses

1.04%

Expense Reimbursement*

0.04%

Net Expenses

1.00%


* Reflects Ruane, Cunniff & Goldfarb Inc.'s ("Ruane, Cunniff & Goldfarb") contractual reimbursement of a portion of the Fund's operating expenses. This reimbursement is a provision of Ruane, Cunniff & Goldfarb's investment advisory agreement with the Fund and the reimbursement will be in effect only so long as that investment advisory agreement is in effect.

SEQUOIA FUND, INC.

SCHEDULE OF INVESTMENTS

SEPTEMBER 30, 2009 (UNAUDITED)

COMMON STOCKS (81.79%)

Shares

 

 

Value (a)


   

 

ADVERTISING (1.20%)

 

 

933,743

Omnicom Group Inc.

 

$34,492,466

     

 

AEROSPACE/DEFENSE (6.62%)

 

 

947,406

Precision Castparts Corp.

 

96,512,249

12,376,114

Rolls-Royce Group plc (United Kingdom)

 

93,093,130

     

 

 

 

189,605,379

     

 

AUTO PARTS (2.14%)

 

 

1,694,139

O'Reilly Automotive Inc. (b)

 

61,226,183

     

 

AUTOMOTIVE MANUFACTURING (4.75%)

 

 

1,729,657

Porsche Automobil Holding SE (Germany) (c)

 

136,004,660

     

 

BUILDING MATERIALS (5.41%)

 

 

1,437,304

Martin Marietta Materials Inc.

 

132,332,579

418,626

Vulcan Materials Company

 

22,635,108

     

 

 

 

154,967,687

     

 

CONSTRUCTION EQUIPMENT (1.30%)

 

 

1,520,736

Ritchie Bros. Auctioneers Incorporated

 

37,318,861

     

 

CRUDE OIL & GAS PRODUCTION (0.21%)

 

 

89,754

Canadian Natural Resources Limited

 

6,030,571

     

 

DIVERSIFIED COMPANIES (20.61%)

 

 

5,777

Berkshire Hathaway Inc. Class A (b)

 

583,477,000

2,190

Berkshire Hathaway Inc. Class B (b)

 

7,277,370

     

 

 

 

590,754,370

     

 

DIVERSIFIED MANUFACTURING (0.90%)

 

 

382,832

Danaher Corporation

 

25,772,250

     

 

FLOORING PRODUCTS (4.42%)

 

 

2,657,723

Mohawk Industries Inc. (b)

 

126,746,810

     

 

FREIGHT TRANSPORTATION (2.10%)

 

 

1,714,933

Expeditors International Inc.

 

60,279,895

     

 

INDUSTRIAL & CONSTRUCTION SUPPLIES (4.69%)

 

 

3,475,384

Fastenal Company

 

134,497,361

     

 

INFORMATION PROCESSING (2.11%)

 

 

298,457

MasterCard Inc.

 

60,333,083

     

 

INSURANCE BROKERS (0.75%)

 

 

1,124,830

Brown & Brown Inc.

 

21,551,743

     

 

PRINTING (0.96%)

 

 

1,912,072

De La Rue plc (United Kingdom)

 

27,434,409

     

 

RETAILING (13.10%)

 

 

39,666

Costco Wholesale Corporation

 

$ 2,239,542

1,368,875

Target Corporation

 

63,899,085

4,934,190

TJX Companies, Inc.

 

183,305,159

2,112,783

Walgreen Company

 

79,165,979

949,032

Wal-Mart Stores, Inc.

 

46,587,981

     

 

 

 

375,197,746

     

 

TRUCK MANUFACTURING (1.10%)

 

 

838,277

PACCAR Inc.

 

31,611,426

     

 

VETERINARY DIAGNOSTICS (6.34%)

 

 

3,636,178

Idexx Laboratories Inc. (b)

 

181,808,900

     

 

Miscellaneous Securities (3.08%) (d)

 

88,125,884

     

 

TOTAL COMMON STOCKS (COST $1,452,752,805)

 

$2,343,759,684

     

Principal
Amount

 

 

 


     
U.S. GOVERNMENT OBLIGATIONS (18.25%)    

$523,000,000

U.S. Treasury Bills due 10/8/2009 through 10/29/2009

 

$522,980,287

     

 

TOTAL U.S. GOVERNMENT OBLIGATIONS (COST $522,980,287)

 

$522,980,287

     
SUMMARY
   
Common Stocks
81.79%
$2,343,759,684
U.S. Government Obligations
18.25%
522,980,287
Net Cash & Receivables
(0.04)%
(1,020,250)
 
Net Assets
 
$2,865,719,721
 
Number of Shares Outstanding
 
26,235,437
 
Net Asset Value Per Share
 
$109.23
 

(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.

 

Securities traded on a foreign exchange are valued at the last reported sales price on the principal exchange on which the security is primarily traded. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at the close of the NYSE on that day.

 

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.

 

When reliable market quotations are insufficient or not readily available at time of valuation or when the Investment Adviser determines that the prices or values available do not represent the fair value of a security, such security is valued as determined in good faith by the Investment Adviser, in conformity with guidelines adopted by and subject to review by the Board of Directors.

 

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.

(b)

Non-income producing.

(c)

The Fund is invested in preference shares of Porsche Automobil Holding SE which possess the same economic interest as Porsche common stock but have no voting rights.

(d)

"Miscellaneous Securities" include holdings in their initial period of acquisition that have not previously been publicly disclosed.

Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in the three broad levels listed below:

Level 1 – quoted prices in active markets for identical securities

Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3 – significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used to value the Fund's investments as of September 30, 2009:


Valuation Inputs

 
 
Investments in
Securities


Level 1 - Quoted Prices

 

$2,343,759,684

Level 2 - Other Significant Observable Inputs *  

522,980,287


   

$2,866,739,971


*

Represents U.S. Treasury Bills with remaining maturities of 60 days or less which are valued at their amortized cost.

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 SEC's web site at http://www.sec.gov. The Fund's Form N-Q may also be reviewed and copied at the SEC's Public Reference Room in Washington, DC. For information regarding the operation of the SEC's Public Reference Room, call 1-800-SEC-0330. For a complete list of the Fund's portfolio holdings, view the most recent quarterly, semiannual or annual report on Sequoia Fund's web site at http://www.sequoiafund.com/fund_reports.htm.

You may obtain a description of the Fund's 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 Fund's web site at www.sequoiafund.com and use the "Shareholder Information" link to obtain all proxy information. This information may also be obtained from the Securities and Exchange Commission's web site at www.sec.gov or by calling DST Systems, Inc. at (800) 686-6884.

SEQUOIA FUND, INC.
767 Fifth Avenue, Suite 4701
New York, New York 10153-4798
(800) 686-6884
Website: www.sequoiafund.com

DIRECTORS
  Richard T. Cunniff
  Robert D. Goldfarb
  David M. Poppe
  Vinod Ahooja, Chairman of the Board
  Roger Lowenstein
  C. William Neuhauser
  Sharon Osberg
  Robert L. Swiggett
   
OFFICERS  
  Richard T. Cunniff — Vice Chairman
  Robert D. Goldfarb — President
  David M. Poppe — Executive Vice President
  Joseph Quinones, Jr. — Vice President, Secretary, Treasurer & Chief Compliance Officer
  Michael Valenti Assistant Secretary
     
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 LLP
One Battery Park Plaza
New York, New York 10004