QUARTERLY REPORT
For the Period Ended September 30, 2005

To the Shareholders of Sequoia Fund, Inc.:

Dear Shareholder:

Sequoia Fund's results for the third quarter of 2005 are shown below with comparable results for the leading market indexes:

With his partner Richard T. Cunniff, Bill started his firm in 1969 and launched the Sequoia Fund in 1970. He compiled one of the finest track records of any mutual fund manager in the country and built a firm in which intellectual rigor and decency were prized in equal measure. We are honored to be part of that.

Bill was an unusual capitalist, as he cared deeply about building up the funds entrusted to him by his clients, but very little about compounding his own. Bill looked for perfection in businesses and could wait patiently, sometimes for years, until he found the right stocks at the right prices. But if he had a cool eye for the market, he kept a warm heart for people. He wanted to improve the world around him and, in his energetic way, launched a number of entrepreneurial philanthropies. He cared deeply about education and mental health issues and took personal interest in the people he helped, especially children. He derived satisfaction from reading annual reports, but took true delight reading the improving report cards of youngsters he'd sent to school on scholarships. He could bend your ear on the subject of the capacity of disadvantaged children to learn. Then he'd smile and buy you a beer. He took his work seriously, but not himself.

Yeats wrote of the choice between perfection of the work or of the life. Bill was the rare man who never had to make that choice. He was exuberant, an optimist, and happy in the way that only a truly good man can be. He built a firm that was more like a second family, which grew over the years with new members astonished at their good fortune to have arrived in such a comfortable home. He respected every employee, rewarded hard work handsomely and endeavored always to strengthen the fabric of the firm.

He was without guile, with no trace of meanness in him. He insisted there be nothing mean in the way the firm did business. The slogan "First Class Business in a First Class Way" may be borrowed, but Bill proved that possession is nine-tenths of the law. He leaves us a precious legacy, which we treasure: a commitment to do right by clients, by employees, and by our own best selves.

October 10, 2005

SEQUOIA FUND, INC.

STATEMENT OF INVESTMENTS

SEPTEMBER 30, 2005 (UNAUDITED)

COMMON STOCKS (90.91%)

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.

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

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