Customer Reviews

The Real Warren Buffett: Managing Capital, Leading People

5 star:		(9)
4 star:		(2)
3 star:		(2)
2 star:		(2)
1 star:		(0)

 

 

I'm sure that like me your time is scarce and you are reading this review to determine which book to read next to improve your investment returns. Well I can save you some time and recommend that you read this one.
O'Loughlin's book won't make you smarter. What it will do is help you to cut out the mistakes that prove so costly to capial accumulation.
I've read most of the popular books about Buffett. All are interesting, because his tale is compelling, but unlike the others, this book is valuable too.
Why does Tiger win all the majors rather than Phil Mickelson? Both can hit amazing shots, but Tiger has developed a series of mental processes that enables him to employ superior course management to the rest of us and so reduce the chance of dropping shots.
So it is with Buffett. This book describes how Buffett has employed a series of mental models to circumvent the ways that our brains delude us into thinking we are making sound decisions when we are making poor ones.
The take-away messages are clear and I have found it relatively straight-forward to employ them in my investment decision making process. I am making fewer decisions, but feeling much more comfortable with each one.
There's much more to the book than this, but to be honest your time would be better spent learning from O'Loughlin and Buffett than from me.
It took Buffett 40 years and billions of dollars to learn these processes. You can learn them in a couple of hours for under 20 bucks. Now, that really is a Buffett-esque bargain!

This book is simply a summary of all the other books about Warren Buffett. It is interesting & tries to distil the concepts, but doesn't really add to our investment knowledge, unless you haven't read anything about Warren before. The continual references to Jack Welsh also seem redundant. You would be much better off reading "Making of an American Capitalist" by Roger Lowenstein which is the definitive Warren text. However, it is easy to read & gives a good overall view of the Buffett approach, but a lot of it is assumption or extrapolation based on other writers, shareholder letters & a bit of psychology thrown in for good measure. No important players were actually interviewed & given that the writer is based in the UK it appears he just pulled out his collection of Warren books, a psych. text & Jack Welsh's biography then started writing. The Warren worship is getting a bit tired.

A sentence crafter happily at work, James O'Laughlin imparts clarity with literacy. On the rare occasion that his industrious research does not find just the right quote from Buffett or Munger (chapters average 90 footnotes), he uses their favorite metaphors from sports and life. This is excellent writing that falls short only on prophesy and damnation. Buffett must pass Berkshire on to an heir in the next decade, but exactly who might follow him is given short shrift. How this unknown magician might cope with Munger (too old to be an heir) is avoided carefully. The manuscript was begun before September 11, 2001, created insurance chaos, but O'Laughlin doesn't elaborate upon it, beyond suggesting that chaos benefits Buffett - whose main float derives from super catastrophic insurance and reinsurance. We from getAbstract recommend this volume highly - along with getting to know the Real Buffett, you will learn a tidy amount about economics.

I read most of the books on Warren Buffett and structured my personal investment philosophy partially by studying this man. I say partially because I don't need to hold my investments as long as he does simply because I have less money, and can find more investment opportunities when the market fully values my positions.

Even though I am very familiar with Buffett's investment style, I still found this book valuable. There is something special about hearing a concept a second or third time, but from someone else. It makes you understand it on a completely different level. This is what this book has done for me. I particularly liked the author's explanation of how Buffett used the insurance business for its free float that he used to make other investments. The insurance business was like a bank, but better because float is like deposits but at a much cheaper price.

Some people might say that there is nothing new in this book, but I never get tired of hearing the same thing. It just reinforces to me that I am doing the right thing. I really enjoyed reading it.

- Mariusz Skonieczny, author of Why Are We So Clueless about the Stock Market? Learn how to invest your money, how to pick stocks, and how to make money in the stock market

Mr. O'Loughlin provides a high quality analysis of Mr. Buffett's leadership style, rational behaviour and critical self-appraisal. The book is well-researched. Even more important, it is well thought out. There is truth here. The challenge for the reader is to look in the mirror and acknowledge how little he knows, then go forth and allocate capital on that limited basis.

A sentence crafter happily at work, James O'Loughlin imparts clarity with literacy. On the rare occasion that his industrious research does not find just the right quote from Buffett or Munger (chapters average 90 footnotes), he uses their favorite metaphors from sports and life. This is excellent writing that falls short only on prophesy and damnation. Buffett must pass Berkshire on to an heir in the next decade, but exactly who might follow him is given short shrift. How this unknown magician might cope with Munger (too old to be an heir) is avoided carefully. The manuscript was begun before September 11, 2001, created insurance chaos, but O'Loughlin doesn't elaborate upon it, beyond suggesting that chaos benefits Buffett - whose main float derives from super catastrophic insurance and reinsurance. We recommend this volume highly - along with getting to know the Real Buffett, you will learn a tidy amount about economics.

Mr. O'Loughlin provides a high quality analysis of Mr. Buffett's leadership style, rational behaviour and critical self-appraisal. The book is well-researched. Even more important, it is well thought out. There is truth here. The challenge for the reader is to look in the mirror and acknowledge how little he knows, then go forth and allocate capital on that limited basis.

I first read this book in 2003 and re-read it again in December 2010.

O'Loughlin's "The Real Warren Buffett: Managing capital, leading people" focuses on both Buffett's skill as an investor and his role as a business leader. Most people are perhaps more familiar with the first yet curiously we are likely to learn more from the second. Why, well because Buffett was "hard-wired" with the kind of logical mathematical brain that favoured him in investing whereas he had to learn to become a good leader.

This book is a great help in addressing how Buffett became a sucessful business leader. It talks about the "explosion" in Buffett's cognition after 20 years being a successful stock picker which came in part from his exposure to Charlie Munger, his subsequent business partner. Just as Benjamin Graham influenced his early approach to investing, Charlie Munger was an equally important influence on his later approach to investing and business leadership.

O'Loughlin highlights how Buffett first began to address the issue of the "institutional imperative" in organisations and then realised it applied to him as well. What is the institutional imperative? It refers to the tendency of organisations to resist any change to its current direction. Buffett liked to quote Churchill who said "you shape your houses and then your houses shape you" and Lord Keynes who said "The difficulty lies not in the new ideas but in escaping from the old ones". In Buffett's case this meant escaping the old ways of valuing businesses that he learned from Ben Graham and learning new ways he was exploring himself urged on by Munger.

In Buffett's case his imperative was to stay focused on stock picking or "renting stocks" as O'Loughlin refers to it, whereas Munger was encouraging him to look at value creation and at those businesses that had enduring franchises (the great businesses as Munger called them). Such businesses had a future whereas for most of Buffett's short-term stock picks, their best days were behind them.

Once he started to acquire these "great franchises" he was faced with a new problem, 'How to motivate their managers to stay running the business long after most had any financial need to do so'? Buffett's answer to this question is the main reason he is as successful as a business leader. How did do it?

His challenge was to get the new managers to continue to think like owners. He did this by guaranteeing their autonomy, but trusting them and by giving them a reputation to live up to. He encouraged them to "run their companies as if these are the sole asset of their families and will remain so for the next century" (Buffett, Letter to Shareholders, 1999).

Ralph Schey noted, "The greatest strength he has - giving you a lot of freedom to run the business the way you want. And that way, you can't pass the responsibility back to him" (ex CEO Scott Fetzer). Bill Child noted, "He has a way of motivating you. He trusts you so much that you just want to perform" (R.C. Willey Home Furnishings). On retiring after 20 years working with Berkshire, Ben Rosner commented to Buffett (paraphrase)"I know why it worked" he said "you forgot you bought the business and I forgot I sold it". In 2000 Buffett said, "in our last 36 years Berkshire has never had a manager of a significant subsidiary voluntarily leave to join another business".

In re-reading the book now, I am struck by the emphasis that O'Loughlin places on "development" which is of course central to my own research on Buffett. I am also reminded that just because a book is eight years old, and there have been many other books on Buffett since (most of which I have read), doesn't reduce this book's many useful insights.

This book consists largely of quoting and paraphrasing Buffett. There are a few original insights which is why I give this book three stars and not two. It largely takes a "big picture" perspective looking at Buffet's management, leadership and capital allocation skills. It omits what I consider the most interesting part of his methodology which is the "low level" process of valuation, identifying durable competitive advantage and spotting mispriced opportunities. Overall a decent book but not for the "must read" list

i read this book about 3 years ago, i don't remember much, i guess the info was ok. but what i do remember is the author really didn't know how to get his points across. I think he needs a better editor.