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The Snowball: Warren Buffett and the Business of Life [Paperback]

Alice Schroeder
4.2 out of 5 stars  See all reviews (286 customer reviews)

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Book Description

October 27, 2009
Here is THE book recounting the life and times of one of the most respected men in the world, Warren Buffett. The legendary Omaha investor has never written a memoir, but now he has allowed one writer, Alice Schroeder, unprecedented access to explore directly with him and with those closest to him his work, opinions, struggles, triumphs, follies, and wisdom. The result is the personally revealing and complete biography of the man known everywhere as “The Oracle of Omaha.”

Although the media track him constantly, Buffett himself has never told his full life story. His reality is private, especially by celebrity standards. Indeed, while the homespun persona that the public sees is true as far as it goes, it goes only so far. Warren Buffett is an array of paradoxes. He set out to prove that nice guys can finish first. Over the years he treated his investors as partners, acted as their steward, and championed honesty as an investor, CEO, board member, essayist, and speaker. At the same time he became the world’s richest man, all from the modest Omaha headquarters of his company Berkshire Hathaway. None of this fits the term “simple.”

When Alice Schroeder met Warren Buffett she was an insurance industry analyst and a gifted writer known for her keen perception and business acumen. Her writings on finance impressed him, and as she came to know him she realized that while much had been written on the subject of his investing style, no one had moved beyond that to explore his larger philosophy, which is bound up in a complex personality and the details of his life. Out of this came his decision to cooperate with her on the book about himself that he would never write.

Never before has Buffett spent countless hours responding to a writer’s questions, talking, giving complete access to his wife, children, friends, and business associates—opening his files, recalling his childhood. It was an act of courage, as The Snowball makes immensely clear. Being human, his own life, like most lives, has been a mix of strengths and frailties. Yet notable though his wealth may be, Buffett’s legacy will not be his ranking on the scorecard of wealth; it will be his principles and ideas that have enriched people’s lives. This book tells you why Warren Buffett is the most fascinating American success story of our time.


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Editorial Reviews

From Publishers Weekly

Successful investor Warren Buffett sits down with author Schroeder to give readers deep and erudite insights into his work and personal life. Detailing his views on current trends in the economy and society, Buffet speaks with tremendous wisdom about everything from his family to his business ethics. Richard McGonagle gives an eloquent, straightforward reading. He has a knack for delivering words with a profound importance in his voice, drawing in listeners and holding their interest for hours. Schroeder reads her introduction and sets the tone for this revealing biography. A Bantam hardcover (reviewed online). (Oct.)
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved. --This text refers to the Audio CD edition.

From Bookmarks Magazine

Warren Buffett should be applauded for allowing such open access to his life. Alice Schroeder, who interviewed friends and family, pored over Buffett's personal archive, and spent thousands of hours with Buffett, comes away with an unprecedented look at the hidden life of an American icon. At more than 900 pages (100 of which are notes), The Snowball—the title is a metaphor for the relentless growth of Buffett's portfolio—sets the bar high for future efforts. Schroeder's account is comprehensive and her eye for the telling detail keen; while she explains the financial deals, she also explores Buffett's childhood quirks and his unconventional marriage. Enough is enough, though, and John Mark Eberhart of the Kansas City Star speaks for several critics when he points out, "I just could have done with a little less bang for my buck."
Copyright 2008 Bookmarks Publishing LLC --This text refers to the Hardcover edition.

Product Details

  • Paperback: 832 pages
  • Publisher: Bantam; Updated edition (October 27, 2009)
  • Language: English
  • ISBN-10: 0553384619
  • ISBN-13: 978-0553384611
  • Product Dimensions: 6.1 x 1.5 x 9.2 inches
  • Shipping Weight: 2 pounds (View shipping rates and policies)
  • Average Customer Review: 4.2 out of 5 stars  See all reviews (286 customer reviews)
  • Amazon Best Sellers Rank: #10,309 in Books (See Top 100 in Books)

More About the Author

Dubbed by Risk and Insurance magazine as one of the most respected--and fearless--thinkers on Wall Street, Alice Schroeder is the author of The Snowball: Warren Buffett and the Business of Life, a #1 New York Times and #1 Wall Street Journal bestseller.

Schroeder started to track the story behind the money as a CPA, and former regulator for the Financial Accounting Standards Board. After joining Morgan Stanley, she was the first and only analyst to be granted an interview with the famously reticent Buffett. Telling The New York Times, "I like the way she thinks and writes," Buffett gave Schroeder unprecedented access -- to his files, family, business associates and himself, devoting massive amounts of his time over the course of five years - to interviews and questions.

The Snowball is a complete -- and revealing -- look at Buffett's life, wisdom and philosophy, from the development of his outlook on the world and the principles he lives by to the business secrets he has never before shared publicly. It was named Amazon's #1 Business and Investing Book of 2008 and one of the 10 best books of the year by TIME. That same year Ms. Schroeder was chosen alongside Ben Bernanke and Hillary Clinton as one of the"People to Watch" by BusinessWeek.

Now a Bloomberg News columnist, she continues her signature brand of telling the greater truth, and is on the road researching her next book.

Customer Reviews

Most Helpful Customer Reviews
242 of 257 people found the following review helpful
Format:Hardcover
I recently re-read Roger Lowenstein's biography, Buffett: The Making of an American Capitalist (first published in 1995 and now re-issued with a new Afterword), and then read this more recent one by Alice Schroeder. Both are first-rate. Which to select if reading only one? That depends on how much you wish to know about Buffett's personal life, including his relations with various family members, and how curious you are about his personal hang-ups, peculiarities, eccentricities, fetishes, etc. If you can do without any of that, Roger Lowenstein's biography is the one to read. I also highly recommend the recently published Second Edition of The Essays of Warren Buffet: Lessons for Corporate America, with content selected, arranged, and introduced by Lawrence Cunningham.

The heft of Schroeder's biography may discourage some people from obtaining a copy. To them I presume to suggest that they not be deterred by that factor. Schroeder has a lively, often entertaining writing style that drives the narrative through just about every period and (yes) interlude of Warren Buffett's life and career thus far. There is much more information provided than most readers either need or desire. However, she had unprecedented access not only to Buffett but to just about everyone else with whom he is (or once was) associated as well as to previously inaccessible research resources. It is possible but highly unlikely that anyone else will write a more comprehensive biography than Schroeder has, at least for the next several years, if not decades. Also, her opinion of Buffett seems to me to be balanced and circumspect. No doubt he wishes that certain details about his life and career were not included. However, there has been no indication from him or those authorized to represent him that any of the material in this biography (however unflattering) is either inaccurate or unfair. Both halos and warts are included.

Others have shared their reasons for holding this book in high regard. Here are two of mine. First, although I had already read various Buffett's chairman's letters that first appeared in a series of Berkshire Hathaway's annual reports, I did not understand (nor could I have understood) the context for observations he shared, especially his comments about especially important 12-month periods throughout BRK's history. Schroeder provides the context or frame-of-reference I needed but previously lacked. For example, whereas in previous letters, Buffett merely offered brief updates on how each BRK company was doing, in 1978 he began to share his thoughts about major business topics such as performance measurement for management and why short-term earnings were a poor criterion for investment decisions. With the help of Carol Loomis, especially since 1977, his chairman's letters "had grown more personal and entertaining by the year; they amounted to crash courses in business, written in clear language that ranged from biblical quotations to references to Alice in Wonderland, and princesses kissing toads." As Schroeder explains, these gradual but significant changes of subject and tone reflect changes in Buffett's personal life as he became more reflective about business principles and more appreciative of personal relationships. His children were growing up and departing the "nest" in Omaha. His wife Susie decided to relocate to San Francisco. Meanwhile, his personal net worth continued to increase substantially. His national and then international recognition also increased. The "Oracle of Omaha" had finally become sufficiently confident of himself to reveal to others "a sense of him as a man."

I also appreciate how carefully Schroeder develops several separate but related themes that help her reader to manage the wealth of information she provides. The biography's title suggests one of these themes: the "snowball" effect that compounded interest can have. From childhood when he began to sell packs of gum (but not single sticks) and bottles of soda, and a money changer was his favorite toy, Buffett was fascinated by the way that numbers "exploded as they grew at a constant rate over time was how a small sum could be turned into a fortune. He could picture the numbers compounding as vividly as the way a snowball grew when he rolled it across the lawn. Warren began to think about it a different way. Compounding married the present to the future. If a dollar today was going to be worth ten some years from now, then in his mind the two were the same." Early in life, Buffett avoided making any purchases unless they were almost certain to generate compound interest. This theme is central to understanding Buffett's investment principles and to his own leadership of BRK. It also helps to explain why he could become physically ill when an investment cost others the funds they had entrusted to his care. Other themes include his determination to simplify his life to the extent he could (e.g. eating hamburgers and wearing threadbare sweaters, minimizing participation in family activities) so that he could concentrate almost entirely on business matters; his dependence on a series of women, beginning with his mother and two sisters (especially Doris) that continued with his first wife Susie (and their daughter "Susie Jr.") and then companion Astrid Menks whom he married in 2006; and his passion for helping others to understand the business principles to which he has been committed since childhood.

There is one other theme of special interest and importance to me: over the years, how Buffett has interacted with various associates, notably with Jerome Newman and Benjamin Graham, Sandy Gottesman, Charlie Munger, Bill Ruane, Katherine Graham, and Bill Gates. By all accounts, Buffett is a superb business associate once he agrees to become involved. He cares deeply about each relationship, does whatever may be necessary to protect and defend the best interests of his associates, and is extraordinarily generous with material rewards as well as recognition. Here is an especially revealing excerpt from Cunningham's Introduction to The Essays of Warren Buffett: "The CEOs at Berkshire's operating companies enjoy a unique position in corporate America. They are given a simple set of commands: to run the business as if (1) they are its sole owner, (2) it is the only asset they hold, and (3) they can never sell or merge it for one hundred years." These three "commands" are wholly consistent with what Lawrence explains earlier in the same Introduction: "The central theme uniting Buffett's lucid essays is that the principles of fundamental business analysis, first formulated by his teachers Ben Graham and David Dodd, should guide investment practice. Linked to that theme are management principles that define the proper role of corporate managers as the stewards of investment capital and the proper role of shareholders as the suppliers and owners of capital. Radiating from these main themes are practical and sensible lessons on the entire range of important business issues, from accounting to mergers to valuation." Those who shared Buffett's same core values of honesty and integrity, and who are also committed to the same basic principles, cherish their relationship with him.

To me, Alice Schroeder's rigorous and eloquent analysis of this theme of mutually productive and beneficial collaboration is her single greatest achievement among many in this definitive biography of one of the most important and yet least understood business leaders in recent years. Bravo!
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131 of 156 people found the following review helpful
5.0 out of 5 stars Valuable Insight into an Enigma! September 29, 2008
Format:Hardcover
The title of this book refers to Buffett's likening life to a snowball - "the important thing is to find wet snow and a really long hill." Buffett certainly has had that effect with money.

"The Snowball" begins with a Buffett presentation to an elite 1999 group at Sun Valley, suggesting in a humorous manner that the ".com" frenzy was no more than a bubble. Then, its on to learning why his associate Charles Munger (an inseparable partner since 1959) is both the opposite and highly similar to Buffett.

Warren Buffett, we learn comes from a heritage of very thrifty small business owners. His parents initially struggled through the Great Depression, carried initially by grandfather's letting the food bill run at his grocery store, then by the success of his newly opened stock brokerage that focused on conservative investments. Unfortunately, his mother was somewhat unbalanced, directing frequent tirades at Warren and his sister, creating a lifelong need for the approval of women. Calculating the comparative life spans of religious song writers while in church led Warren towards religious skepticism at an early age.

Armed with his father's nostrums and examples, his early business experiences (selling gum, pop, magazines, refurbished golf balls, delivering papers) and stock investment (sold too early, losing most of his potential profit), learning that he didn't like physical work (helping his father and grandfather), an early meeting with the head of Goldman Sachs (Buffett just pumped $5 billion into the firm), and knowledge from Benjamin Graham at Columbia Business School (Harvard turned him down), he went on to become the richest man in the world (had $5,000 by the time he finished high school - equivalent to $53,000 today) in a series of interesting stories within "The Snowball."

Buffett learned a number of important lessons en route to becoming the richest man in the world. 1)Commitments are so sacred that they should be rare; allies are important; grandstanding rarely gets anything done. 2)Customer loyalty is valuable (bought a gas station across from one with established clientele - never did well). 3)GEICO had a sustainable competitive model - lowest costs, protected by limiting clientele to government workers (more likely to be responsible), ability to invest funds prior to use. 4)Looking at management, ability to maintain sales growth (Charlie Munger) are important in addition to financial data emphasis (Benjamin Graham). (This was an important change because the number of statistical bargains had shrunk to virtually nil and tended to be small companies which did not work when large sums of money were involved.) 5)Public often overreacted - eg. American Express hit by Kennedy Assassination + DeAngelis soybean scandal at same time = good opportunity. 6)Diversification was not a good thing, as long as investment analysis had a high probability of correctness and low probability of drastic change. 7)Corollary of #6 was ruling out investing in complex technology or human problems (eg. strike, layoffs, plant closings).
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168 of 215 people found the following review helpful
2.0 out of 5 stars requires more editing October 24, 2008
Format:Hardcover
This review is to balance off the many positive reviews in Amazon:
(and to apply an expression from Berkshire Hathaway's brilliant Vice Chairman, Charlie Munger:
"Invert, always invert".)

~
point #1 on Alice Schroeder's Buffett biography:
When someone asked "what factor did people feel was the most important in getting to where they`d gotten in life" (sic), both Warren Buffett and Bill Gates answered: "focus" (p. 623)

Unfortunately, focus is missing in Schroeder's wordy, rambling 960 page biography. A quarter to a third of the content could have been pruned. This book could have used a few more months of rewriting, with more disciplined editing. Schroeder's book was at least five years in the making, yet With the world financial maelstrom upon us now, one wonders its September 2008 release is merely opportunistic publishing.

point #2: To use a Buffett expression: Schroeder is beyond her "circle of competence" . Schroeder has a finance background. When reading this book, We see can tell she does not have any past experience on writing an extensive in-depth personal biography.

~
In contrast, I would recommend you also read the Buffett biography written by Roger Lowenstein. Although published in 1995, it has a professional writer`s mark of clarity. Regrettably, Buffett gave Lowenstein a chilly reception after its publication. Lowenstein may have unfortunately become shut out from accessing Buffett for a subsequent revision.

In summary, Schroeder`s biography is worth reading, but you should expect to exert much patience and persistence when plowing through it. You will find nuggets in there, if you mentally block out certain sections and read between the lines.
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Most Recent Customer Reviews
3.0 out of 5 stars More like an autobiography
This book was ok but it is more about reading the struggles of being Warren Buffett. He had a psychologically difficult childhood that carried into his obsessions into adult life. Read more
Published 13 days ago by Dr. Rhonda Hazell
5.0 out of 5 stars An Amazingly thorough Portrait
N ot only does the author give great detail about every aspect and event of Buffet's life, but she gives the back-story for every life he touches or touches him. Read more
Published 27 days ago by batyark
5.0 out of 5 stars The Business of Making Money
Warren Buffett's story was very interesting. I liked reading about the investments he made, the people he worked with, and the effect of his work-a-holic lifestyle on his family. Read more
Published 1 month ago by Jeanne L. Renner
5.0 out of 5 stars Wonderfully written
Great writing and wonderful subject matter. What an inspiring person Buffet is and his story is told from the start. Its a must read for any business junkie out there.
Published 1 month ago by Elizabeth L. Taylor
5.0 out of 5 stars Worth the long read
This is a long book, but full of intriguing detail and insight. Even if you're not an investor, you will understand the investing philosophy of the world's best.
Published 2 months ago by Bob Lamons
5.0 out of 5 stars Inspiring!!!
Wow, from such humble beginnings to this larger than life character! Thank you Mr. Buffett for being so open and candid about your life. Read more
Published 2 months ago by Jojo
5.0 out of 5 stars Warren Buffet's biography
This book is well written. It is riveting and at the same time fascinating. For those interested in finance and investing it is required reading.
Published 3 months ago by Dr Dee
5.0 out of 5 stars will not fail your high expectations
A very well organized analysis in which the reader gets to know the "Oracle of Omaha" on a personal level; Warren Buffett, the man behind the magnate, the CEO of Berkshire... Read more
Published 3 months ago by Lidia Braboveanu
4.0 out of 5 stars Amazing man, very long book
I carried this book around for way longer than I should have. Interesting but dry in places. It's like EVERYTHING ha to be in there. Read more
Published 4 months ago by Barbara Frank
5.0 out of 5 stars Understand the man behind his success
This book is not about boasting his financial success, but rather a look down memory lane about how he has arrived at his point of success with the old school American way of life... Read more
Published 4 months ago by Alan Chong
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Is this a rough cut edition?
"Rough cut" sounds like a first draft or a grainy copy of an old movie! I thought this kind of page was called "deckle edge" and I have a number of books in that format. I think it's distinctive and elegant. I cherish the books I own with gilt edges, colored edges (usually... Read more
Oct 14, 2008 by DavLibris |  See all 37 posts
This book is $9.99 on Kindle
Anyone know if the photos are included in the Kindle versions?
Sep 30, 2008 by JCC |  See all 8 posts
Question on file size
I think so...I have this book in Kindle format...I have all the text, all the pictures. Kindle rocks!
Oct 29, 2008 by Michael Bigger |  See all 3 posts
When Warren Speaks, We Should Listen!
Today Warren said it is a good time to buy stocks.
Oct 17, 2008 by Yogi Bear |  See all 3 posts
Buffett, Please start a Fund to profit from the credit crisis and save USA
This is not only a money crisis but an American Culture Crisis:

. Real Estate KoolAid
. Excessive Leverage
. Acting not responsibly: Pledge allegiance to the flag and kick the country in the rear end for a buck
. Arrogance
. Having it so good for so long has its downside

Not only Wall Street... Read more
Oct 12, 2008 by Michael Bigger |  See all 3 posts
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