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44 of 45 people found the following review helpful:
5.0 out of 5 stars
To a great extent, his life has been business...and business has been his life, November 17, 2008
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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116 of 145 people found the following review helpful:
5.0 out of 5 stars
Valuable Insight into an Enigma!, September 29, 2008
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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13 of 14 people found the following review helpful:
5.0 out of 5 stars
Investor since 1981., January 20, 2009
Very in depth material about Warren Buffett. Since we may very well be coming to an end of an era in the stock market, both the Greenspan book and this book are giving us a history lesson of the market and business world we have experienced. Since times have been very good in the market since 1982, and some would argue even before; there is a huge audience for this book at this time. Those who don't read it and are interested in investments will miss a great history lesson on what they have been investing in. Not to mention what could be in our future.
Much written here about Buffett is definitely true, eventhough very little is known about him, simply because the amount of detail could not be gotten without the cooperation of the whole Buffett family. You could say this book is like living the life of Warren and his family, because every detail is so laid out, you feel like you are there. In fact I found myself developing opinions, and wanted to tell this one or that one to act differently or compliment them on their life choices depending on their story, especially Warren and his wife Susie. But the most important story of the book is the story of Berkshire Hathaway, GEICO, Salomon Brothers, Long Term Capital Management, and labor strikes at the Buffalo and Washington Post papers, the annual meeting at Coca Cola. These stories show that what happened in the past is not all that different from what is happening today. I don't think I could do the book justice to try and bottom line it. All I can say is you just have to read the book and then you can decide for yourself. I thought I knew a lot, but soon found that even in this day and age, that the J.P. Morgan's and Warren Buffett are essential to the functioning of our economy. This is far from the idea I matured on, of a computer on every desktop, with the self reliance for everyone that would bring to us all. I came of age with that dream and am only a few years younger than Bill Gates. This book may well be best read by someone who is in their 20s and 30s, and hoping and dreaming of hitting it big in the business world and through their investments.
A real history lesson, don't miss it.
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