Everyone interested in investing eventually hears about Warren Buffet. Some hear about Buffet through his investing track record while others are simply aware of his wealth. For those interested in reading about Buffet, there are no shortage of options: a search on Amazon for “Warren Buffet” books results in over 1000 results. In searching for a single book to read, I focused in on “The Snowball: Warren Buffet and the Business of Life” by Alice Schroeder. Spanning over 800 pages, the reader is taken on a journey through Buffet’s childhood, many business exploits and personal life. At times, the book’s exhaustive detail proved something of a challenge however, it was well worth reading to get a sense of one of the world’s outstanding investors.
In reading biographies, I am often curious to learn about a person’s early life. The Snowball delivers in spades in that respect. I was fascinated to read about Buffet’s paper routes, running a pinball business and other exploits. It was also interesting to read about Buffet’s father, Howard Buffet, an investor and a politician. Father and son did some work investing together but Buffet mostly established himself on his own. Buffet’s early hobbies – collecting information, understanding numbers and systems – are laid out in detail. For the modern reader looking for a lesson, it is telling to read about Buffet’s success in learning public speaking and people skills from the Dale Carnegie Course. It is also interesting to see that a rejection letter from Harvard changed the course of business history. After being rejected from Harvard, Buffet went to Columbia where he studied with Benjamin Graham, author of The Intelligent Investor and Security Analysis. The interplay between Graham and Buffet, both legendary value investors, is one of the book’s greatest qualities.
Buffet’s success in the world of investing, portrayed in great detail, is simply outstanding in the book. As a young man, Buffet read through publications on stocks constantly – he even took a Moody’s publication with him on his honeymoon! Constant reading on business remains a staple of Buffet’s method. It’s clear Buffet has kept up the habit of learning right up to the present. In a telling story, Schroeder relates Buffet’s delight at discovering the Korean stock market and learning the particularities of Korean accounting practices. It’s easy to think that Buffet’s investing approach has always been popular but this is not the case. Buffet’s avoidance of technology stocks during the dot com boom of the 1990s (and at other times) have led some observers to see him as outmoded. Despite this criticism, Buffet’s methods continue to deliver. It’s an excellent object lesson in patience and keeping Graham’s Mr Market at a wise distance.
Buffet’s family life is described in great detail through the book. It’s telling to see how Buffet’s family relationships changed over time. From my perspective, there is one key point on family life to keep in mind. The first is Buffet’s approach to estate planning: he gives some wealth to his family but the vast majority of his wealth is assigned to charitable organizations such as the Gates Foundation. Buffet is very self aware of his good fortune of living in the United States; he describes this as winning “the Ovarian Lottery.” There are some family hardships and challenges in Buffet’s life certainly, including at least one instance of a Buffet relation who attracted press attention.
In sum, I recommend the book for those with the appeitite to delve deeply into Buffet. There is much to learn here – in a way, the book is a personal history of American business and investing. Buffet started out in the business world where the telephone was the only available piece of technology and only adopted computers where he learned about Internet bridge. This was the last book I read in 2013 and it was well worth the effort.