Great Read - Could Use More Updated Materials and a Bit More Investing Philosophy

books:

	• Buffett: The Making of an American Capitalist Roger Lowenstein Weidenfeld & Nicholson, 1996 - 512 pages average customer review:based on 106 reviews view larger image
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highly recommended

Great Read - Could Use More Updated Materials and a Bit More Investing Philosophy

When I first came across this book, I had planned on reading a Buffet biography for quite some time. I hesitated for a while because there were so many options. As I enjoyed reading Roger Lowenstein's, When Genius Failed, I made my decision to read this particular book based solely on my knowledge of the author. Fortunately, Lowenstein did not disappoint. Indeed, this Buffet biography is very well written and will be entertaining to both the lay person and professional investor, alike. If I could suggest one or two improvements, it would be for the author to reduce the overall length and sprinkle in a few more investing ideas. Also, potential readers should be aware that most of the content ends in the 1990s when the first edition was printed. So, much of the color about his friendship with Bill Gates and his first non-US investment, Israeli-based ISCAR, is missing.

Just as he did in When Genius Failed, Lowenstein does a great job describing historical accounts of entertaining or semi-dramatic events in Buffett: The Making of an American Capitalist. Remarkably, the author is able to paint very clear pictures of scenes that occurred 50 years ago. This particular work is especially impressive as the author received no assistance from Buffet himself making the task of collecting details on such events very difficult.

Unfortunately, the book contains very little explanation of Buffet's investment strategy. This book is not an investing textbook, which is understandable. Rather, it is a biography that has some elements of Buffet's investing wisdom explained. It would be nice if it had more details on the investing front.

Some readers might find the book a bit longer than necessary. Of course, the wordiness may be a matter of personal preference. I would argue that most readers will stay thoroughly entertained throughout the book.

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Excellent Biography

This is an excellent biography of Warren Buffett's life and why and how he has become the incredible person he is today. It is interesting and also well-written. It could make you an investor if you are not already one.

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English major lovin on Buffett

Read this because you want to know about the man and the method, not the money. I admire the billions of dollars that he's amassed on his own terms, but it's his history, relationships, and singular outlook on life that had me plowing through this tome like it was a short story. I am a reborn fan of biographies, and a new follower of financial books. I hope there are other books out there like this: clear, absorbing, and off-beat enough to make you laugh like a fool on a packed metro. I never dog-ear, but I had to all the way through this book for the stellar quotes dashed off here and there. One being, off the top of my head: "God sent me a blessed gift in the form of a Berkshire Hathaway Annual Report." AGH! And don't get me started on Mrs. B. Extremely worthwhile read.

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Wonderful, Almost Fairy Tale Like, Biography of Warren Buffet

Roger Lowenstein did a remarkable job in researching and writing the story of Warren Buffet. The book is delightful to read, and it balances well the personal and professional sides of Mr. Buffet. I find it amazing how the simplicity and unconventionalism (not to call it old-fashion style) of Mr. Buffet, adhering to basic Graham-Dodd principles of value investing and incarnating the opposite of all the Wall Street hype has proved successful over such a long time-span. I highly recommend this book to any investor!

The Business Genius as Everyman (Almost)

Note: The review that follows is of the Second Edition.

I recently re-read this Buffett biography (first published in 1995 and now re-issued with a new Afterword, dated January 2008) and then read Alice Schroeder's The Snowball: Warren Buffett and the Business of Life. 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.

In fact, I'd now like to provide a brief excerpt from Cunningham's 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 invested 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 business issues, from accounting to mergers to evaluation." Lowenstein does a skill job of examining the context in which various lessons were learned, both by Buffett and by those with whom he was associated. In fact, one approach to his life and career is to examine in terms of student-teacher relationships such as Buffett's with Graham and Dodd as well as others' with Buffett, notably Katherine Graham and those who comprised the "Graham Group": Jack Alexander, Ed Anderson, Henry Brandt, Robert Brustein, Buddy Fox, David ("Sandy") Gottesman, Tom Knapp, Charlie Munger, Bill Ruane, Walter Schloss, Roy Tolles, and Marshall Weinberg. Munger is probably the most important of these associates for reasons best revealed in the narrative. It is worth noting that when Lowenstein was about to begin what proved to be three years of research and then the writing of this book, Buffett informed him that he would do nothing to block his efforts nor would he do anything to assist them. In the Afterword, Lowenstein recalls his first post-publication encounter with Buffett at Berkshire Hathaway's annual meeting in1996. Despite everything that had happened in Buffett's life and career during the previous 45-50 years, Lowenstein observes that "Very little in the portrait, and nothing in the investment profile, has changed." His consistency "may be his least appreciated trait."

As does Schroeder but in somewhat greater detail, Lowenstein rigorously examines subjects that include:

1. The development of Buffett's business philosophy
2. His most important business relationships over the years
3. His most important personal relationships over the years
4. His non-negotiable values
5. What Berkshire Hathaway accomplished under his leadership as CEO
6. Buffett's insecurities
7. His views on philanthropy
8. His social awareness
9. His relationship with Melinda and Bill Gates
10. Why no one else has achieved comparable results by following Buffett's advice

Joe Nocera shares his own thoughts in response to the last point in a profile of Buffett that reprinted in Nocera's book, Good Guys and Bad Guys: Behind the Scenes with the Saints and Scoundrels of American Business. "I think the answer is twofold. First, truly great investing requires a temperament that very few people have. For most of us, it is difficult not to panic when the market tanks, for instance. It is hard not to want to jump on the hot stock, even if we know nothing about the business. The ups and downs of the market are stomach-churning events. The fundamental equanimity required to be a great investor is an extremely rare thing.

"The second reason we don't invest like Buffett is that his methods are far more complicated than they sound. Think about it: When Buffett talks about the `economic prospects' of a potential investment, what he means is that he wants to be able to see where the business will be 10 years from now. If he can see the business remaining dominant for the next decade, he'll consider buying the stock."

"One of the most important reasons for difference [i.e. being able to determine whether or not a business will remain dominant for the next decade] goes almost entirely unacknowledged among those who hope to find in Buffett an easily reproducible investing style. He is a genius when it comes to numbers. `Accounting,' he likes to say,' is the language of business.' It is a language in which his own fluency is unsurpassed, and which gives him an enormous competitive advantage. Usually, all he needs is a quick glance at a balance sheet to know whether he's interested in buying a company or not - because he finds meaning in numbers that the rest of us don't."

Warren Buffett is among the most effective CEOs in recent business history (at least since the conclusion of World War II) and there is certainly a great deal of value to be learned from his performance as both a leader and a manager. Although a business icon, he is also an exceptionally human being because of a unique combination of insecurities, hang-ups, fetishes, neuroses, etc. that various loved ones (notably wife Susie, daughter Susie, and companion Astrid) were able to manage with exquisite sensitivity. Like so many others, he cares more and more deeply than he is (generally) able to express. That said, one close associate and dear friend, Bill Ruane, suggested to Lowenstein after his book was published, "I'm not sure if you captured how [begin italics] tough [end italics] Warren is." Perhaps no one can but credit Roger Lowenstein with providing in this volume a thorough, balanced, multi-dimensional , and insightful explanation of how an ordinary man in almost every other respect accomplished greater success in business than almost anyone else ever has...or ever will.

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