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Buffett à la carte

A successful investor does more things than make money. Here’s a book on the world’s richest man and most generous philanthropist, his friendships, his values

books Updated: Nov 01, 2008 23:17 IST

The Snowball:
Warren Buffett and the Business of Life
Alice Schroeder
Bloomsbury l Rs 995 l pp 960

A successful investor does more things than make money. Here’s a book on the world’s richest man and most generous philanthropist, his friendships, his values

Book of the week

Gautam Chikermane

It’s not his billion-dollar fortune that he’s built up entirely by investing that has forced me to follow each and every move the man has made since 1998. To me the money is incidental, a delightful by-product of the real thing — the simple, universal, disciplined method of making it. In the world of finance, Warren Buffett is the poet and the painter, the doer and the thinker. And Schroeder puts it together grippingly.

Any book on the man, his work and his values has to be seen and judged for two constituencies — that tightly-woven mass of value investors who seek to study or replicate his investing principles; and his fans. On both these charges, I plead guilty. And having devoured most books on him (he is still to write his autobiography), just when I thought there is no more value left in writing on the man, comes this charming 960-page, 3-tonne treatise.

Every author on Buffett lays stake to the claim of original analysis, exclusive interviews and so on. Schroeder’s is not very different. Her treatment, however, is humble and not hyper-amplified like James O’Loughlin’s The Real Warren Buffett: Managing Capital, Leading People. Or Buffettology by Mary Buffett and David Clark, where Mary tries to show access through family (she was his former daughter-in-law).

A quick, surface read will leave students of Buffett a little disappointed. But Schroeder’s skill lies in being able to reach the student through the fan. So, Buffett’s investing philosophy is not encapsulated in 10 bullet points. To get there, you have to know the man, his values.

Schroeder’s poignant chapter on the death of Buffett’s friend Katherine Graham, then chairperson of The Washington Post where Buffett had a substantial equity stake, for instance, brings out his vulnerability, his human side as he
needlessly blames himself: “If I’d been playing bridge with her that day she might not have fallen.”

Stories like these abound this well-researched paperback and that’s where its strength lies. It fills in the blanks that lie between Buffett’s incisive annual letters to his shareholders — a must for any equity investor — and news reports that tell us nothing more than his latest investment or his ever-growing net worth.

Which, in turn, is based on the principles of investing he learnt from his teacher Benjamin Graham, whose Intelligent Investor is essential reading for hard-core investors. Graham, who introduced Buffett to a moody creature called Mr Market was someone Buffett worshipped. But that didn’t stop him from following his own mind while investing in the insurance company Geico. Graham thought Geico was too expensive.

As a writer, Schroeder has three advantages. One, as an award-winning insurance analyst she can read numbers, so important while dissecting Buffett; she applies that research on his softer side as well. Two, seeing the bigger picture as an accounting policymaker. And three, the Buffett advantage — he liked the way she thought and wrote (reported in The New York Times) — who gave her the one precious commodity any writer would die for: his time. Putting all three together, Schroeder has been able to give us a rather intimate look into Buffett.

While Schroeder’s book will occupy a rather large, premium and rightful space on the bookshelves of Buffett students and fans alike, it doesn’t match the mature stature of Roger Lowenstein’s Buffett: The Making of an American Capitalist — my personal favourite. It also lacks the theoretical rigour of Lawrence A. Cunningham’s How to Think Like Benjamin Graham and Invest Like Warren Buffett — the best book to understand his techniques. The Snowball is like adding one more amazing stock to my exceedingly large portfolio of Buffett books — in the absence of my money growing like Buffett’s, at least my collection snowballs.