The Snowball: Warren Buffett and the Business of Life
4.6 4.6 out of 5 stars | 4,383 ratings
Price: 29.53
Last update: 07-16-2024
Top reviews from the United States
Jose C5.0 out of 5 stars
Exellent Read
Reviewed in the United States on June 19, 2024
Exellent book to understand the success in investing, no guessing, no improvisation, hard work, analisys and the experience of 75 years in the field, a great inspirational story for the new generations many of whom expect instant reward in life, this book is about effort and success, also exellent quality edition
B. Joseph5.0 out of 5 stars
The Greatest Investor
Reviewed in the United States on February 4, 2009
Warren Buffett authorized Alice Schroeder, a former insurance analyst with Paine Webber, to pen his biography. He told her if there are 2 versions of a story, use the "less flattering version". This tidbit demonstrates how humble the greatest investor in history is. This book is 838 pages excluding notes. I read this book carefully and I will be reading it again. I admire Buffett. I bought my first BRK share in 1997 and its share price dropped 40% recently and fell below liquidation value. I bought a few more. BRK is my single largest holding, accounting for a third of my portfolio. If the price drops more, I will buy more.
The title Snowball refers to the power of compounding (snowflakes become snowballs). Buffett compounded businesses. He began to sell products (chewing gum) at age 6 years. He always had a fascination with numbers and money. He was a precocious child, very intelligent, good in math. By age 10 he visited Wall Street and developed an interest in stocks. Bought stocks shortly afterwards. By the time he was 16, he was worth $5000 (in today's dollars that would amount to $53,000).
He was born to intelligent parents who afforded him a good education. He states he won the "ovarian lottery". Had he been born in Bangladesh, for example, to a poor family, his skills in capital allocation would have been useless. As such, he states he was very lucky to be born in the USA. His father was a libertarian Republican congressman whom Buffett admired greatly and mourned his death. He was not close to his verbally abusive mother. Buffett himself is a well known liberal democrat and talks about the need for higher income and capital gains taxes. He says he is a democrat because of the party's stance on civil and reproductive rights. Buffett is an atheist. He has contributed to the democratic party, family planning and "nuke free" organizations.
Interestingly, Buffett wanted to attend Harvard but was rejected. He was accepted into Columbia where he fell under the sway of Graham and Dodd. He recommends Grahams' book Intelligent Investor. (He recently gave an interview asking investors to pay particular attention to chapters 8 and 20). He married Susan Thompson, the daughter of a prominent local physician. Susie bore him 3 children. Buffett was distant to his kids, he was busy and focused in his work of compounding money. He adored his wife but she became burned out caring for Buffett that later in life she moved to San Francisco and set up a waitress named Astrid Menks to care for Buffett. After Susie died a few years ago, Buffett married Astrid. Susie, with Warren's blessing, was a social activist. She was very engaged in the civil and gay rights movements. After Susie died, he became very close to his kids.
Buffett befriended Kay Graham, the owner of Washington Post Co. Kay was famous for her Washington DC parties. Buffett the country bumpkin from Nebraska, met many famous people at these parties which he called elephant bumping. After initial reticence, he found that he enjoyed elephant bumping very much.
Berkshire Hathaway was a textile mill that Buffett bought. It did not make any money, it was a losing business. Buffett sold it many years later but kept the name. He partnered with Charlie Munger and began to acquire more businesses. Their business dealings became so complex that they were investigated by the SEC in 1975. This caused Buffett a lot of lost sleep and anxious moments. The SEC commissioner, Stan Sporkin concluded that Buffett and Munger mistepped, but were not crooks. They got a gentle tap on the wrist. The incident caused Buffett and Munger to simplify their partnership.
Another anxious moment for Buffett and Munger was acquiring a stake in Salomon Brothers which became involved in a scandal in buying Treasury bonds. One rogue trader caused so much trouble. Buffett took over as chairman and worked with the federal regulators and paid a massive fine and returned Salomon to health and sold it off. One of the players in this incident was John Merriweather, who later left and founded Long Term Capital Management. In 1999, LTCM nearly imploded and risked causing a global financial meltdown. Buffett offered to buy LTCM only if Merriweather left. Buffett guarded his reputation zealously and Merriweather was considered tainted. The feds, led by Alan Greenspan, saved LTCM, creating a moral hazard. We are still paying the price today because the feds are intervening everywhere these days. Had Buffett taken over LTCM, there would have been no moral hazard.
Buffett said he made a mistake in investing in US Air. But he bought Net Jets and liked it so much even though it is not making much money. His purchase of General Re took years to pay off. He warned about derivatives long before they became toxic. He cleaned out bad management at Gen Re. His purchase of a utility company caused consternation at the time but with the recent alternative energy boom, his purchase now appears to be a stroke of genius.
He has now created a wonderful collection of businesses that will long outlast him at least by a generation. Like JP Morgan, John Rockefeller, and Sam Walton, Buffett's BRK will live on long after his death. Buffett is giving away his billions to the Gates Foundation. He is giving his children enough money but not too much. As Buffett says, his death with be a "buying opportunity".
The title Snowball refers to the power of compounding (snowflakes become snowballs). Buffett compounded businesses. He began to sell products (chewing gum) at age 6 years. He always had a fascination with numbers and money. He was a precocious child, very intelligent, good in math. By age 10 he visited Wall Street and developed an interest in stocks. Bought stocks shortly afterwards. By the time he was 16, he was worth $5000 (in today's dollars that would amount to $53,000).
He was born to intelligent parents who afforded him a good education. He states he won the "ovarian lottery". Had he been born in Bangladesh, for example, to a poor family, his skills in capital allocation would have been useless. As such, he states he was very lucky to be born in the USA. His father was a libertarian Republican congressman whom Buffett admired greatly and mourned his death. He was not close to his verbally abusive mother. Buffett himself is a well known liberal democrat and talks about the need for higher income and capital gains taxes. He says he is a democrat because of the party's stance on civil and reproductive rights. Buffett is an atheist. He has contributed to the democratic party, family planning and "nuke free" organizations.
Interestingly, Buffett wanted to attend Harvard but was rejected. He was accepted into Columbia where he fell under the sway of Graham and Dodd. He recommends Grahams' book Intelligent Investor. (He recently gave an interview asking investors to pay particular attention to chapters 8 and 20). He married Susan Thompson, the daughter of a prominent local physician. Susie bore him 3 children. Buffett was distant to his kids, he was busy and focused in his work of compounding money. He adored his wife but she became burned out caring for Buffett that later in life she moved to San Francisco and set up a waitress named Astrid Menks to care for Buffett. After Susie died a few years ago, Buffett married Astrid. Susie, with Warren's blessing, was a social activist. She was very engaged in the civil and gay rights movements. After Susie died, he became very close to his kids.
Buffett befriended Kay Graham, the owner of Washington Post Co. Kay was famous for her Washington DC parties. Buffett the country bumpkin from Nebraska, met many famous people at these parties which he called elephant bumping. After initial reticence, he found that he enjoyed elephant bumping very much.
Berkshire Hathaway was a textile mill that Buffett bought. It did not make any money, it was a losing business. Buffett sold it many years later but kept the name. He partnered with Charlie Munger and began to acquire more businesses. Their business dealings became so complex that they were investigated by the SEC in 1975. This caused Buffett a lot of lost sleep and anxious moments. The SEC commissioner, Stan Sporkin concluded that Buffett and Munger mistepped, but were not crooks. They got a gentle tap on the wrist. The incident caused Buffett and Munger to simplify their partnership.
Another anxious moment for Buffett and Munger was acquiring a stake in Salomon Brothers which became involved in a scandal in buying Treasury bonds. One rogue trader caused so much trouble. Buffett took over as chairman and worked with the federal regulators and paid a massive fine and returned Salomon to health and sold it off. One of the players in this incident was John Merriweather, who later left and founded Long Term Capital Management. In 1999, LTCM nearly imploded and risked causing a global financial meltdown. Buffett offered to buy LTCM only if Merriweather left. Buffett guarded his reputation zealously and Merriweather was considered tainted. The feds, led by Alan Greenspan, saved LTCM, creating a moral hazard. We are still paying the price today because the feds are intervening everywhere these days. Had Buffett taken over LTCM, there would have been no moral hazard.
Buffett said he made a mistake in investing in US Air. But he bought Net Jets and liked it so much even though it is not making much money. His purchase of General Re took years to pay off. He warned about derivatives long before they became toxic. He cleaned out bad management at Gen Re. His purchase of a utility company caused consternation at the time but with the recent alternative energy boom, his purchase now appears to be a stroke of genius.
He has now created a wonderful collection of businesses that will long outlast him at least by a generation. Like JP Morgan, John Rockefeller, and Sam Walton, Buffett's BRK will live on long after his death. Buffett is giving away his billions to the Gates Foundation. He is giving his children enough money but not too much. As Buffett says, his death with be a "buying opportunity".
Benjamin Mun4.0 out of 5 stars
A Business Journey
Reviewed in the United States on December 10, 2023
Through this book, I got to understand better Mr. Buffett both as a businessman and as a man. I gained greater understanding of how he built the titanic Berkshire Hathaway, a household name among any aspiring businessmen. Simultaneously, though, I learned about some of his personal vulnerabilities, such as his social awkwardness (especially when he was young) and semi-abdication of responsibility as a father and a husband because of his unbalanced investment of time in his business affairs. Still, these vulnerabilities humanized him and added depth to his story.
It was pleasant to read about his business journey fueled by his love for busines and money and about his personal journey detailing the growth of an awkward kid from a cornfield state to a caring man who truly wishes his wealth to transform this world into a better, fairer place.
It was pleasant to read about his business journey fueled by his love for busines and money and about his personal journey detailing the growth of an awkward kid from a cornfield state to a caring man who truly wishes his wealth to transform this world into a better, fairer place.
Marcelo P. Lima5.0 out of 5 stars
Finest insight into the man and his investments
Reviewed in the United States on October 27, 2008
Alice has written a singularly remarkable book: for the first time we have a historical record of Buffett's career with his cooperation as well as the cooperation of those close to him. The book gives Buffett masterful treatment by placing his saga in its appropriate historical context. For students of the world's greatest investor, this is a godsend and adds tremendously to the existing literature. You'll get so much out of this that for the price of the book, you're being paid to read it.
One of the book's best features is the amount of detail it provides on many of Buffett's investments. From a bird's eye view (and from reading the existing histories as well as his letters to investors), you've heard that he bought Washington Post stock and that it turned into a multi-decade multi-bagger for Berkshire. Reality is a lot more complicated than that. Buffett created Kay Graham as an expert capital allocator and had hands-on (literally) involvement with the company. The same is true of GEICO. Buffett's greatest investments, therefore, have been those in which he has invested much more than just his capital.
We also learn that Buffett relied much more than previously thought on his network of friends, and encouraged them to "ride the coattails" of great investors (though not his). Whereas the American Express investment during the salad oil crisis had been explained very simplistically, here we learn that Buffett employed friends to dig up large piles of scuttlebutt and reports on the company before committing capital. And so it goes. Alice provides a very balanced, sometimes skeptical, look at Buffett's life. She's no pushover and holds her own by successfully treating her subject objectively (at least much more than I expected).
Buffett is the world's greatest simplifier: he lives by simple, crisp rules. And in the end, he notes that the purpose of life is to be loved by as many people as possible among those you want to have love you. If you take one lesson from this book, it's that there are two things that even a mountain of cash can't buy: a sterling reputation, and love.
Many anecdotes are poignant, others hilarious, and all are instructive and insightful. At various points I was laughing out loud. The world is much enriched by this history. Is it perfect? No, but neither could it be. Different readers will have different demands. Some won't care about the personal side, and wish the author had provided even more detail on the businesses and investments. But the personal side of this enigmatic personality is essential to an understanding of this puzzle of a man who has, without a doubt, the finest reputation and track record of any juggernaut businessman who ever lived.
If Roger Lowenstein's excellent "The Making of an American Capitalist" is the undergraduate course on Buffett, then this is the master's degree -- masterfully written, researched, thought out, and a valuable gift to Buffett aficionados, admirers, and students of life.
One of the book's best features is the amount of detail it provides on many of Buffett's investments. From a bird's eye view (and from reading the existing histories as well as his letters to investors), you've heard that he bought Washington Post stock and that it turned into a multi-decade multi-bagger for Berkshire. Reality is a lot more complicated than that. Buffett created Kay Graham as an expert capital allocator and had hands-on (literally) involvement with the company. The same is true of GEICO. Buffett's greatest investments, therefore, have been those in which he has invested much more than just his capital.
We also learn that Buffett relied much more than previously thought on his network of friends, and encouraged them to "ride the coattails" of great investors (though not his). Whereas the American Express investment during the salad oil crisis had been explained very simplistically, here we learn that Buffett employed friends to dig up large piles of scuttlebutt and reports on the company before committing capital. And so it goes. Alice provides a very balanced, sometimes skeptical, look at Buffett's life. She's no pushover and holds her own by successfully treating her subject objectively (at least much more than I expected).
Buffett is the world's greatest simplifier: he lives by simple, crisp rules. And in the end, he notes that the purpose of life is to be loved by as many people as possible among those you want to have love you. If you take one lesson from this book, it's that there are two things that even a mountain of cash can't buy: a sterling reputation, and love.
Many anecdotes are poignant, others hilarious, and all are instructive and insightful. At various points I was laughing out loud. The world is much enriched by this history. Is it perfect? No, but neither could it be. Different readers will have different demands. Some won't care about the personal side, and wish the author had provided even more detail on the businesses and investments. But the personal side of this enigmatic personality is essential to an understanding of this puzzle of a man who has, without a doubt, the finest reputation and track record of any juggernaut businessman who ever lived.
If Roger Lowenstein's excellent "The Making of an American Capitalist" is the undergraduate course on Buffett, then this is the master's degree -- masterfully written, researched, thought out, and a valuable gift to Buffett aficionados, admirers, and students of life.