Warren Buffett is one of the most respected businessmen and investors in the world. Buffett’s Berkshire Hathaway owns many well-known companies and has substantial ownership in other renowned institutions. However, Buffett himself tends to shy away from the spotlight. Especially, when the spotlight concerns his personal matters.
After all, Buffett has spent decades carefully shaping his reputation and his public perception.
However, Alice Schroeder’s unparalleled access to the “Oracle of Omaha” makes The Snowball: Warren Buffett and the Business of Life one of the best books to read if you’re interested in the personal life and evolution of one of the greatest investors of our generation.
With Buffett’s cooperation, Schroeder spent thousands of hours interviewing Buffett, his family, friends, and business associates. With this unrestricted access, this memoir offers more than a glimpse into Buffett’s childhood, personal life, and career.
However, Buffett’s biography will not teach you how to analyze stocks. Instead, each page provides valuable insight into the evolution of Buffett that led to him becoming the greatest investor of all time.
Note: If you are looking for Buffett’s “investing Bible,” consider reading this article on the book that shaped Buffett’s investment philosophy.
Buffett is extremely routinal
Old habits are had to break – especially, for an 89-year old whose habits built a $90 billion empire.
The Snowball opens showing the dichotomy between the modest, simple perception Buffett has cultivated over decades with the decadence of a multi-billionaire.
On his annual pilgrimage from Omaha to an investment conference in Sun Valley, Idaho, Buffett’s travel routine is almost nonchalant. Buffett personally drives himself onto the tarmac, boards his private jet carrying his own bag, and is virtually oblivious to the commotion around him.
Instead, Buffett opts to bury his head in his readings and research.
Schroeder explains how Buffett is a creature of habit. While he prefers the simplicity of Omaha, he often moves in powerful circles. He counts politicians, businessmen, and other billionaires as friends. After all, who wouldn’t want to be friends with such a folksy, beloved character such as Buffett?
While he owns several homes and could live anywhere in the world, Buffett lives in the same home he bought 40+ years ago. He arrives promptly to Berkshire Hathaway’s headquarters at 8:30AM. Buffett spends around 2 hours every night playing bridge on his home computer.
Clearly, Buffett has a special affinity for his routine and familiarity.
Buffett’s entrepreneurial spirit
Even as a child, Buffett has been an entrepreneur at heart.
The first pennies young Warren ever earned came from selling packs of gum at 6-years old for a meager 5 cents. With each pack sold, he made 2 cents. Schroeder explains these first few pennies represent “snowflakes in a snowball of money to come.”
As Buffett aged, he began other ventures. At age 10, he sold used golf balls. He also got a job selling peanuts and popcorn at University of Omaha football games. He even had a paper route.
Be patient and stay disciplined
Patience and discipline represent overarching themes in Buffett’s life that led to his success.
After all, Buffett did not become a billionaire over night. In fact, Buffett did not eclipse $1 billion until 1985 when he was in his mid-50s. Therefore, the vast majority of his fortune has snowballed over the last 20 years of his life.
Through frugality, hard work, and a disciplined investing approach, Buffett turned his investors’ small sums into gigantic fortunes over the decades of compounding.
A student of Benjamin Graham, author of The Intelligent Investor, Buffett’s investment strategy epitomizes a life of patient and disciplined forbearance for a greater good.
As The Snowball outlines, Buffett took away 3 main principles from Benjamin Graham’s class:
- A stock represents partial ownership in a business
- Use margin of safety to ensure good decisions are not offset by errors of judgement, estimation, and uncertainty
- Mr. Market is your servant and NOT your master
Just like Graham teaches through his allegory of Mr. Market, Buffett’s strategy for building wealth centers around buying and HOLDING great companies for the long-term rather than falling victim to Mr. Market’s drastic mood swings.
Be Defined by Your Reputation
A positive, well-respected reputation is built over a lifetime. However, your reputation can be destroyed in a single instance.
Therefore, Buffett has carefully crafted his reputation over the last several decades to ensure public perception reflects him favorably. As Schroeder outlines throughout her book, Buffett has always been a people-pleaser at heart.
Whether he sought the approval of his parents, peers in school, love interests, and the investing public, Buffett has valued his reputation above all else.
For this reason, Buffett implements choices in his investment portfolio and business life centered around protecting his reputation. Advocating for integrity over short-term gain, Buffett gives the example that business and investing decisions should be made as if they will be published on the front page of the Wall Street Journal for all to see.
Learn from the “Sage of Omaha” in this Biography
Schroder’s book, The Snowball: Warren Buffett and the Business of Life, teaches the principles that shaped Buffett.
Not only will you learn these valuable lessons to implement in your personal life and portfolio, you’ll learn about the intimate details that shaped one of the greatest investors of all time.
Both young and old investors alike will benefit from Buffett’s life lessons and investing wisdom.