A Buffet Book Blog
What can you do? Warren Buffet -- the richest man in the world, is a god darn liberal--going way back. He opposed the war in Vietnam and bankrolled Eugene McCarthy peace candidacy.. He thought stock options should be expensed. He favored the infamous “death tax” believing inherited wealth is wrong. He supports abortion rights throughout the globe. Obama said he would make a good Secretary of Treasury, for God sakes.
Some people say he is a traitor to his class.
Alice Schroeder, a Wall Street analyst, takes a good long look at Buffet in her 960-page (with footnotes, an index and pictures) book,
Given that, this is an insightful book. You get a feel for Buffet, who started amassing his wealth when he was six years old, selling packs of chewing gum. At 10, he was hawking peanuts at college football games and picking up used golf balls that they found in the muck. Inspired by the book One Thousand Ways to Make $1000, Buffet bought his first three shares of stock in 1942, at the age of 12. He made more than his teachers with his paper route money,
.
But two of his money making schemes were the most telling:
*Picking up beer soaked second and third place tickets thrown away at the horse races. Ignorant gamblers -- watching too many movies where almost-winners tossed their losing tickets into the air in frustration -- didn’t realize that second and third place tickets was worth something. Buffet did, and got something for nothing by picking them off the floor
.
Buffet also got a friend to fix discarded pinball machines, putting them in a barbershop, and splitting the take. Again, Buffet turned trash into something useful, and made a buck out of it
.
Buffet spent of his life taken discarded and undervalued stocks, troubled companies, fixing them up, cashing them in, and making a buck out of it. Even Berkshire Hathaway, his flagship company, started out as a dying textile factory.
The world of investing – according to Buffet – was very simple. Find the real value of something. Divide it by the number of shares. Buy it below that price. Sell it when it reaches or exceeds it true value, to buy another undervalued company.
It was easier said then done. But Buffet, even though he was the son of a congressman – so extremely right wing that he alienated Republican Party in the days of Roosevelt – was a self made man. Although he viewed himself as a winner of the lottery because he didn’t grow up in some third world country without the opportunities that he took advantage of here, Bufffet did not build his wealth on the fortune amassed by his forefathers. Indeed, Buffet hated inherited wealth so much that he was extremely stingy (give the fact that he was a multi-billionaire) with his own children, though he started to ease up on this as he got older. That is why he could never buy into the rabid hatred of the inheritance tax.
And, unlike most of the rich and the famous at the end of their live, Buffet put most of his money in foundation bearing his family name (though several exist) but instead handed it over the Bill and Melinda Gates Foundation. The close connection between the first and second richest (depending on what year it is) men in the world is just one of the fascinating items in this book. Buffet, hadn’t even touched a mouse (without fur on it) before he met the king of Microsoft, and afterward used computers primarily to play bridge. Buffet never put money into software, or hardware for that matter. Indeed the book open with the Oracle from Nebraska prediction -- to wide derision in July of 1999 at the height of the high tech bubble -- that vastly over inflated stocks would burst. (An enraptured Schroeder makes it seem like it was when Babe Ruth pointed to the very spot in the bleachers where he was about to slug the ball)
Yet Gates and Buffett were two nerds of a kind. Both felt more comfortable around numbers then people, yet had a knack for building companies based on loyalty that comes from good people skills. Both were obsessed with money. Both stuck with their field of expertise.
For Buffett, this included undervalued companies that he understood (with a few exceptions here and there), particularly in the insurance field. What Buffet like about insurance companies was the float: the fact that companies put billions of dollars in reserves that they had to invest. In other words, make money wiith other people’s money.
And here New Hampshire readers will enjoy lengthy potions of the book concerning Jack Byrne, the retired insurance executive who founded White Mountains Insurance Group, out of Hanover, NH. (Berkshire Hathaway had a big piece of it, but pulled out shortly after Byrne retired.)
Byrne for his part, could hardly stop talking about Buffet when I interviewed him on June of 2006. He was amazed at billionaires ability to read reams of financial statements, and to pay attention to every small detail including the footnotes.
But in the end Buffet started to value other things besides money. Buffet couldn’t bear to go to his friend Katherine Graham (the former editor of the Washington Post) deathbed after she collapsed at his own annual confab) because he couldn’t deal with real and painful emotions. Yet he forced himself and tended to his dying wife. He ended up learning to actually talk to his children. And when asked by college students about his missed opportunities, it was not this stock or not, but not giving more time to his family.
No wonder these wishy-washy liberals fall all over him.
.
Some people say he is a traitor to his class.
Alice Schroeder, a Wall Street analyst, takes a good long look at Buffet in her 960-page (with footnotes, an index and pictures) book,
Given that, this is an insightful book. You get a feel for Buffet, who started amassing his wealth when he was six years old, selling packs of chewing gum. At 10, he was hawking peanuts at college football games and picking up used golf balls that they found in the muck. Inspired by the book One Thousand Ways to Make $1000, Buffet bought his first three shares of stock in 1942, at the age of 12. He made more than his teachers with his paper route money,
.
But two of his money making schemes were the most telling:
*Picking up beer soaked second and third place tickets thrown away at the horse races. Ignorant gamblers -- watching too many movies where almost-winners tossed their losing tickets into the air in frustration -- didn’t realize that second and third place tickets was worth something. Buffet did, and got something for nothing by picking them off the floor
.
Buffet also got a friend to fix discarded pinball machines, putting them in a barbershop, and splitting the take. Again, Buffet turned trash into something useful, and made a buck out of it
.
Buffet spent of his life taken discarded and undervalued stocks, troubled companies, fixing them up, cashing them in, and making a buck out of it. Even Berkshire Hathaway, his flagship company, started out as a dying textile factory.
The world of investing – according to Buffet – was very simple. Find the real value of something. Divide it by the number of shares. Buy it below that price. Sell it when it reaches or exceeds it true value, to buy another undervalued company.
It was easier said then done. But Buffet, even though he was the son of a congressman – so extremely right wing that he alienated Republican Party in the days of Roosevelt – was a self made man. Although he viewed himself as a winner of the lottery because he didn’t grow up in some third world country without the opportunities that he took advantage of here, Bufffet did not build his wealth on the fortune amassed by his forefathers. Indeed, Buffet hated inherited wealth so much that he was extremely stingy (give the fact that he was a multi-billionaire) with his own children, though he started to ease up on this as he got older. That is why he could never buy into the rabid hatred of the inheritance tax.
And, unlike most of the rich and the famous at the end of their live, Buffet put most of his money in foundation bearing his family name (though several exist) but instead handed it over the Bill and Melinda Gates Foundation. The close connection between the first and second richest (depending on what year it is) men in the world is just one of the fascinating items in this book. Buffet, hadn’t even touched a mouse (without fur on it) before he met the king of Microsoft, and afterward used computers primarily to play bridge. Buffet never put money into software, or hardware for that matter. Indeed the book open with the Oracle from Nebraska prediction -- to wide derision in July of 1999 at the height of the high tech bubble -- that vastly over inflated stocks would burst. (An enraptured Schroeder makes it seem like it was when Babe Ruth pointed to the very spot in the bleachers where he was about to slug the ball)
Yet Gates and Buffett were two nerds of a kind. Both felt more comfortable around numbers then people, yet had a knack for building companies based on loyalty that comes from good people skills. Both were obsessed with money. Both stuck with their field of expertise.
For Buffett, this included undervalued companies that he understood (with a few exceptions here and there), particularly in the insurance field. What Buffet like about insurance companies was the float: the fact that companies put billions of dollars in reserves that they had to invest. In other words, make money wiith other people’s money.
And here New Hampshire readers will enjoy lengthy potions of the book concerning Jack Byrne, the retired insurance executive who founded White Mountains Insurance Group, out of Hanover, NH. (Berkshire Hathaway had a big piece of it, but pulled out shortly after Byrne retired.)
Byrne for his part, could hardly stop talking about Buffet when I interviewed him on June of 2006. He was amazed at billionaires ability to read reams of financial statements, and to pay attention to every small detail including the footnotes.
But in the end Buffet started to value other things besides money. Buffet couldn’t bear to go to his friend Katherine Graham (the former editor of the Washington Post) deathbed after she collapsed at his own annual confab) because he couldn’t deal with real and painful emotions. Yet he forced himself and tended to his dying wife. He ended up learning to actually talk to his children. And when asked by college students about his missed opportunities, it was not this stock or not, but not giving more time to his family.
No wonder these wishy-washy liberals fall all over him.
.
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