Alice Schroeder was a Wall Street analyst and managing director at Morgan Stanley before becoming a full time writer. Buffett had met Schroeder when she was working as an analyst, admired her work, and agreed to speak to her.
It is interesting that Buffett would suggest Schroeder turn to full time writing, as he seemed to unconsciously pick his own biographer. Like his renowned sharpness for picking the right stocks, his canniness also extends to biographers.
The Less Flattering Version
Curiously, one of the major themes of The Snowball is the famous investor’s need to surround himself with supportive and intelligent women. With Schroeder he has a writer who deeply admires her subject, finding Buffett to be an exemplar of honesty, decency and common sense, someone immune to the modern day obsession with conspicuous wealth and fame. Yet Schroeder also follows Buffett’s suggestion when digging for facts on her subject. “Whenever my version is different from somebody else’s, Alice, use the less flattering version.”
The extraordinary investing highs of Buffett’s life are indeed humbled by his many human frailties. There is his natural timidity, an aversion to confrontation at all costs. Like most obsessive geniuses, Buffett lets his personal relationships fall into neglect, most notably with his children. He suffers an inability to deal with the ugly realities of life: sickness, suffering and death.
Emotionally, Buffett is not a giver but a needy taker. Hence he surrounds himself with nurturing women. Ironically the man who ruled the stockmarkets, who excelled at scientifically picking apart the entrails of business balance sheets, could barely dress himself and fix breakfast every morning without help. Like his attitude to food (“If a three-year doesn’t eat it, I don’t eat it.”), Buffett is in many respects quite childlike and immature, needing constant mothering.
Warren Buffett and His Philosophy of Wealth
If this is ‘the less flattering version’, then they are only minor personal failings. Buffett may have clung tenaciously to every penny throughout his life, and drained the women close to him to their last emotional drop, but the grand scheme of his life, what it all meant in the end, was perhaps best illustrated by his decision in 2006 to give away approximately 10 million Berkshire Hathaway Class B shares to the Bill and Melinda Gates Foundation (worth approximately US$30 billion). Collecting money was a great game, but giving it away, redressing the imbalances in society, was the right thing to do.
Here is Warren Buffet on his philosophy of wealth:
“Wealth is just a bunch of claim checks on the activities of others in the future. You can use that wealth in any way you want to. You can cash it in or give it away. But the idea of passing wealth from generation to generation so that hundreds of your descendants can command the resources of other people simply because they came from the right womb flies in the face of a meritocratic society.”
In the end, it turns out, money is not the measure of all things. Love is. On this Buffett talks movingly.
“I know people who have a lot of money, and they get testimonial dinners and they get hospital wings named after them. But the truth is that nobody in the world loves them. If you get to my age in life and nobody thinks well of you, I don’t care how big your bank account is, your life is a disaster.”
The Snowball is a grand work of biography. Schroeder has done a wonderful job of making an unlikely subject, an investment guru obsessed with numbers and financial reports, into an absorbing life. She skilfully weaves the politicial, personal and cultural events that surrounded Buffett, showing how they helped form Buffett’s life and philosophy. Most notably there is Buffett’s father, Howard Buffett, a Republican politician and deeply honest, who would remain a major influence.
The depression era boy who delivered newspapers, dodging snapping dogs and knocking on doors to ensure he got payment never left the grown man. The investment expert who made billions in trading stocks also had an abhorrence for the razzle-dazzle culture of Wall Street. Buffett, now an old man, esteems the love and the respect of your peers as the ultimate value in life. Holding onto money may be the only way to compound it and make it grown, but ultimately giving is more important than hoarding.
Perhaps there is one last question. How to make lots of money? Does the book provide an easy answer? No. Money is made over a long period of time, slowing adding each ‘snowflake’ you save to your snowball until it grows bigger and bigger. Thrift, common sense, delayed gratification and the absence of greed are what’s needed. And yet maybe that’s not enough, either. Perhaps the greatest investment you can make, according to Buffett, the sage of Omaha, is in personal relationships.
Published by Bantam Books, 2008.
Chris Saliba - Chris Saliba is a freelance writer. Read more of his workplace articles at chrissalibafreelancewriter.blogspot.com
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