Have you read the epic ‘Mahabharata’ & ‘Ramayana’? Don’t worry…even I haven’t. But, this man the great Warren Buffett is worth the 900 pages of ink. You read it right – it is that long. It details out the specifics of all the deals – personal & professional that he executes during this 75-year-old journey in this book. One thing I would respect him for is his memory. Elephants, take a bow !
When you read about one of the world’s richest me there is a lot of good that you can learn. Discipline, commitments, tenacity, vision are words that come to my mind when I read about this great man. However, while reading it not so good things come up. One of them is that rich men are greedy in general and after earning money can become a part of philanthropic foundations to keep their legend alive. I love the way where Warren finally thinks about ovarian lottery. The book mentions about his thoughts and how he once said that a person will be devoid of any opportunities if he was born in Bangladesh instead of 20th century America. Let me make my stance clear though – rich men are lucky but they work really hard at it. Warren Buffett is no exception!
Well, anyone who wants to read his biography has to be patient for him to go through many details of his life . First of all, you have to make sure that you like business biographies ( like ‘Call me Ted’ based on Ted Turner). The book starts with introduction to the buffets and their complete family clan. Warren buffett, son of Howard buffett – the conservative congressman, lives in Omaha and enjoys a decent childhood. Warren Buffett had a fascination with numbers from the very beginning. This got him involved in anything and everything that had numbers as a core ingredient. Thus, started his love for stocks and sifting through wall street journals and moody manuals anywhere & everywhere. After getting married to Susie buffet, he started a partnership and asked for funds from friends & family. Family business of stock broking wasn’t such an ideal choice for Warren buffet ,as in, stock broking involved making bigger revenues based on the increased number of transactions. In this, whether the customer loses money or gains is less of a concern to the stock broker. For Warren, everything was closely related to credibility which would hold true all his life.
Warren’s understanding had significantly improved when he began to buy companies through an open market route. Though he always believed in buying excellent businesses, his main business concept was something else. Warren would buy insurance companies – he had a very specific interest in them – their float. ‘Float’ is defined as the premium that is paid by hundreds of thousand individuals and companies to insure them against certain predetermined risks which materializes only for 10% of the clientele universe. Thereby, in effect, insurance companies have large floats – larger the organisation, larger the float. This propelled Warren into buying more companies and it would give him the purchasing power to crack more deals (read ‘Cash in hand’ is the best asset one can get). In his company buying spree, he bought a textile making business – textile company called Berkshire Hathaway. Till that moment, this was his biggest folly and no one knows why did he keep on buying more shares of the company and finally, renamed his partnership to Berkshire Hathaway.
From a novice in the stock market, his share rose to USD 80000 a piece – a number incredibly high by any standards. As he puts it, it is should be good enough to buy a high-end sports car in America. That was his way of measuring Berkshire’s success. On the path to success, he encountered prodigious troubles. Biggest of them all was near demise of ‘Salomon brothers’. In this episode, anyone who has read Micheal Lewis’s “Liar’s poker” will be up to date. Though Berkshire’s share price dropped during 2000s internet boom (almost 50% from its highs), he remained quite firm on his view that path breaking technologies have not been rewarding when it comes to long-term value generation. However, in the end, it is “Oracle of Omaha” who was true to his last word and came out winner with his share price good enough to buy couple of high-end sports car (it ranged near 160 k in 2006). Warren buffet is a wonder and he continues to amaze the whole world with his sheer brilliance. Simple life, no frills defines Warren – only one wife – Susie Buffet with three kids – Susie jr, Howie & Peter. He married again (Astrid Menks) only after his first wife died due to cancer. Warren was a lover of hamburger & french fries and could eat this kind of junk food over and over again. He had fixations on his weight and he would give his kids unsigned checks of USD 10000 after saying that if he doesn’t reduce 30 pounds in 3 months he would sign these checks for them. Warren would continue to incentivize them (for them to reduce weights !) even when they were all grown up. Warren was a simple man but his concepts were so profound and unique that it amazes me
I would recommend this book to anyone who has is fascinated by stock market & of course, Warren Buffett. I rate it a 4 out of 5.