Title and author: Buffett, The Making of an American Capitalist by Roger Lowenstein – Book Review
Contents synopsis:
This superbly written pager is a biography of the enigmatic Warren Buffett from his birth to 1995. It is not an “authorized” biography that freed Lowenstein to write frankly not only about Buffett’s phenomenal success as an investor, but also about his personal flaws. .
From his midwestern middle-class upbringing in Omaha, Nebraska, the book takes him through all of his major personal and business events. You see what shaped this young man who was born fascinated by numbers and business and who began his entrepreneurial career at the age of 6 selling chiclets. Having learned the basics of stock trading from his father, he went on to study under the famous Benjamin Graham at Columbia. This is where you learn the basics of value investing and are warned to stay away from technical or speculative investing.
In the early 1950s, he went off on his own by creating small investor associations and continuing a lifelong obsession with American business. His encyclopedic knowledge of American corporations is explained, as well as his disciplined study of thousands of annual reports.
The book goes into fascinating details about the acquisition and transformation of Berkshire Hathaway, which eventually becomes Buffett’s holding company. You read about his returns with a major soft drink company, GEICO, and many other companies, including newspapers, airlines, and manufacturers. You also meet the fascinating and growing group of friends, associates, and colleagues you meet who expand your influence and reputation. The chapter on his brief time as CEO of Salomon Brothers and how he saved that company is fascinating and exciting.
Buffett’s investment performance has been unparalleled in American business. It has outperformed the stock market and any other investment portfolio. Amazingly, it did so consistently for over four decades. In the end he became the richest man in America.
The book also chronicles her personal life, her ups and downs, her relationships, and her family and friendships with notable people like Katherine Graham and, of course, her partner and longtime alter ego Charlie Munger.
Despite his incredible wealth and fame, Buffett remains loyal to his hometown in Nebraska, where he continues to live, and to the values and ethical standards he learned as a child. You will easily see why you have been compared to Mark Twain and Will Rogers for your homemade wisdom.
Readability / Writing quality:
Extremely well written, this is a turn of the page. Written almost like a novel, the biography is interesting throughout.
Notes on the author:
Roger Lowenstein was a reporter for the Wall Street Journal, authored and co-authored five books, has written for many major periodicals, and is a director of his own investment fund.
Three great ideas you can use:
1. The only way to make money on Wall Street is to invest in value. Intraday trading and speculation about the direction the market is heading is useless. Buffett demonstrated the value of having a clear understanding of the companies in which he invests.
2. Buffett’s genius, so to speak, is described by the author as “largely a genius of character, patience, discipline, and rationality.” This, along with a lot of hard work, is the foundation for success, including investment success.
3. Finding stocks that have a high value but a low price and investing long-term in businesses that are well managed is a key component of long-term success in the market.
Publication information:
Buffett, The Making of an American Capitalist by Roger Lowenstein
Copyright by Roger Lowenstein in 1995. Published by Main Street Books, Doubleday.
Overall Book Rating: Excellent
Writing style: attractive and easy to follow.
Utility: Very useful for anyone looking to understand what works well in value investing.
