Snowball: Warren Buffett
and the business of life
Author: Alice Schroeder
Published by: Random House, 2008
In the darkest days of the great financial meltdown of 2008, the world wondered if the savants of market capitalism had miscalculated in a frightening and irreversible way. Alan Greenspan’s tenure as Chairman of the Federal Reserve was under withering fire. Robert Rubin’s absentee status as a high paid face without portfolio for a bank on the verge of bankruptcy made him untouchable. People wondered if even the venerable leaders of Goldman Sachs were perhaps not quite as smart as once thought.
Enter Warren Buffett, the oracle of Omaha. During the bleakest moments of the winter of our financial discontent, it was Buffett, the seasoned, nonpareil investor, who never lost his voice or his confidence in the sturdiness of market capitalism. He had warned of the dangers of derivatives years before. He had warned of the housing bubble. He had warned of easy money. Now, however, he became the soothing voice of reason, rationality and calm, investing $5bn in Goldman Sachs, buying when others were selling, encouraging colleagues and friends not to let fear guide their investment behavior. For millions of investors, Buffett was the sole voice of reason during the most trying days of the global financial meltdown of 2008.
Reading Alice Schroeder’s remarkable biography of Buffett, we learn why. Though Buffett designated Schroeder as his personal biographer, she delves deeply and with unexpected candor into the history and psyche of this most engaging and idiosyncratic man. A family history of mental illness, an ability to befriend the smartest mentors, cultivating the closest of friends, nurtured by forceful women (surrogate mothers to be sure), Buffett’s personal puzzle is constructed by Schroeder’s book from dozens of fascinating pieces.
Two things seem to me most true and important about the life of Warren Buffett. He has unquestioned integrity and his only true passion in life is the business of investing. Neither are qualities we can say with confidence have been guiding our captains of finance in these trying times. This book should be required reading by the SEC and the FSA before the smartest quant jockey is allowed to trade even the simplest of financial instruments. By making it so, the regulators will ensure that the next generation of financial engineers will learn again the importance of integrity, the importance of respecting and serving their investors, and the true satisfaction that comes from loving what you do, not simply counting what you make.