Rich pickings in an overlong, authorised biography of a billionaire investor
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BOOK OF THE DAY: The Snowball: Warren Buffett and the Business of Life by Alice Schroeder Bloomsbury 960pp, £25 reviewed by CONOR O’CLERY
THIS IS the second major biography of Warren Buffett, whose net worth was recently estimated at US$62 billion, but the first which he authorised. The result is a sympathetic, if overlong, account of the intriguing life and astonishing success of the legendary investor who accumulated money like a snowball rolling down a hill.
From the day his stockbroker father took him, aged 10, to the New York Stock Exchange, Warren Buffett saw the world in terms of numbers and opportunities. (On visiting the Great Wall of China he quipped how he would have liked the brick contract.)
He sought out derelict companies to extract value, such as getting the last puff from discarded cigar butts, and mastered risk and probability as no investor before or since.
Though he lives and works in a modest house in Omaha, and prefers Cherry Coke to wine, Buffett’s reputation for financial acumen made him a social “elephant” in high society. Having acquired an interest in the Washington Post, he escorted its widowed owner, Katharine Graham, to “elephant bumping” dinners in Georgetown, his memories of which are highly entertaining.
Buffett remained devoted to his wife Susie even after she left him for a tennis coach. With her encouragement, a favourite waitress, Astrid Menks, eventually took her place. Warren and Astrid married two years after Susie died in 2004.
Buffett’s quirky life story and his major investment coups have been well chronicled in Roger Lowenstein’s 1995 biography, Buffett: The Making of an American Capitalist. Schroeder here combines her expertise as an investment analyst and a fine storytelling talent with the willingness of her subject to engage in often witty and sometimes emotional retrospection.
The result is a compelling, colourful tome, and a fitting legacy for a unique American.
Renowned for his money-making ability, Buffett is equally famous today for giving away a vast fortune. The genesis of his decision may have been a 1995 seminar at the K Club in Co Kildare attended by other financial titans such as Bill Gates and Don Keough, where, to stimulate discussion about philanthropy, he handed out copies of Andrew Carnegie’s essay on wealth, in which the philanthropist warned that “he who dies rich dies disgraced”.
Buffett always planned to die “rich and disgraced” so that he could keep compounding and have more to give away after his death, writes Schroeder.
However, he may have taken to heart the warning he got years earlier from another philanthropist, Walter Annenberg, about the misuse of foundations after a donor passed on.
In 2006, at the age of 75, he had a change of heart and pledged most of $37 billion worth of Berkshire Hathaway stock to the Bill and Melinda Gates Foundation. Schroeder points out that no major donor before Buffett put such a vast fortune into the coffers of another foundation.
However, disbursing a fortune without leaving a trace of one’s self behind is not so unique.
The duty-free philanthropist Chuck Feeney – who also gave friends Carnegie’s essay to underline his giving-while-living philosophy – not only did that in 1984 at the height of his business career, but he also devoted his entrepreneurial talents to ensure it had an impact for good, whereas Buffett in effect simply wrote a cheque.
I was struck by the similarities between the two men: they treated money as a scorecard; were fundamentally honest; lived frugally; overloaded friends with magazine clippings; and did not put their names on a single building. Pity there are some errors: the K Club is in Co Kildare, not in Dublin; the taoiseach is not head of State; and Walter Annenberg was not a former British ambassador, but a former US ambassador.
Conor O’Clery’s biography of Chuck Feeney, The Billionaire Who Wasn’t, has just been published in paperback by Public Affairs of New York. His latest book is May You Live In Interesting Times: The Journals Of An Accidental Correspondent.
© 2008 The Irish Times