Warren Buffett, "The Snowball"

This rather massive book by Alice Schroeder covers the entire life of the current richest man in the world, the super businessman often called the "oracle of Omaha", Warren Buffett from birth to '08 with a huge amount of detail. I've historically not been that much of a biography reader, but maybe age is changing me, I enjoyed the book.

There are 838 pages of text and a bunch of endnotes, so I'm not going to do a lot of quoting and discussion. The biggest things that hit me:

• Simplicity / Models. Relative to business and investing, while clearly a genious, Buffett used a huge focus and passion for business over a LONG time with relatively simply models of price/earnings, only buying businesses that he understood the business model of, and ALWAYS making sure that he had a "margin of safety" built in. Sticking with a few quite simple basic models with a whole lot of intelligence, patience and courgage to "ignore the herd". Allowed the "snowball" of his great wealth to slowly unfold over time.
  
• While unquestionably having simple tastes in diet and lifestyle, Buffett is a complex man in his dealings with people. He is insecure, hates conflict, loves to push things that he doesn't like off on others (but is generally brilliant at selecting folks that can handle it well and motivating them well). In many ways, it is his "weaknesses" that make him a great business executive--he delegates what he isn't good at well, and focuses like an effective laser on what he is definitely the best in the world at -- selecting the best available businesses and weaving them together into a money making machine.
  
• The "sweep of history" relative to business is discussed in a very "inside business" way that is enlightening. The constant of different sets of people "certain" of some trend or another -- expensive money, cheap money, stocks never going up, stocks always going up, fuel prices always going to be low -- or high, "new models" that would "never change" -- the "Nifty Fifty", Junk Bonds, Techs, Derivatives, etc. The ditches are littered with all sorts of "new paradigms" that fall on hard times wiping out billions and trillions of dollars in their wake. Meanwhile -- people still eat candy, buy furniture, jewelry, insurance, food, mobile homes, Dairy Queen, Coke, etc -- those are Warren's businesses, the ones that are "always going to be around", the ones that are "boring", unless you want to amass a fortune of billions of dollars from a start of a 100K over a period of 50 years.
  

Warren and his family seem to be 100% atheist or agnostic and in general quite liberal. He is pretty much 100% a supporter of Democrats, the farther left the better. He essentially ended up with "two wives" -- Susan, the mother of his children, took great care of him for 25 years or so, but he was pretty much the 100% traditional guy that spent 95% of his time on business and 5% on his family. When the kids left home, Susan wanted to travel, do artsy stuff and help others. She ended up traveling around with some of her old tennis teachers and moved to San Francisco and took care of a lot of gay guys. When she moved, she never really called it leaving, and left a friend of hers named Astrid Menks who ended up moving in and being Warren's female companionship for years. He essentially had "two wives", in public outside Omaha and legally, Susie stayed his wife. He saw her for a few weeks each year. Otherwise, Astrid was his usual companion.

Warren is a huge public propoenent of higher taxes for the wealthy -- but interestingly, he takes a lot of actions to avoid the paying of taxes himself. He has spoken out often and been quoted a lot of being strongly in favor of inheritance taxes, but again, he has transferred many millions to his children using foundations and other mechanisms already and plans to make it a "mere 10%" in the end, constituting a "mere 6 Billion". Apparently, consistency isn't an issue for a liberal no matter how rich you are. I found it especially interesting that he is transferring the remainder of his 60 Billion to the Gates foundation to be spent "as efficiently and well as possible". So why not the US Government? Warren has been outspoken on the need for higher taxes for "the wealthy" -- I assume he MUST believe that those taxes would be well and efficiently spent? Apparently when it comes to taxation the rhetoric and the actions just don't match up even for as succesful, intelligent, and generally admirable a liberal as Buffett. "Do as I say, not as I do".

Buffett is a great study in how captialism allows brilliant people to allocate resources in ways that government would NEVER think of that result in more jobs, stronger business, more money, and while those folks doing there jobs, better allocation of capital for ALL. While guys like Warren and Bill Gates are exceedingly wealthy it is extremely easy to see how they have created far more wealth than they have consumed, and as they allocate that wealth back into the good of all as they get to the end of their lives, they will do even more good. It is a shame that they can't understand that the same principles that have worked so well for them can and do work on a smaller scale for people of far lower wealth, so they continue to espouse political solutions that are likely to kill that golden genie of economic growth that allowed them to amass their great fortunes.