I just finished Roger Lowenstein's "Buffett: The Making of an American Capitalist". It was excellent. Buffett is a real class act, the kind of person you root for. His 28% average annual return since 1962 is mind boggling. Some notes from the book:
At the age of 14, he was earning $175 per month, the salary of many full-time adults, by delivering newspapers and selling magazine subscriptions. While delivering papers, he would look at the labels of peoples' magazines on their doorstep, and determine when their subscription was expiring. He would record this data, and then hit them up for a renewal when the subscription was about to retire. At 14, he took $1200 of his profits and bought 40 acres of Nebraska farmland. LOL!
"There is no such thing as a bad risk. There are only bad rates." Jack Ringwalt, who ran the insurance company that Buffett bought to make his entry into that business.
I knew that he sold out at the top in the late 1960s before the crushing bear markets of the early 1970s, but I didn't know that he cleared his portfolio almost entirely right before the 1987 crash.
"Paul Samuelson, shortly after testifying to the validity of the Efficient Market Hypothesis, took a big stake in Berkshire Hathaway, "a just-in-case" hedging reminiscent of Voltaire's deathbed acceptance of the Church." ROFL!
As for the popular image of Salomon Brothers chief John Gutfreund, Lowenstein turns it on his head. Gutfreund is thought to have ruled with an iron fist, but Lowenstein asserts that actually Salomon was running amok because of lax oversight, and that Gutfreund generally avoideded confrontations even when they were necessary. |
