Buffett: The Making of an American Capitalist Paperback – April 29, 2008

As the title indicates this book is a biography of the self-made billionaire investor Warren Buffett. It takes us through his family upbringing, his early years, his eduction and the building of his capitalist empire in Berkshire Hathaway. The author focuses on the people that were influential in his life, particularly his mentor in value investing: Benjamin Graham. This theme is central to Warren's investment strategy (with adaptation on intangibles - such as brand, reputation etc.) . Through the years, despite all the macro-economics event, changes to the business landscape and technological advances this strategy has driven unparalleled sustained business returns over a period of over 40 years which the book covers. The book is full of non-investment business advice, relationship building, career management etc.Below are some excerpts from the book I found particularly insightful:-"One sees in Buffett a strongly similar suspiscion of public opinion. Buffett viewed a crowd as a potential source of a sort of intellectual contagion. It was the author of acts and feelings which, rather than being a summing-up of the parts, no one individual among the crowd would have subscribed alone."-"Regardless of price, we have no interest at all in selling any good business that Berkshire owns, and are very reluctant to sell sub-par businesses as long as we expect them to generate at least some cash and as long as we feel good about their managers and labor relations. We hope not to repeat the capital allocation mistakes that led us into such sub-par businesses....Nevertheless, gin rummy managerial behavior (discard your least promising business at each turn) is not our style."-"A compact organization lets all of us spend our time managing the business rather than managing each other."-"Buffett's guides to finding such a stock could be summarized quickly:a) Pay no attention to macroeconmic trends or forecasts, or to people's predictions about the future of stock prices. Focus on long-term business value - on the size of the coupons down the road.b) Stick to stocks within one's "circle's of competence." For Buffett, that was often a company with a consumer franchise. But the general rule was true for all: if you don't understand the business - be it a newspaper or a software firm - you couldn't value the stock.c) Look for managers who treated the shareholders' capital with ownerlike care and thoughfulness.d) Study prospects - and their competitors - in great detail. Look at raw data, not analysts' summaries. Trust your own eyes, Buffet said. But one needn't value a business too precisely. A basketball coach doesn't check to see if a prospect is six foot one or six foot two; he looks for seven-footers.e) The vast majority of stocks would not be compelling either way - so ignore them. Merrill Lynch had an opinion on every stock; Buffett did not. But when an investor had conviction about a stock, he or she should also show courage - and buy ton of it.-"I want employees to ask themselves whether they are willing to have any contemplated act appear on the front page of their local paper the next day, to be read by their spouses, children and friends...If they follow this test, they need not fear my other message to them: Lose money for the firm and I will be understanding; lose a shred of reputation for the firm, and I will be ruthless."-"Among history's great capitalists, Buffett stands out for his sheer skill at evaluating businesses. What John D. Rockefeller, the oil cartelist, Andrew Carnegie, the philanthropic steel baron, Sam Walton, the humble retailer, and Bill Gate, the software nerd, have in common is that each owes his fortune to a single product or innovation. Buffett made his money as a pure investor: picking diverse businesses and stocks."-"More than most, he reclaimed the rewards that spring not from trading commitments one for the next, but from preserving them."For anyone interested in the field of investment, it goes without saying that this is a must read book. Given that I had read another book by Roger L. (When Genius Failed - The Rise and Fall of Long Term Capital Management), I had very high expectations from him and he did not dissapoint. Don't let the size of the book discourage you, once you get started you will have a hard time stopping.

"Investment is most intelligent when it is most businesslike", Warren Buffett's teacher, Benjamin Graham, once wrote.This book is a fantastic biography of Warren Buffett. I think anyone who wants to learn about Warren Buffett or his investment techniques etc should first read this book before anything else (including his essays).This book is written time-chronogically, from the time around the early 1930s (Buffett was born in August 1930) to around 1994. Here we can observe how Buffett had a great desire to be rich since he was young, but in his teen years, after being involved in several business ventures, he longed for a method which is more consistent in making money.Meeting Benjamin Graham when he was 19/20 years old solved this longing for Buffett. He became a devoted investor in businesses since then. After working under Graham for several years, Buffett began a partnership (noticed how confident he was, despite his young age, to be successful) when he was 26 years old (in 1956) and achieved a 29.4% compounded annual return in the fund (he dissolved the partnership in 1969). During these 14 years, Buffett learnt which businesses (like those possessing customer franchise - Buffett called these with "Deep moats around the castles") were better than others. He dissolved his partnership in 1969 as he deemed the market to be very overvalued then.From then on, he used the lessons he had learnt to purchase great businesses at reasonable (or cheap) prices, such as Nebraska Furniture Mart, Washington Post, Cap Cities, etc.To fully enjoy this book, the reader should stop at certain chapters, and read other - yes, other - related books. For instance, around after I had finished reading chapter 3, 'Graham', I read Ben Graham's 'Intelligent Investor'. Also, when Phil Fisher was mentioned as one of the strongest influencers in Buffett's life, I read his book 'Common Stocks and Uncommon Profits'. The readers can get more insights from reading it this way.Mr. Lowenstein also took excursions when discussing Buffett to go through discussions about certain business characteristics, to ensure that the readers can fully appreciate Mr. Lowenstein's perceived motivation behind a certain Buffett action etc. Mr. Lowenstein also helped the reader to be more knowledgable about key points about US stockmarket history through interesting dissertations. I found these excursions extremely enlightening.Mr. Lowenstein's writing style is also very 'flowing' - he changed from one topic to another in a very smooth way. You've got to read it to understand what I'm saying.Lastly, I just want to say that the readers should have at least a moderate-to-strong knowledge and interest in business (and investing; but business = investing and investing = business) to fully appreciate this book. Enjoy!

It is very good biography of the Oracle of Omaha. It certainly gives an insight into the life of Warren Buffet - his childhood and younger years are very well captured. I felt a little lost towards the middle where I thought the details surrounded around only the business he did with others. In other words the details came from his business companions and acquaintances. Here, I felt, the author could have used a bit of help from Warren Buffett.I thought portions of the book blabbered too much, hence the lost star.Overall a very good read. Highly recommended