The Snowball Warren Buffet and the Business of Life – Books I Read
The Best Summary Of The Book Comes From The End of the book:
When Warren was a little boy he had no knowledge of what he would become, yet as he rode his bike flinging papers day after day, if you would ask him if he wanted to be the richest man on earth, with his whole heart he would have said yes.
That passion had led him to study a universe of stocks, it made him burrow for information harder than anyone else would try. He sat up nights studying numbers, reading several newspapers daily, he dropped in on companies, spending hours talking about barrels or auto insurance and learning. He spent months reading old newspapers dating back a century to learn the cycles of business and the history of Wall Street and capitalism and the history of the modern corporation. He analyzed economic statistics until he had a deep understanding of what they signified.
He read every biography of people he admired, looking for the lessons he could learn from their lives. He coat tailed anyone he could find that was smart. He attached himself to anyone who could help him, he ruled out paying attention to anything that was not business related. He defined a circle of competence to avoid making mistakes. To limit risk he avoided using much debt.
He studied what was a good business, what was a bad business, what made customers loyal.
He was quite good at turning problems around in his head that gave him insights few others had. He never stopped thinking about ways to make money.
Warren loved money, he loved collecting it. It was his life blood.
He always focused on maintaining a level of safety in his investing. He was a timid man who shied away from competition.
Warren would describe him self as a teacher. He sought to live up to the values instilled in him by his Father.
Warren’s partner Charlie says he could have made money, he was competitive, but he had ethics, he wanted to live life a certain way.
He is famous for writing his annual letter to the shareholders of his company Berkshire Hathaway, which was originally a textile manufacturing company that struggled for many years. In 1955 Berkshire Fine Spinning Associates merged with the Hathaway Manufacturing Company.
“The snowball just happens if you are in the right kind of snow, and that’s was happened with me. I don’t just mean compounding money either, it is in terms of understanding the world and what kind of friends you accumulate. You get to select over time and you need to be the kind of person the snow wants to attach itself to. You got to be your own wet snow in effect. You better to be picking up snow as you go along because you are not going to be getting back to the top of the hill again, that is the way life works”, says Buffet.
He invested in companies he could understand, in companies he knew. In this way he may have missed the rapid growth in the tech sector, but he continued to focus on what he knew best.