Buffett: The Making of an American Capitalist
by Roger Lowenstein, published 1995
Published in 1995, this work of art from Roger Lowenstein (who is also author of “When Genius Failed” and “Origins of the Crash”) chronicles the intimately private, as well as the investing life of one of the greatest investor over – Mr. Warren Buffett, also known as the “Oracle of Omaha.”
Unlike most other “how to” books that only superficially discusses the investing philosophy and strategies of Warren Buffett, this book also seeks to expose the other qualities that have made Buffett so successful – such as his great mastery of numbers and actuarial mathematics, his passion for investment analysis and drive to work hard (in his younger days, he would read over 2,000 annual reports during any given year), his willingness to be a contrarian, and his patience and his beliefs in being a long-term investor.
In sum, if Buffett’s strategies and philosophies were so easy to emulate, how come there aren’t more investing titans like Buffett out there? And why, at the age of 75 (Buffett was born in 1930) is he still going strong, even though the public regard investing as a profession for the young and aggressive?
This book does a grand job of explaining why, if one is careful and manages to catch the subtleties along the way. For example, how many kids started charting and buying stocks at the age of eleven? How many kids became obsessed with making money and “getting rich” before they turn five? Buffett had a true mastery of numbers, and was known to have a “photographic memory.” He also managed to start several successful businesses before he was “forced” to attend college by his father, Howard Buffett. Soon after, he studied at Columbia University under Benjamin Graham, and was regarded as the most vocal and knowledgeable student in the class. How many investors had the opportunity to study under Benjamin Graham, and at the same time, take Graham’s value-investing ideas and evolve them to a much higher level?
The book also details numerous “coups” as orchestrated by Buffett over the years. Most readers may not catch this but a quality that has made Buffett very successful over the years has been his willingness to wait until all or virtually all the odds are lined up in his favor – and then proceed to make a significant bet on his anticipated outcome. The ability to “engineer” any one of these coups (such as the bailout of Geico and the huge purchases of American Express shares during the scandal of 1963) hinges on one’s patience to wait for such an opportunity, as well as a mastery of the subject, and the courage to move forward when the entire public opinion is against you. Most investors do not possess any one of those skills, let alone all three. His frankness and honesty when it comes to business dealings is also very refreshing, especially in the wake of the numerous business scandals revealed since the late 1990s. Combined with his money-making skills as an investor, this man is unparalleled in many ways. Warren Buffett is a true American capitalist, and reading this book is truly eye-opening, indeed.