Biography

Since this book is a biography, it’s not really possible to summarize it. However, I’ve found it to be a very good read so far, and I thought I’d take a few notes, and add it here to make it available for discussion. Feel free to add your own notice - things that struck you as notable about the book.

Notes

• It’s impressive just how focused Buffet was on making money from an early age.

• He generally seems to have been a pretty honest and fair guy in terms of making his money, but there are definitely some things that left me scratching my head, too. For instance, there’s a quote about him borrowing neighbor’s cars and returning them with the tank empty. Also, there’s a bit about him buying up this old stock in a Nebraska company from more or less clueless farmers that had already been swindled once. It didn’t seem the nicest of things to do to people who had already been screwed once by ‘big money’ type people.

• In terms of applicability to today’s market, Graham’s approach strikes me as being sort of ‘quant’ like - he looked for the companies that had certain numbers, and bought them. That was, however, ‘easier’ in a sense, in those days, because they didn’t have computers to whip through thousands of stocks in a few seconds to dig up the ones with matching numbers, so they actually had to spend time and effort to find the “cigar butts” (as they’re called, over and over again, in the book). Would Graham have been so successful today?

• It’s interesting to notice that his aversion to the technology sector is something that was not just limited to the dot-com era. He had a chance to invest in Intel as it was being formed, and passed on it because of his lack of understanding of the field they were operating in. In hindsight, it was a huge missed opportunity, but you also have to credit him for sticking to his guns, and who knows, if he’d bought into Intel, maybe he would have bought into a number of losing propositions as well.

Links

http://en.wikipedia.org/wiki/Warren_Buffett

http://www.berkshirehathaway.com/ - the annual reports are, of course, great reading.

http://www.tnr.com/story_print.html?id=12ef5554-1023-4be9-ad93-681003b280ef - Extensive review of the book, with lots of details.