Buffett: The Making of an American Capitalist book review

Warren Buffett is a man who needs little introduction. He’s America’s most famous and successful stock picker. His holding company Berkshire Hathaway has seen spectacular returns in the past.

This is a story that sets the stage for Roger Lowenstein’s biography Buffett. The very opening of the book is a graph comparing the astounding growth of Berkshire Hathaway, the fat line, compared to the market benchmark the Dow Jones:

It’s this graph, the awesome stock returns, that have made Buffett a household name and a legend amongst investors.

This success has brought attention on celebrity level and raises many questions. Who exactly is Buffett as a person? How did he transform from delivering Cokes door-to-door in Omaha into a mighty investor? What are his investing principles?

These are all addressed in Lowenstein’s wonderful biography. I read this book a couple years ago, and I wanted to share some of my lasting impressions for why I liked it.

(I owe a special thanks to a friend who gifted me this book–thanks for the fantastic read)

The book covers a lot of time

The biography covers some of Buffett’s childhood in the 1930s when he was instilled religious and secular values by his dad and goes until about 1995, which is about when the book was first published.

There is an entire chapter about Benjamin Graham and his influence on Buffett as well as one about how Berkshire Hathaway, a manufacturing company and cotton mill, became the name of Buffett’s holding company.

I remember liking that the book moving smoothly and not dragging in its narration.

The details are amazing

The book includes just enough detail to keeps things interesting. One of the stories I remember is about young Buffett raising money from investors.

Here is how the story goes. At the age of 26, Buffett was raising money and pitching to clients. But he was brazen and wanted to play by his rules. Some of the terms he had were: he would not disclose any of the holdings, he would only give a yearly summary of results, and he would only allow one day of December 31 for withdrawing or adding capital. And some people agreed to this!

In hindsight these investors made a great decision. But it makes me see why some people did not invest with Buffett given the tremendous risk and secrecy of it all. I have a feeling I would not have invested in a young guy asking for such strict terms.

The personal side

The book also has interesting personal details, so it’s not all business. There are stories beyond his love for Coca-Cola and his modest house in Omaha. Some that I remember are how he got married and how he pored over newspapers and data as his craft.

Lowenstein did a great job of interviewing close friends and relatives and incorporating this in the book.

Check it out

In conclusion, I highly recommend Roger Lowenstein’s Buffett: The Making of an American Capitalist both for how it is written and its fascinating topic matter–it’s well worth a read.