University of Minnesota - UMN Executive Leadership Insights
Buffett
Book

Buffett

The Making of an American Capitalist

Roger Lowenstein
Random House, 2008
First Edition: 1995
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Editorial Rating

9

Qualities

  • Innovative
  • Eye Opening
  • Background

Recommendation

Unlike billionaires who become wealthy by developing innovative businesses, Warren Buffett became rich by picking stocks. Forbes has listed him as the world’s richest man, but he lives in the same Omaha house he bought for $31,500 in 1958. He drives his own car, prepares his own taxes and wears inexpensive suits. A simple man with simple tastes, he likes hamburgers, Cherry Cokes and peanuts. Financial journalist Roger Lowenstein does a masterful job of reporting on Buffett’s life and explaining his straightforward, common sense investing approach. When this book went to print, Buffett had a net worth of $64 billion. Using fascinating historical detail and colorful anecdotes, Lowenstein explains how Buffett did it.

Summary

Warren Buffett is the world’s greatest investor, known for being astute at analyzing the financial value of companies. 

To see how superior Warren Buffett is at picking stocks, envision a chart depicting the value of his company, Berkshire Hathaway, compared to the Dow Jones Industrial Average. Over the course of many years, Berkshire’s line on the chart begins to shoot straight up. During the same period, the Dow’s line meanders in a vaguely vertical direction, looking like a weathered hillside silhouette. Of course, the difference is not surprising. Berkshire Hathaway is Buffett’s holding company and primary investment vehicle. And Buffett is the world’s most astute investor.

When Buffett invested in Berkshire Hathaway in 1962, its stock was valued at $7.60. By 2007, a single share cost $141,600. No one in history has been better at analyzing stock values and making investment decisions. If you had invested $10,000 in Buffett’s portfolio partnership in 1956 and stayed with it, your money would have grown to $550 million. A good return on investment? There has never been anything like it.

He made his first stock investment at age 11.

About the Author

Financial journalist Roger Lowenstein worked many years for The Wall Street Journal. He wrote the newspaper’s “Heard on the Street” column from 1989 to 1991.

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