Founders
Episode 182 #182 Warren Buffett (The Making of an American Capitalist)
Founders

Episode 182: #182 Warren Buffett (The Making of an American Capitalist)

Founders

Episode 182

#182 Warren Buffett (The Making of an American Capitalist)

David Senra is the host of Founders, where he studies history's greatest entrepreneurs. This is what he learned from reading Buffett: The Making of an American Capitalist by Roger Lowenstein.

What I learned from reading Buffett: The Making of an American Capitalist by Roger Lowenstein.

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His talent sprang from his unrivaled independence of mind and ability to focus on his work and shut out the world, yet those same qualities exacted a toll.

He emerged from those first hard years with an absolute drive to become very, very rich. He thought about it before he was five years old. And from that time on, he scarcely stopped thinking of it.

Most of us were trying to be like everyone else. I think he liked being different. He was what he was and he never tried to be anything else.

Warren disgustedly reported that he knew more than the professors. His dissatisfaction-a forerunner of his general disaffection for business schools-was rooted in their mushy, overbroad approach. His professors had fancy theories but were ignorant of the practical details of making a profit that Warren craved.

It seemed too good to be true; if the stocks were so cheap, Buffett figured, somebody ought to be buying them. But slowly, it dawned on him. The somebody was him. Nobody was going to tell you that an investment was a steal; you had to get there on your own.

Buffett knew more about stocks than anyone.

He was working virtually all the time, and loving every minute.

His talent lay not in his range—which was narrowly focused on investing—but in his intensity. His entire soul was focused on that one outlet.

He did not draw the usual line between "work" and other activities.

Wall Street's chorus, all reading the same lyrics, was chanting, "Sell." Buffett decided to buy. He put close to one-quarter of his assets on that single stock.

Buffett visited Walt Disney himself on the Disney lot. The animator was as enthusiastic as ever. Buffett was struck by his childlike enchantment with his work-so similar to Buffett's own.

It was virtually impossible to poke through the fog of his concentration.

Jack asked, "How do you do it?" Buffett said he read "a couple of thousand" financial statements a year.

He would go home and read a stack of annual reports. For anyone else it would have been work. For Buffett it was a night on the town. He did not merely do this nine-to-five. If he was awake, the wheels were turning.

As Buffett explained, Berkshire was something he intended never to sell. “I just like it. Berkshire is something that I would be in the rest of my life. It is public, but it is almost like the family business now.” Not long-term, but the rest of his life. His career-in a sense, his life-was subsumed in that one company. Everything he did, each investment, would add a stroke to that never-to-be-finished canvas. And no one could seize the brush from him.

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#182 Warren Buffett (The Making of an American Capitalist)

Introduction

“In the annals of investing, Warren Buffett stands alone. Starting from scratch, simply by picking stocks and companies for investment, Buffett amassed one of the greatest fortunes of the 20th century. Over decades, Buffett outperformed the stock market by a stunning margin and without taking undue risks of suffering a single losing year. This is a feat long proclaimed to be impossible. By virtue of this steady, superior compounding, Buffett acquired a net worth of billions. Buffett's career unfolded as a sort of public tutorial on investing and on American business.

Buffett was aware of his role from the very beginning, and he nurtured a curious habit of chronicling his escapades even as he lived them. Where finance was so forbiddingly complex, Buffett could explain it, like a general store clerk discussing the weather. His talent sprang from his unrivaled independence of mind and ability to focus on his work and shut out the world, yet those same qualities exacted a toll.

Like other prodigies, he paid a price. Having been raised in a home with more than its share of demons, he lived within an emotional fortress. The few people who shared his office had no knowledge of the inner man, even after decades. Even his children could scarcely recall a time when he broke through his surface calm and showed some feeling. His consuming passion and pleasure is his work, or as he calls it, his canvas. It is there that he revealed the secret of his trade and left a self-portrait.”

That is an excerpt from the introduction of the book that I'm going to talk to you about today, which is Buffett: The Making of an American Capitalist, and it was written by Roger Lowenstein. Okay. So I want to jump right into Warren's early life. Jeff Bezos says his great quote where he says, “You don't choose your passions, they choose you.” And we see that this is the case in the life of Warren Buffett as well. First, his family -- this is like a tragedy that happens in his family. They wind up losing all their money. And it says, “On August 13, 1931, two weeks shy of Warren's first birthday, his father returned from work with the news that his bank had closed. It was the defining, faith-shattering scene of the Great Depression. His job was gone, and his savings were lost.”

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