Transcript
Introduction
What he was teaching were the lessons that had emerged from the unfolding of his own life. In that unfolding, he admits to ambition, but he denies that there was ever a plan. He finds it hard to acknowledge his own powerful hand as the creator of the sweeping canvas that is his masterpiece. As he tells the story, a series of happy accidents build Berkshire Hathaway, a moneymaking machine spraying up without design. It's elegant structure of true partnership with like-minded shareholders built on what Charlie Munger calls a seamless web of deserve trust with an investment portfolio buried deep inside and interlock set of businesses whose capital could be moved at will.
All of this turbocharged with flow. And all of this had come about he claims, simply as a reflection of his personality. The final product was a model that could be analyzed and understood yet a few did. What people paid attention to was simply how rich he was. He wanted them to study his model. The truth is this, when Warren was a little boy, fingerprinting nuns and collecting bottle caps, he had no knowledge of what he would someday become yet as he rode his bike through Spring Valley, flinging newspapers day after day, pulse-pounding, trying to make his deliveries on time.
If you would ask them if you wanted to be the richest man on earth, with his whole heart, he would have said, "Yes, that passion led him to study a universe of 1,000 stocks." It made him borough into libraries and basements for records nobody else troubled to get. He sat up night studying hundreds of thousands of numbers that would glaze anyone else's eyes. He read every word of several newspapers each morning and suck down the Wall Street Journal like his morning coke.
He read magazines like the Progressive Grocer to learn how to stock a meat department. He stuffed the backseat of his car with Moody's manuals and ledgers on his honeymoon. He spent months reading old newspapers, dating back a century to learn the cycles of business, the history of Wall Street, the history of capitalism, the history of the modern corporation. Since childhood, he had read every biography he could find of people he admired looking for the lessons he could learn from their lives. He attached himself to everyone who could help him and co-tailed anyone he could find who was smart.
He rolled out paying attention to almost anything, but business, art, literature, science, travel, architecture. He ignored it all so that he could focus on his passion. He defined a circle of competence to avoid making mistakes. To limit risk, he never used any significant amount of debt. He never stopped thinking about business, what made a good business? What made a bad business? How they competed? what made customers loyal to one versus the other? He had an unusual way of turning problems around in his head, which gave him insights nobody else had. In hard times or easy, he never stopped thinking about ways to make money. All of this energy and intensity became the motor that powered his innate intelligence, temperament, and skills.
All right. So that was an excerpt from the book that I read this week and the book that I'm going to talk to you about today, which is The Snowball: Warren Buffett and the Business of Life by Alice Schroeder. And just 2 quick things before I jump back into the book, number one. Listeners have been sending me a lot of suggestions for books to cover on the podcast. Actually, this book Snowball was one of the most requested books. So please, if you have any suggestions, please keep them coming. And two, if you haven't yet e-mailed me your review of the podcast, please do. In return, I'll send you a private link to 7 hidden episodes of founders. All you have to do is leave a review in a podcast player of choice, screenshot it and then send it to foundersreviews@gmail.com.