Sunday, July 26, 2009

The Ulimate Entrepreneur: Warren E. Buffett

Anyone who regularly reads this blog knows I like entrepreneurs. In one post, I went so far as to define entrepreneur. I believe that entrepreneurs are the very foundation of our nation's economy, providing the innovation that supports it.

Well, in recent weeks, I have discovered the ultimate of all entrepreneurs: Warren Edward Buffett.

Until my dad passed me The Snowball: Warren Buffett and the Business of Life, written by fellow University of Texas alumnus, Alice Schroeder, my interest in and knowledge of Buffett was cursory and limited. I have been referred to his Shareholder Letters a number of times, but after downloading them, I would never follow through with the required reading.

Just this year, a close friend of mine, a Buffett fan himself, invited me to Berkshire Hathway's Annual Shareholder Meeting, the boondoggle that attracts as many as 30,000 people to Omaha. I was not able to attend with him, but our plan is to make the trip in 2010.

Back to the book, Schroeder, a former analyst who covered Berkshire Hathaway, spent five years writing the 838-page biography.

In the forced march it must have been, the author received all-access interviews to one of the world's top billionaires as well as the people in his life. She secured a $7.2 million contract and Buffett's word to not change any of her work, a promise he apparently kept.

It is a fascinating look at the evolution of a man, a real personality, who some call an oddball. Aptly named, The Snowball demonstrates Buffett's keen understanding of the compounding effect of money.

The book also details his personal life, which in its beginning stages, was hugely influenced by his father, Howard, whose towering presence led him to the United States congressional seat in the Nebraskan district where Omaha was located.

However, the Republican's isolationistic and right-wing tendencies eventually caused him to be voted out of Washington DC following three terms in office.

As a young man, Buffett read voraciously. One of his favorite books was titled One Thousand Ways to Make $1,000 (or one million dollars, as Schroeder points out to the reader). Buffett announced to one of his best friends at the time that he would be a millionaire by the time he was 35.

His early business endeavors included selling golf balls, publishing horseracing odds and tirelessly managing his own newspaper routes. And it was those business pursuits that would serve as the wet snow which would form the makings of Buffett's "snowball." It had already begun to roll downhill, picking up speed as it did.

Buffett's entrepreneurial drive caused disconnects to form between him and his peers on a social level; the book depicts that Buffett's skills left a lot to be desired. Able to recognize his own social inferiority, Buffett turned to a book entitled How to Win Friends and Influence People.

It was a bit later in life, in college especially, that Buffett began to develop his natural ability as a teacher. He used his firm handle on investing to effectively connect with people, who might have otherwise been more socially adept.

Perhaps the most unrealized trait of Warren Buffett is his mastery as a teacher. He imparts wisdom and life lessons on his investors, students and family. How Buffett can put complex investing concepts into plainspoken language is a gift, and people gravitate to him for it.

To potential entrepreneurs, Buffett advises, "It's crazy to take little in between jobs just because they look good on your résumé. That's like saving sex for your old age. Do what you love and work for whom you admire the most, and you've given yourself the best chance in life you can."

As his own life progresses, Buffett seems to have softened; his views have been shaped by his first wife, Susan, and perhaps even more so, by Bill Gates, to whom he gave 85 percent of his fortune in 2006 so that it could be put to work through the Bill & Melinda Gates Foundation.

Buffett has never lost his uncanny ability to strike as an investor.

While he was not unaffected by the latest economic downturn, it is in these times that he often displays his unique wherewithal to rise above the rest, as he did with his investment in Goldman Sachs, practicing what he often preaches, "Be fearful when others are greedy. Be greedy when others are fearful."

Last year's Goldman investment must have led him to reflect on when he was ten years of age and his dad took him to Wall Street. While there, Howard's connections and persistence afforded them opportunity to meet Sidney Weinberg, a well-known business leader and senior partner at Goldman.

As they left his office, Weinberg asked, "What stocks do you like, Warren?" which left a lasting impression on Buffett. Little did either of them know then that Buffett would later make such a financial impact on the firm.

After returning home from New York City, he realized what money could do to create freedom. In The Snowball, his fondness of money was stated as, "It would make me independent. Then I could do what I wanted to do with my life. And the biggest thing I wanted to do was work for myself."

Warren E. Buffett's life can be distilled to a few key qualities: supreme investor, brilliant teacher and, in later years, heavyweight philanthropist. But above all, Buffett is an entrepreneur, the ultimate in my book.


  1. @All, - Buffett's advice on life: priceless ( Rice students receive the oracle's advice on life in visit to Omaha.
    Love, happiness & fiscal responsibility,

  2. After years of trying, I finally made it to the Berkshire Hathaway meeting in Omaha. What a treat. My expectations were trumped in every measurable way. Buffett is a rare individual who we are lucky to have as a teacher. His, sidekick, Charlie Munger, at 87, is exceedingly wise himself. I will one day attempt to do him justice on this blog as well. Guaranteed.