Buffett: The Making of An American Capitalist.
By Roger Lowenstein
Random House. 473 pp., $27.50
IF anyone doubts that titans of American capitalism and invention tend to be slightly eccentric, they need only read Roger Lowenstein's fine biography of stock-market wizard Warren Buffett.
Forget the conservative business attire and folksy demeanor favored by Buffett. As Lowenstein shows, Buffett is as much the iconoclast and inventor as he is an icon of American capitalism.
As a case study of entrepreneur-capitalists, Buffett is in many respects similar to Thomas Edison, Henry Ford, and even Microsoft chairman Bill Gates. Edison, one remembers, was a curmudgeon who required little sleep and liked nothing better than tinkering with things. Ford puttered with cars, engines, and production lines - and became a global peace activist. Bill Gates of Microsoft, who putters with computer software systems, just bought one of the world's finest collections of old photographs. And who can forget the eccentricity of the "capitalist-gris" of the Founding Fathers, Ben Franklin - one day out flying a kite to snare electricity, another day writing a book or starting up a fire company, and eventually serving as an ambassador.
Buffett's specialty is stock-market finance. He has done that well. The "B" in his name equals "billionaire." Had an investor put $10,000 into Buffett's stock partnership in 1957, Lowenstein points out, he would be worth a cool $80 million today. In 1962 Buffet began acquiring shares of Berkshire Hathaway, a maker of suit liners.
Back then, the shares were worth $7.60 each. This year Berkshire Hathaway has traded in the $25,000-a-share range.
"How," you ask, "does he do it?" From a deep intelligence and vigilant attention to detail, Lowenstein shows; and from a background of personal integrity, innovation, and disregard for mass opinion. Buffett, his friends said, always had a "conviction" about himself.
As a youngster in Omaha, Neb., where he was born and still lives, Buffett was a gangly, not-too-athletic bookworm. He loved reading tomes on making money, such as "One Thousand Ways to Make $1,000." As a slightly older youth in Washington, D.C., in the 1940s, Buffett turned a simple paper route into a major moneymaker. He made so much profit that he took $1,200 and invested it in 40 acres of Nebraska farmland. Not bad for a 14-year-old!
Buffett's stockbroker-father, Howard Buffett, was a formidable influence, Lowenstein notes. A nondrinker, nonsmoker, and pillar of his local Protestant church, Howard Buffett instilled in his children a love for God and community, although by his college years young Warren was an agnostic. Howard Buffett was subsequently elected to Congress as a conservative Republican.
In his adult years, ironically, Warren Buffett became a close confidant of Kay Graham, the owner of The Washington Post, a paper that became a thorn to not a few Republicans.
Buffett was ever the quiet iconoclast. Again, years later, when the Omaha Club, a fashionable business club, would not allow a Jewish friend to join, Buffett joined the all-Jewish Highland Club, a rival organization. The Omaha Club then had to do the obvious: admit Jews.
His habits were simple: early to work, with a small staff. He would invariably have a soda in his hand. He hung on to whatever stocks he bought; none of this "buy today, sell tomorrow" business. He has stayed in the same house on Farnum Street in Omaha, where he raised his family.
But his personal life is not tidy: He and his wife, Susan, are separated. He still takes her to formal parties in places such as New York and Paris. Meanwhile, back home in Omaha, Buffett lives with another woman, Astrid Menks, his close companion now for almost two decades.
Lowenstein, a reporter for The Wall Street Journal, has written an outstanding book that is far more than a "business biography." It tells us as much about the inventiveness, sense of purpose, and "conviction" of the United States, as it does about one very inventive and purposeful American.