Guest Author Blog: Going Behind The Scenes With Warren Buffett Unveiled The Mystery, Brought The Magic to Life by Alice Schroeder, author of "The Snowball: Warren Buffett and the Business of Life."
When I met Warren Buffett in 1998, I was the first analyst on Wall Street to follow his company, Berkshire Hathaway . Beyond his business feats, his wealth and his folksy image, the rest was a mystery.
In 2003 Buffett gave me the opportunity to write what would become The Snowball, the book he will never write himself. I jumped at the chance. People couldn’t get enough of his witty, insightful nuggets of wisdom. And yet I was certain even more business lessons could be learned by observing him at close range. Not only that, I wanted a peek behind the curtain at the real man behind the elusive billionaire’s public image.
For five years, I sat on his sofa and did interviews, ate steaks with him, went through his files, and talked with him by phone. Sure enough, the real Warren Buffett is a much more interesting man than the mysterious Oracle.
Buffett’s life and personality are filled with contradictions: the man who loves making money yet doesn’t care about spending it; the billionaire who believes rich people should pay taxes; the seemingly reclusive person who seeks the media limelight; the principled man who had, in effect, two wives; the icy dealmaker who seems genuine and is liked by everyone.
I dug into reconciling these seemingly irreconcilable facets of his personality and learned many intriguing little details. Buffett grew up at the racetrack handicapping horses, and odds-making permeates all his business decisions. It let him avoid the mistake made by those who bought mortgage derivatives: reaching for small gains at the risk of a catastrophic loss because the loss isn’t likely on any given day.
And yet, when the odds were right, he concentrated his bets so much that it would terrify most people – for example, putting 75 percent of his net worth in GEICO as a young man. He had a high confidence about GEICO’s odds, and an even higher confidence in himself. Even on the remote chance that he was wrong about GEICO, he knew he was young enough and smart enough to start over and still get rich.
In this way Buffett was a prodigy, yet he suffered from such severe social anxiety as a child that he set out to conquer it through study. He learned maxims like “give people a fine reputation to live up to” from a Dale Carnegie book, took these rules to heart and refined them into a sophisticated set of behavior modifications based on incentives. From then on, Buffett would praise people lavishly, set high aspirations for them, and ignore them when they behaved against his wishes. He almost never criticized anyone. It worked, and he became one of the best managers and networkers I have ever seen in business.
The time I spent with Buffett let me analyze and understand the roots of his success, the unusual way of thinking about business and relationships that made him more than just the burger-chomping billionaire. The mystery and intrigue of the ukulele-playing, Coke-swigging business titan had always been intriguing; it was when Buffett pulled back the curtain and revealed himself that his true magic came to light.
Dubbed by Risk and Insurance magazine as one of the most respected--and fearless--thinkers on Wall Street, Alice Schroeder is the author of The Snowball: Warren Buffett and the Business of Life, a #1 New York Times and #1 Wall Street Journal bestseller.
Telling The New York Times, "I like the way she thinks and writes," Buffett gave Schroeder unprecedented access -- to his files, family, business associates and himself, devoting massive amounts of his time over the course of five years - to interviews and questions.The Snowball is a complete — and revealing — look at Buffett's life, wisdom and philosophy, from the development of his outlook on the world and the principles he lives by to the business secrets he has never before shared publicly.