I have been waiting for this book to arrive for quite a while now. I was a bit dissapointed to find out that the mailman had come by to deliver the book but no one was home. So he/she left a pickup slip so I can go to the main office. So I go and what happens next? “They have misplaced it”. I really wanted the book as I was heading to Las vegas the next day, which is about a 4 hour drive from Los Angeles. In my last attempt of attaining the book, I was successful.
Now, I have read most of the Warren Buffett books out there. Most of them had the same information on them, but Snowball blows all the other Warren Buffett books away. Think you have read everything about Warren Buffett, think again. Snowball is filled with tons of new information. Granted, I have read through the first 8 chapters. Unlike some amazon reviewers, I am taking my time and soaking the information.
The Presentation
The book is HUGE (900+ pages). The paper quality is not that great but who cares!
Some early chapter information
I wont give too much away but from the top of my head here are some talking points.
Warren Buffett’s 1999 Sun Valley speech at the height of the tech bubble. Warren reiterates Ben Graham’s idea of stocks being a voting machine in the short term and a weighing maching in the long term.
Early Buffett family history
Warren Buffett’s childhood struggles with his moms “blowups”
Warren’s fascination with numbers and the creation of the “bathtub game”
Warren trying to get his neighbor to invest 10K in his partnership.
There is a ton of information in the early chapters. I cannot wait to continue reading this book. I checked out the Amazon.com reviews today and 19 out of 19 have rated this book 5 starts ( out of a 5 star rating system). I would give this book a 10 out of 5. Its that good!
New interview is now available to view online. The interview took place in San Diego while Warren was attending Fortuen magazines most powerful women. The interview took a short time after it became public Warren had invested in GE. Below is the video and the link to the official website.
Its been a long time coming. A book about Warren Buffett in which Buffett played a major role in. The book officially went on sale yesterday Sept. 29th and early reviews say its as good as advertised. 4 reviews have been written on Amazon.com. All 4 reviewers gave the book a 5 out 5. Caution though, unless these individuals received early copies, I would not trust a review posted on the same day, especially for a book thats 976 pages long. Here is what amazon reviewer “Jordan Calonego” had to say about Buffett’s Snowball:
Alice Schroeder has done a wonderful job parsing the incredibly interesting and complex life of one of the world’s true, living legends.
This should become the tome to site for all things Buffett. It is thorough, examining his family history, his father’s career, and details of his youthful adventures; which in many instances, went well over the moral line he now teaches people to steer away from. The hardships suffered by close family members of the financial, psychological, and personal variety are honestly portrayed through the biography, as are details of the complex relationships he has had with women throughout his life.
For students of business and investment, the book details clearly the growth of his business knowledge early on and the success of his many investment partnerships. Alice details the countless problems he experienced once owning Berkshire Hathaway and the businesses that were later rolled in to create the present Berkshire. The details of his many acquisitions highlight his unique intelligence, as well as the intellect of his contemporaries, who in-fact were first to discover many of the corporate gems he acquired over the years. His collaboration with other investment managers proved vital to his success, contrary to much of what has been said elsewhere. Lastly, flaws are exposed in his investment acumen numerous times with regard to operations of target companies, and his early judgment in management teams. The very fact that he has been so successful, even given these errors, is testament to his unique abilities as a businessman.
The book highlights Buffett’s amazing focus and zest for life. His relationships and personal experiences, which have never been exposed in any detail, have led to the unique character of Warren Buffett. His development into a great human being and quest to create something enduring in Berkshire, the Foundations, and his many “students”, is wonderfully explained in this thoroughly enjoyable biography.
Each week I track which stocks are moving in and out of the top 25 Magic Formula Stocks for companies with a minimum market cap of 50 and 2000 billion. Here are the moves for the week ended 9-27-08:
The beauty about the stock market is one can manage a portfolio however he/she feels like. Want to be stuck in front of computer and trade stocks all day? Go for it. One of the decisions any investor will have to make is how many stocks will be in the investment portfolio. A common trait among value investors who outperform the market by wide margins is they have concentrated portfolios.
Diversification
Before moving on, let me clarify one thing; there is nothing wrong with diversification. I have had a diversified portfolio ( 15+ stocks in my book) for a while now as my time for researching stocks was limited. There are plenty of value investors who diversify and outperform the market by a good margin. Walter Schloss comes to mind.
Some well known concentrators
Warren Buffett/Charlie Munger - While Berkshire holds a great number of stocks, the majority of the stock portfolio is invested in big bets such as Coca Cola (KO), American Express (AXP), Washington Post (WPO) and prior to that GEICO just to name a few. It was Buffett’s sidekick Charlie Munger who turned Buffett into a more concentrated portfolio.
Peter Lynch- The worlds greatest mutual fund manager held hundreds and sometimes thousands of stocks at a time. But as he confesses in his book(s), Peter Lynch had a couple of big bets and a ton of small bets so he could keep up with a company’s “story”
Eddie Lampert- Once considered the next Warren Buffett as the price of Sears Holdings approached $200, Lampert made the majority of his wealth by betting big on the merger of k-Mart/Sears. I believe his cost basis is $1(I might be wrong on this) as he merged the two companies when K-Mart filed for bankruptcy.
Joel Greenblatt- Probably never believed in diversification. Reading both of his books, Greenblatt constantly advocates making few but big bets. Before I get bombarded with e-mails about the magic formula strategy and diversification, Greenblatt does make seveal points as to hold 5-8 well researched stocks for greater returns. For those individuals who want to put their portfolio on auto pilot, follow the magic formula as layed out in the book.
David Dreman- Also advocates a diversified portfolio in his books. But, he made good money by placing big bets in Fannie Mae (prior to its recent drop he bought below $5) and Altria
Pitfalls of concentration
A more volatile portfolio.
A blowup in the portfolio will be a major setback against the market
You have to be VERY patient
Tools for concentrarion
Time
Time
Time
Knowledge
oh yeah, patience
Quotes
I don’t look to jump over 7-foot bars: I look around for 1-foot bars that I can step over. - Warren Buffett
Put all your eggs in the one basket and — WATCH THAT BASKET.
Pudd’nhead Wilson, Pudd’nhead Wilson’s Calendar, Chap. 15
Each week I track which stocks are moving in and out of the top 25 Magic Formula Stocks for companies with a minimum market cap of 50 and 2000 billion. Here are the moves for the week ended 9-20-08:
Each week I track which stocks are moving in and out of the top 25 Magic Formula Stocks for companies with a minimum market cap of 50 and 2000 billion. Here are the moves for the week ended 9-13-08:
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