After meeting Warren Buffett for the first time, Katherine Graham, publisher of The Washington Post, observed that he resembled no Wall Street figure or business tycoon she had ever met. His "corn-fed, Midwestern" appearance concealed qualities of brains and humour that appealed immediately to the patrician Washingtonian. He became her friend, adviser and confidant for life.
Buffett indeed is one of a kind. Born in Omaha, Nebraska, to intelligent, moderately comfortable and far-right Republican parents, he was fascinated from the age of six by numbers - and obsessed with making money. At age seven, he asked Father Christmas for a book on bonds, and his 10th birthday treat was a visit to the New York Stock Exchange. Before he was in his teens, he had become so captivated by another book, One Thousand Ways to Make $1 000 - and by the concept of compounding - that he promised to be a millionaire by the age of 35, a goal he easily achieved.
Though the man now known as the "Sage of Omaha" grew up in a small town, he escaped a small-town education, going to high school in Washington DC while his father served as a US congressman, and thereafter attending Wharton and Columbia, two of America's top business schools. At Columbia, he fell under the spell of the legendary investment guru Ben Graham, whose seminal text The Intelligent Investor is still regarded as a classic. From Graham, he learnt the value of the "margin of safety", that is, buying stock for less than its worth and not making use of debt - lessons he would apply when he returned to Omaha to set up his own investment company that would eventually make him the world's richest man.
THE SNOWBALL: Warren Buffett and the Business of Life
 By Alice Schroeder960 pagesBloomsburyR260
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In this over long, over detailed but nonetheless absorbing account of his life, which Buffett invited investment analyst Alice Schroeder to write in preference to undertaking the task himself, the author does not shrink from revealing her subject's character flaws and contradictions. The man who gave away US$37bn to charity - the largest gift in the history of philanthropy - was once notoriously tight fisted. As a young man of means, he had no car and when he borrowed his neighbour's, never filled up the tank.
Popular though he is today, he was once regarded with suspicion by Omaha society and blackballed for membership of the local country club.
Domestically, Buffett's nerdish character and relentless obsession with money made him difficult to live with. If he was not poring over annual reports and stock market schedules, he would be playing with his huge model train set, which was off limits to his children. His obliviousness to his wife Susan, who once described him as an "iceberg", and their three offspring, was "a running joke among his friends".
His best investment, however, was the warm and outgoing "Susie", who, before she went off to live apart from him in San Francisco, took care of his every need and helped him overcome his social insecurities. As his investment vehicle Berkshire Hathaway (BRK) - once a failing textile mill in New Bedford, Rhode Island - increased in size and profitability, so his reputation grew and his horizons widened. By the mid-1980s, BRK's share price had risen by more than 23%/year for 23 years. In 2006, BRK became the first American stock to trade above $100 000/share. The "snowball" Buffett had created so carefully since his 20s had made his name a byword in investment circles, and his family, partners and shareholders enormously rich.
His method of investing in companies ranging from small mobile home-makers and furniture stores to giants such as Coca-Cola is as simple to explain as it is difficult to execute: estimate an investment's intrinsic value, handicap its risk, buy using margin of safety, concentrate, stay in the circle of competence, and let compounding do its work. He modestly described his and long-time business partner Charlie Munger's role as twofold: attracting outstanding managers to run their various operations, and allocating capital to maximum effect.
Staying within his circle of competence led Buffett famously to steer clear of technology stocks, for which he was roundly mocked by the investment community until the techno bubble burst - whereupon he was lauded for his foresight. It also led him, some years later, to describe financial derivatives as "weapons of mass destruction" well in advance of the credit crisis that is now bringing the global economy to its knees.
Now approaching 80, Buffett is able to fulfil another of his lifelong desires: to teach. Every year thousands of investors from around the world make their way to Omaha for Berkshire Hathaway's AGM to listen to his advice and homespun wisdom. Students in their hundreds from across America sit at his feet and absorb his advice that getting rich quick is not the worthiest goal in life, that values are vital and that the "how" matters far more in business than the "how much".
Several books have been written about Buffett, but this is undoubtedly the most revealing study of the world's greatest-ever investor. Long though it is, it's well worth reading. But don't drop it on your foot: it might cause you serious injury.
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