The Snowball

The Snowball covers Buffett's whole life, from a boy in Omaha selling gum and delivering newspapers to the head of Berkshire Hathaway pledging most of his fortune to the Gates Foundation. The title comes from Buffett's own image of compounding: find wet snow and a long hill.

Schroeder had unusual access. A former CPA and Financial Accounting Standards Board project manager, she covered insurers on Wall Street and wrote the first significant analyst coverage of Berkshire. Buffett asked her to write the book, and she left Morgan Stanley in 2003 to do it. He gave her his files, interviews and introductions to family and friends, promised not to ask for changes, and told her to use the less flattering version when accounts conflicted.

The result is far more personal than Roger Lowenstein's Buffett. Schroeder writes at length about his marriage to Susan Buffett, his life with Astrid Menks and his friendship with Katharine Graham. It was shortlisted for the 2008 Financial Times and Goldman Sachs Business Book of the Year, and Janet Maslin of The New York Times named it one of the year's ten best books. The Economist advised readers who want analysis of the investments to start with Buffett's shareholder letters instead, and at nearly a thousand pages it is long. Buffett reportedly stopped speaking to Schroeder after it came out.

Read it to understand the temperament behind the record.

1. Start early and let it compound. Buffett was saving and investing as a child; the snowball image is about time and a long runway, not one big win.
2. Learn from a master, then adapt. He began with Graham's cheap statistical bargains and, with Munger's influence, moved toward quality businesses held for the long term.
3. Insurance float is fuel. Premiums held before claims are paid gave Berkshire low-cost capital to invest, a structure central to its growth.
4. Reputation is an asset. At Salomon Brothers, Buffett told employees that losing money was forgivable but losing the firm's reputation was not.
5. Focus has costs. Schroeder shows how Buffett's single-minded attention to business left his wife and children with much less of him.

After a short opening chapter on the less flattering version, the book goes to July 1999 and the Allen & Company conference in Sun Valley, where Buffett used a rare speech to argue that stock prices could not keep rising faster than the economy. It then goes back to the start and moves chronologically.

1. Omaha childhood. Buffett's family, his congressman father Howard, and the small businesses he ran as a boy, from paper routes to pinball machines.
2. Graham's student. He studies under Benjamin Graham at Columbia, talks his way into a job at Graham-Newman, then returns to Omaha to start his own partnership in 1956.
3. The partnership and Berkshire. He compounds money for partners through the 1960s, buys control of Berkshire Hathaway, winds the partnership down in 1969 and turns Berkshire into a holding company built on insurance float.
4. Building the empire. The middle of the book covers Charlie Munger, See's Candies, the Washington Post Company, GEICO, and his role as interim chairman of Salomon Brothers during its 1991 Treasury bond scandal.
5. Family and legacy. The later chapters turn to Susan Buffett's death in 2004, his marriage to Astrid Menks and his 2006 pledge of most of his fortune to the Bill and Melinda Gates Foundation.

Shortlisted for the Financial Times and Goldman Sachs Business Book of the Year Prize 2008 The Snowball is the first and will be the only biography of the world's richest man, Warren Buffett, written with his full cooperation and collaboration. Combining a unique blend of The Sage of Omaha's business savvy, life story and philosophy, The Snowball is essential reading for anyone wishing to discover and replicate the secrets of his business and life success. Warren Buffett is arguably the world's greatest investor. Even as a child he was fascinated by the concept of risk and probability, setting up his first business at the age of six. In 1964 he bought struggling Massachusetts textile firm Berkshire Hathaway and grew it to be the 12th largest corporation in the US purely through the exercise of sound investing principles - a feat never equalled in the annals of business. Despite an estimated net worth of around US$62 billion, Buffett leads an intriguingly frugal life taking home a salary of only £50,000 a year. His only indulgence is a private jet, an extravagance he wryly acknowledges by calling it The Indefensible. In 2006, he made the largest charitable donation on record, with most of it going to the Bill & Melinda Gates Foundation. The Snowball provides a comprehensive, richly detailed insight one of the world's most extraordinary and much loved public figures.