The Snowball Book Summary

Book Summary

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Brief Summary

The key message in this book is: though Warren Buffett’s life was almost always focused on rolling the “snowball” — investing and reinvesting his earnings in companies — he never lost sight of the human side of the business. He paid attention not only to the monetary side, but also to the sentimental one, and always made sure to see more than just money and success in a company. He, one of the richest men in the world, will also go down in history as one of the humblest and most charitable.

About the Author

Alice Schroeder is an American author and former insurance analyst.

As a project manager for the US FASB, she managed SFAS No. 113. She was a columnist for Bloomberg News. She graduated with an MBA from McCombs School of Business at the University of Texas at Austin. She worked as a CPA at Ernst and Young in Houston. She then worked as a project manager for the Financial Accounting Standards Boards in Connecticut.

In 1993, she left FASB to work as an insurance investment analyst for Downling Partners in Hartford.

In 2000, she started working for Morgan Stanley, where she was voted the #1 Property-Casualty insurance analyst for a period of two years after being ranked a member as the Institutional Investor All-America Research team for seven years.

In 2003, Schroeder began traveling to Omaha to research and write Buffett’s official biography. She was the first and only analyst at Morgan Stanley to be granted an interview with Buffet, who gave Schroeder full access to the going ons of his life. The Snowball was published in 2008 and debuted at #1 on The New York Times. The New York Times reviewer Janet Maslin called it one of her ten favorite books of 2008. Time and People named it on the ten best books of the year. The Snowball is a comprehensive overview of Buffet’s life, wisdom, and philosophy.

Schroeder currently works as a Bloomberg News columnist.

Topics

Money & Investments Biography & Memoir

The Snowball Book Summary Preview

You have probably heard of him as “the Wizard of Omaha,” the boy who, by eleven, had already saved up $120, which was a lot of money in 1941, and who used this money to make his first investment in the company Cities Served Preferred.

Warren Edward Buffett, one of the world’s few billionaires, has a net worth of $89,4 billion.

In her book, to understand how Buffett went from a broke young boy in Omaha to one of the richest and most successful men in the world, author Alice Schroeder leads us through his journey as the most famous investor of the twentieth and twentieth-first centuries in a way that anyone can learn how to get rich as Buffett himself did.

Start Them Young: How Warren Buffett Made His First Investment at the Age of 11

Warren Buffett was born on August 20, 1930, only a few months after the Great Depression hit the country, leaving most investors broke, to Howard Buffett, a stockbroker and member of Congress, and Leila Buffett (née Stahl).

Young Warren’s early interest in numbers, probabilities, and statistics was noticed and encouraged by his family. When he was nine years old, he was already making money by working several jobs, such as selling peanuts and Coke at football games.

At the age of eleven, having saved $120, he bought six shares of the company Cities Service Preferred: three for himself and three for his sister Doris. In 1942, after his father was elected to Congress, Warren began working as a newspaper delivery boy; at some point, he was earning $175 a month, and it was not long before his savings summed up to $1,000.

At the age of fourteen, Warren Buffett would fill his first tax return.

Years later, during his college years at Columbia University, Warren would come to learn several of the most important lessons and fundamental investment strategies in his life: for example, the importance of investigating a company from top to bottom before investing in it. He took a particular liking to study his professor Benjamin Graham’s “buy and hold” investment theories, and would later call him “the Albert Einstein of the investments.”

It was also during his Columbia years that he would meet his wife, Susie Thompson. Though her father liked Warren immediately, it took a while before Susie herself finally fell for his nerdy, awkward charm. Their daughter, Susie Alice Buffett, was born in 1953, the very same year Buffett got his dream job at his mentor Ben Graham’s investment firm, Graham-Newman. Warren quickly became the company’s rising star, yet he realized he hated being a stockbroker for multiple reasons. He would eventually launch his own company, Buffett Associates, Ltd, in 1956, after the birth of his second child, Howie Graham Buffett.

Buffett Associates only included friends and relatives, and there were straightforward rules, which were listed in his company’s original partnership agreement, behind investments so that no one would be disappointed afterward or have unrealistic expectations. At this same time, Benjamin Graham decided to retire and closed his...