Book Review: Buffett- The Making of an American Capitalist by Roger Lowenstein

Buffett: The Making of an American Capitalist is one of the five books that I set out to read for my 2020 Personal Finance goals.  I’m a Warren Buffett fan and find his giftedness, his ability to invest, and his story very fascinating.

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I went to Omaha in 2016 for the Berkshire Hathaway Annual General Meeting and basically tried to stalk him all around town.  Went to look at his office at Kiewit Plaza, went to look at his house on Farnam street (and also saw him pulling up into the driveway!), went to Borsheim’s to try and see him there, went to see him play ping pong with Bill Gates, and went to eat at Gorat’s and saw Warren Buffett and Charlie Munger there too.  I even saw his wife Astrid about one meter away from me at an event too but didn’t realize it until a few seconds later.

For a picture of the huge Gorat’s 22 oz. T-bone steak I ate, click here.

Kris from Chronicles of a Father with Cents read The Making of an American Capitalist and he recommended it to me.  This was such a good book, I actually liked it better than The Snowball: Warren Buffett and the Business of Life, the other biography about Warren Buffett by Alice Schroeder.

There was a lot more in this book compared to The Snowball about Warren Buffett.  A lot more ‘dirt’ I would say and interesting things that may not paint him in the best light.

Interesting Things I learned about Warren Buffett

Here are some of the interesting things I learned about Warren Buffett in this book, about his frugality, his parenting, his personality, and his upbringing.

• Warren Buffett was already risk adverse as an infant.  When he was learning to walk, he walked with his knees bent so that he wouldn’t fall as hard.
• When his daughter was first born, instead of a bassinet, he put her in a dresser drawer (I assume this is to save money)
• For his second child, he was doing quite well financially at this point… he borrowed a crib from a friend to use instead of buying one
• At age 37, he almost called it quits on investing, because he put too much pressure on himself.  He wanted a ‘less compulsive approach’
• Even though he eats not ideally (Cherry Coke and steaks and McDonald’s), he is careful with his weight and was cognizant of his daughter’s weight too.  He would dangle a monetary carrot for his daughter and would write a cheque to his daughter payable on a certain date that could be cashed only if the target weight was achieved
• There was more detail than in The Snowball about the relationship between Susie, Astrid, and Warren.  I didn’t get the impression in The Snowball that Susie LEFT Warren Buffett, but in this book, it was more clear that this is what happened.  Susie wanted to live her own life, wanted to live in California, and was finished raising their kids.
• Warren Buffett was very careful not to raise entitled children.  His children didn’t mind and they agree with his approach.  His daughter needed some money to park at an airport and she wrote him a $20 cheque to pay him back.  He bought a farm for his son but charged him market rent.
• He tried to motivate his wife, daughter and son to lose weight- he offered Howie, his son, reduced rent on his farm if he would lose weight.
• Another example of him trying to motivate his children (in less than ideal ways I would say) is offering his youngest son Peter an invitation to a swanky club/ dinner event, but on the condition that Peter cut his pony tail.  He did shower his son Peter with praise at a music performance and was impressed with his son’s musical abilities and talent.
• He was very cognizant of financial dependency and did not want this at all for his family.  Later in his life he has loosened up a bit.
• He had a near drowning incident in Minnesota while on a boat with Charlie Munger
• His sister Doris ran into money trouble and was $1.4 million in debt selling naked options from the 1987 market crash and he did not bail her out
• He was worth about $200 million at age 50

What I Liked About The Making of an American Capitalist

As you can probably see, I found out a lot more about Warren Buffett than I previously knew.  This book was fascinating.  Roger Lowenstein is a journalist and in the end of the book, he met Warren Buffett himself but didn’t seem to give 100% approval from this book, maybe because he was wary of being cast in a less than perfect light.  He did not agree to assist Roger Lowenstein with the creation of the book.

In addition to all the personal tidbits about Warren Buffett’s life, the book also talked about some of the deals of Berkshire Hathaway, including Rose Blumkin’s Nebraska Furniture Mart, Cap Cities, and The Washington Post.  I also liked that The Making of an American Capitalist shares Warren Buffett’s values and what he is looking for in a good manager and a good company to invest in.  These are: energy, discipline, integrity, and instinct.

Related:  Poor Charlie’s Almanack:  The Wit and Wisdom of Charles T. Munger

Finally, especially in the current market turmoil and volatility, it was refreshing to read that during the previous downturns, people were betting against Warren Buffett too.

What I Did Not Like About The Making of An American Capitalist

There was really nothing I did not like about The Making of an American Capitalist.  It is a very well written book and the stories about Warren Buffett are captivating.  If I were to pick one thing, it was maybe too much detail and chapters dedicated to The Salomon Brothers debacle.

I would say this is probably the best Warren Buffett book I have read so far especially if you’re interested in learning more about his life and his upbringing.  However, if you’re more interested in his investing strategies, The Warren Buffett Way by Hagstrom would probably be more up your alley.

Although this book wasn’t one of the best dividend investing books on my list, it is still an amazing book about Warren Buffett.

Have you read Buffett:  The Making of an American Capitalist? 

Do you have any other Warren Buffett books that you would recommend?

genymoney

GYM is a 30 something millennial interested in achieving financial freedom through disciplined saving, dividend and ETF investing, and living a minimalist lifestyle. Before you go, check out my recommendations page of financial tools I use to save and invest money. Don’t forget to subscribe for blog updates, a free dividend yield spreadsheet, and the free Young Money Bootcamp eCourse.