September 3, 2018

Book Reflection: The Snowball by Alice Schroeder

This book was published a decade ago, in September 2008, and it took me a while to get to reading it. My good friend Johnson had been telling me about Warren Buffett for years but it wasn't until a few years ago that I really took the time to learn more about the man and his philosophy.

Better late than never right?

The Snowball by Alice Schroeder
The Snowball by Alice Schroeder
There are a lot of lessons to learn from Warren Buffett and many books have been written about the man and his life.

I found this book really interesting because it was very comprehensive in writing about his early life and how he turned into the man now known as the Oracle of Omaha.

Needless to say, the book is not just about business or about how he became one of the richest people in the world, although the book does provide a lot of details about his early investment ideas and how he executed them.

The book also writes about his struggles as a husband, father, son and friend. How he tried to balance his inner scorecard with his outer scorecard and how he always wanted to be liked but became completely inflexible in certain aspects of his life (like money).

Schroeder paints a balanced portrait of a man who is not perfect as some of his diehard fans may lead one to think.

A few things that stood out to me below.

Warren Buffett is humble enough to acknowledge that he won the genetic lottery

As someone who was born in a developing country, I know how opportunities are different where I come from. 

Of course, Mr Buffett did work hard and take advantage of opportunities so it wasn't all about just winning the genetic lottery. Where and when he was born played a factor but it wasn't the only factor in his success. 

His acknowledgement and awareness of it did play a part in his decision to give away majority of his wealth to help other people.

Finding the balance between the inner and outer scorecard

Mr Buffett's father was stubbornly committed to his inner scorecard. To the point that it probably cost himself a few opportunities in his career as a politician. Early in his life, Mr Buffett realized this and tried to overcompensate by always wanting to be liked and steering away from confrontation.

The truth is probably somewhere in the middle as he later realized. Having a strong moral compass and firm beliefs are what has guided him in taking some difficult positions against conventional opinion.  

My final thoughts

The world today is a lot more complex compared to the world Mr Buffett grew up in. Even Mr Buffett acknowledges that when he buys a company, he rarely strays away from his circle of competence. He missed out on investing in technology as a result. A failure of sorts if you consider how technology is now such a big part of our lives today.

If the most successful investor in history has made mistakes and missed out on opportunities, we regular humans shouldn't be afraid of making mistakes too.

Let's all keep learning and growing. Success is measured in different ways - not just by how much money we have.

Always give a thought to the long term impact of the decisions we make. Get our snowballs rolling early and make time work for us. 

And don't forget, the best investment we can make is in ourselves!