"Snowball" Buffett and his wealth life (Part 1)

"Life is like a snowball. The most important thing is to find very wet snow and a long slope." ——Warren Buffett

"Snowball" was January 2009 The book published by CITIC Press, authored by Alice Schroeder, reveals Buffett's real life and describes for us how Buffett, who has encountered setbacks and failures like ordinary people, gained in investment and business. A story of great success and wealth.

This book is divided into two volumes: upper and lower. It took me nearly a month to read the first volume, which has a total of 536 pages. The content of this book is not difficult to understand, but it only involves the names of foreign people, companies, places, etc. They are familiar with each other, and it takes a lot of trouble to sort out the relationship.

In particular, the companies invested by Buffett and Munger are like matryoshka dolls, with links linked one after another. Therefore, when looking at a small part, you often need to review it and connect it with what you have seen before. Figure out their relationship.

Before reading this book, I only knew the title of Buffett, the stock god, but I didn’t know anything else. After reading this book, I have a general understanding of him, his life and his investment philosophy.

01

Buffett is a very simple ordinary person, so simple that the only thing in his life is "investment"; so simple that he only wears the iconic tennis ball Shoes, a shirt that has lasted for several years, and a sweater that he still wears after being worn out; so simple that his only diet is hamburgers and ice cream.

He is a person who is very dedicated to his investment career. Apart from that, he is not interested in other things. Therefore, his wife Susan took on the responsibility for his daily life and family affairs. Susan also takes care of the elderly, children, siblings and other relatives.

She is very capable, and these relatives are willing to ask her for help no matter what they need. Later, she also volunteered to help some blacks and poor people. She became friends with most of the people in Omaha, where they lived.

Buffett focused all his energy on investment. He not only invested himself, but also helped relatives and friends invest, and later helped other partners invest. He is very willing to manage money for everyone, and it is great to see the money he manages snowball and grow bigger and bigger.

Of course, it was precisely because he focused on investing and neglected to accompany his wife. Although he kept giving her money, she felt empty when the children grew up and no longer required her to devote more energy to taking care of them. She would sometimes get up very early, drive to the beach, stay alone for a long time, and then come back.

At that time, Buffett was deeply obsessed with Katharine Graham. He would always appear with her at her banquets and many other public occasions, or travel and vacation together. Although Susan acquiesced to this matter, this may be part of the reason why she felt lonely, because she was used to being relied on by Buffett, and in this case, she seemed to be no longer needed.

Later, Susan bravely took the step to live out her life. She began to develop her favorite singing career. She held concerts and enjoyed her own time. Later, she moved to San Francisco alone.

Buffett was living a life without Susan in Omaha, which made him very uncomfortable. He made his life a mess and called and begged Susan to come back, but Susan refused. At this time, he reflected that he had ignored Susan's feelings before, and he felt regretful and helpless.

Susan asked Astrid Menkes, whom she had rescued, to give Buffett some treatment and take care of him. But what Susan didn't expect was that Buffett and Astrid would come together. They negotiated and maintained this triangular relationship. By this point, Buffett and Astrid lived in Omaha, while Susan lived alone in San Francisco, but she remained Buffett's wife.

02

Buffett studied under Benjamin Graham at Columbia University, and he was a leader among Graham's students. But when Buffett graduated, he wanted to join Graham and start Graham Newman Company, but he refused. A few years later, he planned to enter the company and learn investment from Graham.

Buffett’s investment philosophy is value investing. He is always looking for valuable companies, banks, etc. that are on the verge of bankruptcy. Once he finds them, he will try his best to buy the stocks of these companies. After occupying a certain proportion, he will have a controlling stake or the opportunity to join the board of directors, making these companies more attractive. If it develops in a good direction, he will be able to make money. He called these companies "cigarette butts," an investment philosophy he learned from Graham.

Based on this investment philosophy, he owns a considerable proportion of the stocks of many companies, the most famous of which are Berkshire Hathaway, Diversified Retailing, and the "Washington Post".

He has a partner, Charlie Munger, and they have collaborated on many projects. He often jokingly calls himself and Charlie Munger "Siamese twins." They have many similarities and are both keen on investing. , rarely pay attention to things other than investment. Life is relatively monotonous. Some people call Buffett a "creature of habit." But Buffett said that Munger is a "creature of habit."

Buffett has had the idea of ????making money since he was a child, and he began to accumulate his first pot of gold by delivering newspapers and picking up bottle caps at a very young age. Then use the money to invest in stocks, making the money snowball into more and more money.

He also earns a fee by helping partners manage their money. By buying shares in valuable companies, he makes more and more money. He has topped the rich list many times and won the title of stock god.

03

As the saying goes: "The richer people are, the more frugal they are." This saying couldn't be more appropriate for Buffett. Although he has hundreds of billions of assets, he is very stingy with spending money.

His wife Susan and he have different ideas. Whenever Susan wants to improve the conditions at home or do something that costs money, Buffett doesn't agree very much and will argue with Susan. A quarrel is described in the book, "Often when there is a quarrel, it seems that we can't live together anymore."

Buffett loves Susan very much, so after the quarrel, Buffett often tries to avoid it. When Susan is angry, she will give her money to do what she wants to do. Susan can get money from Buffett, but it is not so pleasant every time she asks for money, because Buffett often values ??the future value of the money.

Buffett himself is not particular about food or clothing, so he spends very little on himself. His stinginess is also reflected in his treatment of his children. He does not give them money, but only buys them shares in Bakeshire Hathaway.

When the eldest son Howie and daughter Susie had no money and still wanted to fulfill their wishes, they sold these shares. No matter what kind of life they live, Buffett will never give them money again, but Susan will give them money occasionally.

04

After reading this book and thinking deeply about it, I felt very conflicted.

On the one hand, I admire Buffett's investment philosophy and his persistence in focusing on one thing. Of course, I also admire his success in the investment career. And he has helped many people through the charitable foundation he established. It can be said that he is a successful man in his career, and he is a good friend and partner of others.

On the other hand, when he returns to his family, although he cannot be said to be a failure, I think he is not a good husband or a good father. When he wanted to save Susan and let her come back to him, he also realized that he cared too little for his children. The child did not have a deep relationship with him. He wanted to enhance the relationship between father and son, but it was too late.

Perhaps, no one is perfect, and we are destined to lose something as much as we gain. We can't be too demanding on a person to be perfect. However, seeing other people’s life experiences often gives us some inspiration. We will ask ourselves, what do we want?

In addition, we can learn from his investment philosophy, look for things that are valuable and worthy of investment, and hold them for the long term. Ensure cash flow and buy heavily when the stock market is down and others are panicking. Sell ??stocks when the market is high and others are excited to buy.