Friday, December 01, 2006

The Real Warren Buffett - Book Review

The Real Warren Buffett: Managing Capital, Leading People

What Is It About?

This book is obviously about Warren Buffett. Unlike other books on Buffett, this book does not simply look at his success as an investor. The book instead focuses on Buffett's success as a leader and capital manager. While the book refers to Buffett's investment prowess, it does so within the context of Buffett's leadership decisions and capital allocation as CEO of Berkshire Hathaway.

What Did I Get Out Of It As A New Investor?

I must say that this book is excellent. The author does not try to reduce Buffett and his ideas to a simple quantitative formula one can hope to easily emulate. Rather this book does a great job of examining Buffett's investing success as a function of his excellent leadership skills. It does so by looking at Buffett's approach to the institutional imperative, allocation of capital, successful integration of acquired companies, and the use of the insurance business as a source of investment capital.

If the above was not enough, this book also has an excellent explanation of what Buffett means by the circle of competence. Both in written and diagram form the author sets forth with clarity an understandable elucidation on just what is and is not meant by the circle of competence. When I first read this book several months ago I had already read about the idea of a circle of competence but the book provided the key to a deeper understanding of how to define, recognize, and use my own personal circle of competence.

Simply put, I got a lot out of this book.

The Good News

Simply the best book I have read, outside of Buffett's own writings, on the subject of circle of competence. When I read this book it clarified many concepts for me. If you are tired of reading other books on Buffett that try to explain how-to be like Buffett by following some simple formula, this book will provide a refreshing point of view.

The Bad News

In a few sections, especially the last part, the book does seem to slow down a bit, still interesting mind you, just a bit of a slog.

The Bottom Line

I would recommend that every new investor at least read it and would strongly recommend it be purchased and included in your personal library.

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Anonymous said...

Did you know that Buffett bragged about paying less taxes than his secretary?



Warren buffett is a great value investor.