Secrets of the Psychology that Truly Makes Warren Buffett Who He Is: The Snowball

Written by Scott February 13, 2009

The Snowball: Warren Buffett and the Business of Life
by Alice Schroder
Pub. Date: 09/29/2008, Bantam Books
ISBN- 9780553805093
838 Pages
Success Rating: 4

Why I Read this Book: Warren Buffett is the epitome of success in many ways for a lot of people. I had to find out the real story.

Topics Covered:

  • Modeling
  • Internal Values
  • Value Investing
  • Trade offs of various forms of success
  • Understanding your purpose and priorities
  • Importance of Relationships

Review:

I preordered my copy of Snowball through Amazon the day it was announced. I will warn you that I am a fanatic. I make it out to Omaha each year for the Berkshire Hathaway meeting and it’s one of my favorite weekends learning lessons on life, business and of course investing. The foundation of my investment firm is based on the principles he made famous. Needless to say, I could not wait to get my copy.

Nearly two months later, I have finally turned the last page. One thing is for sure, Alice Schroder managed not to spare a detail in the 830 odd pages. No doubt that the length of this biography is a symbol of the depth and fanatics of Warren’s life, which becomes clearer with each page. I believe that Alice could have spared some of the detail so be prepared for a dense read.

I have been a student of Buffett and his approach for years, which made Snowball a logical progression in my ever-growing investing curriculum. Although for those of you looking for deep insight into Warren’s investment approach and steps on how to mimic it, you have come to the wrong place. There are hundreds of other titles that do a much better job of that (some of which you will see on my site). That value in this book instead was to get a window on the mind, life and thinking of the most financially successful person of our time.

For years I have had my question prepared for Buffett at the Berkshire Hathaway annual meeting, but I have yet to awaken early enough to secure a place in line. Shareholders and attendees willing to stand in line starting at around 3am are granted one question on a topic of their choosing. Mine is along the lines of “What was it that you told yourself, thought about and visualized when you were younger that made you certain that you would be one of the wealthiest people in the world one day? We have heard of your physical routine, but what about your psychology?” I believe The Snowball is my answer (although I hope to ask him again in Omaha next year).

Snowball brings up plenty of realizations and surprises of Warren’s life, but for me more than anything, this was a lesson in modeling. Modeling is one of the most valuable tools available for success. Early on, the likes of Ben Franklin, Benjamin Graham and plenty more, discovered that if you learn how someone lives their life and the beliefs they possess, it is possible to model their actions and thinking to achieve similar results. Tony Robbins is the biggest promoter and teacher of this technique in today’s world. This tool is incredibly valuable in anyone’s tool chest to success. It’s a huge handicap to not put it to use on your journey. That is essentially what ReadingForYourSuccess comes down to. A guide on how to model the most successful authors, people and approaches I come across.

Anyone looking to model Warren Buffett (and I know there are a lot of you out there) must read Snowball. Over the years I have worked hard to model what I’ve learned about Warren’s approach to investing and life. Outwardly it seems doable, but after spending two months and 830 pages peering through the window on his life, it has become glaringly clear why there is only one Warren Buffett.

From the early years of childhood, Warren has had a one track mind about collecting as much money as possible. This has come at the regrettable sacrifice of various family interactions and relationships throughout his life. I wont get into the specifics but the eye-opener for me was that when it comes down to success, never forget that trade off’s exist around every corner. Only a true understanding of your life’s mission, purpose and definition of success will allow you to properly choose as these issues are presented. For Warren, he loved nothing more than analyzing businesses and building wealth. He obviously did not care about what it could buy, since he is still quite frugal and is giving it all back to society, but he loves the accumulation. This has taken top priority and there’s little doubt that he could have achieved what he has without the inhuman discipline that he’s displayed in his 78 years.

Key Lessons:

  • Discipline is one on of the most valuable traits one can possess
  • There is no substitute for a firm set of values
  • The importance of giving back and philanthropy—there’s no pride in being the richest guy in the graveyard
  • ake every opportunity to teach, develop and give knowledge to others
  • Desire and commit to never stop learning

This was a fundamental learning for me and I hope it presents a valuable example for you as well. While, building a successful investment business is very important to me, it does not rank as high as my health and my relationships and interactions with my family, friends and the love of my life. I am willing to accept this as I set my goals and expectations for my business and all other things important to me.

Snowball is a wonderful guide to what it would really take to model the success of Warren Buffett. And just as it took an incredibly unique individual to become who Warren is today, it would take just as much to model him. You wonder though, even if you could model Warren, would you really want to? After learning the details provided by Schroder, I have a feeling fewer would be up to the task. This is a fantastic realization however. It is up to you to choose what traits and qualities you want to model about a mentor or teacher. Just as important as what you choose to model, is what you choose to leave behind. We do this everyday without knowing it, whether it’s with our parents, friends or significant others. Common sense says to take the desirable and leave the rest. As you reevaluate your modeling for this new year, keep this close in mind.

We are all uniquely fortunate to be living and learning among the likes of such business and financial greatness. Never before have we seen a man with an internal set of rules and convictions (an “internal yardstick” as Buffett would call it) so strong that no one would be successful in throwing him off his finely calculated path to the top. Generations to come will listen in envy as we tell them of what we learned as we witnessed Warren amass his Snowball in real time. All the while giving those willing to listen, some of the most fundamental and priceless lessons on life, values, philanthropy, business and investing ever provided. If you have not taken advantage of these real time lessons, it’s not too late, but sadly that will not always be the case. If you’re up to it, dig into Snowball, but if not then you need not look further than any book store or a month’s worth of news papers to begin seeing all that Warren has been providing to us and society. The years are limited where it will still be real time.  There is a strong dose to be had every year out in Omaha. Perhaps I’ll see you out there in 2009.

-Reading for Your Success

Buy The Snowball at Amazon

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