There are scads of books on the market purporting to tell the story of investing guru Warren Buffett, says William Patalon III in Money Morning. But if you really want to learn about Buffett the man and Buffett the investor, there’s really only one biography worth reading…

“Buffett: The Making of an American Capitalist,” by Roger Lowenstein, was first published in 1995, meaning it’s been out on the market for more than a decade. And, yet, it remains the best Buffett biography out there, providing the most complete picture to date of the world’s richest man, best-known as the sagely investor who has transformed Berkshire Hathaway Inc. (BRK.A, BRK.B) from a wheezing textiles firm into the world’s greatest investment vehicle.

Please note, that when I refer to the “best Buffett book,” I’m excluding such Buffett-penned works as “The Essays of Warren Buffett: Lessons for Corporate America.” I’m also – by necessity – not including the new “authorized” biography, “The Snowball: Warren Buffett and the Business of Life,” since that’s not due on bookstore shelves until Sept. 29. “The Snowball” is a Bantam Dell Publishing Group book.

But I looked at pretty much everything else available, looking for the one book that captured the personal life, the personality and the investment wisdom of the man folks refer to as the “Oracle of Omaha.” Indeed, many consider Buffett to be the single-greatest investor of our times.

Strong From the Outset

So many biographies – especially those of business luminaries – highlight their achievements, but go no further, never breaching the façade to show us just what makes the person tick. It’s there, I believe, that Lowenstein excels, thereby setting his book apart from all the others.

For instance, “American Capitalist” talks about Buffett’s youth, and his introduction to business in the form of his grandfather’s old-fashioned neighborhood grocery store, with its interesting smells, bare-board floors, and the wheeled ladder that clerks could slide along the shelves to reach items stored high overhead. And Lowenstein also writes about Buffett’s terrible homesickness for his hometown of Omaha when his father Howard – who Warren proclaimed his lifelong “best friend” – is elected to Congress, a development that forced the family to leave Nebraska for a new home “Inside the Beltway.”

Both of those experiences influenced Buffett in a profound way, and those influences continue to manifest themselves even today.

For instance:

• His work in the family-run grocery store experience imbued Buffett with a lifelong affinity for companies with easy-to-understand business models – particularly businesses that actually make or sell a tangible product (the easier to understand, the better Buffett likes it). If the companies are family run, or have had the entrepreneur/founder at the helm for years and years, all the better, Buffett believes.
• And that bout of homesickness helped create in Buffett a deep-seated aversion to change.

Taken in tandem, Lowenstein believes those two qualities are a key reason that Buffett likes to invest in the businesses that he does – and to do so as a “partner,” a kind of long-term owner – but without interfering with the existing management team, so long as the corporate officers achieve the promised objectives in such areas as “return on invested capital.”

Building Berkshire

Buffett’s seemingly homespun investment ideals have generated unparalleled financial results, and that confidence and independence instilled tremendous loyalty in the top managers of the companies he’s invested in or bought outright – and that was true even before Buffett made a lot of those folks rich.

Indeed, Lowenstein jokes that only once did the former-proprietor/now-manager of a Buffett-acquired company subsequently turn on the Sage of Omaha. That was Rose Blumkin – known around Omaha as “Mrs. B.” – the semi-tyrannical owner-operator of Nebraska Furniture Mart, which Buffett bought for an estimated $60 million in 1983. The business was a huge moneymaker for Berkshire. But in 1989, after a tiff with several of her grandsons over the management of the business, she quit in a huff and started a rivaling company – next door. At the time, Mrs. B. was 95.

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Buy, Sell or Hold: Buffett’s Berkshire Hathaway Inc. Has Been Masterfully Managed and Will Cont... (Money Morning, 11/9/09)

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Riding Warren Buffett’s coattails (Canadian Business Blog, 11/4/09)

Read more on Warren Buffett, Berkshire Hathaway at Wikinvest

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