下载掌阅APP，畅读海量书库
立即打开
In the annals of investing, Warren Buffett stands alone. Starting from scratch, simply by picking stocks and companies for investment, Buffett amassed one of the epochal fortunes of the twentieth century. Over a period of four decades—more than enough to iron out the effects of fortuitous rolls of the dice—Buffett outperformed the stock market, by a stunning margin and without taking undue risks or suffering a single losing year. This is a feat that market savants, Main Street brokers, and academic scholars had long proclaimed to be impossible. By virtue of this steady, superior compounding, Buffett acquired a magical-seeming net worth of $15 billion, and counting.
Buffett did this in markets bullish and bearish and through economies fat and lean, from the Eisenhower years to Bill Clinton, from the 1950s to the 1990s, from saddle shoes and Vietnam to junk bonds and the information age. Over the broad sweep of postwar America, as the major stock averages advanced by 11 percent or so a year, Buffett racked up a compounded annual gain of 29.2 percent. 1
The uniqueness of this achievement is more significant in that it was the fruit of old-fashioned, long-term investing. Wall Street’s modern financiers got rich by exploiting their control of the public’s money: their essential trick was to take in—and sell out—the public at opportune moments. Buffett shunned this game, as well as the more venal excesses for which Wall Street is deservedly famous. In effect, he rediscovered the art of pure capitalism—a cold-blooded sport, but a fair one.
The public shareholders who invested with Buffett also got rich, and in exactly the same proportion to their capital that Buffett did. The numbers themselves are almost inconceivable. If one had invested $10,000 when Buffett began his career, working out of his study in Omaha in 1956, and had stuck with him throughout, one would have had an investment at the end of 1995 worth $125 million. 2
And yet, the numbers alone do not account for the aura that Buffett cast on Wall Street. Once a year, disciples and money men would flock to Omaha like pilgrims on a hajj, to hear Buffett deconstruct the intricacies of investing, business, and finance. His annual meetings became a piece of Americana, like an Elvis concert or a religious revival. Financial groupies arrived in Omaha clutching Buffett’s writings like a Bible and reciting his aphorisms like excerpts from the Sermon on the Mount.
His grasp of simple verities gave rise to a drama that would recur throughout his life. Long before those pilgrimages to Omaha, long before Buffett had a record, he would stand in a corner at college parties, baby-faced and bright-eyed, holding forth on the universe as a dozen or two of his older, drunken fraternity brothers crowded around. A few years later, when these friends had metamorphosed into young associates starting out on Wall Street, the ritual was the same. Buffett, the youngest of the group, would plop himself in a big, broad club chair and expound on finance while the others sat at his feet.
On Wall Street, his homespun manner made him a cult figure. Where finance was so forbiddingly complex, Buffett could explain it like a general-store clerk discussing the weather. He never forgot that underneath each stock and bond, no matter how arcane, there lay a tangible, ordinary business. Beneath the jargon of Wall Street, he seemed to unearth a street from small-town America.
It is a curious irony that as more Americans acquired an interest in investing, Wall Street became more complex, more abstruse, more arcane, and more forbidding than ever. When Buffett was born, in the midst of the Depression, the few Americans who did have capital felt personally equipped to manage it. This they did by salting it away in blue chips and triple-A bonds. The Depression cast a long shadow, but the postwar prosperity eclipsed it. Today, tens of millions have at least a small grubstake, but very few feel comfortable with handling it, and fewer still have the old habit of prudence. At best, they anxiously scan the financial pages, as though each day’s twitch in the data on housing or inflation might bring the long-awaited “answer.” At worst, they switch in and out of mutual funds with an impatience that would have shocked their grandparents.
In such a complex age, what was stunning about Buffett was his applicability. Most of what Buffett did was imitable by the average person (this is why the multitudes flocked to Omaha). Buffett’s genius was largely a genius of character—of patience, discipline, and rationality. These were common enough virtues, but they were rare in the heat of financial passions, and indispensable to anyone who would test his mettle in the stock market. In this sense, Buffett’s character and career unfolded as a sort of public tutorial on investing and on American business. Buffett was aware of his role from the very beginning, and he nurtured a curious habit of chronicling his escapades even as he lived them.
As an investor, Buffett eschewed the use of leverage, futures, dynamic hedging, modern portfolio analysis, and all of the esoteric strategies developed by academics. Unlike the modern portfolio manager, whose mind-set is that of a trader, Buffett risked his capital on the long-term growth of a few select businesses. In this, he resembled the magnates of a previous age, such as J. P. Morgan, Sr.
But the secretive Morgan was a Wall Street archetype; Buffett, a plainspoken Midwesterner, was its antithesis. He was famous for quipping that it was the bankers “who should have been wearing the ski masks,” 3 or that, as he said to a friend who had been offered a job in finance, “you won’t encounter much traffic taking the high road in Wall Street.” 4 He once wrote that he would no more take an investment banker’s opinion on whether to do a deal than he would ask a barber whether he needed a haircut. 5 This commonsensical cracker-barrel wit made him an archetype of something larger, and far more basic, to the country’s past. It answered to a deeply American need for authentic heroes.
This has always been America’s secular myth: the uncorrupted commoner from the Midwest or West who stands up to the venal Easterners, be they politicians, bankers, big businessmen, or other. It is a ransom to the country’s origins, a remembrance that the first authentic and pure Americans were destroyed. Let Europe have its princes; the American ideal has always been a self-made man from the midcountry—a Lincoln, a Twain, a Will Rogers. In an age without heroes, this, too, is what Buffett’s disciples were seeking in Omaha.
As Jack Newfield wrote of Robert Kennedy, Buffett was not a hero, only a hope; not a myth, only a man. 6 Despite his broad wit, he was strangely stunted. When he went to Paris, his only reaction was that he had no interest in sight-seeing and that the food was better in Omaha. His talent sprang from his unrivaled independence of mind and ability to focus on his work and shut out the world, yet those same qualities exacted a toll. Once, when Buffett was visiting the publisher Katharine Graham on Martha’s Vineyard, a friend remarked on the beauty of the sunset. Buffett replied that he hadn’t focused on it, as though it were necessary for him to exert a deliberate act of concentration to “focus” on a sunset. 7 Even at his California beachfront vacation home, Buffett would work every day for weeks and not go near the water.
Like other prodigies, he paid a price. Having been raised in a home with more than its share of demons, he lived within an emotional fortress. The few people who shared his office had no knowledge of the inner man, even after decades. Even his children could scarcely recall a time when he broke through his surface calm and showed some feeling.
Though part of him is a showman or preacher, he is essentially a private person. Peter Lynch, the mutual-fund wizard, visited Buffett in the 1980s and was struck by the tranquillity in his inner sanctum. His archives, neatly alphabetized in metal filing cabinets, looked as files had in another era. He had no armies of traders, no rows of electronic screens, as Lynch did. Buffett had no price charts, no computer—only a newspaper clipping from 1929 and an antique ticker under a glass dome. The two of them paced the floor, recounting their storied histories, what they had bought, what they had sold. Where Lynch had kicked out his losers every few weeks, Buffett had owned mostly the same few stocks for years and years. Lynch felt a pang, as though he had traveled back in time. 8
Buffett’s one concession to modernity is a private jet. Otherwise, he derives little pleasure from spending his fabulous wealth. He has no art collection or snazzy car, and he has never lost his taste for hamburgers. He lives in a commonplace house on a tree-lined block, on the same street where he works. His consuming passion—and pleasure—is his work, or, as he calls it, his canvas. It is there that he revealed the secrets of his trade, and left a self-portrait.