Warren Buffett chose Alice Schroeder to be his biographer, granting her access to his personal life like no outsider has ever been granted. In The Snowball, she is rather frank and is not always complimentary of the investing legend, which has apparently led to a rift between the two. Here follows a summary of the book.
These chapters examine the lives of Buffett's ancestors. The author has identified some common traits of the Buffett families through the generations. They are hard-working, love to preach/educate, and avoid debt wherever possible.
Warren's father, Howard, became a stock broker in 1927 as the market marched upward and optimism reigned. After the crash in 1929, commissions were hard to come by, as were other jobs, and he worried about how to feed his family. His father (Warren's grandfather) owned a grocery store, and while he couldn't afford to hire Howard, Howard's family was able to run up a tab while money was tight. Howard then started his own broker firm and made it a success despite the economic depression that ensued.
Warren was born soon after. As a child, he enjoyed games that involved numbers, counting or odds. He was also into collecting things like stamps, bottle caps and coins. At school, Warren was bored by many subjects but enjoyed and excelled at math. It wasn't long before he entered the business world; at age six, Warren sold gum at a profit of 2 cents per pack. Over the next few years, he would sell gum and newspapers door-to-door, packs of Coke at the beach, and used golf balls at a nearby course (until the owners ran him off with the help of the police).
He bought his first stock at age 12, but knew very little about what he had purchased. All he knew was that his father had sold this issue to a lot of clients. The stock fell significantly, then rose (following which Warren sold it) and then rose by a huge margin. Warren learned a couple of lessons he would never forget:
1) Don't fixate on what you paid for a stock
2) Don't rush to grab a small profit