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.
As Buffett spent most of his time working, whereas his wife Susie tended to their children, community affairs, and a singing career, they began to grow apart. Buffett spent much of his time in Washington and New York with the female CEO of the Washington Post in which he owned a large stake, while Susie was spending time with other men. Once the kids were grown up, Susie moved to San Francisco while Buffett remained in Omaha.
According to the author, Buffett was a wreck after Susie left. They would talk for hours on the phone with Buffett weeping, wishing her to return. Susie enlisted Astrid Menks to look in on her husband and bring him hot meals every now and then. Buffett and Menks would soon lean on each other, and eventually move in together. This was not what Susie intended, but Astrid was willing to defer to Susie, who was the public wife, while Astrid was the private mistress.
During this time, Buffett purchased the Buffalo Evening News through Blue Chip Stamps. This was his largest purchase to date, at $35 million, and it was almost a complete failure. Buffett had stated publicly that most cities would end up with only one daily paper, and so he quickly went after the competition in Buffalo. While his paper led on weekdays, the competition had the Sunday paper market cornered. Buffett got his paper to print a Sunday edition, and offered it free and/or with heavy discounts in order to undercut the competition. This, along with his comments about him seeing only one daily paper in US cities would land him in hot water with anti-competitive laws. The competition asserted that Buffett had aimed to shut them down from the start, and they were winning in court. Legal restrictions that were subsequently placed on Buffett's paper were causing massive losses.
Buffett was ready to give up and liquidiate, but Munger (another owner of Blue Chip Stamps) wanted to fight on. With new management, the paper's fortunes improved, and court decisions were reversed on appeal after much legal wrangling. Five years, later, the Buffalo Evening News started generating huge profits relative to the purchase price.
In 1983, Buffett and Munger also agree on a price for Blue Chip Stamps, and Berkshire acquired the entire company. Thus, Munger and Buffett now officially became partners in Berkshire Hathaway.
Finally, the author details the incredible life story of Rose Blumkin, who started the Nebraska Furniture Mart that Buffett purchased in the 1980's. Blumkin was dirt poor in Russia, and traveled to the US to live out the American dream. Through hard work and perseverance, she and her husband started and grew their store to become the largest furniture retail store in North America.
When they first started, no suppliers would sell to them because the competition was complaining that they undercut on price. (She would only mark up inventory by 10%!) Undeterred, Blumkin was forced to travel around neighbouring states by train looking for overstock in order to stock her store. Her customers came to appreciate the value they were getting, and the competition was wiped out or crippled in the process. Buffett somehow purchased 90% of the company for $55 million, though its inventory at the time of purchase was $85 million. Blumkin turned away investors offering more money because managerial control going forward was important to her.