The Warren Buffett CEO: Secrets from the Berkshire Hathaway Managers
Posted by jack_miller | Published 10 months ago
With 11 ratings
By: Robert P. Miles
Purchased At: $971
The first book to reveal the investment and management strategies of the Berkshire Hathaway all-star management team. Much has been written about Warren Buffett and his investment philosophy; little has been made public about the inside management of Berkshire Hathaway. With a market cap exceeding 100 billion , Berkshire Hathaway has a market value surpassing many icons of American business such as Dell, AT&T, Disney, Ford, Gillette, American Express, and GM. Drawing on his personal experiences as well as those of Berkshire's chief executives, officers, and directors interviewed for this book, Berkshire insider Robert P. Miles provides a unique look at the Berkshire Hathaway culture and its management principles.
Jeff Matthews, author Secrets in Plain Sight: Business & Investing Secrets of Warren Buffett, 2012 Edition (eBooks on Investing Series)
Tony Nicely, head of operations at GEICO - The most striking thing about Tony is that he treats GEICO as his company even with no direct share ownership. The company forms an integral part of his life and when that type of manager is combined with a high quality business the results are very potent
Lou Simpson, investment manager at GEICO - Lou has an edge because he is able to obtain differential insight into a company which has not yet been factored into the share price. He maintains this edge by thinking and reading voraciously. He is in the office by 6am and stays until 7:30pm - that is a lot of reading and thinking, almost certainly more than his competitors. He evaluates companies both qualitatively and quantitatively, he is interested in both the business and the people
Ajit Jain - Ajit is obviously a very intelligent man since he is charged with pricing super catastrophe insurance. Yet he says "I can take a deal that I've spent 10 days trying to analyse and give it to him, and in 5 minutes he's two steps ahead of me...Warren is a lot smarter, he has a lot more experience and he can make judgement calls. There is no dimension I can think of where I am anywhere close to where he is"
Rose Blumkin - Once again the incredible work ethic shines through and it is emphasised that Buffett invests in people first and businesses second
Frank Rooney, CEO of H. H. Brown - When acquiring the business, Buffett said "Don't any of that stuff from Goldman Sachs, just send me the audited numbers for the last couple of years". Rooney says "Warren hadn't seen a factory and he hadn't met any of the people. Why the hell did he buy a shoe company". Warren subsequently said "Much of my enthusiasm for this purchase came from Frank's willingness to continue as CEO. Like most of our managers, he has no financial need to work but does so because he loves the game and likes to excel"
Melvyn Wolff, Star Furniture - This interview illustrates Buffett's meticulous eye for detail. In examining three years of financial statements he observed and queried a slightly different wording of a footnote between one year and the next. This shows his incredible memory and recall. The interview also provides some insight into his valuation methods. Regarding the furniture business, the author mentions that Buffett purchases the company valued "at its current annual sales"
Susan Jacques, Borsheim's - Buffett needed only 10 minutes and five questions to determine his purchase price "What are sales? What are gross profits? What are expenses? What's in inventory? Are you willing to stay on?"
My primary criticism is that the book seems unbalanced. Not one negative thing was said and although working for Berkshire must be very good I can't imagine it is perfect. I think a review of mistakes can be just as insightful as review of the wonderful aspects and I'm disappointed that this was not present. Overall a recommended read.
The CEOs describe their businesses and different challenges and how Berkshire has helped them in indispensable ways both with advice and finances -- help that they would not have gotten had they not been under the Berkshire umbrella.
Collectively, the stories told by the CEOs are a strong endorsement of the Berkshire model of buying great companies and leaving the managements of the acquired companies intact.
The title is misleading in a way -- there are no secrets divulged, unless the ethos of the Berkshire-acquiree relationship is considered a secret.
- Mariusz Skonieczny, author of Why Are We So Clueless about the Stock Market? Learn how to invest your money, how to pick stocks, and how to make money in the stock market