The Warren Buffett CEO: Secrets from the Berkshire Hathaway Managers

The Warren Buffett CEO: Secrets from the Berkshire Hathaway Managers

Posted by jack_miller | Published a year ago

With 11 ratings

By: Robert P. Miles

Purchased At: $971

"Everyone knows Warren is the greatest investor of our time. . . .This book for the first time captures his genius as a manager."
Jack Welch

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.

Bob Miles has compiled one of the best books on Warren Buffett or Berkshire Hathaway, period. What makes "The Warren Buffett CEO" unique is that it doesn't focus on Buffett himself, it focuses on the key CEOs of various Berkshire companies, and lets them tell the story of 'How Warren Buffett Does It' in their own words. It also introduces you to managers who don't always make the news (e.g. Susan Jacques) as well as those who do (e.g. Ajit Jain). And to his credit as a writer, Miles assembled the book seamlessly, so it goes by very quickly. If you really want to understand how Warren Buffett manages more than a quarter-million people working at the 70+ businesses Berkshire Hathaway now owns, read "The Warren Buffett CEO," don't read any more reviews.

Jeff Matthews, author Secrets in Plain Sight: Business & Investing Secrets of Warren Buffett, 2012 Edition (eBooks on Investing Series)

- stevie_foster

From the outset I had the feeling that this book would be something special. In a typical Buffett book the author sits back in his armchair, reads some historical Berkshire annual reports and then attempts to rehash and paraphrase the words of Buffett. Miles has taken the effort to physically travel across the country to interview some of Berkshire's finest managers. If Buffett is the brains of the organisation, then his managers are its heartbeat. They keep its lifeblood, namely cash, pumping through the organisation on a daily basis. This book provides some penetrating insight into one of the most important yet arcane aspects of company valuation, which is evaluating quality of management. Some of my notes on the CEOs follow:

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.

- raphael_jackson

A nice book. The CEOs of Berkshire Hathaway companies seemingly answer the same set of questions such as 1) your background 2) How did it come about that Berkshire bought your company (most CEOs are leftovers from before Berkshire's purchase 3) how has the purchase worked out (I've read 3/4 of the book and everyone so far praises Buffett to the heavens (caveat: he is their boss now)); and the most interesting question of all, how the CEOs feel Berkshire will do when its brilliant elderly leaders (Buffett and Munger)have to turn over the reigns. All except one CEO (as far as I have read) have answered the last question with "no problem". The exception says something like: "There will never be another Warren Buffett. He is irreplaceable. Berkshire will be a good investment but not as good as before, regardless of what Warren does". Buffett comes across in the telling of his CEOs as a magnetic personality, -- humble, deeply moral, life-loving and brilliant.

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.

- vanessa_brown

Many books have been written on Warren Buffett's equity investment style. This book takes a different approach and describes Warren Buffett as a manager. Berkshire Hathaway is nothing but a holding company or an investment vehicle. The success of Berkshire Hathaway, and therefore, its shareholders is directly tied to the success of the underlying companies. The author did an excellent job of sharing the story of Berkshire Hathaway from the eyes of the CEOs and managers of its underlying companies. Whether you are an investor or manager, you will learn plenty from this book. I wish that more CEOs learned at least some of the lessons from Warren Buffett. He truly is an inspiration.

- 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

- susan_morales

Read this and you will learn and know more than any MBA from Harvard.

- kara_anderson

I'm a huge fan of Warren Buffett and buy a lot of books regarding the great man. This book is okay. I read it but wouldn't necessarily recommend it.

- carter_white

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