Alice Schroeder: Buffett Message Is ‘Do as I Say, Not as I Do’

[hardincap]

to point out the false characterizations specifically,

 

1. you say she was a no name analyst on wall st, when she was in fact ranked as a member of the Institutional Investor All-America Research Team for seven years and named the #1 Property-Casualty insurance analyst two years in a row.

 

2. you say she was made a millionaire many times over, when she actually took a pay CUT to write the book. she could have chosen to stay as MD at morgan stanley, which is far more lucrative than any publishing contract.

[Parsad]

to point out the false characterizations specifically,

 

1. you say she was a no name analyst on wall st, when she was in fact ranked as a member of the Institutional Investor All-America Research Team for seven years and named the #1 Property-Casualty insurance analyst two years in a row.

 

2. you say she was made a millionaire many times over, when she actually took a pay CUT to write the book. she could have chosen to stay as MD at morgan stanley, which is far more lucrative than any publishing contract.

 

1)  Would you say her notoriety as an analyst increased significantly after Buffett started to solely speak to her at Berkshire meetings, or would you say it decreased?  Had you heard of Alice before that?  Would you say her notoriety after writing "The Snowball" increased or decreased? 

 

2)  She took a pay cut to write the book.  How much do you think she made from the book, or her speaking engagements after?  That's like saying Buffett took a pay cut after leaving Graham-Newman to start the Buffett Partnerships. 

 

And by the way, its got nothing to do with the so-called "fanatics".  The fanatics read the book and really none of us complained much about the gossipy side of the biography.  It's the stuff after the book that has really left a bad taste for many people.  No one is saying Buffett isn't flawed, but Alice seems to be intent on kicking him around when he gave her such access that most other authors could only dream of.  Her job was to write the biography, warts and all...not pound the man with her fists every other article.  Cheers!

[hardincap]

to point out the false characterizations specifically,

 

1. you say she was a no name analyst on wall st, when she was in fact ranked as a member of the Institutional Investor All-America Research Team for seven years and named the #1 Property-Casualty insurance analyst two years in a row.

 

2. you say she was made a millionaire many times over, when she actually took a pay CUT to write the book. she could have chosen to stay as MD at morgan stanley, which is far more lucrative than any publishing contract.

 

1)  Would you say her notoriety as an analyst increased significantly after Buffett started to solely speak to her at Berkshire meetings, or would you say it decreased?  Had you heard of Alice before that?  Would you say her notoriety after writing "The Snowball" increased or decreased? 

 

2)  She took a pay cut to write the book.  How much do you think she made from the book, or her speaking engagements after?  That's like saying Buffett took a pay cut after leaving Graham-Newman to start the Buffett Partnerships. 

 

And by the way, its got nothing to do with the so-called "fanatics".  The fanatics read the book and really none of us complained much about the gossipy side of the biography.  It's the stuff after the book that has really left a bad taste for many people.  No one is saying Buffett isn't flawed, but Alice seems to be intent on kicking him around when he gave her such access that most other authors could only dream of.  Her job was to write the biography, warts and all...not pound the man with her fists every other article.  Cheers!

 

1) well, of course it increased. that is a silly question. i never disputed that, just pointed out that she was far from a "no name" you characterize her as.

2) i think you'd be surprised. yes it gains her notoriety, but id bet that sticking w/ her wall st career would have been far more lucrative.

 

i agree the article was on the critical side, but i dont understand how you come up with "pound the man with her fists every other article." most of the articles paint in positively, and she heaps praises on him in interviews. she did an hour long interview with a radio show host that i loved where she talked about how principles buffett used in his personal life could dramatically improve anyone in their lives, not just in investing.

 

if she was as vicious as you paint her as, why would buffett's own son like her?

[Liberty]

Interesting.  I see (or used to see) the opposite.  He used to speak of royalties as being the best business.  If he prefers a railroad or a utility over a See's Candies type of investment then he has changed tremendously and that might explain his decisions and performance over the last decade.  Purchases of NetJets, Burlington Northern, etc. are lower risk, low return, and poor FCF investments. 

 

I just don't think he's found a 10-20 billion See's Candies for sale... and even if he did, he's still need to find a lot more with the cash it would through off. So it makes sense to invest in businesses that can also deploy capital at ok returns.

[Parsad]

If she was as vicious as you paint her as, why would buffett's own son like her?

 

Which son?  Howard didn't like the way he was portrayed.  From what I understand, both Susie Buffett and Howard Buffett didn't like the way their mother was portrayed, and that was the bulk of the reason Buffett's relationship with Alice deteriorated. 

 

As well, I spoke to a few other Buffett authors in Omaha shortly after the book came out, and they were all taken aback by some of the details in the book.  You can call them fanatics too if you like, but the general tone of those around Buffett or knew the man was not positive on "The Snowball".  Cheers!

[hardincap]

If she was as vicious as you paint her as, why would buffett's own son like her?

 

Which son?  Howard didn't like the way he was portrayed.  From what I understand, both Susie Buffett and Howard Buffett didn't like the way their mother was portrayed, and that was the bulk of the reason Buffett's relationship with Alice deteriorated. 

 

As well, I spoke to a few other Buffett authors in Omaha shortly after the book came out, and they were all taken aback by some of the details in the book.  You can call them fanatics too if you like, but the general tone of those around Buffett or knew the man was not positive on "The Snowball".  Cheers!

 

I think you just answered your question, unless there is a third son I dont know about? :)

 

anyway, this comes down to two very different interpretations, lets just agree to disagree.

[Kraven]

If she was as vicious as you paint her as, why would buffett's own son like her?

 

Which son?  Howard didn't like the way he was portrayed.  From what I understand, both Susie Buffett and Howard Buffett didn't like the way their mother was portrayed, and that was the bulk of the reason Buffett's relationship with Alice deteriorated. 

 

As well, I spoke to a few other Buffett authors in Omaha shortly after the book came out, and they were all taken aback by some of the details in the book.  You can call them fanatics too if you like, but the general tone of those around Buffett or knew the man was not positive on "The Snowball".  Cheers!

 

I think you just answered your question, unless there is a third son I dont know about? :)

 

anyway, this comes down to two very different interpretations, lets just agree to disagree.

 

Alice, welcome to the board!

[hardincap]

LOL i cant believe you actually think im alice.  ;D

[Parsad]

Alice, welcome to the board!

 

Hehe - identity revealed  ;D. While I find Sanjeev and many other rational folks on this board, Alice, I don't find your arguments rational at all. I also think you want to be known as a "writer" and whatever you are doing is not helping you in that direction.

 

Ah, that's not Alice...don't know why guys think so, or did Shalab and Kraven just create a mess!  ;D

 

Incidentally, on Alice's own blog, from her January 11th entry:

 

"...Another reason I have not written much lately is that there isn't much I want to say about Buffett or Berkshire. At some point, people have accomplished enough in their career that they should get to rest on their laurels, meaning that it isn't appropriate to comment on every little thing they do and say. If anything important happens, I'll write about it -- probably for Bloomberg -- and post the link here..."

 

She took her own advice for about two months and then she wrote this diatribe.  My whole point was exactly what she finally got into her head for a while.  At some point, the poor slob has done enough for society and others to just deserve to go out in dignity.  You don't need to de-robe the guy, just because you can. 

 

You can call me a fanatic...but Buffett changed (maybe saved is a better word) my life!  I get to do exactly what I want every day and if I died tomorrow, I would be a happy man.  So would Prem, Francis, Tim, Mohnish, hundreds on this board and I know a couple thousand more.  We owe the man...so we do take offense at times.  Cheers!

[hardincap]

Parsad, Buffett is my ultimate idol, as with Munger. He's definitely changed my life. I just think its important to learn from his very human mistakes as well as his stunning professional accomplishments. E.g. not nurturing relationships w/ family, wife, etc..

[Liberty]

Just to play devil's advocate for a sec: Does it matter if Buffett's friends or family like the book/the portrayal of some people in it? That doesn't make it accurate or inaccurate. People might dislike seeing their family member's flaws presented to the world, but if the goal is to have an accurate biography, that's a necessary evil.

 

Yes, she did spend a lot of time on psychology, but my understanding is that this is a biography of the man and not an investment book. There's a lot about investment in it because that's most of Buffett's life, but that's not all that makes him who he is.

 

I dislike many of the bloomberg articles that Alice S. has written in the past few years, and she seems to be playing a "gotcha" game with Buffett, but I did like the Snowball when I read it. I can't swear if the details in it are accurate or not, but since she had incredible access to primary sources, I would tend to trust her until shown otherwise, and Buffett's entourage disliking the book is not the same as them saying that it is factually wrong (though maybe they've done that too and I've missed it).

[compoundinglife]

This thread has been in the back of mind and while I was catching up on it just now, I think I figured out what *really* bothered me about this article...

 

So lets say someone new to investing comes across this article. They see the piece is written by someone who has spent a ton of time w/WEB and is the article is published on a well known financial site. They read the article and what impression do they walk away with? I believe a lot of people would potentially walk away with the impression that Buffett is just another guy on Wall St. saying one thing and doing the other and that there is nothing to learn from him. Instead they go out and buy Jim Cramer's latest book because he is really looking out for the little guy :'(

 

Big Assumption here I know, and shame on this hypothetical person for believing everything they read and not doing more independent research if they are looking for an investment guru. 

 

I guess I really just fail to see what value this article provides to anyone and if it were Kass or some one else I would not even give it a second thought. But the fact that someone who devoted so much time to understanding WEB can sit there and compare Apple, JPM, and Berkshire like they all the same apples with regards to use of cash and share buybacks just blows my mind. As others have echoed statements like that either 1. imply that she was not value inoculated at birth as the saying goes and just doesn't get it or 2. She wrote it to push buttons and create hype rather than to provide people with accurate information.

 

 

 

 

[Parsad]

This thread has been in the back of mind and while I was catching up on it just now, I think I figured out what *really* bothered me about this article...

 

So lets say someone new to investing comes across this article. They see the piece is written by someone who has spent a ton of time w/WEB and is the article is published on a well known financial site. They read the article and what impression do they walk away with? I believe a lot of people would potentially walk away with the impression that Buffett is just another guy on Wall St. saying one thing and doing the other and that there is nothing to learn from him. Instead they go out and buy Jim Cramer's latest book because he is really looking out for the little guy :'(

 

Big Assumption here I know, and shame on this hypothetical person for believing everything they read and not doing more independent research if they are looking for an investment guru. 

 

I guess I really just fail to see what value this article provides to anyone and if it were Kass or some one else I would not even give it a second thought. But the fact that someone who devoted so much time to understanding WEB can sit there and compare Apple, JPM, and Berkshire like they all the same apples with regards to use of cash and share buybacks just blows my mind. As others have echoed statements like that either 1. imply that she was not value inoculated at birth as the saying goes and just doesn't get it or 2. She wrote it to push buttons and create hype rather than to provide people with accurate information.

 

I think you've got it exactly right Compoundinglife!  If you recommended to a family member or friend on why they should read a book on Buffett, and they read this article, how compelling does your argument suddenly become to them.  In effect, the article does such a disservice to the individual whose investing life and results could be dramatically improved. 

 

I think that's why it's such a shame that the individual who wrote the article, who actually spent an enviable amount of time with Buffett, walked away only with the thought of how hypocritical his advice is.  Quite a tragedy actually!  Maybe we've been looking at this all wrong, and Alice deserves our pity, rather than our scorn.  Cheers!

[cogitator99]

Does anyone actually know what caused Schroeder to become such an attack dog when it comes to Buffett?

 

Because from what I recall, it was a fairly abrupt thing right after the book came out. I recall liking the book overall, because it shed more light on Buffett as an individual. Though I did dislike the "gossipy side" side of it -- you really could tell it was written by a girl. That may sound chauvinistic but that was really the impression I got at the time. I agree that Loomis would have done better.

 

If Buffett said anything publicly about their rift, I missed it. Anyone have a link somewhere?

 

 

 

 

 

 

[merkhet]

 

Hasn't she considered that BRK hasn't risen as much as the market since the 2009 lows because it didn't fall as much from 2007 to 2009?

 

 

I think that the above is what bothers people the most.  (Or perhaps I'm extrapolating from my own view.)  It's hard to argue that a person of Alice Schroeder's ability or experience would have missed this obvious logical fallacy, and so the remaining default position (by virtue of Occam's Razor) is that she has an agenda.

[bargainman]

Does anyone actually know what caused Schroeder to become such an attack dog when it comes to Buffett?

 

Because from what I recall, it was a fairly abrupt thing right after the book came out. I recall liking the book overall, because it shed more light on Buffett as an individual. Though I did dislike the "gossipy side" side of it -- you really could tell it was written by a girl. That may sound chauvinistic but that was really the impression I got at the time. I agree that Loomis would have done better.

 

If Buffett said anything publicly about their rift, I missed it. Anyone have a link somewhere?

 

The interviews I've read say that Buffett stopped taking her calls and basically stopped talking to her at all after the biography came out, and *after* his relatives said they disliked it.  Notice that Buffett himself apparently did not dislike the book and he did supposedly read it before it came out.  (If I'm remembering the interview/article right, it's been a while).  But he reacted only after people close to him reacted to the book.

 

So as much as I admire Buffett to me, he did bring this on himself *to some degree*.  If he had maintained a more cordial relationship with Alice even after the book came out I doubt she'd be writing such one sided articles.  I really didn't like that article. I think she missed out on a lot of important points and counterpoints.  That said it is true that Buffett, like many other public figures, does tell others to do as I say not as I do, with some shades of gray.  I think that's just a natural outcome of being quoted so many times, and generally being superior intellectually and otherwise to us mere mortals.  (I say that honestly and sincerely, even though it might sound tongue in cheek :-) ).

 

All said I think Alice could exercise some better judgement and maybe present both sides of the argument more clearly.  That said a lot of journalism these days is designed to be click bait.  That's how medias gets paid these days, so things have to be inflammatory otherwise they don't get enough clicks to attract advertisers.  It's a sad reality of the world where everyone wants their media and news for free..

[twacowfca]

Does anyone actually know what caused Schroeder to become such an attack dog when it comes to Buffett?

 

Because from what I recall, it was a fairly abrupt thing right after the book came out. I recall liking the book overall, because it shed more light on Buffett as an individual. Though I did dislike the "gossipy side" side of it -- you really could tell it was written by a girl. That may sound chauvinistic but that was really the impression I got at the time. I agree that Loomis would have done better.

 

If Buffett said anything publicly about their rift, I missed it. Anyone have a link somewhere?

 

Warren, to his great credit, hasn't said anything publicly about the rift with Alice.

 

Warren's instructions to Alice were to tell it all, including the personal stuff, without sugar coating anything.  In this, she followed his instructions.  After publication, the other women in his life disliked having the unflattering parts of his life exposed for the world to see, especially the sadness of all the circumstances about his first marriage and Susan's death.  It was especially hard for them when Ms Schroeder departed from her usual objectivity and characterized the other women around Warren as "Daisy Mae's", meaning bimbo groupies.  That was the last straw that broke the back of their patience.

 

Warren then had no choice.  It was risk the wrath of one woman feeling scorned or having every other woman in his family and circle being mad at him.

[Parsad]

Does anyone actually know what caused Schroeder to become such an attack dog when it comes to Buffett?

 

Because from what I recall, it was a fairly abrupt thing right after the book came out. I recall liking the book overall, because it shed more light on Buffett as an individual. Though I did dislike the "gossipy side" side of it -- you really could tell it was written by a girl. That may sound chauvinistic but that was really the impression I got at the time. I agree that Loomis would have done better.

 

If Buffett said anything publicly about their rift, I missed it. Anyone have a link somewhere?

 

Warren, to his great credit hasn't said anything publicly about the rift with Alice.

 

Warren's instructions to Alice were to tell it all, including the personal stuff, without sugar coating anything.  In this, she followed his instructions.  After publication, the other women in his life disliked having the unflattering parts of his life exposed for the world to see, especially the sadness of all the circumstances about his first marriage and Susan's death.  It was especially hard for them when Ms Schroeder departed from her usual objectivity and characterized the other women in Warren's life as "Daisy Mae's", meaning bimbo groupies.  That was the straw that broke the back of their patience.

 

Warren then had no choice.  It was risk the wrath of one woman being scorned or having every other woman in his family and circle being mad at him.

 

I also think the parts about his wife upset him a bit.  The long-held theory was that Buffett was the womanizer and cheated on Susan, when in fact Susan had drifted apart and left Buffett.  From what I heard, he did not want that to come out and his children were upset with it as well.  Regardless, I thought the great aspects of the book were overshadowed by the soap opera like inferences Schroeder kept making...his crazy mother, his need to be loved, his relationship with Susan and Sue Graham.  Too much psychoanalysis!  Cheers!

[rranjan]

  Too much psychoanalysis! 

 

In my opinion, that's the main problem here. Looking at human Buffett is fine but focus is too much on psychoanalysis and that's in poor taste.

[rmitz]

I also think the parts about his wife upset him a bit.  The long-held theory was that Buffett was the womanizer and cheated on Susan, when in fact Susan had drifted apart and left Buffett.  From what I heard, he did not want that to come out and his children were upset with it as well.

 

The thing that gets me, is why do people even think that was a bad thing?  It's life!  I thought the Buffetts actually dealt with it in an incredibly touching and mature way.  There was nothing insulting to me about it.  I know, it has to do with people's obsession with things like monogamy and forever...the world usually doesn't work that way.

[Kiltacular]

The thing that gets me, is why do people even think that was a bad thing?  It's life!  I thought the Buffetts actually dealt with it in an incredibly touching and mature way.  There was nothing insulting to me about it.  I know, it has to do with people's obsession with things like monogamy and forever...the world usually doesn't work that way.

 

I think you've captured a point here that is important.  Combined with Parsad's point, I think I've realized the problem.

 

The thing that is pretty amazing about a lot of what Buffett has done personally is so impressive because -- in the end -- he's just another person making his way through life.

 

I too thought the Buffett's handled this situation in a "touching and mature way" (well said). 

 

And yet, the manner in which Alice Shroeder presented it in the book left me feeling as though it were somehow seedy or scandalous.  The reader didn't need to know all those details to imagine that when a man's wife leaves him to move to one of the coasts and sing in bars that...well...just that!

 

Moreover, given the specific conclusions Schroeder arrived at with her psychoanalysis (at least those that she included in the book), she can't be surprised that Buffett ultimately got upset with her.  The irony here is that Schroeder herself made the point over and over again that Buffett -- after his experience with his mother in childhood -- needed (only wanted) women in his life that protected him, gave to him, etc. (whatever all her points were). 

 

Given those were her notions, she should have realized that if she chose to include the gory details about the woman that Buffett loved most, he'd get upset.

 

What is annoying me about Schroeder is that it was her choice to include it in the book -- saying it was her duty as his biographer.  That's an acceptable response.  But, given her choice, she should be tough enough to accept a big consequence of such a choice -- the subject of the biography might get really upset. 

 

After Buffett cut her off, she said things like: "I sent him the book and he didn't say anything."

 

Again, the irony her is that she still doesn't get it -- that it's her own psychoanalysis of him that applies. 

 

Of course he didn't say anything -- that's completely in keeping with Buffett.  Buffett wanted her to look at his life and him and only see the good (however irrational that might be).  He wanted the approval from her that he didn't get from his mother.  That's what she would say, right?

 

 

 

 

[cogitator99]

Thanks for the responses, that sheds some light.

 

What was written about his wife though...since he read the book before it came out, I assume he approved of it in some form.

 

When I first started following Buffett, he seemed like a perfectly wise person. And I still think that he's much wiser than the rest of us. As time has passed I've gotten to realize his imperfections, but that hasn't really diminished my admiration for him. He's human like the rest of us, but he's certainly maximized the hand he's been dealt. 

 

I agree with the sentiment that learning about Buffett and applying his teachings was a life-changer. For myself, I shudder when I think about how I would developed as an investor (and as a person) without his beneficial influence. 

 

   

[ubuy2wron]

to point out the false characterizations specifically,

 

1. you say she was a no name analyst on wall st, when she was in fact ranked as a member of the Institutional Investor All-America Research Team for seven years and named the #1 Property-Casualty insurance analyst two years in a row.

 

2. you say she was made a millionaire many times over, when she actually took a pay CUT to write the book. she could have chosen to stay as MD at morgan stanley, which is far more lucrative than any publishing contract.

 

1- I have been on Wall Street for 30 years. I can assure you I can not name 1 other Institutional AllAmerican Analyst. I also believe her reputation and career as an analyst was also aided by Warrens attention. So much for her fame prior to The Snowball.

2Regarding her wealth I have no inkling however I am guessing only a handfull of people other than Alice are aware of what her net-worth was prior to the Snowball.

3 I have also had the opportunity to listen to Alice speak and she intimated that a great deal of  Warrens investment prowress was a result of inside information and that she would reveal all in her next book the great wizard would be revealed to be just a mortal.

4 I only suspect that Warren was more than a little upset of the portrayl of Susie it makes him appear to be a cuckold and her worse. Since then Alice has given him far better reasons to not want to have anything to do with her.

[cogitator99]

"I have also had the opportunity to listen to Alice speak and she intimated that a great deal of  Warrens investment prowress was a result of inside information and that she would reveal all in her next book the great wizard would be revealed to be just a mortal."

 

Pretty serious allegations to be making. Conveniently ignores the fact that Buffett had his best years when he didn't really know anyone. Am amazed that she's made a public claim on something like this without showing definitive proof. If true, she should be writing the SEC, not making speeches. 

[rmitz]

"I have also had the opportunity to listen to Alice speak and she intimated that a great deal of  Warrens investment prowress was a result of inside information and that she would reveal all in her next book the great wizard would be revealed to be just a mortal."

 

Pretty serious allegations to be making. Conveniently ignores the fact that Buffett had his best years when he didn't really know anyone. Am amazed that she's made a public claim on something like this without showing definitive proof. If true, she should be writing the SEC, not making speeches.

 

That sort of inside information wasn't illegal at that time.