The Snowball_ Warren Buffett and the Business of Life - Alice Schroeder [506]
“The snowball just happens if you’re in the right kind of snow, and that’s what happened with me. I don’t just mean compounding money either. It’s in terms of understanding the world and what kind of friends you accumulate. You get to select over time, and you’ve got to be the kind of person that the snow wants to attach itself to. You’ve got to be your own wet snow, in effect. You’d better be picking up snow as you go along, because you’re not going to be getting back up to the top of the hill again. That’s the way life works.”
The snowball he had created so carefully was enormous by now. Yet his attitude toward it remained the same. However many birthdays lay ahead, he would always be astonished each time the calendar turned, and as long as he lived, he would never stop feeling like a sprout. For he wasn’t looking backward to the top of the hill. It was a big world, and he was just starting out.
Afterword
On October 23, 2006, Berkshire Hathaway became the first American stock to trade above $100,000 per share. By the end of 2007, BRK traded above $140,000 per share, which valued Berkshire as a company at more than $200 billion. Berkshire was the world’s most respected company, according to a Barron’s survey.1 Buffett’s personal fortune exceeded $60 billion.
For a decade, BRK stock had compounded at slightly over twelve percent—a rate that some might compare unfavorably to Buffett’s early years, when he achieved an average twenty-seven percent return. Trees don’t grow to the sky, he always said; as Berkshire’s capital grew, the climb would get steeper. But investors in Berkshire had only gratitude for the “lower” returns. Those who bought an index of the market had just suffered through what the Wall Street Journal called a “lost decade” in which the S&P 500 index had gone exactly nowhere, falling below its level of April 1999.2 Buffett’s talk at Sun Valley was unfolding along the lines he had discussed; the period after the 1999 stock market bubble had burst was now the third-longest stretch in the past hundred years when the market made no progress. Buffett still said that stocks are the best long-time investment—as long as they were bought at the right price, and for a low fee. As of early 2008, he was buying stocks, but not with great enthusiasm. Sooner or later the market’s weighing machine would catch up with its voting machine. In the meantime, he continued to mostly buy businesses.
Buffett had added several new directors to the Berkshire board since Bill Gates and Charlotte Guyman. In the 2002 chairman’s letter he had invited shareholders to nominate themselves for the director position. The letters had come pouring in, and Buffett—of course—collected them; he was amused, entertained, and in a few instances impressed by the people who’d nominated themselves. Still, in the end, he had added Don Keough and Tom Murphy that year instead of a self-nominated candidate. The process had revealed, however, the highly personal—to say the least—corporate governance at Berkshire. Berkshire had agreed, in response to an SEC request, to adopt a formalized process for shareholders to nominate directors. In 2007, Berkshire added another woman, Yahoo! chief financial officer Susan Decker, to his board, again tilting the board demographic to a younger age.
Along the way, Buffett had found that he liked the idea of advertising for people to nominate themselves for jobs. He had always preferred that people ask him for things, rather than the other way around. In his 2006 letter to shareholders, prodded by Bill Gates, he had pointed out that Lou Simpson’s “top-notch” record was at risk if anything happened to both Simpson and himself, and advertised for a successor