Review of Of Permanent Value: The Story of Warren Buffett/More in '04, California Edition (Hardcover)

Andy Kilpatrick did a great job as usual.The chapters are organized as short stories.These stories and pictures take the reader into the world that surrounds Warren Buffett, Charlie Munger, family, friends, fans, and the Berkshire Hathaway subsidiary companies.The book is a solid account of Warren Buffett's and Berkshire's history.Furthermore, it includes many of the people that have been affected by this growing phenomenon called Berkshire Hathaway.

The author presents the story with a good sense of humor and he captures the spirit of fun each of these people bring to the annual meetings.I almost fell off my chair after seeing page 1464.This biography of investor Warren Buffett includes 1,500 pages and 750 photographs.It is a real valuable addition to anyone's library, and it is offered at a bargain price, relative to its intrinsic value.For those new to the study of the Buffett-Munger investment phenomenon, this book is a "must have" to your collection.The Compounding Success of the Graham-Dodd-Buffett-Munger investment ideas are conguent with ideas presented in the OPV book.Forget the Efficient Market Hypothesis!In an old school paper entitled the "Compounding Success Model", found somewhere on a web search, I had concluded that 10 major factors contributed to the Compounding Success of the Graham-Dodd-Buffett-Munger investment approach:
1. Rational and thorough business analysis, with keen emotional intellects that promote ethical information exchange.
2. Wide experience with analyzing and managing numerous different businesses.
3. Charlie Munger's Role as (a.)"Devils-Advocate" (Munger as therapist/analyst of investment decisions) and (b.) Munger's role in encouraging further limiting the portfolio towards "wonderful businesses."
4. Leverage via a Low Cost of Capital from Insurance Operations
5. Disciplined Tracking of Understandable Businesses
6. Analysis of Strategic and Sustainable Competitive Advantages of Industries and Businesses.Warren Buffett has a Masters in Economics from Columbia University and Charlie Munger has a Law degree from Harvard University. Both have a variety of operational business experiences.
7. Trustworthy First-Class Managements with proven track records.
8. Ben Graham's Mr. Market and search for the Margin of Safety. The Margin of Safety is the bargain obtained when purchasing at a market price below the intrinsic value estimation. Graham and Dodd taught: "An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return."
9. Satisfaction: Buffett stated: "Though "working" means nothing to me financially, I love doing it at Berkshire for some simple reasons: It gives me a sense of achievement, a freedom to act as I see fit and an opportunity to interact daily with people I like and trust."
10. Learning from Practice, Mistakes, and Experiences: "After many years of buying and supervising a great variety of businesses, Charlie and I have not learned how to solve difficult business problems. What we have learned is to avoid them."

Andy's book gives you a more comprehensive view of the human interactions that make these successes possible.I also got a big kick of Andy including my poem on page 1034.This book gives a very good account of Buffett's business and investing evolution.Any student of "investment decision making" should review this work. I learned more about this evolution by reading an earlier OPV edition.It described the growth from Benjamin Graham's classical "Value Investing" to the Buffett-Munger "wonderful business" purchases.

Of Permanent Value: The Story Of Warren Buffett is a big book that will appeal to fans of financial wizard Warren Buffett. It explores how Buffett began from scratch to form a business empire. It includes in-depth examinations of business philosophy while providing a fun and lively read.In my view, time is the friend of the wonderful book, and the enemy of the mediocre one. This one packs a big punch. In time, it will be a bestseller.



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Review of Of Permanent Value: The Story of Warren Buffett, 2005 Edition (Hardcover)

This new edition is the most comprehensive and compelling history of Berkshire Hathaway and it's officers, owners and hundreds of people who have invested in, run, benefitted, admired, nurtured, or otherwise influenced the life of Warren Buffett, as well as countless other people,factors and strategies responsible for the unprecedented and still relentless growth of one of the most successful corporate enterprises of all time. 272 quick-reading chapters cover just about every facet of the Buffett mistique, personality, thought process and lifestyle. The investment executive author and former journalist nails down all the whos, hows, wheres, whens, whys and hows relating to this remarkable man from his youth through the 2004 Berkshire Annual Meeting which brought 20,000 enthusiastic shareholders to Omaha this past May. Frank Betz



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Review of Of Permanent Value: The Story of Warren Buffett/2008 Cosmic Edition/2 volumes (Hardcover)

In my opinion, Of Permanent Value 2008 Cosmic Edition by Andy Kilpatrick is the best book about Warren Buffett and Berkshire Hathaway (which I also believe it is the thickest book about Warren/Berkhire, and for the better). It also covers important people around/related to Warren Buffett.Simply, this book is a must read for all Warren Buffett fans and all value investor.

First, eventhough this book is very abundant in information (i.e. thick), it is not boring to read. One of the reason is that the chapters are mostly short (and getting directly to the point). If you don't feel like reading the whole book, you can always pick the chapters that interest you. Kudos to Andy Kilpatrick for putting this book together and continue to update the story about the greatest value investor of our time. I also appreciate Andy Kilpatrick's (and Warren Buffett's) sense of humor.

Secondly, this 2008 Cosmic Edition contains several important improvements/updates. Some of the example:
1. Lots of awesome color photos (page 1117-1190, etc)
2. Updates on Warren Buffett/Berkshire Hathaway activity during the year 2007 and early 2008 (Business update, 2007 Annual Shareholder Meeting, Berkshire 60% purchase of $7B business/Marmon Holdings, Warren business trip to Canada, China, South Korea, etc)
3. A photo index on page 1813 (with 1,400+ photos, it is really nice to have an index for the photos)

I hope you enjoy this book as much as I do. I have read this book more than once (including the previous versions). I learn so much from Of Permanent Value, and I learn something new everytime I read it.

Below I added more detail review about the content of the book.

Sincerely,

Sidarta Tanu

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Now about the content of the book. You will learn a lot about Warren Buffett and his life, and not only investing topic (investing decisions that he made throughout his career) but his life principles, family, and business in general as well. You will learn about his first job delivering papers when he was 13 (he filed income tax and deducted the bike as business cost), and how he build his first business (pinball machine business), created Buffett partnership, break it up (liquidate), acquire berkshire mills, creating Berkshire Hathaway as investment vehicle, and many other great investment decision/story that he made (Geico, See's Candies, Dairy Queen, General Re, Coca Cola, Salomon, Washington Post, Gillette etc)

Buffett concrete rules for investing are:
1. Never lose money
2. Never forget rule #1

I know it's easier said (what he say above about to never lose money) than done based on my 10 years of invesitng experience , but then again I'm no Warren Buffett.

In my opinion, here are the 5 strategy/skills that Warren Buffett uses (Mr. Buffett, please correct me if I'm wrong):
1. Intrinsic Value
2. Margin of Safety
3. Temperament (discipline and understanding Mr.Market)
4. Circle of Competence (knowing what your circle of competence)
5. Common Sense (which I think is the most important factor and encapsulate everything about Warren Buffett.)

You will learn that Warren is very good with numbers (calculating in his head) and memorizing so many facts and numbers. You will also learn that Warren is a man with a very good sense of humor.

There are so many things/chapters that I like on this book. Let me try to mention three of my favorite sections.

One is when Warren need to make a decision who would run Salomon ($150B institution with 8000 employees) within 2 days during their first crisis. There are 12 top-level managers that he interviewed. "This was the most important hire of my life", said Warren to the Columbia business students. The chapter explain his thought process of this candidate selection in detail. Warren mentioned that the good news (for the students and the candidate) is that he didn't ask what their grades were (laughter). Warren also said, "Somebody once said that in looking for people to hire, you look for three qualities: integrity, intelligence and energy. and if they don't have the first, the other two will kill you. if you think about it, it's true, if you hire somebody without integrity, you want them to be dumb and lazy" (laughter). And he conclude the topic with this statement which I think is very powerful: "Pick the kind of person to work for you that you want to marry your son or daughter. You won't go wrong". By the way, he picked Deryck Maughan by the way for his integrity.

Another chapter that I really like is how Warren put the audience (of more than 2000 people) through Business School in an electrifying two minutes (The chapter about "Generics"). See how Warren answer the question of "Will developments in the generic brand area hurt coca-cola?" which is a very important questions. I'll try not to spill too much and take the joy of reading this chapter yourself but he basically explains in a nutshell (with all the details and numbers) how business and competition works (and using several other example like Gilette, Marlboro, Sam Cola etc) and how he convinced the audience (and me as a reader) that coca cola is considered immune to generics. He explains how one can save $500 for smoking generic brand (vs Marlboro) which is a lot of money. While a man will probably will only save $11 per year by not using Gilette Sensor and probably leave band-aids on his face and an uncomfotable experience for opting for generics/lower quality blades. And for coca cola, the net profit margin is only 1 cents per serving (can) while a lot of the ingredients cost (such as the aluminium close to 6 cents a can, sugar 1.3 ounce per can or 1.75 cents etc) the same regardless for coke or other cola company.

The third chapter that I like is when Warren is being questioned by CEOs about what is his best advice for CEOs/leaders.. expecting to get some standard answers like honesty and loyalty.. Warren actually didn't even touch those areas (which I'm sure Warren do think those are also important).. but what Warren actually said is, "Set your expectation low, and you will rarely get dissapointed".

I'll stop here before it's getting too long. In summary, If you are a Warren Buffett fans, then this book is for you. If you are uncertain, you can get other books first (potentially less thick book), like "Warren Buffet Way" or maybe "Buffettology", and if you like them (Warren) or want to know more about Warren then get this book. I personally don't like it at the beginning but as time goes by (and after I re-read the book/chapters), I changed my mind, this book is a masterpiece.

As a Berkshire shareholder, I want to encourage all berkshire shareholders (and potential/future shareholders) to read this book to know more about the person in charge of your berkshire investment. I also want to encourage all shareholders to go to the annual shareholder meeting while Mr. Buffett is still in charge.

Last but not least, if I have to sum this book up in a word or two, I would use the word "WISDOM" to describe this book, though I have a strong feeling that Warren will disagree with me and think that the more suitable phrase is "COMMON SENSE"
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