Book Review: Buffett, The Making of an American Capitalist

Buffett, The Making of an American Capitalist, like most biographies, follows the progression of Warren Buffett's career, wealth, and personal life. However, at the same time, author Roger Lowenstein is able to report on the progress of the stock market and many major businesses throughout the text. Because Buffett has been a successful investor for over four decades, the author describes the prospects for success of such organizations as Coca-Cola, GEICO, and the Washington Post. Overall, the book remains engaging while being somewhat lengthy. Lowenstein gives an excellent blend of personal and business information about Buffett that the reader can gain of full understanding of the man.

Not having followed Buffett closely in the past, I was aware of his wealth and primary position with Berkshire Hathaway but surprised about five things in particular...
1. He is reluctant to change. My opinion on change, as you can tell from the title of my blog, is that it is unavoidable and somewhat exciting. Buffett, on the other hand, did everything he could to avoid change. As a teen he stayed in Omaha while the rest of his parents and siblings moved to Washington, D.C. He chose to live in Omaha as an adult even though he made his career primarily in New York City. Buffett's desire to remain in Omaha, eat the same foods, befriend the same people, and much more did not allow him to experience a lot of what I consider the pleasures of life.
2. He follows his convictions to a fault. In business, Buffett strictly adhered to his convictions on investing. I respect that. On the other hand, he is a distant father because of his overwhelming sense of responsibility to shareholders. He has a marriage that resulted in separate lives because of his determination to not lose money. He won't help his children financially because he wants to make sure that he will get a return on his investment.
3. He has been interested in making money since his youth. Buffett once stated to a friends' mother (who lived on a busy street), its too bad you can't charge a toll to everyone who drives by your house. It is and always was about making money.
4. Buffett's relationship with family was hurt by his career. Susie Buffett, Warren's wife, moved to California after all of their children were grown. He stayed in Omaha. At his wife's prompting, another woman moved in with Warren. Warren refused to help his sister get out of some financial trouble because she had done it to herself, but at the same time he was not willing to give advice. His youngest son bought him a book about fatherhood and Buffett didn't understand why it was given to him.
5. His investment skills may be the greatest of all time. Buffett had an amazing ability to select stocks that were undervalued. He could do this by both evaluating a balance sheet and by evaluating the business as a whole. This is why he is one of the wealthiest men in the world.

While Warren Buffett may be excessively wealthy, earthly powerful, and known around the world, he does not live a life I will strive toward. My impression is that he his is uncomfortable and unfulfilled. However, since the writing of this book, Buffett has continued his business success, mourned the passing of his wife, and become a major contributor to The Bill and Melinda Gates Foundation. The donation of approximately $30 billion (!) may signal some significant changes in his perspective on life. I am also fully aware that there are many parts of his business practices, such as discipline, integrity, and knowledge, that I need to use if I hope to attain a successful career.

Cape Cod Vacation

To celebrate my wife's graduation we took a trip to Martha's Vineyard and Cape Cod. Our hope was to have a relaxing time amongst beautiful scenery. On the first day of our trip we went to Martha's Vineyard. As you can tell from the picture above of the Clay Cliffs in Aquinnah on Martha's Vineyard, the scenery was spectacular. This day was especially relaxing because we were at the beach by the Clay Cliffs from early evening until sunset. Given the beauty around us, we were amazed at how few people were at this beach. But, this made our time all the more relaxing.

After staying the night at a quaint inn on Martha's Vineyard, we walked a couple hundred yards out our front door to spend the morning at the Oak Bluffs' Beach. While not as spectacular as Aquinnah, it got our day off to a good start. In the early afternoon we made our way to the furthest tip of Cape Cod called Provincetown. That evening we walked a couple miles to Herring Cove Beach on the Cape Cod Bay - another relaxing evening on the beach, especially after the longer than expected walk!

Day three was by far the most exciting of our trip. At 9:30 in the morning we set off on the Dolphin VIII for a whale watching tour. We sat right in the front of the boat by a few guys from the area's ecology club. Fortunately for us, we saw every behavior of the humpback whale, including multiple full breaches! The guys in the ecology club, who collectively have been on over 50 whale watching tours all said that this was one of the best viewings they have been a part of. While I didn't do a great job of getting pictures (I was too busy not blinking), this one will show you how close we got to the magnificent creatures.


In the evening we rented bicycles to check out the dunes that are a part of the Cape Cod National Seashore. The views were spectacular, again, and we ended our bike ride at the Race Point Beach on the Atlantic Ocean. The water was amazing and we saw a seal (I think) swimming right where we were! The beach was roped off in some areas because of shore bird nesting. I took the picture below right before we left the beach to get a late dinner - fresh lobster!


Overall, it was a fantastic trip. We are certainly enjoying living on the East Coast thusfar and hope to explore more of the region during the next couple months.

Yale SoM featured in Wall Street Journal

On Tuesday, July 11, The Yale School of Management was highlighted in The Wall Street Journal. The following MBA Track article by Ronald Alsop appeared.

M.B.A. Programs Blend Disciplines To Yield Big Picture

Integrated...cross-functional...multidisciplinary. Those are the popular buzzwords these days for how some academics and corporate recruiters believe schools should redesign their M.B.A. curriculum.

In short, it's all about breaking out of so-called academic "silos" like finance, accounting, marketing and operations, and teaching students to take the big-picture view of how those functions blend together in business. Critics of M.B.A. programs complain that graduates too often struggle to solve complex, ambiguous problems that cut across different business units.

"Academic silos get in the way of what organizations want from their leaders today," says Joel Podolny, who was appointed dean of the Yale School of Management last year. "Recruiters and CEOs tell me they need people who can frame a problem and solve it by working across boundaries and drawing resources from different parts of the company."

Dr. Podolny has responded swiftly to concerns about academic "balkanization" with an ambitious transformation of Yale's M.B.A. curriculum. Instead of the traditional compartmentalized courses, students this fall will learn the basics from the viewpoints of a company's external stakeholders and internal constituents. These "organizational perspectives" courses will include customer, competitor, investor, employee, innovator, the state and society, the "operations engine," and the sourcing and managing of funds.

The customer perspective class, for example, will go well beyond marketing to touch on psychology, sociology, economics, operations, accounting, organizational behavior and information technology.

Other schools are taking steps toward a more integrated curriculum, too, but not on the scale of Yale's bold revision. Some are creating a single capstone course that attempts to pull everything together near the end of the M.B.A. program. In a twist on that approach, Georgia State University offers a new introductory "cornerstone" course -- "Managing in the Global Economy" -- that shows the complexity of international business and the way corporate functions interrelate.

The University of Southern California's Marshall School of Business is encouraging professors to collaborate more in its new full-time M.B.A. curriculum. Professors of marketing and economics might teach together now, or the same case study might be discussed simultaneously in finance, marketing and ethics classes. "Professors sometimes convey that their course is the be-all and end-all of business, but we want students to see the interconnections and not end up with one-track minds," says Ravi Kumar, vice dean and co-chairman of the curriculum innovation committee. To revitalize its executive M.B.A. program last year, Case Western Reserve University's Weatherhead School of Management in Cleveland restructured classes by themes -- the language of business, stakeholder management, global business, processes and systems, and execution. "Executives don't face academic disciplines," says Betty Vandenbosch, associate dean. "They face problems."

Such a major curriculum overhaul is usually met with some resistance. Students worry that they won't learn basic business skills in an integrated curriculum and some fear that recruiters might view it as an incomplete education. The biggest hurdle, though, is usually the faculty. Some professors are reluctant to teach outside their comfort zone or to share their classrooms for team teaching with other faculty.

But so far, there seems to be unusually solid support for Yale's M.B.A. facelift. Dean Podolny believes the curriculum change has advanced so quickly because Yale's M.B.A. program is relatively small and nimble (425 students) and its faculty already tended to work well across disciplines. Indeed, after overcoming some initial reservations, the faculty unanimously approved the new curriculum.

Professors aren't getting much rest this summer as they race to finish the curriculum by August. Senior faculty meet at least weekly to hash out course details and craft new case studies and other teaching materials. "This change is requiring the faculty to stretch, but it's incredibly exciting working around the clock on it," says Jonathan Feinstein, an economics professor. "In my 20 years in business schools, I've never experienced a curriculum development like this."

Yale is prepared to deal with the inevitable skeptics. It plans to administer a proficiency test to compare the basic business knowledge of students from both the old course structure and the new curriculum. "This will address any concerns about a loss of rigor when what used to be taught in a core finance class now shows up in several different classes," says Jake Thomas, an accounting and finance professor and head of the curriculum committee. "It will help convince other people -- and even ourselves -- that the new curriculum is working."

Already, Yale has tried to reassure incoming students who were anxious about the course redesign and feared there could be kinks in the system at first. "New students felt better when they learned that the school's all-star faculty would be teaching the first-year curriculum where the changes are most dramatic," says Spencer Hutchins, who served on the curriculum reform committee and will be a second-year M.B.A. student this fall.

Rather than discourage students, Yale believes the refashioned curriculum is at least partially responsible for a big jump in the number of applicants who accepted admission offers this year. "A lot of us were joking that if business school weren't so expensive, we'd like to start over and try the new first-year curriculum ourselves," Mr. Hutchins says.

AMA Racing

I am not a race fan. I don't like Nascar, Indy, or any other major racing circuit for that matter. However, 20 motorcyclists going close to 100 mph on a dirt track is something else... While I was still in Michigan I went with my dad to the I-96 race track just south of Ionia. The AMA Dirt Track Series and all of its top riders were there for the evening. The event started with the heats, then went to semis, and finished with a 25 lap final. Kenny Coolbeth, from Connecticut nonetheless, was most impressive and ended up winning the race. The picture below is of him waving the checkered flag after dominating the final, which included the overall points leader Chris Carr.


So, as I explained before, I am not a race fan. But, these guys are ridiculous. The start is two straight lines of motorcycles one behind the other. There is much less than a quarter mile between them and turn one where all of them fish-tail through the corner - on purpose. That is the thing with flat track motorcylce racing. The riders slide their bikes through the turns and use his/her (there is one woman on the circuit - a fan favorite!) foot to prop themselves up. Kenny Coolbeth is in the picture below showing how it is done...

Fourth of July - New Haven

On the evening of the Fourth, we decided to catch the New Haven fireworks from East Rock Park. The Park is the highest point in New Haven, approximately 400 hundred feet above sea level - the view of New Haven, the Long Island Sound, and surrounding communities is spectacular. Not only did we see the New Haven fireworks over the water, we saw four other sets of fireworks from neighboring communities. It was a great time and amazing to consider that we are in the "Constitution State" to celebrate our country's independence! I will post more pictures of East Rock Park in the coming days. It is only two blocks from our place, so we spend a lot of time in and around the park.

Budget Trucks - Moving

On Thursday, June 22, we picked up the 16' Budget truck that we would be using for our move to Connecticut. We had decided to go with Budget for a few reasons. First, it was the cheapest. Second, we haven't had the greatest U-Haul trucks in the past. Last, Budget supposedly has the newest fleet. I can honestly say that our expectations were surpassed. The truck we rented had only 5,000 miles on it. In addition, the tow dolly we used for our car was brand new!

As for the move, I don't think it could have gone better. Our driving day was Friday, June 23, and we drove through rain the entire trip, but it wasn't heavy. Traffic was not heavy either. The only slow downs were before the Tappan Zee in New York and on I-95 north just before New Haven. Again, it was nothing significant. The truck drove great (althought the mpg had to be in the teens) and towing our car was not a hassle. We unpacked the bed and a couple other necessary items that evening to get some much needed rest. In the morning, one of our New Haven friends came over to help us unload the entire truck. The rain held off while we were unloading and then picked right back up when we were done. Now it continues to be a settling in process. All in all, I have no complaints about the move.

After our first adventure to New Haven, I returned to Michigan to work another week. I wrapped things up at work on Monday, July 3, and drove straight to New Haven in 11 hours. Since arriving, I have started to get acquainted with area and settled in the apartment. There are plenty of things to be done...