Anthony Beachey

The man with the Midas touch

The Snowball, by Alice Schroeder

issue 11 October 2008

The perfect timing of this book rivals the brilliance of Warren Buffett’s many invest- ment coups. For years, this true ‘master of the universe’ has highlighted the dangers posed by derivatives — or ‘financial weapons of mass destruction’ in Buffett-speak. Losses from these highly complex instruments, based on sub-prime US mortgage debt, precipitated the credit crunch and now threaten the entire global financial system.

Presciently, Buffett warned in 2003 that derivatives could push companies into a ‘spiral that can lead to a corporate meltdown’. But Wall Street’s investment bankers ignored his advice, and while they now head for the pawnshops, the world’s greatest investor continues to accumulate wealth faster than anyone else in history.

Would-be billionaires worldwide, seeking the formula of Buffett’s financial alchemy, will doubtless pore over this biography, published with the co-operation and encouragement of the ‘Oracle of Omaha’.

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