March 27, 2013
Guest Review: Larry Cunningham's The Essays Of Warren Buffett, by Pamela Holmes
Posted by David Zaring

Over the transom comes this review of one of Larry Cunningham's two business memoirs, from seasoned reviewer Pamela Holmes.  Nice to get a different perspective on the book:

What you see is what you get with Warren Buffett.  When he writes to his shareholders, he talks about not just the numbers in their annual report, but about himself, what he thinks, and how Berkshire Hathaway has come to be where it is today.  The book is a compilation of Warren Buffett’s annual letters to Berkshire Hathaway shareholders from 1979 to 2011, and reads as sound investment strategy and business practices, with abundant offerings of good horse sense.   He believes if "you can't understand a footnote or other managerial explanation, it's usually because the CEO doesn't want you to."

The first edition of The Essays of Warren Buffett: Lessons for Corporate America was the focus of a symposium held twenty years ago and was the standard textbook for a specialized course taught by the author, Professor Lawrence A. Cunningham of George Washington University Law School.  It has since been adopted by many law and business schools for study in investment, finance and accounting.  Investment firms have used this book in their staff and investor training programs.  However, the layman should not be put off by these credentials as the book is an approachable guide to understanding investment.  Buffett quotes Twain, Churchill and even Woody Allen.  If it's a matter of faith in Warren's wisdom, you may be reassured by the sprinkling of Biblical references used to illustrate his points.

A sampling of Buffett's sage advice to shareholders includes, "Beware of companies displaying weak accounting."  If you question what you see, "it is likely they are following a similar path behind the scenes.  There is seldom just one cockroach in the kitchen."  Berkshire Hathaway's board of directors do not receive company stock as part of their compensation, they "purchased their holdings in the market just as you did...I love such honest-to-God ownership.  After all, who ever washes a rental car?"  Another gem, "...lemmings as a class may be derided but never does an individual lemming get criticized."

Organized by topic rather than chronologically, the words of Mr. Buffett are the words of every man - there is extremely little corporate lingo and no baffling verbiage.  His plain-speak is valuable guidance to learning the history of investing in the U.S., the good and the bad, and to understanding how you can make an intelligent investment decision if effort is put into researching the integrity and focus of company and management behind the investment.

The table of contents is well organized and the book includes a concept glossary and a disposition summary to help readers familiar with the previous editions of this book.

Berkshire Hathaway Inc. is a holding company owning subsidiaries involved in business activities including insurance and reinsurance, freight rail transportation, utilities and energy, finance, manufacturing, services, and retailing.  They hold interests in 28 newspapers, even with the overwhelming influence today of the Internet.

I typically review biographies and lifestyle publications, and have been an admirer of Warren Buffett for many years so, naturally, I wanted very much to read this book.  Clearly, is it a valuable tool for training anyone in anyway connected with handling the money of others, and I would highly recommend this book to investment clubs and to anyone giving serious thought to planning their retirement portfolio, be they in their 20's or their 60's.

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