Buffett: The Making of an American Capitalist

Most people—high-powered executives perhaps especially—tend to compartmentalize their lives. They may be tigers at the office and kittens at home. But Buffett was all of a remarkably consistent piece. To young Peter, his father ran on an inner clock whose springs and gears never ceased to turn. Day to day, Buffett was in his own solar system.39 “I

Buffett looked at a stock, he was beginning to see not just a frozen snapshot of assets, but a live, ongoing business with a unique set of dynamics and potential.

Picking a stock depended not on the whim of the crowd, but on the facts. And Buffett took this to heart, partly because he saw Graham in idealized terms—as a “hero,” like his father.39 Graham had a similar effect on others.

The Graham-and-Dodd investor saw a stock as a share of a business, whose value, over time, would correspond to that of the entire enterprise. It is an almost unbelievable fact that Wall Street never asks, “How much is the business selling for?”

Buffett’s genius was largely a genius of character—of patience, discipline, and rationality.

I will tell you the secret of getting rich on Wall Street. [Pause.] Close the doors. You try to be greedy when others are fearful and you try to be very fearful when others are greedy.§

The Intelligent Investor boiled Graham’s philosophy down to three words—“margin of safety.”24 An investor, he said, ought to insist on a gap—a big gap—between the price he was willing to pay and his estimate of what a stock was worth.