Tap Dancing To Work: Warren Buffett On Practically Everything - Book Review

by: Kevin Hsu

About Carol Loomis, Compiler of Tap Dancing to Work: Warren Buffett on Practically Everything, 1966-2012

Carol Loomis had the longest tenure at Fortune magazine of any employee in its history. She is noted particularly for having covered Warren Buffett's life since 1966 more closely than any other business publication. For decades, she watched first hand as Warren Buffett became Warren Buffett. Over the years, she has developed a tremendous relationship and rapport with Warren, so much so that she has been the pro bono editor of his annual letter to shareholders for many years. Incidentally, it was Carol's husband who first met Warren Buffett. In Carol's first article mentioning Warren Buffett, she had misspelled his last name 'Buffet'. Later on, Warren gave grief to Carol about that.

Overview and Thoughts about the Book

Tap Dancing to Work: Warren Buffett on Practically Everything is a collection of articles about Warren Buffett, some of which were either written by Fortune and Carol Loomis herself (13 cover stories), Warren Buffett himself (12 articles), or various other writers. All of which definitely help to contribute to understanding Warren's thought process and principals. The book starts with an article about Alfred Winslow Jones, who is largely considered the father of hedge funds. At the time, Warren Buffett had started a partnership, which he eventually closed in 1969 due to what he believed to be unfavorable market conditions. By that time he had already amassed $25 million. While many of these articles you can probably find online, Carol provides insightful information on each of the articles in hindsight. This includes the aftermath of what had happened in the banking crisis of 2008 and Buffett's temporary seat at Solomon as chairman.

For someone who is looking to gain rare insight into Warren's investment principals, you'd have to go through 368 pages of articles to comb though and pick out the fruit. Evidently, he does not lay out his investment procedures in simple, easy to follow steps, but each of these articles does provide incredible insight into Warren's thoughts and more importantly his adherence to his principals. In particular, a couple of the articles illustrates Warren's cost management and thriftiness.

I would say about a third of the articles are about Warren's generosity in donating a large portion of his fortune to charities. It goes through how the idea came about, who else he has involved, and his relationship with Bill Gates in all of this.

"How did BYD get so far ahead?" Warren Buffett asked Wang, speaking through a translator. "Our company is built on technology know-how," Wang answered." Wary as always of technology play, Buffett asked how BYD would sustain its lead. "We'll never, never rest," Wang replied."

Perhaps one of the most insightful pieces is "Why Warren Buffett's Betting Big on American Express". While Fortune attempted to decipher the secret formula behind Warren's decision to buy American Express (NYSE:AXP), at the end of the article, Carol eludes to the real reason behind Warren's decision to keep it all these years. While Warren was initially concerned with competition from other credit card companies such as Visa (NYSE:V), his golf day with Frank Olson at the time CEO of Hertz largely shifted him the other direction. In mid-2012, Berkshire's Amex stock had a cost basis of $1.3 billion and a market value of $8.8 billion. Let's not kid ourselves, Warren did not buy American Express on solely a stock tip.

But being serious now, the article 'Buffett Takes Charge' by Marc Gunther is one of the best articles that describes Buffett's investment criteria and the degree in which they need to be met. This article is on his decision to invest in the Chinese car and battery company, BYD. Buffett purchased the stock at HK$8 and it is now trading at about HK$60. Even with the recent drop in the Asian stock markets, he still returned about 750% from his initial investment.

Final Word

Had I had the insight and good fortune of collecting all the articles on or related to Warren Buffett prior to or during 2009, I would probably be sitting on a lot more cash than I am right now. Being able to say that means that there is intrinsic value in all of the articles presented in the book. All the way from how to pass on wealth to your future generations to what to look for in purchasing a business. While all of this is easier said then done, at the very least you will have some kind of background into going about becoming a better person and investor. Not to mention, the articles are very well written in their own right, which makes Tap Dancing to Work: Warren Buffett on Practically Everything an entertaining read if nothing at all.

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