Warren Buffett and the Bidding War

Posted on October 13, 2005

Forbes reports that Warren Buffett has sparked a bidding war by announcing he's going to write a financial advice book. Buffet has an estimated net worth of $40 billion and is ranked as the second-richest person in the world, behind Bill Gates, so when Buffett talks money, people tend to listen.

Everybody wants a piece of Warren Buffett. Now that the investment maharishi has agreed to have a hand in another financial advice book, publishers have eagerly rubbed their hands and leapt into a bidding war for the title. Stakes are now as high as $7 million--less than the $12 million advance paid to Bill Clinton for his memoir My Life, although unlike Clinton's 1,000-page tome, Warren's stream of consciousness will be penned by insurance analyst Alice Schroeder.
Schroeder is "the only one Warren Buffett will speak to," according to a Risk & Insurance biographical article, after the top analyst spent years following Buffett's company Berkshire Hathaway. "I think she did a very thorough job," the article quoted Buffett as saying of her work. "It seems to me she varied from the standard approach of securities analysts."
Schroeder was a surprise for scuttlebutts, who had expected the billionaire guru--ranked No. 2 on the Forbes 400 Richest Americans list--would write a book with Fortune's Carol Loomis. The latter's explanation for the snub: although a collaborative investment book had been on the cards, Loomis was put off by Buffett's aversion to do the required work. Which now puts Schroeder in a rather lucrative position. Along with her deep knowledge, she has staunchly defended Buffett's Berkshire as "the most talked about and the least understood company in the world."

Buffett isn't really writing the book, of course. It's more like he discusses his ideas with Alice Schroeder, then she makes it readable. Ghostwriter or not, expect this one to be a bestseller.