“Life is like a snowball. The important thing is finding wet snow and a really long hill.”

With that homely image, Warren Buffett has expressed the philosophy that has guided both his personal life and his professional career; it also provides the title for Alice Schroeder’s new biography of Buffett, The Snowball: Warren Buffett and the Business of Life.

Other books about the “Sage of Omaha”—for example, Robert Hagstrom’s The Warren Buffett Way and Janet Lowe’s Warren Buffett Speaks: Wit and Wisdom from the World’s Greatest Investor—have focused on Buffett’s investment prowess or his words of wisdom. Much of the material in those books comes from Buffett’s legendary shareholder letters. Although a great deal can be learned from studying Buffett’s investment strategies, his life story is invaluable in truly understanding his investment philosophy.

In 1995, Roger Lowenstein produced an excellent full-scale biography, Buffett: The Making of an American Capitalist. He did a masterly job of intertwining interviews with analysis of Buffett’s investment strategies. One limitation of Lowenstein’s book, however, is the neutral stance Buffett took toward the project, neither encouraging nor discouraging friends and family from participating. Despite this constraint, Lowenstein managed to create a fascinating 400-page look at the man. Unlike Lowenstein, Schroeder, a former managing director at Morgan Stanley, was able to obtain Buffett’s full cooperation, including permission to rummage through his files. The result is the definitive Buffett biography, totaling more than 800 pages of text and some 90 pages of notes.

In a short video on www.amazon.com, Schroeder discusses her desire to write a book about Buffett in his entirety. She believed that numerous contradictions in his life needed to be explained. How did a man who grew up in a conservative Republican family become a liberal Democrat? Why is someone so interested in making money so uninterested in spending it on himself? Through interviews with Buffett, his family, and friends, Schroeder has been able to explore these and numerous other issues.

For those who have read the Lowenstein biography of Buffett, many events recounted in The Snowball will be familiar. In the 13 years since Lowenstein’s book appeared, however, several momentous events have occurred in Buffett’s personal life and in the financial world, including the passing of Buffett’s longtime friend, Washington Post publisher Katherine Graham; the death of Buffett’s wife, Susie; the Long-Term Capital Management (LTCM) debacle; and the current financial crisis. Schroeder’s unlimited access to Buffett takes the reader from observer status to being a part of his life during these episodes.

Buffett’s cooperation allows us not only to understand his personal side but also to gain insight into some of his investment decisions. Perhaps the most fascinating story is Buffett’s attempt, together with American International Group (AIG) and Goldman, Sachs & Co., to buy out LTCM. The deal fell through, and a bailout plan brokered by the Federal Reserve Bank of New York wound up saving LTCM and the financial markets. Most of us who followed the story believed that the transaction broke down because the terms were unsatisfactory to LTCM, but the actual explanation is more interesting and even amusing. Without Schroeder’s direct access to Buffett, this story would likely never have been told.

The 2008 financial crisis, which led to bailouts of numerous financial firms, has been widely regarded as unprecedented, but The Snowball reminds its readers that the Great Depression was not the most recent financial crisis to raise the specter of systemic risk. In the context of the recent AIG bailout, details of the Salomon Brothers bond-trading scandal and the LTCM debacle have a familiar ring. At the time, the fear that one of those organizations would be the first domino to fall, leading to a collapse of the world financial system, was widespread. In the intervening years, regrettably, little heed was given to warnings by Buffett and others that excessive leverage and reckless use of derivatives might again bring the system to the brink.

Buffett’s skeptical view of financial engineering is by no means a unique instance of his rejecting the prevailing wisdom. Reading The Snowball drives home not only the truth that we are all dead in the long run but also that Buffett is usually correct. For example, his avoidance of technology stocks during the dot-com boom provoked derision but his insights were ultimately vindicated with a vengeance.

Schroeder has succeeded in her objective of presenting Warren Buffett in his entirety. She does a skillful job of elucidating his relationships with friends, family, and business associates. Her Wall Street background enables her to write about the financial side of Buffett’s life in a manner that is accessible to the layperson yet still provides insight to experts in the field.

What sets this near autobiography apart from other books about Buffett can be summed up in the title of the first chapter, “The Less Flattering Version.” Schroeder quotes Buffett telling her, “Whenever my version is different from somebody else’s, Alice, use the less flattering version.” Eschewing the authorized biographer’s temptation to confer sainthood on her subject—and throwing in one or two small flaws to make him seem human—Schroeder leaves readers feeling that they have seen the real Buffett, warts and all.

The Snowball is not only an enjoyable biography about an intriguing man; it also provides lessons on ethics, the financial markets, and Buffett’s Nostradamus-like ability to envision the future. All in all, it is an excellent book for anyone who simply likes a good read.

—R.L.M.