Dear Mr. Buffett; What an Investor Learns 1,269 Miles from Wall Street

I’ve stopped writing book reviews.  Not because I’ve stopped reading books – I have read plenty since my last book review.  No, the reason why I’ve stopped writing book reviews is because I’m lazy and I don't find it particularly fun.

But I’ll make an exception for this one - Dear Mr. Buffett; What an Investor Learns 1,269 Miles from Wall Street.  I finished it on the weekend.

I am not writing this book review because I suddenly had the urge to put pen to paper – or keystrokes to cyberspace.  Rather, I am writing this because I am putting Dear Mr. Buffett on my recommended book log and I wanted to alert potential readers what this book is all about.

Upon reading the title, it may appear that Dear Mr. Buffett is a book which might reveal deep insights regarding Buffett’s investment acumen.  It is not.  In fact, if you want to learn about Warren Buffett, do not buy this book.  There are a gazillion other books on Warren Buffett you should buy instead. (Roger Lowenstein’s Buffett: The Making of an American Capitalist is the best, in my opinion.)  This book is about something totally different.

Dear Mr. Buffett is written by derivatives expert Janet Tavakoli (who is also my New Favourite Blogger, and whose site I have included on my Blog Roll to the right).  Tavakoli takes the reader through the arcane and mind-numbingly complex world of structured finance and how it contributed to the financial crisis in a fairly readable manner.  According to Tavakoli, Wall Street is the primary culprit for the financial crisis as the Street created the transmission mechanisms via the derivatives markets through which liquidity flowed into residential real estate, creating the Housing Bubble.

So why the reference to Warren Buffett?  The book encapsulates Tavakoli's initial meeting with Buffett and the ensuing correspondence thereafter.  Tavakoli weaves her narrative around her communication with Buffett, his investment philosophy and Berkshire Hathaway.

Tavakoli’s interaction with Buffett ranges from interesting to kind of annoying and perhaps trite.  It feels forced at times, almost as if passages were included at the insistence of an editor who thought that plastering Buffett’s name on the front cover would sell more copies. 

None the matter.  This is a good book.  Tavakoli has something to say and she should be heard.  Dear Mr. Buffett goes to the heart of one of the primary causes of the financial crisis, written by one of the relatively few people who understands structured finance.

Out of five, I rate Dear Mr. Buffett

1/2

Comments

[Kevin Flick]

Toro, have you looked at this one as a candidate for shorting Canada Real Estate?

http://finance.yahoo.com/q?s=MIC.TO