The Warren Buffett CEO: Secrets for the Berkshire Hathaway Managers
by Robert P. Miles
John Wiley & Sons, 2002, 412 pages

Berkshire Hathaway is arguably the most successful investment company one can buy on Wall Street. Built on companies picked and bought by legendary financier Warren Buffett, the management company thrives on the earnings of its operating units.

How the various companies is the key to understanding their profits. To that end, Robert P. Miles, an unabashed fan and shareholder in Berkshire Hathaway, describes how Mr. Buffett picks his top managers.

The review of operations and management is extensive from insurance, reinsurance, retail furniture, jet leasing, publishing, candy making, and jewelry. In all, BH firms operate in 125 categories of business. From interviews with the managers, Mr. Miles distilles the rules of BH management. Among 60 similarities, perhaps the most important are:
1. Each CEO is independent and expected to run a business as if it is independent of BH.
2. The firms are horizontal organizations and get nothing from the BH empire.
3. All managers are skeptical of short run profit myopia, the phenomenon that makes stock markets soar and swoon.
4. Many firms are family affairs. Many of the managers have 90 per cent or more of their wealth in BH stock.
5. There tend to be no fancy offices. Many CEOs answer their own phones.

Management manuals tend to be books for times you run out of sleeping pills. This book is an exception. It is vivid and clear, the product of immense research and much thought. Its ideas are provocative for anyone interested in financial managment, human resources and corporate relations. And it will help BH stockholders and those who would like to buy into BH. The company's shares are not cheap, however. In the last 52 weeks, BH shares have traded between US$59,000 and US$75,300 with a recent price of US$60,000.