Warren Buffett's 7 Pearls of Wisdom

Of all the biographers competing to be Warren Buffett's Boswell, Carol Loomis, dean of writers at Fortune magazine, would seem to be the best equipped.

For more than 40 years, she has been Buffett's personal friend and sometime bridge partner. For 35, she has ghost-edited his annual letter to the shareholders of his holding company, Berkshire Hathaway. In the pages of Fortune she has written more about him, probably, than any other journalist. So, is her Buffett book, out this week, a biography?

Read more: Buffett's Golden Touch Hits a Snag

No. "Tap Dancing To Work: Warren Buffett On Practically Everything, 1966-2012" (Portfolio/Penguin, $27.95) isn't so much a biography as it is a catalog of Buffett's views on everything from how much money to leave your kids (a few hundred thousand dollars is enough ) to whether the Internet will change the way people chew gum (it won't).

For 7 pearls of Warren's wisdom from the book, see below.

The book gives a kind of cubist portrait of the Sage of Omaha: Buffett refracted in the eyes of 40 different people--most of them Loomis' fellow Fortune writers, who, since 1966, have been recording his observations and opinions. One writer, though, is Buffett himself: Since 1977, he has occasionally written pieces in the magazine on topics ranging from inflation to America's trade deficit to The Best Advice I Ever Got. 15 of the book's selections are Buffett-bylined.

The book's title, says Loomis, is the phrase Buffett long has used to describe his love for running Berkshire Hathaway, arguably one of the best-run and most profitable companies in the world over a span of decades.

Here you will find Warren explaining how to chose charitable causes; how he first got started as an investor; his opinion of the flat tax ("I wouldn't support it"—sorry, Steve Forbes); of index funds and of derivatives. His strategy for winning at bridge? You'll find it here.

Loomis, asked which of Buffett's opinions surprised her most, tells ABC News it was his answer to the question, "What was the best advice you ever received?"

"I was genuinely surprised when all he wanted to talk about was the worst advice," says Loomis: In 1951, when Buffet wasn't yet 21, he told both his father and his mentor--value-investor Benjamin Graham--that he wanted to go into the securities business. They advised him not to, telling him his timing was wrong and that he ought to wait a little while.

When Loomis interviewed Buffett about this in 2005, he speculated there might have been another reason for their caution: "I was so immature," he told her. "I was not only young-looking, I was young-acting. I was skinny. My hair looked awful. Maybe their advice was their polite way of saying that before I started selling stocks, I needed to mature a little, or I wasn't going to be successful."

He ignored them, and went on to greatness.

Buffett routinely is described as having been the greatest investor in history. But how great, exactly? Loomis, in her commentary accompanying the book's final piece ("Why Stocks Beat Gold And Bonds"), succinctly quantifies her friend's accomplishment:

"In 1966, he was the proprietor of an un-famous hedge fund and the controlling shareowner and de facto CEO of a small New England textile company, Berkshire Hathaway, with $49 million in annual revenues. By 2011, Berkshire was No. 7 in the Fortune 500, with $144 billion in revenue. Few others within his lifetime have taken a company from obscurity to the top 10 of the 500." As for Berkshire's market value (a measure Loomis says Buffett respects much more than sales), Berkshire in 2011 ranked 9th in the Fortune 500, with $202 billion.

7 Pearls of Warren's Wisdom:

-Where Amateur Investors Should Invest: "They should just stay with index funds. Any low-cost index fund. And they should buy it over time. You just make sure you own a piece of American business, and you don't buy all at one time."

-The Right Amount of Money to Leave Your Kids: "Enough so they would feel they could do anything, but not so much that they could do nothing." In 1986, Buffett estimated that the right amount to leave a child who was a college graduate would be "a few hundred thousand dollars."

-Foreigners Will Never Flee The Dollar. "The fact is that foreigners—as a whole—cannot ditch their dollars. Indeed, because our trade deficit is constantly putting new dollars into the hands of foreigners, they have to just as constantly increase their U.S. investments."

-Be Happy Now: "I always worry about people who say, 'I'm going to do this for 10 years; I really don't like it very well. And then I'll do this…' That's a little like saving up sex for your old age. Not a very good idea."

-The Internet Won't Change Chewing Gum. "When I look at the Internet, I try to figure out how an industry or a company can be hurt or changed by it, and then I avoid it. Take Wrigley's. I don't think the Internet is going to change the way people chew gum."

-Picking Causes Is Harder Than Picking Stocks: "In stocks, you're looking for things that are obvious and easy to do. You try to identify the one-foot bars you can step over. But when you give in the charitable arena, you are attacking problems that have been the most intractable and resistant to solution throughout history."

-Choose Colleagues Carefully: "When you go out to work, work for an organization of people you admire, because it will turn you on." The reason he's happy, he says, and why he tap dances to work is, "I don't have to associate with anybody who causes my stomach to churn."

The author of this story was a writer at Fortune and several of his magazine pieces appear in the book.

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