According to many economists, Warren Buffett doesn't exist. The proponents of the efficient-markets hypothesis assert that over the long term, stock markets reflect all known information and therefore cannot be consistently beaten by any single investor.

Yet a folksy ukulele-playing man-child who never left provincial Omaha has consistently outperformed the stock markets for more than half a century, turning an original seed corn earned from his schoolboy paper round into the world's largest individual fortune (over $50 billion).

Yes, unlikely as it may seem, Buffett does exist, and one way of demonstrating it is the discomfort you would feel if you dropped Alice Schroeder's titanic biography on your foot. At almost 1,000 pages, The Snowball (the title refers to Buffett's steady accretion of wealth) evokes the brick-like solidity of its subject, a man who, to the bemusement of late-20th-century Wall Street, refused to put a cent in internet stocks, on the grounds that he'd “never seen an electron”.

Although there have been earlier biographies - of which the best is Roger Lowenstein's Buffett: The Making of an American Capitalist (1995) - this is the only one authorised by its subject. His choice of biographer would not please those seeking elegant prose: Buffett came across Alice Schroeder because she was the investment analyst he thought best understood his sprawling, multifaceted holding company, Berkshire Hathaway. She is also, as the dust jacket confirms, an attractive woman - and Buffett, though absolutely not a philanderer, has always preferred female company. It is fair to say that women, in turn, have found Buffett irresistibly motherable.

This is not just because he is a classic absent-minded genius who struggles to dress without assistance. Perhaps the most important insight provided by Buffett to his Boswell is that his mother, Leila, was unimaginably cruel to her offspring. This cruelty did not involve physical punishment, but an unremitting verbal assault that seemed diabolically designed to destroy her children's sense of self-worth. The all-conquering Buffett, now a grandfather in his late seventies, would still weep helplessly when he told his biographer what he had endured at the razor-sharp end of Leila's tongue.

In fact, as Schroeder reveals, his mother's family had a strong genetic predisposition to insanity: both Leila's own mother and her sister were committed to asylums - something that can only have added to Warren's feelings of terror and insecurity. It's scarcely an exaggeration to say that his mental stability was saved by the best investment of his life - his wooing in the early 1950s of Susan Thompson, the daughter of a close friend of his father Howard. To be more correct, Warren wooed old “Doc” Thompson, and eventually Susie was prevailed upon to break up with her Jewish boyfriend (a strict no-no in Rotarian Nebraska at the time) and consider the attractions of a profoundly awkward young man whose precocious entrepreneurialism in a variety of money-making schemes had made him a taxpayer by the age of 14.

Susie, the real hero of this book, was not in the least attracted by Warren's earning capacity - indeed, she scarcely understood it. What she quickly saw in him was a desperate, aching need for love and reassurance - and she was someone driven above all by an urge to bring succour to those she saw as helpless. This aspect of his wife eventually seemed to have a dramatic influence on Buffett's politics. He had worshipped his father, a sometime Republican congressman whose politics were, to say the least, forbidding. Howard Buffett was a founder member of the John Birch Society, and the only congressman not to endorse Ike Eisenhower at the 1952 Republican Convention: he had thought the former five-star general too soft on the communists in America's midst. Under Susie's tutelage Buffett lent his name - if not his money - to the civil-rights movement. They became among the very few members of the Midwestern business establishment of the day to count African-Americans among their friends.

Buffett's fulminating tracts on the greed of America's chief executives owed nothing to his wife's opinions, however. What he found offensive about the increasingly gigantic share-option deals given to the country's director class was that they usurped the privilege of ownership: as far as Buffett was concerned, the shareholder was king and the nation's institutional investors - insurers, pension funds - were shockingly complicit in allowing their beneficiaries to be fleeced by mere employees.

The flip side of this is seen in one of the few episodes in Schroeder's book showing Buffett in a bad light. As the owner of the Buffalo Evening News, he had led an expensive and highly litigious circulation war against the rival Courier-Express. When, in 1982, the Courier-Express finally folded, Buffett attended a celebratory meeting of his journalists. One of them made the suggestion that perhaps a bit of profit sharing might now be in order. “There is nothing that anyone on the third floor [the newsroom] can do that affects profits,” said Buffett. He then walked out, not even bothering to thank anyone. “After everything they had all been through,” comments Schroeder, “the staff was stunned at his lack of empathy.”

This lack of empathy seems to me almost pathological. Although Schroeder never once raises the possibility in her epic account of the greatest capital accumulator in history, it seems perferctly possible that Buffett is a case of high-functioning Asperger's syndrome. As a child, he was an obsessive collector. As an adult, his most treasured possession is a model train set, which he shows only to his most trusted friends. His other idea of relaxation is to play bridge on a computer for hours every evening. He detests any variation in his domestic routine: he lives in the same house he bought for $31,500 half a century ago, and consumes only hamburgers, chips and Cherry Coke.

The author describes Buffett's “horror” when a vegetable touches his beloved hamburger in a restaurant. When he wants to diet he reduces his intake to exactly 1,000 calories a day by the simple expedient of cutting out his Cherry Coke - not realising that the absence of any drink with his food is causing him to become dangerously dehydrated. Buffett has a unique genius for “feeling” the basis of a brilliant investment and a similarly rare gift for insurance handicapping (the engine of his company's prodigious cash generation) but can't understand the most primitive workings of his own body.

When I met Buffett five years ago, I was struck by this otherness - and also by the pulsating mental energy that surely must be the other reason for his remarkable endurance at the top of the business world. Before writing this, I went back to look at my notes of that meeting in 2003. At one point he warns me that in a few years there would be “major bank failures” because of the speculation in mortgage-backed derivatives: “The good banks will get pulled down by the bad banks.”

Never, ever, bet against Warren Buffett.

The Snowball by Alice Schroeder
Bloomsbury £25 pp974

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