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Last week there were several business media stories about Warren Buffet and Berkshire Hathaway. Before we get to the best of them, here's some background.

Berkshire Hathaway began as two New England textile companies. Berkshire Cotton Manufacturing Company and Hathaway Manufacturing were both founded in the late 19th century. In 1955, they merged to become Berkshire Hathaway.

The merger was an attempt to remain in business and profitable during the long decline of the New England textile industry. Very few companies survived. Many were gobbled up by other companies. That's what happened to Berkshire Hathaway.

In 1965, a group of investors, led by Warren Buffett, acquired a controlling interest in the company and Berkshire Hathaway became the investment vehicle for Buffett. He turned Berkshire Hathaway into a holding company, and it became one of the most successful of the breed.

At the end of 2008, Berkshire Hathaway owned more than 60 companies including GEICO, Dairy Queen, Fruit of the Loom, Johns Manville, Clayton Homes, Helzberg Diamonds, and General Re. It also owns a share of at least ten more companies.

Buffett's record has been nothing short of amazing. Calculations of Berkshire Hathaway's return vary but most commentators place it between 20 and 26 percent. There has to be some method there. There is.

Warren Buffett spoke to students at the Wharton School of Business in 1999 and laid out four rules for investment:

• Understand the business in which you are investing. Look for businesses within a circle of personal competence.
• Look for sound, fundamental economics. Seek out companies that have a sustainable economic advantage.
• Find competent leadership.
• Buy at the right price if you want an investment to pay off.

In an article in the Economist, Buffett described what his role becomes once a company has been acquired. "One [job] is to attract and keep good managers to run our various operations. The other is capital allocation."

Every year, Warren Buffett writes a letter to shareholders. The letters are all collected on the Berkshire Hathaway site. They have become classics for their overviews of the economy and business and for the way they share Buffett's business wisdom.

The publication of this year's letter was the spark that ignited several business media stories about Buffet and Berkshire Hathaway. Here's my pick of the best of them.

From Globe Investor: Red meat and a side of wisdom
"Over steak and a side of hash browns – Mr. Buffett had a New York cut, Salida CEO Courtenay Wolfe went for a rib eye – the legendary CEO of Berkshire Hathaway Inc. held forth on the economy, business, philanthropy and the all-important balancing act between work and play."

From Fortune: Berkshire bounces back
"Berkshire Hathaway reported today that its book value rose in 2009 by $21.8 billion, a record for the company. The previous record was $16.9 billion, set in 2006. In the interim between those two handsome results, however, Berkshire suffered its worst year ever -- in crisis-wracked 2008, when book value fell by $11.5 billion. That was only the second decline in Warren Buffett's 45-year history of running Berkshire."

From the AP via the LA Times: Buffett criticizes business world where shareholders hurt more than execs when risky bets fail
"Billionaire Warren Buffett, in his annual letter to shareholders, sternly urged companies to develop harsh penalties for executives who get into trouble with risky investments."

From the NY Times: Buffett’s Bargain Shopping Spree
"America’s most famous investor, Warren E. Buffett, struck a confident note in his annual letter to the shareholders of his holding company on Saturday, as he described in characteristically colorful terms how his businesses had largely ridden out the calamity of the financial crisis"

From Business Week: When CEOs Have Warren Buffett in Their Boardroom
"Who wouldn't love to pick up the phone and ask Warren Buffett for advice? People have spent more than $1 million just to have lunch with the man. He was voted the most admired corporate director in America by Directorship magazine in 2008. Chief executives of companies he has a stake in laud his patience, foresight, and ability to capture the essence of a complex financial situation in just a few words. They also like the fact that he usually leaves them alone as long as they're getting the job done. "

Wally's Comment: The Business Week article needs some interpretation. It's written by Alice Schroeder who is described as "a reporter for Bloomberg News." In fact, she is more than that.

Schroeder was an insurance industry analyst for Morgan Stanley who met Buffett in that capacity when Berkshire Hathaway acquired General Re in 1998. That's when she began hosting a dinner, with Buffett as the special guest, where several hundred people could pepper him with questions. For six years, until 2003, she was the only "sell side" analyst with direct access to him.

In 2003, Ms Schroeder left Morgan Stanley to go to work for Buffett. She also began working on the "authorized" biography The Snowball: Warren Buffett and the Business of Life.

The book was published in 2008. It revealed details of Buffett's somewhat eccentric private life. That's when Buffett decided not to continue attending Ms. Schroeder's dinner and when contact between them dropped off dramatically.

Several articles have suggested that the falling out was caused by publication of personal details that Buffett found uncomfortable. Whether that's true or not, reviewers found much good business material in the book and generally recommend it.

If you decide to read The Snowball, you may want to read another book on Buffett as well. Most books about him are about his investing style or secrets. But Roger Lowenstein has written an excellent biography titled, Buffett: The Making of an American Capitalist.

Wally's Working Supervisor's Support Kit is a collection of information and tools to help working supervisors do a better job. It's based on what Wally's learned in over twenty years of supervisory skills training. Click here to check it out.