WHEN GOLDMAN SACHS felt in need of a capital injection to bolster its balance sheet and reputation, it turned to Warren Buffett. The terms of his $5 billion investment looked onerous to the bank - Buffett is famous for striking a hard bargain - but the market was none the less impressed. The Buffett imprimatur was worth it: his support is the best currency available in these troubled times.

For more than 30 years he has been the most revered businessman in the US: an all-American hero from Omaha. Owlish, rumpled, with suits from JC Penney's discount rack, the sage is a legend in his own lifetime. On this side of the Atlantic, opinion polls usually suggest that Sir Richard Branson is the corporate creature whom the British most admire. For the French, the footballer Zinedine Zidane is numero un.

There must be a lesson somewhere in these choices of hero. Americans are attracted to the down-home image Buffett has cultivated throughout his life. His office is in a low-rent business park in Nebraska. His favourite meal (indeed practically his only meal) is burger and fries followed by strawberry ice-cream, washed down with cherry Coke.

We British, by contrast, have far more sophisticated tastes. Our hero worship is reserved for a one man walking photo opportunity with a talent for exploiting fads through a “cheeky chappie” brand proposition. A British Buffett would be based in Accrington, or Redcar. Somehow, an offshore Virgin islander wearing a pully appeals to us more, tax or no tax.

Alice Schroeder does not allow herself any reflections on the secret of Buffett's “hero status”. Her 1,000 pages permit no room for doubt or questioning. The answer is entirely obvious to her: he has made simply oodles of money, for himself and for his shareholders. What more could anyone want?

He paid $7.50 a piece for shares in Berkshire Hathaway in 1965. The shares peaked at the end of last year at more than $155,000 and, even after the recent downturn, are trading above $130,000. Buffett has beaten the Dow for all periods from one week to five years, and by an increasingly comfortable margin. Schroeder recounts the many corporate coups that have lain behind this astonishing performance with uncritical commentary: this is essentially an authorised biography, based on “countless hours” of discussions with our hero. So we should not expect a critical dissection of the Buffett secret, and we do not get one.

Are there any clues as to how he has done it? Certainly the help of his long-term partner Charlie Munger has been a vital part of the formula. He has focused single-mindedly on wealth creation throughout. He has never been afraid to buy unfashionable stocks at low prices or to get his hands dirty with board positions. He is not a remote portfolio investor. He has avoided fads and fancies. Berkshire Hathaway was a manufacturer of suit lining based in a decaying whaling town in Massachusetts.

There has been no particular industrial logic to his strategy. He has owned Salomon Brothers; he has been, or still is, in insurance, reinsurance, electricity generation, and newspaper publishing; and is the proud owner of the Medical Protective Company. This approach to investing does not work in theory. In academia we know that shareholders are not interested in highly diversified conglomerates, which typically destroy value. If shareholders wish to diversify their portfolio, they can do so themselves more effectively by buying the shares of companies in the individual sectors. So I can confidently assert that Buffett is a statistical aberration, an exception that proves the rule only more vividly.

As he prepares for his ninth decade, he can afford to be relaxed about this academic verdict on his performance. In addition to a still robust stock price, he has the comfort of having given more than $30 billion to the Gates Foundation, a remarkable gift. His conclusion was that Gates had proved himself adept at running a charitable foundation with a clear focus, so that was the best destination for his surplus funds rather than setting up a memorial to himself. It is hard to think of many other billionaires who have taken that modest line.

Buffett comes across as a strangely sympathetic character in spite of Schroeder's uncritical approach. It takes a while to get to love him. But over time he grows on you. And by the end we can even forgive him, as his wife clearly did, his unusual ménage à trois maintained for many years. If the burghers of Omaha could live with Susie and Astrid, who are we to complain?

So if you have $130,000 (£73,961) at your disposal, a share in Berkshire Hathaway might be a nice Christmas present for your nearest and dearest. Alternatively, if Sir Richard is still your man, you could book them a space voyage on Virgin Galactic.

The Snowball: Warren Buffett and the Business of Life by Alice Schroeder
Bloomsbury, £25 Buy the book

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