Alice Schroeder (born December 14, 1956) is an American executive, financial journalist, and author who was
Berkshire Hathaway
Berkshire Hathaway Inc. () is an American Multinational corporation, multinational conglomerate (company), conglomerate holding company headquartered in Omaha, Nebraska, United States. Its main business and source of capital is insurance, from ...
's leading
sell-side insurance analyst at
Morgan Stanley
Morgan Stanley is an American multinational investment management and financial services company headquartered at 1585 Broadway in Midtown Manhattan, New York City. With offices in more than 41 countries and more than 75,000 employees, the fir ...
and later became
Warren Buffett
Warren Edward Buffett ( ; born August 30, 1930) is an American business magnate, investor, and philanthropist. He is currently the chairman and CEO of Berkshire Hathaway. He is one of the most successful investors in the world and has a net w ...
's appointed biographer. Schroeder remains a widely-regarded insurance expert, having most recently served as a Non-Executive Director on the Board of
Prudential PLC
Prudential plc is a British Multinational corporation, multinational insurance company headquartered in London, England. It was founded in London in May 1848 to provide loans to professional and working people.
Prudential has dual primary list ...
. In the first week of October 2008, she published ''
The Snowball: Warren Buffett and the Business of Life'', a
''New York Times'' bestseller. As a project manager for the US
Financial Accounting Standards Board
The Financial Accounting Standards Board (FASB) is a private standard-setting body whose primary purpose is to establish and improve Generally Accepted Accounting Principles (GAAP) within the United States in the public's interest. The Securi ...
, she oversaw the release of
SFAS No. 113, a critical change in US
reinsurance
Reinsurance is insurance that an insurance company purchases from another insurance company to insulate itself (at least in part) from the risk of a major claims event. With reinsurance, the company passes on ("cedes") some part of its own insu ...
accounting regulations. Since 2008, Schroeder has worked as a
columnist
A columnist is a person who writes for publication in a series, creating an article that usually offers commentary and opinions. Column (newspaper), Columns appear in newspapers, magazines and other publications, including blogs. They take the fo ...
for
Bloomberg News
Bloomberg News (originally Bloomberg Business News) is an international news agency headquartered in New York City and a division of Bloomberg L.P. Content produced by Bloomberg News is disseminated through Bloomberg Terminals, Bloomberg Televi ...
.
Early life and education
Alice Lynnette Davey is a native of
Dallas
Dallas () is the List of municipalities in Texas, third largest city in Texas and the largest city in the Dallas–Fort Worth metroplex, the List of metropolitan statistical areas, fourth-largest metropolitan area in the United States at 7.5 ...
, Texas.
[
] She received a
BBA in finance and an
MBA
A Master of Business Administration (MBA; also Master's in Business Administration) is a postgraduate degree focused on business administration. The core courses in an MBA program cover various areas of business administration such as accounti ...
from the
McCombs School of Business
The McCombs School of Business (McCombs School or McCombs) is a business school at The University of Texas at Austin, a public research university in Austin, Texas. In addition to the main campus in Downtown Austin, McCombs offers classes outside ...
at the
University of Texas at Austin
The University of Texas at Austin (UT Austin, UT, or Texas) is a public research university in Austin, Texas. It was founded in 1883 and is the oldest institution in the University of Texas System. With 40,916 undergraduate students, 11,075 ...
in 1978 and 1980.
Career
Work for the Financial Accounting Foundation
From 1980 to 1991, Schroeder worked as a
CPA at
Ernst and Young
Ernst & Young Global Limited, trade name EY, is a multinational professional services partnership headquartered in London, England. EY is one of the largest professional services networks in the world. Along with Deloitte, KPMG and Pricewaterh ...
, starting in Houston.
In 1991 Schroeder became a project manager for the
Financial Accounting Standards Board
The Financial Accounting Standards Board (FASB) is a private standard-setting body whose primary purpose is to establish and improve Generally Accepted Accounting Principles (GAAP) within the United States in the public's interest. The Securi ...
of the
Financial Accounting Foundation
The Financial Accounting Foundation (FAF) is located in Norwalk, Connecticut, United States. It was organized in 1972 as a non-stock, Delaware Corporation. It is an independent organization in the private sector, operating with the goal of ensur ...
in Norwalk, Connecticut. Her projects focused on ending abusive insurance industry accounting practices primarily due to the use of finite risk transfer contracts, an issue which later became central to the criminal allegation faced by employees of
AIG
American International Group, Inc. (AIG) is an American multinational finance and insurance corporation with operations in more than 80 countries and jurisdictions. , AIG companies employed 49,600 people.https://www.aig.com/content/dam/aig/amer ...
and
Berkshire Hathaway
Berkshire Hathaway Inc. () is an American Multinational corporation, multinational conglomerate (company), conglomerate holding company headquartered in Omaha, Nebraska, United States. Its main business and source of capital is insurance, from ...
-owned
General Re
General Reinsurance Corporation is an American multinational property/casualty and life/health reinsurance company offering a range of reinsurance products and services. The company is a primarily direct reinsurer and is represented in all major ...
,. Schroeder's work included overseeing
the release of:
*SFAS No. 113: ''Accounting and Reporting for Reinsurance of Short-Duration and Long-Duration Contracts'',
*EITF Issue 93-6
''Accounting for Multiple-Year Retrospectively Rated Contracts (RRC's)'' and
*EITF Issue 93-14
''Accounting for Multiple-Year Retrospectively Rated Insurance Contracts by Insurance Enterprises and Other Enterprises''
When
Maurice R. Greenberg
Maurice Raymond “Hank” Greenberg (born May 4, 1925) is an American business executive and former chairman and chief executive officer of American International Group (AIG).
Early life
Greenberg was born into a Jewish family in Greenwich Vil ...
was terminated from AIG at the insistence of
New York State Attorney General
The attorney general of New York is the chief legal officer of the U.S. state of New York and head of the Department of Law of the state government. The office has been in existence in some form since 1626, under the Dutch colonial government of ...
Eliot Spitzer
Eliot Laurence Spitzer (born June 10, 1959) is an American politician and attorney. A member of the Democratic Party (United States), Democratic Party, he was the 54th governor of New York from 2007 until his resignation in 2008.
Spitzer was b ...
, five employees of General Re and AIG were also indicted in connection with an accounting fraud at AIG that overstated reserves in this and subsequent quarters, the accounting rules violated were those Schroeder oversaw as an FASB project manager. She testified as an
expert witness
An expert witness, particularly in common law countries such as the United Kingdom, Australia, and the United States, is a person whose opinion by virtue of education, training, certification, skills or experience, is accepted by the judge as ...
about accounting for finite risk reinsurance at this federal criminal conspiracy trial in
Hartford, Connecticut
Hartford is the capital city of the U.S. state of Connecticut. It was the seat of Hartford County until Connecticut disbanded county government in 1960. It is the core city in the Greater Hartford metropolitan area. Census estimates since the ...
. Warren Buffett was never named in the case.
Former AIG CEO Greenberg and CFO Howie Smith disputed in court whether the New York AG had the power to pursue a civil fraud case against them. The U.S. Second Circuit Court of Appeals has overturned the convictions of all five Gen Re and AIG employees. In mid-2012 they signed deferred prosecution agreements with the Department of Justice that acknowledged mistakes and misjudgments but not criminal wrongdoing.
Insurance analyst
In 1993, Schroeder left the FASB to work as a sell-side insurance investment analyst for Dowling Partners in Hartford, a boutique firm run by V.J. Dowling. In 1994, Schroeder moved to CIBC Oppenheimer
CIBC Capital Markets is the investment banking subsidiary of the Canadian Imperial Bank of Commerce. The firm operates as an investment bank both in Canadian and global equity and debt capital markets. The firm provides a variety of financial ...
. In 1998, she joined PaineWebber. In 1998 Schroeder wrote Warren Buffett
Warren Edward Buffett ( ; born August 30, 1930) is an American business magnate, investor, and philanthropist. He is currently the chairman and CEO of Berkshire Hathaway. He is one of the most successful investors in the world and has a net w ...
a letter requesting a meeting for her clients about Berkshire's recent acquisition of the reinsurer General Re
General Reinsurance Corporation is an American multinational property/casualty and life/health reinsurance company offering a range of reinsurance products and services. The company is a primarily direct reinsurer and is represented in all major ...
, which she covered. Afterward, Buffett approached her to become the first and only Wall Street sell-side analyst to whom he would speak. Schroeder then initiated coverage of the hard-to-analyze Berkshire Hathaway
Berkshire Hathaway Inc. () is an American Multinational corporation, multinational conglomerate (company), conglomerate holding company headquartered in Omaha, Nebraska, United States. Its main business and source of capital is insurance, from ...
in a widely-admired report. This was the first significant Wall Street coverage the company received. In 2000, Schroeder was hired by Morgan Stanley
Morgan Stanley is an American multinational investment management and financial services company headquartered at 1585 Broadway in Midtown Manhattan, New York City. With offices in more than 41 countries and more than 75,000 employees, the fir ...
, where she was voted the #1 property-casualty insurance analyst two years in a row after having been ranked a member of the ''Institutional Investor'' All-America Research Team for seven years.['']Institutional Investor
An institutional investor is an entity which pools money to purchase securities, real property, and other investment assets or originate loans. Institutional investors include commercial banks, central banks, credit unions, government-linked co ...
''. October 2001. October 2002. In 2002. Schroeder was voted one of ''Business Insurance
Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to hedge ...
'' magazine's "Rising Stars". That year, she was also named analyst/researcher of the year by ''The Review'', a reinsurance industry publication.
Books and reporting
''The Snowball''
In 2003, Schroeder has reported that an investment writer approached her to jointly write a book about Warren Buffett
Warren Edward Buffett ( ; born August 30, 1930) is an American business magnate, investor, and philanthropist. He is currently the chairman and CEO of Berkshire Hathaway. He is one of the most successful investors in the world and has a net w ...
and corporate governance
Corporate governance is defined, described or delineated in diverse ways, depending on the writer's purpose. Writers focused on a disciplinary interest or context (such as accounting, finance, law, or management) often adopt narrow definitions th ...
. Schroeder felt this was not the right book and discussed another idea with Buffett, who offered to cooperate with her if she wrote a more comprehensive book.[ In June 2003, Schroeder, then a managing director at ]Morgan Stanley
Morgan Stanley is an American multinational investment management and financial services company headquartered at 1585 Broadway in Midtown Manhattan, New York City. With offices in more than 41 countries and more than 75,000 employees, the fir ...
, began traveling to Omaha
Omaha ( ) is the largest city in the U.S. state of Nebraska and the county seat of Douglas County. Omaha is in the Midwestern United States on the Missouri River, about north of the mouth of the Platte River. The nation's 39th-largest city ...
to research and write Buffett's official biography, '' The Snowball''. Schroeder spent approximately 2,000 hours with Buffett and interviewed 250 other people. Schroeder reportedly received a $7 million book contract for publishing ''The Snowball''.
''The Snowball'' was published September 29, 2008, and debuted at #1 on ''The New York Times'', ''The Wall Street Journal
''The Wall Street Journal'' is an American business-focused, international daily newspaper based in New York City, with international editions also available in Chinese and Japanese. The ''Journal'', along with its Asian editions, is published ...
'' and ''Publishers Weekly
''Publishers Weekly'' (''PW'') is an American weekly trade news magazine targeted at publishers, librarians, booksellers, and literary agents. Published continuously since 1872, it has carried the tagline, "The International News Magazine of B ...
'' lists of hardcover nonfiction best-sellers and remained on the bestseller list for more than three months. After the book's publication, Buffett reportedly stopped speaking to Schroeder. He canceled the yearly dinner Schroeder hosted in Omaha at which she interviewed him before nearly two hundred people. ''The New York Times'' reviewer Janet Maslin
Janet R. Maslin (born August 12, 1949) is an American journalist, best known as a film and literary critic for ''The New York Times''. She served as a ''Times'' film critic from 1977 to 1999 and as a book critic from 2000 to 2015. In 2000 Maslin ...
called it one of her ten favorite books of 2008. ''Time
Time is the continued sequence of existence and events that occurs in an apparently irreversible succession from the past, through the present, into the future. It is a component quantity of various measurements used to sequence events, to ...
'' and ''People
A person (plural, : people) is a being that has certain capacities or attributes such as reason, morality, consciousness or self-consciousness, and being a part of a culturally established form of social relations such as kinship, ownership of pr ...
'' also named ''The Snowball'' one of the ten best books of the year.['']People
A person (plural, : people) is a being that has certain capacities or attributes such as reason, morality, consciousness or self-consciousness, and being a part of a culturally established form of social relations such as kinship, ownership of pr ...
''. December 29, 2008.
MBIA and Bill Ackman report
In 2002, activist hedge fund manager Bill Ackman
William Albert Ackman (born May 11, 1966) is an American billionaire investor and hedge fund manager. He is the founder and CEO of Pershing Square Capital Management, a hedge fund management company. His investment approach makes him an activis ...
challenged bond insurer MBIA
MBIA Inc. is an American financial services company. It was founded in 1973 as the Municipal Bond Insurance Association. It is headquartered in Purchase, New York, and as of January 1, 2015 had approximately 180 employees. MBIA is the largest bo ...
's AAA rating
A rating is an evaluation or assessment of something, in terms of quality, quantity, or some combination of both.
Rating or ratings may also refer to:
Business and economics
* Credit rating, estimating the credit worthiness of an individual, c ...
calling for a division between MBIA's bond insurers' structured finance business and its municipal bond insurance side. Ackman published a report raising extensive concerns about MBIA's continued solvency. He gave Schroeder's team an early draft and suggested they downgrade MBIA, but they initially resisted. Schroeder and her colleague Vinay Saqi eventually responded to Ackman's report, partially acknowledging Ackman's thesis.
Goldman Sachs pistol retraction
On November 30, 2009, Schroeder published an opinion piece
An opinion piece is an article, usually published in a newspaper or magazine, that mainly reflects the author's opinion about a subject. Opinion pieces are featured in many periodicals.
Editorials
Opinion pieces may take the form of an editorial, ...
on Bloomberg News
Bloomberg News (originally Bloomberg Business News) is an international news agency headquartered in New York City and a division of Bloomberg L.P. Content produced by Bloomberg News is disseminated through Bloomberg Terminals, Bloomberg Televi ...
stating that several Goldman Sachs
Goldman Sachs () is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered at 200 West Street in Lower Manhattan, with regional headquarters in London, Warsaw, Bangalore, H ...
bankers, in a show of prescience about potential social unrest, had obtained pistol permits. In a December 9, 2009, ''The Wall Street Journal'' blog post, journalist Susanne Craig
Susanne Craig is a Canadian investigative journalist who works at ''The New York Times''. She was the reporter who was anonymously mailed Donald Trump's 1995 tax returns during the 2016 presidential election. In 2018, she was an author of ''The ...
reported that New York City Police Department
The New York City Police Department (NYPD), officially the City of New York Police Department, established on May 23, 1845, is the primary municipal law enforcement agency within the City of New York, the largest and one of the oldest in ...
spokesman Paul J. Browne retracted certain earlier information it had earlier given Alice Schroeder on the number of banker permit applications, which was part of the basis for the column. Bloomberg has since re-published the column on its website in corrected form.
First Call estimate
In 2002, ''The Wall Street Journal
''The Wall Street Journal'' is an American business-focused, international daily newspaper based in New York City, with international editions also available in Chinese and Japanese. The ''Journal'', along with its Asian editions, is published ...
'' broke the news that Thomson Reuters
Thomson Reuters Corporation ( ) is a Canadian multinational media conglomerate. The company was founded in Toronto, Ontario, Canada, where it is headquartered at the Bay Adelaide Centre.
Thomson Reuters was created by the Thomson Corpora ...
' First Call, a research database which compiles the earnings estimates of Wall Street analysts to publish consensus earnings estimates for public companies, removed Schroeder's estimate on Chubb Insurance from the database after Schroeder refused to raise her estimate on Chubb to match that of other analysts, whom she disagreed with. Once other investment banks complained about similar experiences, First Call agreed to include a broader range of analyst forecasts in its estimates and better disclose the factors that account for their differences in judgment.
References
External links
{{DEFAULTSORT:Schroeder, Alice
Living people
McCombs School of Business alumni
American women journalists
1956 births
American business and financial journalists
American business writers
Women business writers
American women essayists
Women business and financial journalists
21st-century American women