The Snowball, the first authorized biography of Warren Buffett, has been one of the most eagerly anticipated business books of the year. Published on Monday, the book is particularly timely because of Buffett's role in the credit crisis now roiling Wall Street.

A team of Portfolio.com writers, starting today with finance blogger Felix Salmon, are reviewing the book in sections over the next five days, and will be commenting on each other's reviews. Readers are invited to add their thoughts in the Comments section.

Warren Buffett is a great value investor—which means that he's a lucky value investor, something he himself readily admits. He found himself in the right place at the right time, blessed with a skill set and self-confidence which allowed him to become the richest man in the world, a title of which he was very proud.

But Buffett didn't reach those heady heights just by investing his money wisely. He needed more money than just his own, and he was good at finding O.P.M. (other people's money) in many different places.

Sometimes he would raise it by persuading people to give him their money to invest on their behalf. Sometimes he would borrow it—although that kind of leverage, debt finance, has never been particularly appealing to Buffett.

Instead, Buffett's biggest source of O.P.M. came from the most leveraged industry the world has ever invented: insurance.

One of the central ironies of insurance is that an industry predicated on safety has at its heart so much risk. Insurance premiums are essentially interest-free loans from the insured to the insurer, carrying an unknown maturity and an unknown principal amount.

With most loans, you have to pay back only the amount you borrowed; with insurance premiums, you might pay back hundreds of times that sum, if you (or, more to the point, the insured) are particularly unlucky.

When an investor buys an insurance company, then, he turns it into something of a race against time. He takes in premiums, and then invests them in the market, with the hope that his investment returns will be so great that by the time the claims come in, the premiums will more than cover them. If his investment returns are big enough, he can bring down the price of the insurance he's selling, thereby selling even more of it and having ever more money to invest.

It's a dangerous game, and it's prone to blowing up—as most investment companies do, sooner or later. Sometimes they're wiped out by a natural catastrophe, like a hurricane, where many large claims suddenly appear at once. At other times, the catastrophe is financial: A.I.G. Financial Products, for instance, brought down not only itself but also its parent by insuring complex debt instruments against default.

Buffett, like A.I.G.F.P., plays large-stakes games in the financial markets. In 2007, he took in an astonishing $4.5 billion by selling long-dated stock-index put options. He got a huge amount of money to play with, probably forever—but if certain indices perform very badly over the next 11 to 19 years, then he could find himself with a truly monster obligation down the road.

Indeed, when academic types talk about the proverbial Capital Decimation Partners—a hedge fund that looks as if it's getting strong but not excessive returns, and then one day implodes—the model they generally use is one where the fund does nothing but sell puts.

Obviously, Buffett does many things other than selling puts. His businesses are diversified across many different industries. But there's one thing they all have in common: they throw off substantial amounts of cash, which Buffett can then reinvest.

Author Alice Schroeder calls this the "snowball": you put money into a company, which generates more money, which you add to the snowball, generating more money still. Any time you take money out of the snowball, you're denying yourself much more than that sum in future gains. Buffett likes to say that when he lost $2,000 buying a gas station in the early 1950s, he really lost the $6 billion that money would otherwise have become.