This last weekend I had the great pleasure of going to see Warren Buffett at the Berkshire Hathaway Annual meeting in Omaha. Even though I started shopping for hotels a couple months ago, just about everything within 20 miles was full. So we decided to stay in Kansas City and just drive up to Omaha on saturday – about a 3 hour drive.
By the way, if you are planning a vacation this year, I highly recommend Hotwire.com. We have used them in the past to get a great price renting a car and we got another killer deal on our hotel this year. We ended up getting a 4-star hotel on the Plaza (the best place to be in KC, in my opinion) for $100 a night. It was definitely the nicest hotel I have ever stayed at – I mean the toilet paper rolls had the end folded to a point – Linda never does that for me. 
Anyway, back to the topic. The event was held at the Qwest center in Omaha which is basically like an area and convention center in one. There were about 40,000 people there and even though we got there an hour before it started, we were sitting pretty high up.
The meeting began with an hour long video about a lot of Berkshire’s Companies. After that, the next six hours – really all of the meeting – consisted of Warren and Charlie Munger in an open Q&A session. Warren likes to talk, and he is very good at elaborating and explaining in simple terms why he does what he does.
While I am really glad I went, I think anyone who is interested in learning how Warren does what he does can learn more from reading his annual reports than attending the meeting. It may have been the questions that he was asked, but I feel that there is more to be gleaned from his reports than what I got at the meeting.
However, there is something to be said for being there listening to him. It was fun.
So, I didn’t take as many notes as I had planned, but I mostly picked up nuggets of wisdom. Some of these are from Warren and some are from Charlie.
Work and life…
- Warren said that the common thread with all the managers of his companies is that they absolutely love what they do. That’s what he looks for in a manager.
- “Find your passion and don’t let anything stop you.”
- “Always try to go to bed a little wiser than when you woke. If you do that for a long time, you will be a success.”
Investing…
- When investing Warren is extremely patient. He waits and waits and waits for the perfect opportunity. Then he takes action.
- Warren likes businesses that get a great return on capital and require little capital to run them.
- You don’t need to find very many winners. Just a couple big winners make all the difference.
When asked about the resiliency of the US economy…
- They are both very confident the in US and think this is still a good place to invest.
- Don’t ever underestimate human’s abilities to solve the world’s problems.
When speaking about the dishonesty of much of Wall Street…
- Create a business structure that minimizes the weaknesses of human behavior. Eliminate the opportunities for transgressions.
- The system that holds no one accountable is a bad system. Everyone needs to be responsible for their actions.
- “Having integrity is the safest way to do business.”
Random…
- Charlie is VERY optimistic about the future of solar energy, but he says not to buy panels now because they will be much cheaper in the near future.
- Warren likes to do video interviews over newspaper interviews, because he finds that it more accurately portrays what he meant to say.
One of my favorite things that was said was that they both admitted they aren’t particularly brilliant, it is just that they work hard to avoid stupidity. I have been soaking this one up the last couple days and am working to minimize the stupid things I do!
So, there was a lot more I got out of the meeting, but this is the gist of it. Were you there or have you ever been to see Warren? What did you think?
{ 12 comments… read them below or add one }
Some thoughts from an infrequent passer-by:
I’m a little concerned about Buffett because he gives money to support abortion (a lot of money).
http://www.wnd.com/news/article.asp?ARTICLE_ID=50815
While you don’t seem to be lifting him up as a “perfect” person or even a Christian, we do have to be careful whom we model ourselves after and support.
These notes next to each other were interesting:
* Don’t ever underestimate human’s abilities to solve the world’s problems.
* Create a business structure that minimizes the weaknesses of human behavior. Eliminate the opportunities for transgressions.
In the first point, he is uplifting humanism (humans as the solution to all the world’s problems instead of Jesus Christ), yet admitting in the second point that we have “weaknesses” (which Christians would call sin or a sinful nature).
Not sure I got the Christian perspective on this meeting from your post. Would be good in light of your blog title (CPF).
Mark,
you are right I should have addressed that a bit. I wasn’t aware of his financial support of abortion, but since he isn’t a professed Christian, it doesn’t really surprise me. Just to be clear, I in no way look at Warren as a moral compass or role model. But, he has had a great deal of success and I believe a lot of it has to do with his following of Biblical principles – whether he knew it or not.
So, I look at everything he says with a grain of salt – and take the good that I can learn (and lines up with the Bible) from and leave everything else. So when I see him saying something like this “Don’t ever underestimate human’s abilities to solve the world’s problems.” it doesn’t cause me to start thinking from a humanist perspective and conclude that I don’t need God – rather it reminds me of Phil 4:13. And when I see him talking about a structure that eliminates opportunities for transgressions, I think of Romans 13:14 where it talks about making no provision for the flesh.
So, bottom line, you are right, I should have been a little more clear about how I am interpreting what I hear from him.
Hey Bob,
Your response really encouraged me. I appreciate your humility and willingness to listen to other viewpoints.
I definitely agree with everything you said. I sometimes tend to “throw the baby out with the bathwater,” but we can glean principles from others, Christian or not (as long as they line up with Scripture).
Thanks for your blog and keep up the great work.
~Mark
P.S. It would be such a blessing to see a biblical Christian with that much wealth who is using it to build God’s kingdom instead of his own.
I definitely agree with the stupidity aspect. When we look at laws in our country, one can certainly observe holes in the system…I believe that there should be a “Stupidity Law” in all cases. It should hold all people accountable for their actions and provide consequences for them.
Glad to hear you had a good time.
While I don’t look at Warren as the ULTIMATE role model, I think it’s hard to deny that he’s achieved success as an investor. As such, I do let him influence me in this area, including reading The Intelligent Investor, which he says is the best book on investing ever written.
But since I don’t know him personally, I obviously won’t say that I agree with him in regards to every issue of life.
As far as the post goes, I love his quotes about finding your passion and going to bed a bit wiser than when you woke up. They really resonate with me.
Bob, did you get a chance to ask him a question?
Darren, I didn’t get a chance. It was pretty tough competition, there were about 40K people there and there were probably 20 questions asked from the audience – maybe next time
I share your enthusiasm and perspective. I too spent time at Qwest Center last Saturday. One other interesting nugget was that he also seem to feel that education was useful, but over valued, and that wisdom is what ultimately makes you successful. Finally, his most famous advice, which he repeated on Saturday, is to only invest in businesses you understand.
That is really cool that you went. It sounds a lot like a sporting event, where sometimes you’d rather just watch it from home?
I think you need to have a stern discusson with Linda about the lack of folding of TP in your household!
Nice post. I really admire Warren Buffet. His words are like a gospel in the investment world. Clearly an Icon and a legend.
I am a shareholder and my questions have not been picked (I suppose the journalists got hundreds of them by e-mail, so which ones to select ?). These would have been my questions:
1. Do your partner Charles Munger or you get investment ideas from reading the financial magazines/newspapers (if yes, what was the last article/idea) ?
2. Most expensive 3 stock investing mistakes in the last 5 years and why (I suppose you used the same methodology as for all the other investmensts) ?
3. Do you read financial blogs and if yes which ones ?
4. From the letter to the shareholders:
“First, we have never had any five-year period beginning with 1965-69 and ending with 2005-09 – and there have been 41 of these – during which our gain in book value did not exceed the S&P’s gain.”
Of course ‘past performance is not an indication for future results’ but this makes a compelling argument.
What is your best explanation that not more people buy Berkshire shares at least to be a part of their portfolio and keep buying mutual funds and even worse go stock picking themselves ?
My wife and I went and we had a really good time. We work up super early at 5am and there were already thousands of people in line!
It was definitely a great experience as I have been following Buffett for awhile and it was good to finally experience the ‘Woodstock for capitalists”.
I love Warren’s advice, because it’s so simple and even though he is a very intelligent person, he is able to break down complex concepts into easy to understand tidbits.
I was reading a book about the meetings on the way there, and I was saddened to find out that Buffett is a self-professed agnostic. Which I find ironic as a lot of the principles that he follows are from the Dale Carnegie books, (Carnegie’s books were written on Christian principles).
Overall, it was a great time to hear what the world’s best investor ever had to say in person!
My comment is primarily directed to The Cynical Investor. It seems to me that his questions are of the “magic bullet” type. That, for example, he might be hoping that Buffett or Munger would point him to columnists/bloggers that Cynical could then read in hopes of improving his own investing success rate.
But that’s not how successful investing works.
After all, Buffett himself says repeatedly “only invest in businesses you understand”…and you’re not going to ‘understand’ a company by reading financial blogs and articles.
(Think about it. How many people actually check into the writers of such articles, columns and blogs and see how successful *they* are at investing? Heck, how many people even *think* about doing that? Much less know how to check it out.)
To understand a business, you have to get down and dirty. Do the necessary research. And ‘research’ isn’t just reading about what others say in their blogs and columns. Or looking at how a company’s stock performs.
Rather, it includes pouring over a company’s annual reports…not just skimming through them. It requires understanding what those financial reports are actually saying…and asking questions if you don’t understand what they’re saying or how the company justifies this or that. (And I’m not talking about asking financial writers or posting questions on blogs. You don’t seriously think that’s what Buffett does, do you???)
To follow Buffett’s advice, you have to learn what it is that a particlar business does to make money and how that’s sustainable. (Shoot. Bernie Madoff wouldn’t have been able to steal so much money from so many people if his investors had done this.)
And this leads to Cynical’s question #4: “What is your best explanation that not more people buy Berkshire shares at least to be a part of their portfolio and keep buying mutual funds and even worse go stock picking themselves?”
Apparently Cynical doesn’t understand human nature and human needs…or human finances.
For example, Company A offers its employees the opportunity to invest in this or that retirement fund. The workers don’t know anything about investing and don’t feel comfortable doing it by themselves. Plus their investment dollars are pre-tax. Maybe the company even kicks in some money. Does Cynical think those employees should *not* invest that way…even if the practical/emotional alternative for these folks is to not invest at all?
Does Cynical honestly not understand the genuine value of mutual funds to many people? That they’re affordable? That people with a small amount of money can diversify? That they are more liquid that most forms of investment and, in many cases, it’s easy to shift between funds? And that, in the long run, they’ll have far more money than they would by putting that money in a savings account?
Sure. Most portfolio managers don’t outperform the market…and there are fees involved that can reduce your ROI. But most people are going to do far better with mutual funds than with no investing at all. And it’s unreasonable to expect most people to be “active” investors. It’s not like financial investing is a required course in high school!
Frankly, based on his own words, I’m convinced that Warren Buffett understands that. Does not feel that people who don’t buy BH stocks are making clueless mistakes. (And, like it or not, a person doesn’t have to be a Christian to be wise or compassionate…or understanding.)
I’d also venture to say that Buffett doesn’t believe he actually made “Most expensive 3 stock investing mistakes in the last 5 years and why…” After all, just because something doesn’t work out as expected means it was a “mistake”. Perhaps Cynical ought to simply ask “Do you think you’ve made stock investing mistakes in the last 5 years? If so, why do you consider them mistakes?”