- We have all heard about it...
- We have all watched the highlights on television...
- We have all read about it in the Wall Street Journal the following Monday morning...
And now I understand the meaning of " Woodstock of Capitalism"
As a Berkshire Hathaway shareholder, I have always mailed in my proxy and thought "some day I should attend this event, kindly referred to as the 'Woodstock of Capitalism.'" Considering Warren Buffett is 83 and Charlie Munger is 90, I moved this up on my "Bucket List of Business Must-Dos." Attending the annual shareholders meeting in Omaha on May 3 was without a doubt, one of the most enjoyable business experiences of my professional life.
There is much being reported in the current popular press on the meeting, as well as the remarks from Messrs. Buffett and Munger, so I won't repeat that commentary. But, what I would like to share is the vibe and experience of the meeting; something I encourage all business practitioners and students to attend (sooner than later).
Over 40,000 shareholders descended on Omaha this year for the all-day annual shareholders meeting. The activities begin on Friday night with a reception (live music & free buffet line) at Borsheims Jewelry Store, one of Berkshire Hathaway's holdings, and an anchor tenant at the Regency Court Mall, just a short distance from Mr. Buffett's "Happy Hollow" neighborhood. It's quite the event and shareholders should attend as this begins creating the excitement and energy for the annual meeting the next day.
The doors to the CenturyLink Center open at 7:00 a.m. Saturday. Little did I know when I arrived at 6:15 a.m. there would be a queue of shareholders almost three blocks long; some had camped out all night, reminiscent of the lines for rock concerts back in the day! It is important to note, Berkshire's first shareholder meeting had 12 shareholders present and was held in the Orpheum Theater in Omaha.
It is also important to note that someone who invested $1,000 at the outset of Buffett purchasing enough stock to control the company in 1965, would now have more than $10m, compared to around $100k if they had invested the same amount of money in the S&P 500.
Seating is "first-come first-served" with no seats reserved for major shareholders. The stage is set up Spartan, with nothing more than a six 6-foot table and two chairs that Buffett and Munger will use to address questions over the next six hours. You begin getting the feeling as you walk into CenturyLink that this event is truly done in Buffett style: simple, fun, no teleprompters, personal handlers or high-tech screens and monitors, no logos on the stage. There's just a simple blue curtain backdrop, and lastly no Twitter hashtags — this is all about hearing and engaging Warren Buffett and Charlie Munger live and enjoying their simple folksy style.
To help enjoy the long morning session, Berkshire provides free coffee and bear claws for everyone! The meeting does reserve a few rows in front for the board of directors and Berkshire Hathaway portfolio company managers, who Buffett calls on at times to add additional insight into the questions presented to him from the audience. I thought this was very well done!
Shareholders mark their seats with jackets, hats, scarves, etc. and then visit the adjoining exhibit hall, which is similar to an industry trade show with all of the Berkshire Hathaway companies displaying their goods in booths and engaging shareholders. As I am walking through the hall, I ran upon Buffett himself, walking around talking with all the employees working in the booths and thanking them for coming (see pic at bottom).
Also at 7:30 a.m. in the exhibit hall, you can always catch Buffett, Bill Gates and others engaging in the "Newspaper Tossing Challenge." Buffett, who likes to invest in the newspaper business said: "Our target will be a Clayton Home porch, precisely 35 feet from the throwing line — I tossed about 500,000 papers when I was a teenager, so I think I'm pretty good. Challenge me: I'll buy a Dilly Bar for anyone who lands his or her throw closer to the doorstep than I do." Clayton Homes and Dairy Queen, maker of Dilly Bars, are of course Berkshire Hathaway companies.
The meeting begins promptly at 8:30 as Buffett and Munger walk to the stage, have a seat and welcome everyone in a very casual manner. First on the agenda is the "company movie." Prior to attending, I heard about the "company movie" and expected a typical corporate production — not Buffett style. The movie, over 30 minutes in length, is an entertaining movie characterizing "Team Berkshire" as competitive winners with several celebrity appearances, including Buffett and singer-songwriter Paul Anka singing a version of "My Way."
After the "company movie" Buffett begins the meeting with "one slide" showing the Berkshire Hathaway condensed and abbreviated income statement. This is the only slide you will see during the entire meeting! He talks a few minutes about the challenges and opportunities of Berkshire Hathaway, praises the wonderful managers and employees who make-up the Berkshire Hathaway holdings, and then goes directly to questions from a panel of four national journalists and four wall street analysts; rotating his questions in round-robin format between the panel and the shareholders, who are able to speak from several stations set up in the hall. Open mike questions from shareholders also included university students, and from one individual who had traveled from Thailand for the meeting as well as an individual who began by saying he named his new son "Warren."
After six hours of questions from the audience (one hour break for lunch), Buffett stops the questions promptly at 3:30 p.m. and conducts the formal session of the shareholders meeting, which lasts 30 minutes. I was surprised that Buffett has no assistant, lawyers, or staff on stage to help him conduct the official session of the shareholder meeting. He has a pad and paper and runs the entire process from chairing the meeting and guiding the formal agenda, to election of the board members, to general proceedings. Quite an effort considering this man is 83, began his day at 7:00 a.m. in the exhibit hall tossing newspapers and visiting shareholders and his subsidiary company associates!
At the conclusion of the shareholder meeting, there is a post meeting reception Saturday evening at The Nebraska Furniture Mart, another Berkshire Hathaway company. Buffett traditionally shows up and hawks goods with the sales team. The Nebraska Furniture mart is the company that Buffett bought from "Mrs. B" on a simple handshake in 1983. NFM is located on Farnam Street, the same street where Buffett resides and the same street where Berkshire Hathaway's modest corporate offices are located. And, of course, before heading out of town it is obligatory to drive by Buffett's house where he has lived for 40 years. It truly provides insight into the modesty of this man and his material possessions.
As events winded down Saturday, I enjoyed a steak dinner at Gorat's Steak House, which is Buffett's favorite in Omaha. As you might guess, it's a simple place and reasonably priced — but don't miss the Wall Street Journal articles and New York Times articles on Buffett and his favorite steak house inconspicuously placed on a wall near the exit. The earliest reservation I could get was 10:00 p.m., and Gorat's normally closed on Sunday, remains open all day for shareholders who want to eat there before leaving town.
Sunday begins the final day of activities with Borsheims opening at 9:00 a.m. Buffett shows up in the afternoon to help the sales team hawk goods and takes a "break" to play Ping-Pong with board member Bill Gates (see pic at top).
So, in closing I will say this was an extraordinary weekend. As a business executive, I can say Warren Buffett is the sort of individual and leader who I believe has most all of it figured out. In a day when it's easy to become cynical about Wall Street and industry in general, spending time around Buffett and Munger, and hearing these men address business issues for six hours will help you get reenergized about free enterprise.
Now that I have experienced the "Woodstock of Capitalism," I can say it is everything you have heard and more. If you have the time and desire, be sure to attend once in your business or academic career.