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Record Crowd Makes Pilgrimage for Buffett
Thursday May 1, 8:24 pm ET
By Bill Rigby
NEW YORK (Reuters) - It's the time for spring pilgrimages, and this weekend brings one of the most unusual.
More than 15,000 devout capitalists are journeying from around the world to the Midwest U.S. city of Omaha, Nebraska, to hear the word of local resident Warren Buffett (News), a down-to-earth 72-year-old who happens to be one of the best stock investors the world has ever seen.
Buffett -- the second-richest man in the world behind Bill Gates (News) -- leads a normal life for 51 weeks of the year, driving himself to Gorat's Steakhouse and Dairy Queen in his Lincoln sedan. Despite his $36 billion fortune, he still only pays himself $100,000 a year, and counts Coke and hot dogs as his favorite meal.
But in the first weekend in May he, and his long-time business partner Charlie Munger, 79, are followed by adoring throngs to the Berkshire Hathaway Inc. (NYSE:BRKa - News) shareholder meeting, his annual six-hour sermon.
Requests for tickets hit an all-time high this year, according to Buffett's assistant, and attendance at Saturday's meeting looks set to smash last year's record of 14,000 or so that packed into Omaha's Civic Auditorium. This year Berkshire is relaying the meeting to a screen in a hall downstairs to deal with the expected overflow.
LINING UP AT DAWN
The shareholders, a mix of Wall Street power-brokers and ordinary Americans with their children, plus Buffett devotees from Europe, Asia and beyond, line up before dawn to get the best seats in the house.
Although their aggregate wealth probably far exceeds that of the crowd at the average Hollywood premiere -- Berkshire class A shares sell for $69,800 each -- there is no glitz. Dressed as they might be for church, they come to listen to Buffett's mixture of straightforward advice and sophisticated analysis of stocks, the economy, ethics and whatever else the shareholders ask him.
"For some people it's a cult-like gathering," says Henry Asher, a fund manager who holds Berkshire shares personally and for clients. "But for me it's more the experience of hearing him in real time, answering complex questions -- to the speed, the accuracy and depth of his responses."
Three years ago, at the height of the technology stock mania, Buffett's style of investing -- buying stocks cheap in areas you understand -- was out of favor and he was written off, like so much else, as "old economy."
Now the rules of the old economy have reasserted themselves, Buffett has enhanced his reputation with shareholders and established a new generation of followers.
"If you are interested in business management or investing in general, you are going to get a six-hour running dialogue that is probably unmatched by any collegiate course that you could enroll in," says Matt Sauer, portfolio manager at Oak Value Fund, which holds Berkshire shares. "People are both enlightened and entertained by Mr. Buffett and Mr. Munger onstage."
ENLIGHTENMENT
Enlightenment can be sudden, Asher says, recalling the time three years ago when Buffett pointed out that certain $500 billion companies would have to generate more profit than they had in revenues to post an acceptable investment return.
"A bunch of people turned to each other at the same time and said -- Cisco!," according to Asher. A lot of them sold the stock the next week, he says.
Buffett, who was born into the teeth of the Great Depression, never bought into the late 1990s stock mania, and has a level contempt for the greedy CEOs and dishonest Wall Streeters who fed it.
"Managers that always promise to 'make the numbers' will at some point be tempted to make up the numbers," Buffett quipped in his 2002 annual report, summing up his disdain for the system that built up share prices and fostered crooked CEOs over the past few years.
This year, shareholders can expect more of the same from Buffett, along with his usual message to dilute expectations of Berkshire's performance.
As he has done for the last few years -- and echoing his annual report published in March -- Buffett is likely to say he does not see any bargains in the stock market.
The only change this year is that Buffett will not be throwing the first pitch in the minor-league baseball game after the annual meeting.
Instead, Buffett, the consummate businessman, has invited shareholders to a barbecue at the Nebraska Furniture Mart, which, of course, he owns. |
