Shareholder Weekend in Omaha
Thursday.
We're in Lincoln, Nebraska ...storm over Omaha, airport closed... flight diverted, have to refuel.
Now waiting for word from Omaha where thunderstorm is hovering over the airport. Three other flights await.
Cleared for Omaha after an hour.
Friday.
At the Fair. The Exhibition Hall.
Shopping day at Berkshire Hathaway stores all brought together under one roof. Cowboy boots, bed linen (bamboo sheets!), carpets, kitchen stuff, small planes, mobile homes, ice cream, diamonds. 30% off retail prices for shareholders.
Saturday.
At the Century Link Center. The Warren and Charlie Show.
It's cold and wet, the sky a dreary gunmetal grey, but Stuart's up at 6:30 to secure seats at the convention hall outside which people had started queuing this morning at 4.
The show starts with a film at 8:30 and I find myself in the wrong place. I'm in one of the overflow rooms and a text from Stuart tells me I'm miles away from where I should be.
The nice man at the door leaves his post to escort me to where Stuart sits, waving to me, in one of the precious sought-after seats in the main auditorium. We're way up in the gods but we consider ourselves lucky to be there.
Sunday.
Epilogue.
Okay. It was fun, exciting, and entertaining. Stuart got to chat with money man Mario Gabelli who thought Stuart was some big shot from Sydney. I got to be in the same elevator as CNBC's Becky Quick. She didn't ask to interview me though. I would it were Andrew Ross Sorkin instead- I'd have asked to interview him! And I saw Billy Jean King in the hotel lobby.
Oh alright, there was an exciting buzz in the lobby all the time and I did get to breathe the same air as some heavy hitting masters of the capitalist universe.
However I probably won't bother to come again.
Did I learn much? I'm not even sure I was meant to learn anything. It was purely entertainment. The cult of personality. The Warren and Charlie Show. Preaching to the faithful.
In the end, I couldn't help feeling a bit let down. At times those two old geezers behaved like a couple of rich spoiled brats.
A young man asked an earnest question about the future prospects of his family's cattle ranch.
Charlie, who usually waits until Warren finishes answering the question and turns to him with a "Do you have anything to add, Charlie?' was quick at the draw.
"I can't think of a worse business!" He scoffed.
It was mean spirited and unnecessary. Warren attempted to be more kind but didn't try hard enough. He said, "I know people in the cattle business who did well... but they also owned banks and such."
On Coca Cola. Questions to do with the well known and highly contentious issue of investing in a product with an obscenely high content of sugar, arguably the single seriously major contributing factor in obesity and related diseases.
Warren said it's his choice to get his daily 700 calories from Coke (his choice is the sickly sweet Cherry variety) and it's other people's choice if they want to consume excessive amounts of sugar by drinking unreasonable amounts of Coke. He says he's 95 and he's healthy and happy. He could drink water and eat broccoli but then he wouldn't be happy.
Munger said he considered such questions "immature and stupid."
I thought a serious issue like that needed a less cavalier treatment from the Sage of Omaha.
From the start of his address, he was defensive about BH's not too stellar performance. So I came away asking myself why we, the shareholders, should continue paying for foolhardy investments in businesses that are unprofitable and have no clear path to profitability.
BNSF. Its main cargo, coal, is down and bound to go lower. The railway is a capital guzzler. WB said more expenses are in the offing as railways are expensive to maintain.
Then why stay in it? Good money after bad.
GEICO. The insurance business has become too competitive. The float is no longer advantageous in today's low (soon to be zero) interest rate scenario.
Amazon/ Jeff Bezos was mentioned at least five times. BH used to like consumer-oriented retail businesses but now Buffett says he can't and won't even try to compete with Amazon.
Why IBM when he used to say he wouldn't go into IT because he didn't understand it?
And if BH is so great, why the low bond rating? Munger's answer: "They're wrong."
At times, I found Warren's folksy stance a tad overplayed. He doesn't like committees, meetings, or market research. Oh, he probably has a PowerPoint somewhere but he wouldn't know how to use it anyway. And repeatedly insulting hedge fund managers and investment advisers? Tacky.
Quo vadis?
I'm still processing all this. I'm still a fan...
By the way, this is his house. Taxis are under strict orders not to stop in front of it.
Monday.
Leaving Omaha.
At the airport, an overwhelming presence:
Buffett was at our hotel this morning. We knew this because they were setting up in the lobby yesterday for an interview by Becky Quick on Squawk Box. A once in a lifetime chance to be in the same room as the reigning superstar of investing, the very person we travelled to Omaha to see!
We didn't feel like getting out of bed at 6 o'clock for this. I guess we're suffering from Buffett fatigue.
Labels: Berkshire Hathaway, Omaha, Warren Buffett
