BERKSHIRE 51st AGM - A FESTIVAL CELEBRATING BUFFETT
By Ruma Dubey
Omaha or ‘Warrenland’ is to Buffett fans what Orlando’s Disneyland is to children.
Berkshire Hathaway Inc or better recognized as ‘Warren Buffett’s company’ held its AGM on 30th April in Omaha, Nebraska and it turned out to be as scintillating as it usually is, with some great Buffett quips and quotes.
This AGM also marked Buffett’s 51 years in running the company and even now, he sounded as optimistic as he did 50 years ago. Bringing the reality of mortality to center stage, Buffett said that his company will survive long after he is gone. A very sobering thought which strikes in the reality that no one, even Warren Buffett is not immortal. The AGM had an air of festivity around it, with some 40,000 people attending.
Hotel rooms in Omaha during this time of the year, to attend the AGM, draws people from all around the world and helps the state’s economy boom. Hotels are full, even though some charge $400/night and if you get a room, you would be lucky as rooms are booked almost a year in advance.
Everybody wants to be there as no one knows how long this will last – one does not know how long Buffett would be around. So not a single shareholder wants to miss hearing this legend; after all it would be a tale to tell their children and grandchildren.
The good part - For the first time in the company’s history, Berkshire Hathaway live-streamed its annual shareholder meeting for all of the world to see. Investors and non-investors alike were able to witness history, live, Buffett and Munger shared their unscripted views on the company, the markets, the economy, corporate governance and even happiness.
The meeting had two stars – of course the shop stopper was Buffett and the other star was his second-in-command, Charlie Munger. So before the AGM began, shareholders of the company were shouting in unison, “Warren and Charlie, we love you!”. The duo after the meeting, fielded questions from shareholders for five long hours and there were some 80 questions in all! Where in India have we ever heard of such a thing happening at an AGM? Maybe Dhirubhai elicited such adulation but no one really in our modern times. And which CEO shows the patience and the humility to field shareholder questions for 5 hours? Here, they start looking at their watches and mobiles within half an hour into the session. Warren thus teaches our CEOs as important lesson – I exist because you exist, better to leave all arrogance back at home.
It was not all roses and peaches all the way. The duo had to field criticism for some business practices of Berkshire owned companies and those it works with. Also there was no word on Buffett’s succession plan as he suggested that he did not intend to leave any time soon. The names doing the rounds as probable CEO candidates - insurance executive Ajit Jain and Berkshire Hathaway Energy chief Gregory Abel.
A peek into some wonderful (as usual) quotes of Buffett during this AGM.
- On the ill effects of Coca Cola, Buffett said, “I really wish I had a twin that had eaten broccoli his entire life. ... I know I would have been happier and I think the odds are I would have lived longer. ... I think Coca-Cola is a marvelous product."
- Talking about Wall Street, Buffett said, “There is far more money made by people in Wall Street through salesmanship abilities rather than investment talent."
- Munger said on economics, "Micro-economics is what we do and macro-economics is what we put up with."
- On who would become the next President of USA, Buffett said, “That won't be the main problem for Berkshire Hathway. Company will do fine whether Democratic front-runner Hillary Clinton or Republican candidate Donald Trump win the November elections.”
- “When you buy a stock, get in the mental state that you would own the whole business. Think about what you would pay for the whole business”
- Buffett said, “The nature of capitalism is that if you’ve got a good business, someone is always wanting to take it away from you and improve on it”.
- This is what Buffett said on the effect of internet on business. He said, “If I owned a bunch of department stores and shopping malls I would be thinking very hard about what they will look like 10 years from now.”
- Warren Buffett said, “A full wallet is like a full bladder. You may get the urge to pee it away”
- “Intrinsic values can’t be so finely calculated that you can figure it out to four decimal places”
- Another beautiful nugget from Buffett, “You don’t need to have a high IQ in the investment business, but you do need emotional control.”