Buffett fans head to Woodstock for capitalists
Here’s a question for you to ponder. What is the single least likely event that could fill an 18,000 seat arena to overflowing in the US Midwest state of Nebraska? To bring people from all around the world for a single day?
Here’s a hint: the ‘'act'’ they go to see has an average age of 84.5 years (unlike boy band One Direction, who’d be lucky to make that age cumulatively), and the crowd is likely to have the highest average net worth of any similar sized gathering anywhere in the world.
I’m sure you’ve already worked out that I’m talking about the annual general meeting of Berkshire Hathaway (NYSE: BRK-A, BRK-B), held in early May every year in Omaha, Nebraska.
The '‘act'’ in question is the duo of Berkshire chairman & CEO Warren Buffett and his less famous, though equally brilliant vice-chairman, Charlie Munger. Buffett, 81 and Munger, 88, hold court on stage for over six hours, answering any and all questions thrown at them by analysts, journalists and shareholders.
They also consume an extraordinarily large amount of peanut brittle, and Buffett has a penchant for Cherry Coke.
The cult of Buffett and Munger
Now, as a Berkshire shareholder (only the much cheaper B-class shares, unfortunately), I’ll happily admit that my fellow shareholders can be a little fanatical. They probably have a right to be, though – especially as many of them have become millionaires just from their Berkshire shareholdings alone.
And true, the meeting is a little less ‘'special'’ these days, given the amount of television interviews Buffett gives.
All that said, I’ll be attending the Berkshire Hathaway AGM this weekend. The opportunity to spend 6+ hours listening to the greatest living investor speak – and hopefully answering some great questions – is too much to pass up.
So much of our investing lives are spent trying to decide how to react to a constant stream of business and economic news. It seems not a day goes by when there’s not an official or unofficial release of inflation, growth, unemployment or job ad figures.
Add that to consumer confidence, business confidence, ‘purchasing managers’ indices and multiply that by the number of countries releasing this information, and there’s nothing short of a torrent of information we feel obliged – and told – to absorb.
Here’s the rub – and the lesson from Buffett: despite the increase in the amount of information and the regularity with which that information is being made available, the underlying basics of business and investment haven’t changed since the industrial revolution.
If we spent even a small portion of that time thinking and reflecting on the things that really matter, we’d do a much better job of investing. It’s why Buffett lives in his native Omaha, and not in New York – the noise on Wall Street makes it harder to invest, not easier.
Buffett is widely considered to have significantly above-average intelligence. Some put him in the genius class. Regardless of where you particularly place Buffett, he’s smart enough to have worked out the best way to make his fortune. It’s not necessarily the only way – there is almost always more than one way to skin the investment cat – but he clearly hasn’t found anything that works better for him.
That alone makes Buffett worth listening to, but there are some specifics I hope Buffett covers this weekend.
The headlines will likely be about his recent prostate cancer diagnosis and succession at Berkshire.
Of far more importance for me will be his view of the Berkshire businesses and the broader economy, and I’ll be listening most keenly to any additional hints and tips as to how Buffett makes his investing decisions – the factors, concepts and metrics that convince him to press what these days is often a multi-billion dollar button.
Are you looking for attractive dividend stock ideas? BusinessDay readers can click here to request a new free report titled Secure Your Future with 3 Rock-Solid Dividend Stocks.
Scott Phillips is an investment analyst at The Motley Fool. Scott owns shares in Woolworths and Domino’s. You can follow him on Twitter @TMFGilla. The Motley Fool's purpose is to educate, amuse and enrich investors. This article contains general investment advice only (under AFSL 400691).