Berkshire Hathaway held their shareholder meeting this past weekend celebrating 50 years of a profitable partnership. Having recently returned from the event I reflected upon my time there and what I have taken away from the experience.
More than a simple shareholder meeting, the Berkshire Hathaway Shareholder Meeting was a multi-day event. The shareholder meeting itself lasted less than ten minutes but there were substantial events surrounding the meeting which started Friday evening and concluded Sunday afternoon.
Two Berkshire Hathaway companies, Borsheims and Nebraska Furniture Mart hosted shareholder events over the weekend. Borsheims, a jewelry store with over 13,000 SqFt of retail space held a complimentary cocktail event with hors d’oeuvres and band just outside their retail store on Friday evening. The following Sunday, Borsheims also held a complimentary shareholder brunch while maintaining cocktails and the music band that served to closeout the weekend on a festive note.
On Saturday, the main shareholder event occurred at the CenturyLink Center. There were over 20,000 attendees at this event that filled the entire CenturyLink Center, multiple overflow rooms, and conference rooms in the adjacent Hilton. I had heard from attendees from past years that this was the largest crowd they had experienced with this event.
The Saturday shareholder event started with a Berkshire Hathaway movie which consisted of a combination of celebrity spoofs with Warren Buffett and Charlie Munger and promotional materials of several Berkshire Hathaway companies – Coke, Geico, etc. Celebrity appearances in the movies were significant and included casts from Desperate Housewives, The Office, and individual celebrities such as Jamie Lee Curtis, and even Floyd Mayweather which corresponded with the boxing match that same day.
After the movie Warren Buffett and Charlie Munger answered shareholder questions for most of the day. Questions ranged from fairly basic to advanced and were a randomly drawn mix from absent shareholders and attendees. Overall there were a good range of questions.
I had learned much from the question and answer portion of the meeting but here are my main takeaways:
Success has a price. The more successful one becomes the greater the scrutiny placed upon their actions. In front of the CenturyLink Center there were NetJet pilots protesting labor conditions. Early shareholder questions were focused on the ethics of recent investments associated with Clayton Homes and 3G Capital. There were questions concerning predatory lending and “right-sizing” which were of concern to some shareholder. Warren Buffett and Charlie Munger thoroughly addressed each concern in great detail.
The future is unclear. Many shareholders posed questions regarding what the future holds. Despite being the Oracle of Omaha, Warren Buffett made it clear that neither he nor Charlie Munger could accurately predict the future and that they simply keep swimming regardless of the tide. At one point I recall that Charlie responded with something to the effect of – Why do you keep asking us about the future when we have no idea?
Each investor must have their own strategy. While witnessing the success of investors such as Warren Buffett and Charlie Munger makes it tempting to attempt to mirror their strategy, it likely is not for everyone. Seeing the partners in person gave me a sense of just how conservative these investors are and how their investment strategy is likely a projection of their combined personalities. My assumption is that each individual must experiment on their own to discover where exactly their passion lies and what works for them consistently over time.
Big need not mean complex. Attending the shareholder meeting for a company with over $500B in assets and nearly $200B in annual revenue one would expect a lengthy, complex shareholder meeting. As stated earlier, the meeting itself was brief and simple – lasting less than ten minutes and resulting mainly in the re-election of officers. There is an underlying concept of efficiency that pervades the Berkshire Hathaway organization which extended to the shareholder meeting itself. The simplicity and brevity of the shareholder meeting for such a large and successful firm made me seriously consider the more complex meetings in which I had taken part for much smaller and less successful firms in the past.
Berkshire Hathaway Shareholders are more than shareholders. Berkshire Hathaway Shareholders are much more than simply owners of stock certificates in a company, they are an engaged, passionate community. Many Berkshire Hathaway Shareholders make the trip to Omaha on an annual basis and do so in groups of family and friends. This is a group of individuals who are committed to the success of the company and are in it for the long term. This engaged community forms a virtuous cycle of sorts – Warren Buffett and Charlie Munger build value within the company, as shareholder value increases, shareholders become more engaged over time and tell their family and friends. As shareholder engagement increases over time, the amount of meeting attendees increases. As the number of attendees increase, the amount of shopping and engagement with Berkshire Hathaway companies and the overall brand increases, thereby increasing the potential basis and shareholder value. Both the Berkshire Hathaway business and individual shareholders benefit from this symbiotic relationship.
Simultaneous to the shareholder Q&A, there was an exhibit hall where shareholders could purchase items from Berkshire Hathaway companies at discounted prices. While touring the exhibit hall it is difficult to not be impressed by the amount and quality of companies which comprise the Berkshire Hathaway portfolio. One of my favorite discoveries here was See’s Candies – which I was likely led to suggestively through the constant consumption of See’s Peanut Brittle and Coke by Warren and Charlie throughout the entire meeting 🙂
The Saturday event concluded with a brief shareholder meeting and a shareholder picnic at Nebraska Furniture Mart. Beyond a simple furniture store, Nebraska Furniture Mart is a sprawling complex with nearly everything imaginable for the home. One of my favorites was a $120K curved television.
In hindsight I am pleased to have made the pilgrimage to Omaha and to have had the opportunity to participate in a Berkshire Hathaway Shareholder meeting in person. By attending I feel that I have become smarter in business and investing, and even met some great individuals who I have kept in contact with after the event. Rather than a stodgy corporate meeting, the Berkshire Hathaway event had the feeling of a family reunion – a group of like-minded individuals who share a passion for Berkshire Hathaway and it’s companies.
Image Credit: Insider Monkey