Understanding the whole Warren Buffett at Berkshire Hathaway’s 50th Shareholders’ Meeting


How well would Ed Sheeran go if he was playing in a city like Omaha, Nebraska, with a population of under 1 million people? My son told me that Ed’s concert at the Sydney Footbal Stadium was sold out in 30 minutes. But Sydney is an international city, with a population 4 times the size of Omaha in America’s midwest.

When you think about it, the fact that an 86 year old Warren Buffett and a 91 year old Charlie Munger are able to attract over 40,000 people to Omaha to spend six hours listening to Q&A on mainly investment issues is truly remarkable. It is even more remarkable when you consider the fact that the majority of the audience flies in from all around America and the rest of the world, has to book accommodation about a year in advance and that any room under $500 is a bargain.

The huge crowd packed into a sports stadium listening to 6 hours of Q&A with Charlie Munger and Warren Buffett  and no Ed Sheeran
Ed Sheeran eat your heart out: the huge crowd listening to 6 hours of Q&A with Charlie Munger and Warren Buffett

Well, this year we joined the throng to attend the 50th anniversary of the Berkshire Hathaway Shareholders’ Meeting. Thanks to our good friend Scott Pape, the Barefoot Investor, who has been attending for a number of years, accommodation and other logistics were arranged to actually allow it to happen. Scott does a great job in educating his followers, applying Buffett’s principles and it’s worth looking up what he does as well as reading a copy of the latest edition of The Barefoot Investor.

As those of you who have read How Much is Enough? know, I am a Buffett fan and have read most of the books on him as well as his shareholders’ letters. So I was going for the experience, rather than in the expectation of learning anything new. While I did not pick up much in the way of new facts, the experience was great and I walked away with a number of learnings from it.

To have the full experience, we joined a crowd of shareholders the night before the meeting queuing to eat at one of Buffett’s favourite restaurants – Piccolos. The place was packed and buzzing, but sadly the food took me back to Australian food in the early 1960s. It’s one thing to be a fan, but important not to become a cult member, following everything Buffett does, particularly when it comes to diet.

Scott Pape and me joining the throng outside one of Buffett's favourite restaurants - and learning to stick with his investment tips instead
Scott Pape and me joining the throng outside one of Buffett’s favourite restaurants – and learning to stick with his investment tips instead

The venue for the meeting was in a huge enclosed stadium housing 40,000 people –the queues to get the best seats began the previous evening and if you weren’t there within an hour of the doors opening at 7am, you had to watch proceedings on a screen in one of many overflow areas. Even these were completely full.

A huge exhibition space in the stadium was filled with stalls of some the companies owned by Berkshire Hathaway selling their wares. It presented a dramatic visual image of the very diverse array of businesses involved, including: prefabricated housing, confectionary, Coca Cola, lingerie, furniture and railroads to name a few and the very substantial insurance business.

It has become a tradition for the shareholders’ meeting to begin at 8.30am with around a 30 minute video, which in many ways is a metaphor for the meeting itself. It is eclectic and has the look and feel of a home video, despite being professionally produced and featuring a variety of Hollywood and other celebrities. Scenes range from the very serious testimony Buffett was called upon to give to the US Congress some decades ago in the wake of the Salomon Bros scandal (which led to Buffett for some time becoming Chairman of the firm ) to a spoof where Buffett challenged Floyd Mayweather to a boxing fight. Fortunately the video stopped before the first punch was laid.

The meeting then opened to Q&A until 3.30pm, with a one hour lunch break. Questions ranged from highly technical (such as what will a raft of new safety regulations for trains mean for Berkshire’s interests in the sector) to the tough (does Clayton Homes act ethically with respect to its home loans and foreclosure policies) to asking for personal advice with respect to careers and life philosophies.

Despite this great diversity, we left the session with a great sense of coherence which reflects an underlying consistency of values and common sense that permeate all the answers. Here are my main takeaways.

  • Central to Buffett’s success is the fact that he loves what he does and has focused his entire life on getting better at it. In How Much is Enough? Andrew Ford and I argue that while money may not be enough to buy happiness, happiness buys money. In other words, people who enjoy sustained success, figure out what makes them happy first, become very good at it and the financial success then is a result of this. Buffett is the classic embodiment of this idea. He had the good fortune to discover in his early teens that he loved investing, but initially was not very good at it. His love for the work though, led him both to discover great tutors, in particular Benjamin Graham and then Charlie Munger as well as to spend many hours mastering his subject. It is said that Buffett typically reads several hundred pages of material daily.
  • The compound effect of this learning is as remarkable as the effect of compound interest over time. It was demonstrated over the course of the meeting in Buffett and Munger’s astonishing ability to talk with authority on a broad array of topics, rarely having to draw on the managers of the various businesses that they own. But I want to stress that this prodigious ability to learn and apply knowledge only occurs if you love what you do.
  • Equally important is Buffett’s motivation for what he does. Buffett’s sport is not making money per se. Those whose motivation is purely about making money typically end up flouting laws, ethics and make the characters from the Wolf of Wall Street look like innocents. Rather, four of Buffett’s key motivations are:
  1. The intellectual stimulation of analysing companies, not as pieces of paper listed on the stock exchange, but as real businesses and what makes them tick, the sustainability of their cash profits in a dynamic economy and how to value them
  2. The thrill of buying these companies at fair prices, particularly when these businesses can be purchased outright
  3. Providing an environment in which the purchased businesses can continue to flourish, typically under the original owner and management until they choose to retire, with minimal interference from Berkshire’s head office
  4. Genuinely thinking of his fellow shareholders in Berkshire Hathaway as partners and applying the highest fiduciary standards to how they are treated.
  • In short at the heart of Buffett’s success has been passion, a love of life-long learning, continuous improvements in execution, a fundamental commitment to the highest ethical standards and the strength to stay the course. I have come across money managers who have one, two or three of these characteristics, but very rarely all four. Buffett does enjoy the extraordinary financial success he has achieved for himself and his partners. But only because it is a measure of a job well done, rather than because of the pursuit of money for purposes of greed, making up for personal insecurities or a desire to lead a lavish material lifestyle.
  • Buffett, despite projecting a folksy image, is a complex personality, who clearly wants to be appreciated by others and to be popular. But he does not confuse this with being populist – in short, he has not compromised the rigour of his analysis, his focus on long term sustainable success or his values, in order to court approval or popularity.
  • Rather, he has been willing to devote substantial effort and resources to communicating with, and educating, his shareholders and the investing public as a whole. The extent to which Buffett displays empathy in personal relationships is a moot point. His history has been one of being highly introverted and socially awkward. But in mastering the ability to use the key tools of story-telling – aphorisms, analogies and memorable one-liners to make the complex simple, without ever being simplistic, he has become extremely adept at the skill of influencing people.

My lasting impression of Buffett is that he has transcended being a great investor and has emerged as a great leader. It is important not to get caught up too much in the hype of some of his followers and hero worship him. A Saint, a Gandhi, or a Nelson Mandela he is not.

But he has displayed leadership not just in the technicalities of how money should be managed, but wisdom in how it should be used. There are many Buffett wannabes who try and understand the technicalities of what he does, without understanding the underlying character and how the whole has been important to his sustained success.

Munger as usual nailed it when he said that Buffett didn’t want to be remembered as a great investor, or as one of the world’s richest men, rather, he wanted to be remembered as a teacher.

The wannabes who are motivated mainly by making money will end up failing, because the greed that underpins this undermines their ability to withstand periods of great stress. Periods when your strategy, which requires patience to succeed, is perceived by others to be a failure. How many of the wannabes could withstand the many headlines like: “Has Buffett Lost his Marbles?” that Buffett has periodically endured when the market has gone through prolonged manic or depressive phases? Buffett’s emotional ability to stay the course in the face of sometimes overwhelming pressure is arguably his most important strength.  In contrast Isaac Newton lost his entire inheritance when envy drove him to buy back into the South Sea Company at close to its speculative peak, proving that character trumps intelligence. What makes Buffett a leader is that he has both.

And as a leader, putting aside the fortune that he has made for his long term shareholders, he has achieved two extraordinary outcomes, which help to explain why he is able to attract a much larger crowd to Omaha than Ed Sheeran.

  • He has used his skills of influence and teaching directly to help hundreds of thousands, if not millions of people to overcome the behavioural biases that destroy long term wealth creation. And indirectly by influencing a legion of fund managers, like VGI Partners and Magellan in Australia and wealth advisers like Scott and me, he has had an even greater effect, even if the act as a whole is difficult to follow.
  • Spurred by the influence of his late wife Suzy, in the first instance and more recently by people like Bill Gates, he is now devoting the bulk of his fortune to try to solve some of the world’s most important problems via the Gates’ foundation. And he is using his considerable influence to encourage fellow billionaires to join him in this. The long term impact of this is likely to be even greater than his investment achievements

Nobel Prizes for Economics and for Peace have been handed to people for achieving far less.


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