This weekend, more than 40,000 people from all over the world will descend on the city of Omaha, Nebraska, for a curious celebration. The occasion is the annual meeting of Berkshire Hathaway, a multinational holding company with assets that include Duracell, Fruit of the Loom, NetJets, Helzberg Diamonds, and more than 100 other companies in whole or in part.
Acolytes come to eat See’s Candies, quaff Coca-Cola, and snack on Dairy Queen Dilly Bars—all Berkshire holdings. But more than anything, they come to see chairman Warren Buffett, the “Oracle of Omaha” himself.
From its humble start as a gathering of a few shareholders in an Omaha cafeteria, the Berkshire meeting has evolved into a four-day fanfest crowned by a six-hour Q&A session with legendary investor Buffett and his business partner Charlie Munger. Repeat attendees—and there are many—say it’s not just about the money, though Buffett has indeed made many of them rich with his unique brand of folksy, straight-talking investment wisdom. For the most ardent shareholders, the Berkshire meeting is a cross between county fair, spiritual retreat, an investing crash-course, and family reunion.
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Quartz ObsessionBerkshire Hathaway's annual meetingMay 05, 2018
Invest-a-pa-looza!
This weekend, more than 40,000 people from all over the world will descend on the city of Omaha, Nebraska, for a curious celebration. The occasion is the annual meeting of Berkshire Hathaway, a multinational holding company with assets that include Duracell, Fruit of the Loom, NetJets, Helzberg Diamonds, and more than 100 other companies in whole or in part.
Acolytes come to eat See’s Candies, quaff Coca-Cola, and snack on Dairy Queen Dilly Bars—all Berkshire holdings. But more than anything, they come to see chairman Warren Buffett, the “Oracle of Omaha” himself.
From its humble start as a gathering of a few shareholders in an Omaha cafeteria, the Berkshire meeting has evolved into a four-day fanfest crowned by a six-hour Q&A session with legendary investor Buffett and his business partner Charlie Munger. Repeat attendees—and there are many—say it’s not just about the money, though Buffett has indeed made many of them rich with his unique brand of folksy, straight-talking investment wisdom. For the most ardent shareholders, the Berkshire meeting is a cross between county fair, spiritual retreat, an investing crash-course, and family reunion.
🌐 View this email on the web
Reuters/Rick Wilking
By the digits
20: Approximate number of attendees at Berkshire Hathaway’s 1979 shareholder meeting
42,000–44,000: Attendance record set at the 2015 annual meeting (no official tally is kept), according to the Omaha Convention & Visitors Bureau
3.1: Millions of viewers on Yahoo’s livestream of the 2017 meeting
95%: Typical occupancy rate of greater Omaha’s 15,000+ hotel rooms during the meeting
$44.6 million: Weekend sales at Berkshire-owned Nebraska Furniture Mart during the 2017 annual meeting
12,000: T-bones served at Gorat’s Steak House in Omaha during the meeting weekend in 2017
$290,450: Price of a single Berkshire Hathaway Class A share at close of trading May 2
11: Age Buffett was when he bought his first stocks, in 1942
$3.4 million: Amount that an anonymous bidder paid in a charity auction to have lunch with Buffett (actually, this happened twice)
60: Minimum ounces of Coca-Cola that Buffett drinks a day (that’s five cans)
Origin story
Compound it
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In 1962, a 32-year-old investor started buying shares in a struggling New Bedford, Massachusetts textile company called Berkshire Hathaway. By 1965, that investor, Warren Buffett, had taken control of the company and was using it as a vehicle for dozens of acquisitions and investments.
Berkshire’s first annual meetings were held in the brick offices of the old mill in New Bedford. “Hardly anyone showed up,” Buffett biographer Roger Lowenstein wrote in 1995’s Buffett: The Making of an American Capitalist. Meetings drew at most two or three people (apart from Buffett), and Buffett spent hours talking about investing following the conclusion of formal business—a precursor to the epic Q&A sessions that would come to dominate later gatherings.
Those early attendees, however, had a lot to learn. Buffett was at the start of an unparalleled investment career. His strategy of identifying undervalued businesses, buying large amounts of their shares, and letting compound interest do its magic has yielded unmatched returns over Buffett’s long tenure. Had you invested $1,000 in Berkshire Hathaway in 1964 and simply let it sit there, you’d have $16 million today.
Reuters/Juda Ngwenya
Pop quiz
Which of the following is not a Berkshire Hathaway-owned company?
Dexter Shoe CompanyGaranimalsAcme Brick CompanyHelzberg Diamonds
Correct. At least, it's not a Berkshire-owned company anymore. The group paid $433 million for the shoemaker in 1993; a few years later, it struggled mightily and got folded into Berkshire’s H.H. Brown Shoe Group. “To date, Dexter is the worst deal that I’ve made,” Buffett wrote in 2008.
Incorrect.
If your inbox doesn’t support this quiz, find the solution at bottom of email.
Fun fact!
At the 2009 meeting, someone asked Buffett what people should do to help the US economy recover after the financial crisis. With a wink, Buffett suggested that new household formation would help. Buffett’s grandnephew, Alex Buffett Rozek—the man asking the question—then turned to his girlfriend Mimi Krueger and proposed. (She said yes.) Buffett was thrilled, though reportedly a little disappointed that Rozek offered a family heirloom ring and not one from Berkshire-owned jeweler Borsheim’s.
Quotable
“Maybe I’m a little crazy about this, but if you practice a faith, you go to the church. Buffett energizes me.”
— Tim C. Medley, a Mississippi-based financial planner and Berkshire shareholder, as quoted in the 1995 biography Buffett: The Making of an American Capitalist.
Watch this!
Curious about what it’s like to bask in Buffett’s wisdom? Check out the highlights of Buffett and Munger’s Q&A at the 2017 annual meeting.
Reuters/Rick Wilking
Brief history
1955: Berkshire Fine Spinning Associates merges with the Hathaway Manufacturing Company to create the textile company Berkshire Hathaway in New Bedford, Massachusetts.
1962: Buffett Partnership, an investment fund controlled by Warren Buffett, starts buying stock in Berkshire Hathaway.
1964: Berkshire Hathaway goes public.
1973: Buffett moves the meeting from New Bedford to Omaha, where it first takes place in the employee cafeteria of subsidiary National Indemnity, an insurance company. A note reading “Meeting in Progress” is taped to the door to dissuade hungry employees from interrupting.
1981: The annual shareholder meeting moves to the basement of Omaha’s Red Lion hotel. A Buffett associate recruits employees to stand in the room to make it look more full.
1985: Buffett’s role in helping finance Capital Cities Communications’ purchase of ABC brings more attention to Berkshire. Attendance that year leaps to 250 people, prompting Buffett to book Omaha’s Joslyn Art Museum for the following year’s confab.
1994: Buffett tells subsidiaries like See’s Candies and Dairy Queen to set up booths in the lobby of the Orpheum Theater, where 2,700 people attend the annual meeting.
1996: Buffett’s decision to add a new class of Berkshire shares increases the number of shareholders by more than 40,000. Attendance jumps to 7,500 for the meeting, now held in the city’s convention center.
2004: Attendance reaches 20,000. Realizing that meeting credentials are being scalped on eBay for up to $250 for a set of four, Buffett sets up his own eBay site selling credentials for $5 a pair.
2015: As many as 44,000 people attend the meeting marking Berkshire’s 50th anniversary.
CHARTED
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take me down this 🐰 hole!
Meetings, amirite?
Every public company in the US is required by law to hold an annual general meeting of shareholders. Annual meetings are typically a place for corporate housekeeping, like board elections and fiscal reviews. Apart from the occasional outbreak of shareholder activism, the average shareholder meeting is dullsville. More than 250 US companies, including Ford, PayPal, and ConocoPhillips, have moved their meetings online. Activists may not be happy, but most stockholders barely notice.
While there’s no chance of the Berkshire meeting going digital-only anytime soon, the company started streaming proceedings online in 2016 for those who couldn’t attend.
Reuters/Rick Wilking
Many many millions-of-dollars question
What's it like at the meeting?
Buffett’s 1996 decision to issue B shares, a new class of Berkshire stock with a much lower per-share price, added more than 40,000 shareholders to the Berkshire family and catapulted the meeting into festival status.
From Thursday to Sunday, Omaha is abuzz with book signings, networking sessions, seminars, and auxiliary panels on investing and related topics around town.
The convention center is full of booths from Berkshire companies and their related swag. (American Express is enthusiastically accepted—Berkshire owns 17.6% of the company.) There are even celebrity cameos: TV soap-opera star Susan Lucci once pretended to stage a takeover, and actress Debbie Reynolds once sat in with reporters during a press conference.
But the main event is when Buffett and Munger take the stage, throw it open to questions, and hold court in a session that can last up to six hours. Subjects range from investing to politics to Buffett’s take on life. “It helps me refocus,” said David Lin, Nashville radiologist, shareholder, and frequent meeting attendee, in the book The Warren Buffett Shareholder: Stories from inside the Berkshire Hathaway Annual Meeting. “I’ve learned what things Warren thinks are important. Things like friendship, morality, developing good habits, how to live a happy life—and it’s not just about money.”
One final question
So, uh... who's next?
Questioner at an annual meeting:
“I’m thinking of making a purchase of Berkshire but I’m concerned about something happening to you, Mr. Buffett. I cannot afford an event risk.”
Buffett:
“Neither can I.”
— Lowenstein, Buffett: The Making of an American Capitalist
For as long as Berkshire has existed, the question of what would happen to the company if something happened to Buffett has loomed large. Buffett will be 87 at this year’s meeting, and the question becomes more urgent every year.
The company will continue in Buffett’s absence of course, even if its sheer size means that it will never match its best years again. Buffett elevated Berkshire executives Gregory Abel and Ajit Jain to vice chairmen earlier this year, and one of those men will likely succeed him as chairman. But will either have the charisma to draw tens of thousands of people to the Midwest just to hear them speak? Doubtful. Perhaps it’s good, then, that Buffett has joked that he plans to continue as chairman even past his final exit—via séance.
Reuters/Rick Wilking
Poll
Would you go (or have you gone) to a Berkshire annual meeting?
Click here to vote
Absolutely!Maybe, if I could get my hands on some Berkshire stock.No thanks—See’s candy isn’t to my taste.
The fine print
In yesterday’s poll asking how you feel about iconic Swedish pop group ABBA, 58% of you said “Can’t talk, making an ABBA playlist” and 24% said you’re sewing your own jumpsuit.
Today’s email was written by Corinne Purtill, edited by Jessanne Collins, and produced by Luiz Romero.
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