1500 Days to Freedom

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Berkshire Meeting: Warren Buffett and Charlie Munger speak

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Quick note: Just like last year, we’ll be giving away 2 sets of Buffett/Munger rubber ducks. Tune in on Monday for the ducky details! Hint: Start thinking about who has positively influenced your money decisions…

geckoBerkshire Hathaway is Warren Buffett and Charlie Munger’s holding company. Anyone can buy a share, well maybe a B share (as of this writing, A shares cost $190,000 (each!) while B shares go for $127). Berkshire has generated tremendous returns for over half a century, making many folks wealthy. Berkshire’s annual meeting is the first weekend of May every year and any shareholder can attend. Last year was our first and we went again this year.

The very idea of a shareholder meeting puts many to sleep. However, this is no ordinary meeting. It’s a big party of sorts. Where else can you spend a weekend with 40,000 others who travel from all over the world to talk about making money? Buffett is regarded as a rock star and is mobbed. The energy level is high and people are thrilled to see Buffett and Munger in person.

The best part of the meeting is that you have a chance to ask Buffett and Munger questions. Just drop your name in a box. If you’re chosen, you get to step up to the microphone and talk to Buffett.

Airbnb to the rescue

As you might expect, hotels jack up the prices for the Berkshire weekend. We were horrified to see hotels wanting $300/night with 3 night minimum stays. We hit up Airbnb and found a place 2 miles south of the event for $40/night.

We were more than happy with our first Airbnb experience. It wasn’t the 4 Seasons, but it was a clean place with a comfortable bed. All we did was sleep there and all hotels look the same with your eyes closed. I’ll definitely check out Airbnb for future travel needs.

SR-71!

We managed to find a cheap car rental, so on Friday, we jumped in our little Chevy Cruze and visited the Strategic Air Command museum. Since this post is about money and not flying things, I won’t drone on with airplane talk. However, I have to mention that they have an SR-71. Reading about this amazing machine blew my mind as a kid. Seeing one in person was incredible!

Lines and Throwing Newpapers for Ice Cream

lineThe meeting always takes place on Saturday. The doors open at 7am, so we got there at 6:45am to get a good seat. We massively underestimated everyone else who had the same idea. The line already had 1000s of folks in it. However, the PoPs came to the rescue, saving us a decent seat and sparing us from the top of the upper deck again.

We put our stuff down and headed to the exhibition hall. The hall is where many of Berkshire’s companies showcase their businesses and also sell Berkshire related stuff. I walked into the hall and saw a huge mob of people in one corner of the room. That could only mean one thing, Warren was throwing newspapers.

Warren delivered papers as a youngster, so he has a contest every year at the meeting. First, he throws a newspaper at a target. Then, you have the chance to challenge him. Beat him and you get an ice cream bar (Dairy Queen is owned by Berkshire). I snapped a picture and moved on.

Meeting time

centurylinkAt 8:30, the meeting starts. First, there is a movie that lasts about an hour. The movie has humorous skits and also showcases some of Berkshire’s brands. Paul Anka and Warren Buffett performed their own version of My Way in part of it.

After the movie, it’s question time. Questioners include the audience and journalists. Some of the questions dig deep into specifics on particular business units of Berkshire. Others are more general. Some are terrible*. Here are some of my favorite quotes from the meeting.

Talking about the financial crisis:

buffettBuffett: In 2008, cash was king. However, it was very stupid to hold on to it.

Of course Buffett was talking about putting cash to work to take advantage of the many bargains and opportunities that presented themselves in the crisis.

 

About Berkshire’s just announced quarterly report:

Buffett: Pay no attention to quarterly or even annual results.

Play the long game. There will be periods of ridiculous exuberance and there will be recessions. Staying in the game long term is the only way to go.

 

About investing style:

Buffett: I used to emphasize quantitative measures only. Charlie taught me to look at qualitative measures.

When evaluating an investment, it’s not all about numbers and charts. Munger is famous for studying a company from all different facets to understand competitive advantages.

 

About getting ahead:

Munger: I’m not a genius. What I needed to get ahead was to compete with idiots. Luckily, there is a large supply.

I love Munger’s little quips and deadpan delivery. He shoots from the hip; no filter on this man.

 

About Berkshire investors:

Munger: When I look out at the audience, I see a bunch of understated frugal people. We collect you people.

This one surprised me a bit. Munger is a curmudgeon of very few words. This is the closest I’ve ever heard him being emotional in any way.

 

There is much more to say. Two of my favorite questions were about frugality and financial education in the United States. However, I’ve blabbed on for long enough today. Stay tuned…

See you in 2015?

This year, we attended the meeting with Mr. and Mrs. PoP of Planting Our Pennies. We really hope they come again next year and we also hope to see more of you there as well. I’ve already heard from a couple readers who have mentioned that they will be there in 2015. Do it. Buffett is 83 and Munger is 90. They are no spring chickens, errr ducks.

 

*One member of the audience asked Buffett if he’d ever consider buying a sports team. Anyone who knows anything about Buffett knows that wouldn’t happen. Ever. Munger refused to even say a word when prompted.

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Comments

    • Do it! I use Etrade, ShareBuilder or Loyal3. I think that Buffett gives tickets away to people who aren’t shareholders too. I’ve never researched it though.

  2. SFL – you can buy the shares through any brokerage account. But a new option is to buy the class B shares on Loyal3 with no fees. I just invested $10 last month as part of my Junk Food Experiment since they own Dairy Queen. With a little luck and a little more money I should have my 1 share needed by next spring.

    1500s – do you know of a place where you can watch the q&a session online?
    Mr. Grump recently posted…Travel Hacking to Cancun- Episode 1My Profile

    • I completely vouch for LOYAL3. I love that service!

      They don’t post anything online and even make a big point of telling the audience they’ll kick people out if they possess any recording devices. Only way to see it is to be there.

    • The question about financial education touched my heart. I have 2 kids and I see how terrible it is. What is a kid to do when they have parents with horrible money habits and the school teaches them nothing?

  4. Sounds fun. I didn’t know they were that old, the power of drinking coke and eating cheeseburgers I guess. Might have to try and convince the wife to travel to Nebraska…..man this is going to be tough.
    Even Steven recently posted…I Joined the Yakezie ChallengeMy Profile

  5. One of our favorite parts was the weird combination of derision and pride in Munger’s voice when referring to “you people”, of the frugal variety. And their discussion about which one of them, Buffett or Munger, was more frugal.

    So much fun, though! Barring some unforeseen catastrophe, we’ll definitely be back next year!
    Mrs PoP @ Planting Our Pennies recently posted…PoP Balance Sheet – April 2014My Profile

        • Ha yes, good observation. Warren does allow himself some luxuries, but they are sparse compared with others that have 1/100 as much money at him.

    • I love Munger. He is the perfect compliment to Buffett’s folksy ways.

      The other thing that greatly amused me was when someone asked the question about Buffett buying a sports team. Buffett asked Munger to comment and he didn’t say a thing. Translation: That question isn’t worth a response.

  6. Sounds like a lot of fun, but not for me – I’m willing to read about it through your eyes (and Mr & Mrs PoP’s!). However, if you want to see a SR-71 blackbird & Discovery (the shuttle) at the same time – we live about 5 minutes away from the Smithsonian’s Udvar-Hazy Air and Space Museum 🙂 – free parking after 4! Daughter Person learned to walk practically under the Blackbird there.
    Mom @ Three is Plenty recently posted…Detailed Financial Picture – May 2014My Profile

  7. If you are a military aircraft junkie you can’t go wrong with Wright-Patterson AFB in Dayton, OH. The National Airforce museum is there. Not only do they have an SR-71 they have the only perminant public exhibit for a B-2 Stealth Bomber

    • Oh man, I’ve been wanting to go to this thing for the longest time. I think the B-2 was a silly way to spend taxpayer money, but you can’t argue that it’s a neat plane.

      • I’d take the B-2 program over the JSF. Talk about a waste of money. It doesn’t really do anything that each branch wanted it to do and it costs more than it was supposed to (shocking a government program costs more than it should… I know)

    • Dividend Mantra, a Berkshire meeting is a must-do at least once. If you don’t own any shares, hit me up next year. Perhaps I’ll have an extra ticket.

  9. I’ll probably just weigh in with a couple of A class shares then catch my PJ* over there next year….

    On a serious note, I had no idea the average Joe could even invest in BH!!! I will have a look into it, but not being a US resident may prove to be a stumbling block I think, and even then, I’m not sure the airfare from London would be worth it. Do they do a Podcast of the thing? Can you suggest it next year if you get picked to speak? 🙂

    *Private Jet
    theFIREstarter recently posted…Get your violins out for the middle classMy Profile

    • Yeah, don’t make the trip just for this. Perhaps you can incorporate it into a bigger trip to the states?

      They don’t publish the meeting which is too bad since much of the information doesn’t seem to see the light of day.

    • It is one of the few individual stocks I’d buy moving forward. Commission, ha! I’d just like to talk to Munger for half an hour. I’d even buy him a cheeseburger.

  12. Very cool! I almost got a chance to go as I live in Omaha and my boss had tickets she wasn’t going to use, but she forgot about them until the last minute so no fun for me. Maybe next year!

  13. Congrats on being able to go, it seems like it was a really fun time.

    Attending the annual meeting is on my bucket list. I hope to be able to go sometime in the near future.

    Is it safe to assume you are a happy long term BRK-B shareholder like me?

    Brian
    Brian recently posted…Introducing the Long Term Mindset PorfolioMy Profile

    • I’m a very happy long term shareholder. I’m not even worried about post-Buffett/Munger. Their portfolio of holdings is amazingly strong. This is one of the few stocks that I’ll continue to buy moving forward.

  15. Mr. 1500,
    I was curious about how busy the town gets for the Woodstock of Capitalism. Great deal on AirBnB. I haven’t tried it yet, and I’d like to someday rent a room or apt if our future home has a spare room or in-law suite. While I’d love go to the event, I think the crowds would be too much for me. Must have been some serious finance nerds there! Those guys are getting old, so the days are numbered. Sad to think no one will show up if Buffet isn’t around.
    -RBD
    Retire Before Dad recently posted…The Ugliest $1 Bill I Ever SpentMy Profile

  16. 1500,

    Congrats! on attending the BH mtg. It is in one of my to-do list.

    The beauty of owning BRK is that stock keeps growing and you do not incur any taxes on dividends as there are none. Once you reach retirement, you can start chewing them bit by bit. It’s like a deferred tax-advantaged stock.

    Also, it looks like your portfolio is growing faster than BRK 😉 and may cross 1M before 2017.

    Best wishes.
    Passive Income Mavericks recently posted…My Recent Buy – May 2014My Profile

    • Yeah, I really like BRK for a long term holding. I plan on upping my BRK holdings in the years to come.

      Ha yeah, portfolio has been doing well. However, I’m barely over a year into my little project! THe proof is in the 5-10-25 year pudding!

Trackbacks

  1. […] 1500 days recaps his visit tothe Berkshire Hathaway annual meeting (aka, the ‘woodstock for capitalist’), in Omaha.  Color me jealous that he got to go. […]

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