Author Topic: First week of May - meetup in Omaha, Nebraska  (Read 3328 times)

Grigory

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First week of May - meetup in Omaha, Nebraska
« on: February 18, 2012, 06:07:31 PM »
I'm pretty sure I'm not the only Mustachian that attends Berkshire-Hathaway's annual shareholder meeting, aka Woodstock for Capitalists. :) For those not in the know, it's a giant convention (over 40,000 participants last year) dedicated to value investing and everything that has anything to do with Warren Buffett. The main event is a ~7-hour-long Q&A session with Buffett and his 87-year-old sidekick Charlie Munger. All the other events are networking opportunities - lectures and seminars on value investing, cocktail parties, etc.

The best part is that you don't have to be a shareholder to attend! Each year, Buffett floods ebay with convention passes for anybody who wants to attend. You can get two passes for just $5 - and that includes shipping! This'll be my fifth visit to Omaha and I was wondering if any other Mustachians would like to meet up. Here's more information about the meeting: (warning, it's a PDF) http://www.berkshirehathaway.com/meet01/2012meetinginfo.pdf

So, who is in? :)
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MMM

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Re: First week of May - meetup in Omaha, Nebraska
« Reply #1 on: February 18, 2012, 10:06:45 PM »
That sounds like great fun! Very nice idea.

I probably won't be making it this year, just because my springtime trip schedule is already filling up.. but I'd love to visit Warren while he's still leading Berkshire (I've never been to the event before).

I'll be rolling through Omaha just a few weeks later (June 23rd), on my way to Canada for the summer.

Grigory

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Re: First week of May - meetup in Omaha, Nebraska
« Reply #2 on: April 07, 2012, 04:12:36 PM »
Update - the convention tickets went on sale here. You can get two tickets and a convention guide for only $5 with free shipping. :)
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femmestache

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Re: First week of May - meetup in Omaha, Nebraska
« Reply #3 on: April 30, 2012, 04:10:23 PM »
Grigory--

I didn't know that anyone could get tickets for the meeting! I work at a hotel close to the convention center where the meeting is held and usually only see the very well-to-do folks who call for "turn down" service every night. (People actually call to have you come turn down their covers? It's a strange thing... and I don't work at a fancy full-service hotel.)

It's too bad I'll be working the whole meeting weekend or I'd pick some tickets up myself! Perhaps next year.

iamsoners

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Re: First week of May - meetup in Omaha, Nebraska
« Reply #4 on: May 07, 2012, 08:57:53 AM »
Sorry I couldn't do a meetup--had my mom and great aunt in tow--but I'm curious what you thought of the meeting.  It was my first and I really enjoyed it but found a few things interesting, especially in light of mustachianism.

The main thing was that it really was a carnival of capitalism and I was surprised by the consumptive nature of events.  Even though Warren was pimping jewelry and steakhouses, I couldn't help but wonder whether he would actually make those purchases himself.  We're talking about a man who early in his career sold the family farm to get more capital for investment.  Much has been made of his frugality and he has always been clear that retaining capital means retaining future earnings power.

Along those lines, it was also very interesting to me how many investors in Berkshire basically eschew Warren's type of frugal lifestyle.  The people I stood in line next to had several houses and had bought very expensive plane tickets in to Omaha and jacked up hotel prices and all the like.  Again, not very Buffett like.  I guess you don't have to agree with his lifestyle choice in order to also want to profit from his investing prowess!

And, along the lines with not agreeing with his lifestyle practices, I was surprised how many people are openly hostile to his political views.  I completely understand that politics is pretty emotionally driven and of course there will be a divergence of opinions among any group that large.  I just didn't expect Warren to be in the tiny majority.  I thought he did a great job of explaining his position and, like every decision he makes, there was a very clear, rational reasoning to his decision.  It's so interesting that people can see his rationale for investing decisions but not political ones.  I'm confused, do they think they are in the top 400 wage earning families that he described?  THEY AREN'T.  Are they defensive because they hope to be in the top 400 some day?  THAT'S THE WHOLE POINT!  Buffett is saying that changing the tax system is the only way to retain a level playing field.  So, I'm confused by why the vast majority of shareholders seem to be against this idea.

Finally, one thing that really stood out to me is just the discipline it took/takes for Warren, Charlie and the company to continue with their investing philosophy over the very long run.  I think that's my biggest take away.  People can say yeah, great ideas but then they get pulled away by some other great philosophy at some point.  To me, this was encapsulated by a financial advisor who asked a question  to Warren and Charlie at the meeting--he stated he has nearly $1b of BRK under management and went on to ask a question about the share buy back and wouldn't it be advantageous to BRK to issue a dividend which would drive up the price of the shares after a buy back (I think that was the premise although it's a little fuzzy--something along those lines though).  This is against BRK principles for two reasons. 

1. we don't really give a damn about the share price.  In the long run, it should roughly reflect book value but of course it will swing high and low on a scale for market reasons but the company is creating growing value and as long as the company's value is increasing substantially, the share price will, over the long run, follow along.  We would never do anything, like issuing a dividend, merely to manipulate it's price in the market.

2.  It's been clearly stated that as long as the company believes it has the ability to get a better return on investments than the market at large, it will never issue a dividend.  Why return money to the shareholder when we can make even more money by keeping it?

It is crazy to me that a guy with $1 BILLION DOLLARS invested in this company doesn't understand the fundamental reasons that the company makes decisions.  Obviously he is being blinded by the freaking huge payday he would get if a dividend was issued but to me it served as a great reminder that it takes an incredible amount of DISCIPLINE to stick to investing principles when there are so many pressures not to.

So, that's a summary of thoughts.  I'd love to know what others thought if you happened to be there (or read the transcript online).  There's a lot I didn't cover that I also thought was very interesting (renewable energy being a big one!)

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Re: First week of May - meetup in Omaha, Nebraska
« Reply #5 on: May 03, 2013, 09:27:33 PM »
Nuts. I forgot all about this. Anyone there this weekend?

Nords

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Re: First week of May - meetup in Omaha, Nebraska
« Reply #6 on: May 04, 2013, 09:34:30 PM »
Sorry I couldn't do a meetup--had my mom and great aunt in tow--but I'm curious what you thought of the meeting.  It was my first and I really enjoyed it but found a few things interesting, especially in light of mustachianism.
I think you may be confusing a thoughtful gathering of shareholders with a three-ring circus marketing lollapalooza. 

Borsheim's, See's, and National Furniture make more money that weekend than the rest of the year combined.  It's like Black Friday weekend all over again in May.  Buffett clearly understands that his job over the weekend is to show people how to spend their money on Berkshire products.  If he could clone himself 30 or 40 times then he'd be able to sell that much more.

At the same time, the annual meeting is a flashpoint for all the disgruntled laborers and communities affected by Berkshire's businesses.  None of these groups have access to national attention for the other 51 weekends a year, so they make the most of this opportunity.  More marketing again, only this time of the political lobbying type.

As for the financial advisor getting paid a commission to "manage" Berkshire shares for his customers... is this a great country or what?!?

I can't wait to see what happens to the share price tomorrow.  I think we're going to have to sell call options and rebalance.  Rebalance into what I have no idea, but people seem to finally be recognizing Berkshire's enterprise value.

As exciting and as entertaining as the annual meeting spectacle may be, I see no reason to rub elbows with 35,000 other people and pay 3x the usual prices to compete for a chance to do all of those activities.  I can enjoy the annual meeting just fine from all the journalists and video crews who are camped out there.  I can enjoy greater metropolitan Omaha for 362 other days of the year, too, without all the crowds.

The Mustachian act for an Omaha resident would be to rent out their home for that week (at wildly inflated prices).  Then they could leave town for their own vacation anywhere else, and still clear a profit.
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iamsoners

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Re: First week of May - meetup in Omaha, Nebraska
« Reply #7 on: May 06, 2013, 08:06:37 AM »
...those were comments from last year, wasn't able to make it this year. I'm not going to try to go every year but I would like to try and make it back some time--it's a fascinating experience.  I just drove up for the day--eliminating the hotel costs--and didn't shop.  Anyways, need to read the news and get caught up on all that was said.  Looks like the stock is up 1% an hour into the trading day, so that's not bad. 

BUT, it does also bring up another caution flag for me--my main concern with BRK is that many, many investors are in it because Buffett is and when he leaves/dies, they'll run for the hills. Obviously so much has been made about his successor and I have confidence that they'll pick well and the stock will retain its value--at the very least the value of the company won't crash over-night and there will be time to evaluate the new manager's performance--but I fear the stock with dip hard when Buffett leaves.  Buying opportunity I suppose, right?

Nords

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Re: First week of May - meetup in Omaha, Nebraska
« Reply #8 on: May 06, 2013, 08:11:54 PM »
Obviously so much has been made about his successor and I have confidence that they'll pick well and the stock will retain its value--at the very least the value of the company won't crash over-night and there will be time to evaluate the new manager's performance--but I fear the stock with dip hard when Buffett leaves.  Buying opportunity I suppose, right?
I've been selling puts with just that hope eventuality in mind. 

I think one of the reasons that the stock is headed up is because people are setting their minds at ease about the successor question.  Buffett's brought in two good investment guys and he just brought aboard four former AIG execs to bolster the insurance side.  I don't think he needs much help with Mid-American or BNSF, and now the bench is deep enough for Ajit Jain or any of the CEOs to step up and learn to be the public face of the company.

I wonder if they'll choose to keep the HQ in Omaha, though.  Imagine if the annual meeting was held in LA or Chicago or Vegas.
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