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Stalking Warren Buffett
Volume 77: Sun May 27, 2007
Ryan continues his stalking of celebrities, and this time brings Amanda along as backup.
We were on our way to Omaha, Nebraska. Not the usual tourist destination, I know, but we were on the prowl for Warren Buffett, one of the world's richest people, last estimated to be worth about 52 billion dollars. Billion, with a B. That's $52,000,000,000.00 if you write it out. He lives in Omaha, in a modest house he purchased something like 40 years ago. Last summer, I purchased a single class B share of Warren's company, Berkshire Hathaway for about $3,000. I can't afford the class A shares which now trade over $100,000 per share. Today, my single share has grown to $3,600, netting me a cool $600 in paper profits. What better way to celebrate than flying out to Omaha, Nebraska, and stalking the man who made this possible.
For those of you not familiar with Berkshire Hathaway, you've probably heard of some of the companies it owns: Geico, Fruit of the Loom, Dairy Queen, and Sees Candy, for instance. It also owns a heck of a lot of companies you likely never heard of as well. And it owns a lot of stock in companies such as Coca Cola, the Washington Post, American Express, and so forth. You'd be hard pressed to pass an entire day without crossing paths with the Berkshire Hathaway empire in some manner along the way.
Publicly traded companies are required to have annual shareholder meetings, and Berkshire Hathaway is no exception. Berkshire's annual shareholder meetings are legendary. Thousands of people show up to hear words of wisdom from Warren, get shareholder discounts on furniture, jewelry, and car insurance. It's the biggest shareholder meeting each year, drawing about 25,000 people to Omaha last year and attendance was expected to top that this year.
You have to be a shareholder to get into the meeting, or at least know someone who is a shareholder. The ticket in cost $3,600—give or take a bit from day to day—and certainly ranks as one of the most expensive tickets into an event I've ever bought! =) On the plus side, I can always sell the ticket to someone else later if I choose to. Amanda, of course, knows a shareholder. I'm her ticket into the event.
Flying into Omaha would be a problem. When over 25,000 people are expected to descend into Omaha for a weekend, planes would be very full. Rental cars scarce. Hotels full. I was disinclined to pay full price for a plane ticket, which meant flying standby on Amanda's airline. Standby would not get me into Omaha.
So we hatched a plan. We would fly into Kansas City, Missouri, where a rental car would be awaiting us. We'd drive 200-or-so miles to Omaha, attend the Berkshire Hathaway meeting, then drive back to Kansas City to return the car and fly out. Of course, we made a few stops along the way....
It was a wet and muddy day. Amanda and I arrived in Kansas City and picked up our rental car. The woman behind the counter asked where we would be staying, and Amanda made up a hotel in Omaha. We had no hotel booked and would likely have to stay quite a long drive away from Omaha to find an available hotel, but we were cool with that. The woman offered us an upgrade to a mini-van for free, which we took. "We might have to sleep in it," I whispered to Amanda. "We'll want the extra space!"
The weather was terrible. Rain sprinkled from the moment we arrived and never ceased. We drove out to Leavenworth, Kansas, where we admired the famous prison and found some letterboxes. The trails were terribly muddy and slippery, but no mishaps to report. We spent most of the afternoon there, finally quitting near sunset and driving up I-29 to the town of St. Joseph, Missouri, an hour away from Kansas City where we found a hotel for the night.
That morning, doing a bit of Internet sleuthing, Amanda managed to find one hotel room available in Omaha for just $55/night. "Book it!" I told her. "Two nights." It was tough to find a room available. I searched on half a dozen websites looking for available rooms for nearly an hour the night before and only found one hotel with a room going for $199/night—way out of our price range. Even searches for hotels within an hour's drive was coming up empty. Things looked desperate, and I was certain we would be sleeping in the van that night.
But at the last minute, Amanda from an available hotel actually IN Omaha, for a measly $55/night. Actually, that's still more than I prefer to pay for a hotel, but given the severe lack of availability, it was remarkably cheap.
There were letterboxes to be found in St. Joseph, but we could find letterboxes anywhere. Neither of us had ever been to St. Joseph before and we wanted to see the tourists traps before wandering around town looking for plastic boxes and rubber stamps, so our first stop was the Pony Express museum. Wonderful place to visit! The eastern terminus of the Pony Express was St. Joseph since it had the telegraph and was the last city along the Missouri the railroad could reach, and the Pony Express museum is housed in the old horse stables used for the express mail service. The mail could be rushed to Sacramento, California, in a mere 10 days. The service didn't last long—19 months. In fact, even that's stretching the numbers a bit since the service was stopped for a couple of months after Indian raids on the Pony Express outposts and the fact that it didn't run during the winter months when snow blocked the route. Once a telegraph was connected from coast to coast, the Pony Express withered away. Physical mail would not move between the east and west coasts that fast again until the transcontinental was completed over a decade later. Fascinating story and a wonderful place to visit, that museum.
Then we walked over to the old house once used by Jesse James. It's particularly historic because it's also where he was shot and killed. The outlaw was hiding out in St. Joseph under a fake name and while straightening a picture on the wall with his back turned, one of the members of his gang shot him for the $10,000 reward. The house, of course, because an instant tourist trap. The bullet hole that supposedly killed him is still there in the wall. It's not a very small hole anymore since collectors of the day pulled pieces around the hole off as souvenirs. There's an exhibit there about his grave being dug up in 1995 for DNA testing (some people thought the outlaw faked his death to get the authorities off his tail—but they say there's a 99.7% chance that the body really was that of Jesse James). As well as lots of information about his family and friends, and the day of his death, of course. Fascinating little place and well worth the stop, I think.
Then we found a few letterboxes around town before driving north towards Omaha. We checked into our hotel, then drove over to the Cheesecake Factory for dinner and to meet a letterboxer from Lincoln City (Hello, Ona Journey!) before going back to the hotel and getting some sleep. On the door of the hotel, a sign was taped up saying no more rooms were available. I doubt there was an empty room in the entire city, and I felt lucky we actually got the one we did.
Then we went to sleep, because we planned to wake up much too early the next morning for our date with Warren Buffett.
It was a dark and stormy night. Dark clouds dangled overhead, but the rain, fortunately, had yet to begin. We left the hotel and drove out to Quest Center in downtown Omaha, arriving at about 4:00 in the morning. Already a line of twenty or so people had already formed at the entrance. We parked, then became one with the line.
Actually, to describe it as a line suggests it was more organized than it really was. Mostly, it was a pile of people, spread out across several doors that made up the entrance, with maybe four or five people per door. Some people came with chairs and blankets. We took our place on the cold concrete and began our wait. One man, we learned, arrived at 8:00 the evening before, making him the 'official' first person in line, and the news media were already out in force to cover the saga.
About ten minutes into our wait, the rain started. Amanda and I squished ourselves in under the overhang, barely. We would stay dry. Everyone behind us would have to stand in the rain for the next three hours. If for no other reason, that made getting there as early as we did worth it.
A flash of light lit up the sky, and thunder rumbled around us. It was an amazing show, brilliant and loud, especially from our dry perch. I suspect the folks behind us weren't as impressed.
The reporters thickened as the morning progressed, many not even speaking English. While I cannot confirm or deny this, it is entirely possible sharp-eyed folks in Tokyo may have been able to see me in the background, one of the huddled masses of the crowd, in the evening news. Or maybe it was the morning news. I really had no idea what time it was in Tokyo, although if it was morning in Omaha, it seemed unlikely it would have still been morning in Tokyo.
We watched several interviews taking place. The first guy in line, standing there since 8:00 the night before, was a popular subject. Asked if he was going to do it again next year, he seemed to suggest that it wasn't likely. Another group of three guys, just behind us and sitting in the rain under their umbrellas, were also interviewed. When asked why they were attending, one of them replied that it would be his third Jimmy Buffett concert, he loved Jimmy Buffett. Everyone around him laughed, not a surprise there, and the reporter asked him to say that again—it was good, and he wanted to make sure the camera guy got the reply.
It was a rather surreal experience, waiting in line, watching the rain and lightning, being swarmed by reporters. By around 6:00, the first hint of dawn started showing, which took some of the bang out of the lightning. It was still fun to watch, but that burst of light didn't seem as extreme anymore.
The doors were to open at 7:00 in the morning, and with a half hour of waiting left, we heard one guy saying that the line for getting in stretched a long, long way, something like a couple of blocks long, then turned a corner and kept going who knows how much further. I got out in the rain long enough to admire the line properly and sure enough, I could not see the end of it. There were a lot of wet people out there.
Tick tock, tick tock. Opening time was approaching. Amanda and I did have one slight issue we needed to take care of when the doors opened that most people didn't have to worry about: credentials. Due to the popularity of this event, only shareholders and people who know shareholders of Berkshire Hathaway are allowed in. Most people who go to this plan things months in advance and get their credentials—another term for 'ticket'—through the mail. Procrastination is in my blood, though, and I didn't commit to going until about a week before the gathering. I was afraid that would not be enough time to let the post office do it's thing, so I printed out my brokerage statement from March (the meeting was open for shareholders on March 6, 2007, so I made sure to print out my March statements). I wasn't sure where to go or who to show off proof that I did, in fact, own one class B share. Perhaps tables were set up inside somewhere for the last-minute folks like me. =)
The doors opened rather unexpectedly—I must have lost track of the time since I thought we still had another five or ten minutes until the doors opened, but they were opening and the Running of the Shareholders began. And it was a run. The employees inside were shouting out to everyone to walk, not run, but nobody seemed to pay any attention. It was a rush for the best seats. The employees also shouted out asking everyone to make sure their badges were showing.
I wanted to run with the rest of them, but alas, I still needed to get badges, so I asked the closest guy where I could get mine. He pointed us outside and said to go to the ticket booth, with directions about how to get it. The hard part, as it turned out, was trying to get back outside. The line of people continued streaming in and we were like fish trying to swim upstream through them. It wasn't easy!
We did make it back out and walked over to the ticket office where a much smaller line of procrastinators such as myself were standing. They set up a small table, and the line went quickly. We were in front within a couple of minutes, and I showed off my brokerage statement, the woman behind the table asked how many badges I needed, I told her two, she handed them over, and we walked back out, joining the line that was still entering the arena. I handed the one over to Amanda and we both put ours around our necks.
The second time back in, we decided to hit the exhibits first. Thousands of people had already streamed into the arena, all out to get the very best seats, and we figured that was a lost cause at this point. However, the exhibit area was practically empty because everyone else was in the center claiming seats. Only a handful of people were in the exhibit area.
Except for one small group of people way off in a corner. When we got closer, we realized they were a huddled mass of reporters.
"Is that Buffett?" Amanda asked me.
I wasn't sure. Something was obvious up, but they were all bunched together and it was hard to see what was happening in the middle. We walked around the perimeter, looking for a better view. Yep! There was Buffett himself, not more than 15 feet away. If only one could get rich through osmosis, I'd be filthy.
Reporters were asking him questions, and Amanda took pictures with her camera held high over her head hoping something would come out.
"Suckers," I told Amanda, referring to the people who rushed the arena. "THIS is the best seat in the house!"
I was kind of surprised at how easily accessible Warren was, though. It's not like we went through security or had our bags searched.
Then we continued on our tour of the exhibit area. Representatives from dozens of the companies and brands owned by Birkshire, in whole or part, were set up and ready to do business, and shareholders even got special discounts on the stuff. The Bookworm had an array of books to choose from, all related to Buffett. Even one book about shareholder's experiences at the annual shareholder meeting, which I leafed through. They were all 20% off, I think, but we didn't buy anything.
Other booths promoted Dairy Queen, Coca-Cola, and Amanda had her picture taken with the Geico lizard, one of her proudest moments. There were displays for manufactured homes (including one you could check out first hand), and a bunch of guys dressed up as the Fruit of the Loom characters, and a Fruit-of-the-Loom photo with one of the heads cut out so you could take a photo with your own face as part of the group.
We made quick work of the exhibit area since we had not planned to buy anything in the first place, and it was rapidly filling up with people who secured their seats and now were looking for something else to do. We decided it was time to secure our own seats.
Knowing all the good seats were already long taken, we walked to the far side of Quest Center and picked a couple of seats about halfway up. Not great seats, but there were much worse ones available higher up in the nosebleed sections. Then we waited some more. The main event wasn't supposed to start for another hour.
Amanda pointed at a bunch of chairs up front, set off from the rest of the arena, asking me who all got those seats. I guessed it was probably friends and family of Warren and Charlie, and probably many of those who made up the board of directors or headed some of the companies owned by Berkshire. "Maybe even Bill Gates," I told her, saying he was on the board of directors and was well known for being good friends with Warren.
As the start time approached, we noticed a lot more activity taking place near the stage, including one person we suspected was Warren Buffett, but it was hard to tell since they were so small and hard to see. Some commentary by the people just behind us who attended previous gatherings pointed out some of the other people near the stage such as Suzi, his daughter.
Shortly before start time, we noticed Warren walk out pass the roped off area and among the shareholders at large, walking across most of the arena before taking a seat in a chair. We knew it was him, too, because several beefy security people walked in front and behind him, and it had a sense of royalty walking among the peasants. Most of the peasants were too busy chatting with each other to even realize that Warren just walked right past them.
Warren and friends took a whole row of seats, and two security guys kneeled at the each end of the row, obviously intending to make it difficult for anyone that wanted to say hi.
The arena seemed filled to capacity at this point. Even the highest nosebleed seats in the arena were filled. I didn't see any empty seats at all, except for perhaps a couple of people who might still be in the exhibit hall after losing track of time.
A few minutes later, the lights dimmed and a video of Warren appeared on the monitors, welcoming us to the meeting. The movie would follow, he explained, but recordings of it were strictly forbidden. Many of the people we see in it we might recognize, but none of them were paid for their appearances under the condition that nobody would profit from the video. So if we saw anyone trying to film it, to bring it to the attention of one of the workers there. Rat them out, basically.
Then the movie started. I was looking forward to the movie. I heard last year's movie included a segment with the four women from Desperate Housewives scheming to get Warren's multi-billion dollar fortune which sounded pretty darned funny. In fact, for a lot of people, the movie is the reason they go to these events.
This year's movie started with a cartoon. Warren and Charlie were hippies, driving around in their VW van, goofing around and going to Woodstock. (Warren often calls these annual shareholder meetings "Woodstock for Capitalists," which is a surprisingly accurate assessment!) They meet a few people, such as Bill Gates that tries to explain to Warren about computers (Warren is well-known for knowing next to nothing about technology and does not invest in tech companies because he doesn't understand them), with an assortment of product placements of Berkshire products. There were a lot of 'inside' jokes involved, which you had to know a bit about Warren and Berkshire to understand, so I think a lot of those went over Amanda's head.
It was kind of lame, to tell you the truth.
After that short little cartoon, a series of commercials were played. Coca-cola commercials, Geico commercials, and other amusing commercials you've all probably seen. Then another short segment showed Warren sitting in his office, drinking Cherry Coke (a Warren favorite) calling up a basketball player. Alas, I don't know my sports very well, and had no idea who the guy was. LeBron or something like that? Anyhow, the player was drinking PowerAid, another Coca-cola product, and Warren told him he needed to be drinking Cherry Coke. Well, one thing let to another, and Warren challenged the basketball player to a basketball duel.
Cut to the basketball court and other hijinks ensue. There were some very funny scenes in it, watching Warren, a 70-odd-year-old white guy going one-on-one with a seven foot tall black guy at basketball. One of the funniest scenes involved the ref throwing the ball in the air. Warren crouches down, ready to spring for it. The ball is thrown in the air, and Lebron smacks the ball, dribbles it to the hoop and scores, while Warren is still crouched waiting to jump for the ball. Then Warren jumps and, of course, there's no ball there anymore. Very funny, but it's probably funnier to watch than it is to read about it. =)
At the end of the movie, and Amanda and I heard one of the folks behind us whispering to their friends that last year's movie was better. Even though we didn't see last year's movie, we agreed. The cartoon we thought fell flat, and the basketball setting was something neither Amanda or I could really get into.
The lights came back on, and Warren stood up, walking back to the front of the arena with his family and security in tow. The royal march.
The security guys stopped at the roped off area and took their seats there while the rest proceeded through to the area in front of the stage. Warren walked behind the curtain to get backstage. A few seconds went by, where we assumed he was getting up on the stage, and out walked....
Jimmy Buffett! Trickery, folks. They tricked us. We were expecting Warren Buffett to walk out, and all we got was Jimmy Buffett, who said he was now running the company and if you didn't like it, tough. =)
I thought back to the guy in line who joked about this being his third Jimmy Buffett concert and couldn't help but laugh. Little did he know, he would be right!
It wasn't just that we didn't know Jimmy Buffett would be appearing. Nobody knew he was attending. It was a big secret and a surprise for everyone, although he has apparently been a Berkshire shareholder for years. (And no, they are not related.)
Jimmy sang a Berkshire-themed version of Margaritaville, substituting the actual words with things about buying Coca-cola and having Geico insurance. He flubbed a few lines—clearly he had not spent much effort memorizing them, and tried to follow along using cue-cards at his feet (at one point joking that Warren didn't give him a big budget for a teleprompter to work with). It was all fun, but after the song was over, he officially introduced Warren and Charlie to the stage and ducked back behind the curtain again.
Warren gave a few words about the earnings that were announced the night before. Excellent, but such great returns will probably not continue since last year had no major hurricanes, earthquakes, or other natural disasters to hurt profits. Much of Berkshire's profits come from insurance, and severe disasters hurt profits. Berkshire actually insures other insurance companies! Anyhow, due to the nature of the business, the earnings from year to year can be very lumpy. A good year with no major hurricanes, earthquakes, terrorist attacks, and so forth cause earnings to surge dramatically. A bad year such as events like Katrina or 9/11 can cause huge losses. The earnings this last quarter were excellent, Warren told us, but it's not sustainable. The next major disaster will happen, and it will hurt earnings in the future.
Then he introduced everyone from the board of directors sitting inside the roped off area, including Bill Gates, who stood up and turned around long enough to wave. I didn't recognize him from the back of his head. Did you know Bill Gates has a BALD SPOT?! Neither did I! It's no wonder we didn't recognize him when his head was faced straight ahead.
"Do you realize," I told Amanda, "between Warren Buffett and Bill Gates alone, there is over one-hundred billion dollars in this room?" It's an amount I find hard to comprehend.
Warren also said they recorded about 27,000 people who attended, which filled up the arena and the overflow rooms that could watch the live video of the meeting taking place, topping last year's 24,000 attendees. Poor Billy Joel must feel like a shmuck. I read in the local paper that he had put on a concert at Quest Center the weekend before, his first in Omaha in nearly two decades, and only pulled in 17,000 people.
Next started the question and answer period. This is the time when shareholders, even lowly shareholders with a single class B share such as myself, could ask Warren a question. Granted, with 27,000 people in attendance, not everyone would get a chance to ask the Oracle of Omaha a question. I had no intention of doing so—I was there to observe and report, not to be observed and reported. =)
About a dozen microphones were set up around the arena and overflow rooms, numbered, and Warren would go from one microphone to the next for the next few hours answering questions. Each microphone had a sheet next to it with directions about what should and should not be done. Say your name and where your from. Do not ask about what Warren is investing in because he won't tell you. Yadda, yadda, yadda.
I should mention Charlie—for those of you not familiar with Berkshire, you probably haven't heard of Charlie Munger, Warren's righthand man for the last several decades. They always answer shareholder questions together, but I was surprised at how quiet he was. From reading about the meetings at earlier years, I thought Charlie was rather talkative, but as it turned out, he seemed shyly quiet. Someone would ask a question, and Warren would go on for five minutes answering it and exploring the subject, then turn to Charlie and ask, "So what do you think?" And Charlie would think a bit and say something short and to the point like, "That sounds good." It was actually rather comical. Charlie's a funny man, but a man of few words. Warren, I felt, enjoyed talking. No so much that he likes to hear himself talk, but rather seemed like a grandfatherly sort who genuinely enjoyed entertaining people and telling stories.
Charlie seemed to be the opposite, not wanting to say anything unless it was an important point Warren may have overlooked.
Another thing that surprised me were the number of foreigners who asked questions. People come from all over the world attend this meeting every year, and while most people in attendance are from the United States, I figure fully half of the people asking questions were not from the United States. It seems to me that foreigners were far more likely to be asking the questions.
One guy, from India, I assume, since he seemed to have an Indian look and accent asked a long, rambling question and I swear I could not understand a word he was saying. The accent was just so thick, I could not understand what was being asked, and I marveled at Warren sitting there nodding his head like he had no trouble at all. I hoped Warren would repeat the question so I'd know what was asked, but he started into a story. I'm paraphrasing here—I did not record this story, so it's only recreated from my memories.
A few years ago, Warren explained, he thought Charlie had a hearing problem. It was a delicate situation, though, since he didn't want to offend Charlie by bringing it to his attention, so when he saw his doctor, he asked for his suggestions.
"This is what you do," the doctor told him. "When he's across the room for you, say something to get his attention, then close the gap until he responds." Thus, Warren would have a way to find out how good or bad Charlie's hearing really was.
"So one afternoon, Charlie was standing on the other side of the room, and I said, 'Hey, Charlie, I'm thinking about buying GM at 30. What do you think?'
"Charlie did not respond, so I crossed halfway across the room and said it again, 'Hey Charlie, I'm thinking about buying GM at 30. What do you think?'
"Again, Charlie did not respond, so I walked right up next to him and said it again. 'Hey Charlie, I'm thinking about buying GM at 30. Do you think I should buy?'
"And Charlie replied, 'For the third time, yes!'"
The audience laughed, myself included, then Warren turned to Charlie. "I'm don't know what he asked. Can you help me here?"
Charlie seemed to understand the gist of the question—I don't even remember what the question was anymore, I just remember the story about Warren going deaf. =)
I won't bore you with all the questions asked and answered. The media covered those quite well, and you can read about them there. Amanda quickly grew bored of the question and answer period and ditched me. I said I'd call her when the meeting was done to pick me up again.
I wrote a few notes down that I thought were most interesting, such as "Upside to gluttony, but not envy." I don't even remember what context it was in, but Warren must have said something to that effect at some point. He had no problem with people shorting Berkshire stock (at least it guarantees you'll have at least one buyer in the future), and even lent stock Berkshire owned for others to short (USG, I think). Warren "watches the Weather Channel to gamble, since he bets on hurricanes." I liked that perspective of gambling. He called gambling a "tax on the ignorant" and felt that the government should be protecting the weak instead of taking advantage of them.
He suggested to a 10 year old to read everything one can get their hands on and learn. To another person he said that one should practice with paper trades, but to remember that paper trades compared to the real thing is like reading a romance novel compared to, well, the real thing. (Warren and Charlie are rather amusing to listen to, even if talk about investments are usually dull.)
Mostly, I wrote down the funny comments, because I figured the reporters would cover the more serious information. One person who asked a question, Whitney Tilson, grabbed my attention because I used to love reading his articles on the Motley Fool website. Best darned writer that site ever had, I think, and I don't read it nearly as much as I used to since he stopped writing. Whitney was asking his question from an overflow room, and I would have loved to track him down and meet him face-to-face. He probably didn't have a ton of reporters and security guards blocking him like Buffett did. =) I had no idea what he looked like, though, and being in an overflow room, and I couldn't even see him in the arena. I'd never be able to find him. I certainly did not expect to hear a name of someone I 'knew' asking a question, though, so that was a fun surprise.
Last year, Buffett pledged to donate most of his wealth to charity, but said it wasn't really a big deal. For him, it's just pieces of paper. He has not sacrificed anything, not like others who have given up vacations or a dinner out. Those people have made sacrifices to make donations, which is far nobler than anything he has done.
One person asked about his silver investment, and Warren said, "We bought too soon and we sold too soon, but other than that, we did pretty well." When he asked Charlie for his thoughts, Charlie quipped, "Don't ask us for advice on silver."
One particular incident I did not see mentioned in any newspaper accounts, except a brief mention of the criticism without the context it was in. One man, who brought his 10-year-old daughter to the meeting, praised Buffett for his investing skills and went on about how much he admired Buffett but (there's always a but!) heard that some of Buffett's money to charity would go towards Planned Parenthood. "Ah, yes, a pro-lifer," I thought, and was more annoyed at wasting our time listening to his propaganda than anything. Can't he ask a real question with an answer we can actually learn something from? But then the man crossed the line, saying that he went to the Planned Parenthood website where they were promoting promiscuity and Internet porn! I was shocked. Absolutely shocked. I know there are people who are pro-life, and there are those who are pro-choice. That's fine, they're each entitled to their opinions, but saying Planned Parenthood promotes promiscuity and Internet porn is a reach regardless of what side of the line one falls on. Everyone in the stadium booed loudly once he crossed that line, and I felt terrible for the little girl next to him, and I hated that man. For a brief instance, I utterly hated that man for using his child like that. Seems like an incident like that could scar her for life, watching a stadium full of people booing her dad like that.
Buffett, I think, replied strongly and simply saying he thought Planned Parenthood is a good organization (the arena cheered after he said this), and that he respected the man's opinions, and he hoped the man would respect his, and that was that. On to the next question.
Other questions came and went. Some people criticized a Klamath River Dam in Oregon. The Native Americans dressed up in their traditional outfits, pleading to take the dam down and save the fish. Past years, I've heard, have largely been free of criticisms, but as the number of people each year have grown, more and more people are using that audience to promote their own causes. Apparently these Native Americans were not actually shareholders, but Warren allowed them into the meeting to express their concerns which seemed like a nice thing for him to do. (His response was that he had no control over that decision, and it was up to some government agency somewhere to do that. Basically that he felt sorry for them, but it was out of his hands.)
Charlie thinks turning corn into fuel is "stupid." He said he's a Nebraskan to the core, but he thinks it's just stupid. It's raising the price food that the poorest people can ill-afford as it is. (I was rather happy to hear him say this, because from what reading I've been doing, ethonol sounds like it's way overrated and not nearly as good for the environment as a lot of people want you to think. Anyhow, I buy more food than oil, so I'd rather the food stay cheap. *nodding*)
One particularly amusing Munger-ism had Charlie saying, "We should learn not to pee on an electrical fence without actually having to pee on it." Warren made a similar comment saying that he does make mistakes, but he would "rather learn from other people's mistakes instead."
There was an hour-or-so break for lunch during the question and answer period. I've read some news accounts of the meeting that said Warren and Charlie answered questions for over five hours, but if you include the lunch break, it was really closer to four. However, I think it's wonderful they do this. Most shareholder meetings do allow any shareholder to ask questions of the top management, but rarely will they sit around for half the day doing so. During this time, Warren would drink his Cherry Coca-cola and eat other Berkshire products—talk about your product placements!
And for hours, they answer shareholder questions, big and small. They don't have to, but they do, and I wish the management of more companies treated their shareholders with as much respect.
Finally an end was called the the question and answer period and the 'official' meeting started. Minutes would be taken, directors elected. Several speeches were made about a shareholder proposal in the hopes of convincing everyone that Berkshire should divest itself of its PetroChina holdings since it supposedly helps fund the genocide in Sudan. Actually, even the people who support the shareholder proposal admitted there's not a direct connection, but seem to think that such an action will convince China to stop the genocide in Sudan? Genocide is a terrible thing, obviously, but Buffett's point of view is that dumping the shares would only allow China to pick them up cheap and give them even more money to fund what they want, which makes a lot of sense. I got the impression that Buffett would be more than happy to take a loss if he thought it would end the genocide (heck, he's giving away billion to charities already, what's a few more?), but he didn't think it would help the matter and possibly even make it worse.
One thing that annoyed me about the shareholders promoting the proposal was their name dropping. One person said he worked with Martin Luther King, and another person was a former congressman who worked with Ronald Reagan. Come on, people, both of them are dead and aren't around to tell us their opinions of what's happening in the Sudan. Their name dropping has nothing to do with the issue, and I found myself getting annoyed by it. I like a good logical argument, and I felt the supporters were just going for the emotional appeal that had no real substance to it. The proposal failed miserably with something like 99% of the shares voting against it.
Buffett mentioned that he did not have to allow this shareholder proposal at all, but that he wanted to give the supporters of it a voice to express their thoughts and opinions. I like this. Most companies seem to be run by companies where the management cares absolutely nothing about their shareholders and often try very hard to squash every shareholder proposal they can before it can be voted on. Even though Buffett disagreed with the proposal and could have squashed the proposal, he still let run.
Then Buffett motioned for an end to the meeting, asking if someone seconded the motion. Nobody really said anything, and there was an awkward pause, then Buffett said, "I guess that's a second," and declared an official end.
I waited for most people in the arena to leave, not really wanting to battle the masses who were leaving. Eventually I got up and left myself, but had trouble finding a pay phone to call Amanda. You'd think in an arena that can fit 27,000 people, there would be at least a couple of pay phones in the place, but you would be wrong. I did find one, but then it was blocked off by a baggage check setup. International shareholders could check their bags, go through an airport-style security, and meet Buffett face-to-face. (He says since they came so far, he wants to make a special point of meeting international shareholders.) But because of that, I couldn't get the one payphone I could find!
When I asked a couple of employees there where the nearest payphone was, none of them knew the answer!
Frustrated, I finally left and walked across the street to a hotel. The rain had stopped at some point, and blue skies poked through the clouds. I asked an employee there about a pay phone, and they directed me to a bank of them on the second floor. Finally, I called Amanda. "I'm ready to be picked up!"
She picked me up at the hotel a few minutes later, then we headed back to our own hotel. Actually, we stopped at Denny's, next to our hotel, for dinner, then went to our hotel. And after waking up at around 3:00 in the morning, we were both pretty tired so we went sleep almost immediately. I did make a few phone calls to tell people about my adventures with Warren and write some postcards to brag 'Wish you here!' first. ;o) Then I finally went to sleep. =)
The most complete 'minute-by-minute' coverage I could find of the event online was the Motley Fool website. If you want to read all the details I did not write about or hear the story from some else's perspective, check out Live from Omaha: The Berkshire Hathaway Metting. I particularly enjoyed the part of about the 'bum rush,' since this reporter was already inside when the doors opened for the rest of us and I could perfectly imagine someone running through the exhibit yelling, "They're opening the doors early. We're going to get bum-rushed!"
During the night, the rain started again in earnest, and based on the morning news, the weather was a top news story for the area. Tornadoes warnings were in effect, as were flood warnings, and one poor town in Kansas was practically wiped off the face of the planet by a particularly large tornado.
We, however, would not be intimidated by tornadoes and floods. =) We drove out to a park in Omaha to look for a few letterboxes and plant some of our own. Miraculously, it did not even rain on us while we were out and about. Then we headed over the Missouri River to Iowa where we looked for and planted more letterboxes. I noticed an interpretive center on the map, about trails, which intrigued me. =) The Omaha area was the jumping off point for a lot of western travelers in the old days, most notably the Oregon Trail, and Counsel Bluffs (here on the Iowa side of the Missouri River) was the eastern end of the transcontinental railroad. There's a lot of history here.
I also noticed a small path on my map leading from the interpretive center to Lake Manawa State Park which looked like it would take an hour or two to walk, and I was itching to walk it. Amanda and I toured the interpretive center (fascinating place, but it's not especially large or time consuming), then I started hiking to Lake Manawa. I wasn't on the trail for more than five minutes before the drenching downpour started and thunder crackled through the air. Of course, I expected nothing less. =)
The walk took a detour almost immediately due to some construction work alongside the trail ahead, so I ended up following detour sites through a mobile home park along a mile or so of the route before reconnecting with the proper trail. It was sketchy—I heard that mobile home parks attract tornadoes, and here I was walking through one with tornadoes likely in the area. The hike wasn't especially exciting, but it wasn't bad either. I can say that much about it. =) There's just not much to say about it.
Water levels were clearly very high. The Missouri River seemed dangerously high, and the current was extraordinarily fast with large logs and trees floating downstream with it. A lot of land in the area seemed flooded as well, with houses completely surrounded by water and cars parked in lots that had a foot of standing water. I wondered if this sort of flooding was normal for the area—none of the locals seemed to pay any mind to it.
Amanda picked me up a couple of hours later at the lake, and we stopped by a boat ramp to admire all the debris floating down the Missouri at high velocities. "Last time I saw something that looked like this," I told Amanda, "was in Hot Springs." While thru-hiking the Appalachian Trail, Hot Springs, North Carolina, suffered from the worst flooding to hit the area in decades, and I remembered watching all the large trees floating downstream. I stood on one bridge crossing the French Broad River and could feel the whole bridge shake and vibrate every time a large tree hit the foundations. "This can't be normal."
We then drove south, back towards Kansas City. We made it as far as St. Joseph before finding a hotel for the night. The parking lot behind the hotel had a couple of inches of standing water covering it. "This can't be normal," I repeated. The thunder and lightning abated for most of the afternoon, but it came back again, with reinforcements, later that night.
During the nightly news, the weather was the top story. Scenes of flood damage were followed by scenes of tornado damages, then a map of the area, from just north of Omaha to just south of Kansas City was put up with dots pointing out tornado sighting. "Holy cow!" I pointed to Amanda! "Look at all those dots! We were ALL OVER that area!"
And we didn't see one darned tornado. Apparently they were striking everywhere around us, though.
And there was a flash flood advisory that covered the town we were now in.
Exciting stuff, let me tell you. =)
The next morning, we continued our migration south towards Kansas City, stopping in parks to look for and plant letterboxes along the way. The day, remarkably enough, stayed sunny and clear most of the time, but the Missouri River still looked dangerously high and fast. One railroad bridge that crossed the river seemed to hover just a couple of feet above the river. Any large piece of debris such as a tree would hit it.
We called up Wes, former webmaster of LbNA who's been banished to the Kansas City area for a crime he did not commit, to meet with him and his beautiful wife for dinner that evening. To kill the time before they got of work, I convinced Amanda to go to Cabella's store in the area. I had heard something about these stores, but never actually saw one myself. And maybe I'd be inclined to invest in the company. I came out here for the Berkshire annual shareholder meeting, I figured I'd do a little extra hunting for investments while I was in the area. Not to mention that Cabellas was next to the Nebraska Furniture Mart, another Berkshire holding. I'd never been to a Nebraska Furniture Mart either. Maybe after checking out Cabellas, I'd check out the furniture mart.
I never did make it to the furniture mart. How many of you people have been to a Cabella's store? OH MY GOSH! The place was amazing! I later heard that the store is supposedly the number one tourist destination in the state of Kansas with three million visitors. It had an aquarium nicer than most zoos I've been to, and even one of those toy shooting galleries. A giant mountain in the middle of the store had stuffed animals from around the world. It was astounding, but it's something you have to see to believe. Amanda and I ended up spending the next hour or two looking around and checking the place out. The only thing we bought were some beer battered fried cheese curds or something like that from the restaurant there, but we were impressed and the store took much longer to look through than we expected.
Wes and Jess caught up with us there, then we headed to Ted's restaurant for dinner, where they hand out paper straws for drinking with (eco-friendly Ted Turner thinks paper straws will save the world), but I was fascinated by them. I had heard about paper straws before. My mom tells me those were normal in her younger years before plastic straws were invented, but never before had I actually seen an honest-to-goodness paper straw. It might be politically incorrect to say so, but I rather prefer the plastic straws myself. Maybe they can re-melt used straws and turn them into new ones instead. That would still be environmentally sound, right? =)
Afterwards, we bummed around the nearby mall, checking out T-Rex, a restaurant with lots of enormous animated dinosaurs all over the place. Very Rainforest Cafe kind of feeling to it, and we're convinced there's a connection between the two, even if we couldn't prove it.
By the time we said goodbye to Wes and Jess, it was dark, and already very late. They offered to let us stay at their place for the night, but we had to be at the airport at something like five or six o'clock in the morning and decided it would be better to find a hotel close to the airport to crash for the night. While driving north towards the airport, though, we decided it was stupid to get a hotel room we'd only be in for four hours before we had to leave, and we decided to take advantage of our mini-van and save some money to. We'd sleep in the car near the airport. =)
We found a Wal-Mart—most of their stores have a policy of allowing people to sleep in their parking lots at night we had heard, and decided to take advantage of it. Then we crawled into the back and went to sleep. =)
A few hours later, we were up again, driving the last few miles to the airport. We returned the rental car, found our gate, and flew off to Phoenix then on to Seattle. Our trip was over.
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