Berkshire Hathaway Annual Meeting: Notes, Quotes and More

4 May, 2009 | by


The Berkshire Hathaway (BH) annual shareholder meeting has long been regarded as the Mecca for prestigious investors and businessmen alike.  Knowledge-thirsty shareholders and spectators flock from all over the world to hear the Oracle of Omaha, Warren Buffett, and his curmudgeonly sidekick, Charlie Munger, pontificate in grand fashion on the conglomerates’ performance, as well as on a wide array of current events. 

Attending the meeting had been a personal desire of mine going all the way back to my grad school years.  The event has often been described as an “MBA in a weekend” or even the “Woodstock for investors”.  Such sensational statements always left me feeling a bit incredulous, as I always found it hard to believe that an annual shareholder meeting could yield such a worthwhile experience.  However, my incredulity was surpassed by my appetite to discover the reality for myself.  So I purchased my obligatory share of BH stock and made my way to Nebraska for the 2009 annual meeting on May 2nd

(Actual Event Passport)

Weekend Format:
The weekend’s festivities started on Friday May 1st at the BH-owned Borsheims, where shareholders were welcomed to a warm reception.  Snacks, cocktails and conversation kicked off this illustrious gathering of investors.  The annual meeting began early the next day at the Qwest Center located in downtown Omaha.  The “Wild West” was the theme of the event in case the conspicuous photo above didn’t tip you off.  Doors to the massive building opened promptly at 7am, followed by the humorous annual meeting movie at 8:30am.  The main event kicked off at 9:30 when Warren and Charlie took the stage to begin their famous Q&A session.  Questions were presented by audience members (a lottery was held to determine which shareholders would ask a question).  A panel of journalists asked preselected questions that had been submitted via e-mail.  Based on my estimates, there were approximately 50 different people who managed to ask their questions, some of which were multi-part questions, during the 6 hour session. 

Around 3:15pm, the formal annual meeting was held to formalize the session.  An official vote to approve the current list of BH directors was approved.  Out of the ordinary was a motion that was put forth to demand BH conduct a sustainability report in response to allegations of poor working conditions in several Russell Athletic-owned factories in Honduras.  The motion was denied after the CEO of Russell Athletic defended the company’s approach to handling the unfortunate situation.  The annual meeting officially ended at 3:45. 

Carnival-like Atmosphere:
Afterwards, there was a special session designated for international shareholders only, where my understanding is that Warren and Charlie personally greeted the shareholders and thanked them for making the long journey.  Throughout the day, people were free to roam the Qwest center.  Most made their way to the Grand Hall (see screen shot below) in order to enjoy the carnival-like atmosphere and the 40+ booths featuring BH-owned companies.  Mars, Dairy Queen, See’s Candy and the book worm appeared to be very big hits there.  You know it’s a special environment when you see the business elite snacking on ice cream while hanging out at the rather pretentious NetJets booth.  Simultaneously, you see William Gates and Peter Buffett casually walking amongst the crowd.  It was almost surreal at times because it was such a diverse audience.  Business students wandered the facility in small groups while clutching their notes and resumes.  Groups of families enjoyed the festivities.  Even my taxi driver (a non-shareholder) managed to score a passport to the event.  From designer suits to ratty jeans and t-shirts, the event really is the Woodstock event of the year for savvy investors.      


Around 5:30, droves of shareholders migrated to “Warren’s Western Cookout” which was held at the Nebraska Furniture Mart some 15 minutes away from the center.  Local country music and pulled pork were the highlights of this event.  The following day was Omaha’s official “Borsheim’s Shopping Day” where shareholders were given attractive discounts to encourage them to crack open their wallets.  The weekend festivities concluded with dinner at the Gorat’s Steakhouse which is supposedly Warren’s favorite steakhouse in the world.   

MBA in a weekend:
In retrospect, I think the characterization of the BH annual meeting as an “MBA in a weekend” is a relatively fair statement to make.  However, I would go so far as to say that the event offers so much more.  Much of the advice doled out was rooted in the fundamentals of “value investing” that were comprised of simplified mathematics and patience to find “bargain investments”.  Munger actually made a rather sarcastic remark stating “professors teach these advanced mathematical models because they have to teach something…”  Buffett then chimed in with the old proverb, “a bird in the hand is worth two in the bush”.  He went on to explain that such a statement in business school simply wouldn’t fly given its over-simplicity.  

The beauty of the exchange between Buffett, Munger and the shareholders was just how candid each and every answer was.  No fluff, no politically correct response, just real-world strategic perspective based on decades of practical experience.  Simply incredible.  Equally incredible were the networking opportunities readily available over the entire weekend.  All I can say is “wow.”  Investment analysts, doctors, lawyers and entrepreneurs were just some of the people I casually bumped into during the festivities, all of whom were looking to exchange insights, not to mention business cards.

Here are some of my notes from the Q&A session, as well as the rest of my first Berkshire Hathaway experience, including conversations in the hallways, taxis and airports with some sharp people.


Non-Linear Notes:

Buffett twice mentioned Jamie Dimon, CEO of JP Morgan Chase, and his latest letter to shareholders as a great perspective on the US economy today.  You can view the letter by clicking here:  Click to download

Question arose regarding the Moody’s recent downgrade of BH credit rating.
WB:  I’m irritated that the downgrade took place, of course.  With that said, BH has never outsourced investing research and they do not believe credit ratings are a substitute for a good business with sustainable intrinsic value.  We’re confident that the rating will be restored in the future. 
CM:  “Sometimes to a man with a hammer, every problem looks like a nail.”  Advanced mathematics caused this problem.  “…This is a clear case where Moody’s was too smart for their own good.”

Look for attractively priced businesses, not stocks. Could you remain confident in your choice based on their durable competitive advantage?

Question regarding the future of real estate.
WB:  Currently there is an excess inventory of 1.5 million units.  If we continue to eat through the inventory at 500K per year then I would suspect it will take anywhere from 2 – 3 years for prices to stabilize.  Some areas have been hit harder then others such as south Florida which will have problems for a much longer period of time. 

There were several questions regarding succession planning.
WB:  “There are 4 candidates for the CEO position, all of which are internal.”

Note:  Several people at the event mention that Byron Trott (Buffett advisor and former Goldman Banker), Tony Nicely (Head of Geico), Ajit Jain (Head of reinsurance) and David Sokol (Head of Mid-American) are the front runners.  Based on conversations with several long term shareholders, most seem to feel that David Sokol is the most likely to be awarded the top spot. 

WB:  Ajit Jain is one of those individuals that’s “irreplaceable”.  The problem we’re facing is that most internal candidates are currently happy with their roles and are not interested in the CEO role. 

WB and CM have never discussed timing the market, and if they could, they would focus exclusively on S&P 500 futures

Question regarding transition planning for candidate.
WB:  “…They would have nothing to do if he followed me around and watched me read, write and make phone calls.  These candidates would not be candidates if they were not ready right now.  They’ll have a different stance at the plate, but they all know how to hit homeruns.”

Question regarding the prospect of a nationalized health care system in the US and the potential impact on BH.
CM: “…Something like Europe will come to the US.  As a republican, I would like to see that happen.  However, I would like the government to wait for the economic situation to first stabilize before it happens.” 
WB:  We have 246 thousand people working for us.  We’ll adjust as needed. 

Several questions regarding the future of financial literacy for the next generation.
WB:  I lecture to 49 universities that come to Omaha every year.  Individuals need to understand some accounting but must also ignore certain aspects at time which are nothing but noise.  Furthermore, it’s important to be able to identify a fleeting business versus a durable one.  You also need to have an “emotion stability” to do well in investing.  CM:  “…Half of future investors will be at the bottom 50%.  Reduce the nonsense.”
WB:  “You don’t need to have a high IQ to do well in investing.  In fact, if you have an IQ of 150, sell 30 points to someone else as it won’t help you.”

Buffett questioned Chrysler and the newspaper industries’ sustainability.  The newspaper industry in particular has been searching for a new business model, but it doesn’t seem to be presenting itself.  BH will not invest in the newspaper industry regardless of how cheap it gets.

Question regarding BH sustainable competitive advantage.
WB:  We have a very different shareholder base at less then 20% turnover compared to the 100% turnover everywhere else.  That cannot be replicated, nor can our special culture. 

Question regarding the heavy advertising that Geico spends.  $800 million this past year alone. 
WB:  We want to capture the mind share across the US.  The value of Geico has gone up every year since its inception.  We’re getting more then our money’s worth for what we spend.  “…I’d spend $2 billion a year if I thought it would help us.  We’ll continue to spend as needed.”  

Questions regarding BYD and how it seemed to be speculative.
CM:  This is not some unproven company.  “It’s a damn miracle.”  It’s a great privilege to be associated with this venture as I think it will have a great impact on the world.
WB:  BYD does $4 billion a year.  We would have invested more then 10% in the company but they did not want to sell us any more then that. 

Great Quote:  WB mentioned how CM will periodically say “In the end you’ll see it my way because you’re smart and I’m right”

Questioned regarding the prospect of BH spinning over some businesses.
  “…No!  Our current structure provides us great tax flexibility and the ability to easily reallocate funds to businesses as needed.”

Question regarding the world economy as a potential underlying issue.
WB:  “We have a system that works and unleashes the human potential.”

Question regarding executive compensation in capital-intensive subsidiaries:
WB:  “…I’ve served on many boards, and what I’ve seen is that boards have little effect on executive compensation.  More often than not, it has been the CEO that has had a huge influence on their own compensation.  The compensation committee is staffed by the CEO who usually selects Cocker Spaniels, not Dobermans.” 
CM:  “I feel directors should not be paid at all due to conflicting reciprocal interests.” 
WB:  “…Who wants rationality when irrationality pays more?”
WB:  “…Take the top 6 investment managers and have them speak up toward egregious acts.  Public embarrassment can change big shot behavior.  Boards respond to negative press”

Hope you found the notes useful.  I’ll leave you with one of my favorite quotes from Buffett “Of the billionaires I have known, money just brings out the basic traits in them. If they were jerks before they had money, they are simply jerks with a billion dollars.”

12 Responses so far | Have Your Say!

  1. kathleen
    May 4th, 2009 at 9:42 pm #

    great article. sounds like a good time!

  2. Raymond Donovan
    May 4th, 2009 at 10:22 pm #

    Thanks for sharing your notes. This article has inspired me to make it out to Omaha next year!

  3. Luis Silva
    May 4th, 2009 at 10:53 pm #

    Good article. I felt like I was there. I’m hoping your next topic will cover all the great stock tips you picked up on your trip. The boys at Harvard could use some help. -Lui

  4. Sandy
    May 5th, 2009 at 8:09 am #

    The tone that was set at the annual is not one I would have imagined, very refreshing to hear. My favorite quote you mentioned was from William Buffet, “You don’t need to have a high IQ to do well in investing. In fact, if you have an IQ of 150, sell 30 points to someone else as it won’t help you.” They definitely try to simplify everything in order to enable you with an ‘I can do this’ attitude.

  5. Brian GIbeault
    May 5th, 2009 at 8:33 am #

    Very interesting to see a little but of the thought process behind some of these large companies, even if it is just a quick glimpse in.

    I particularly like this quote – “In the end you’ll see it my way because you’re smart and I’m right” I will definitely use that at some point in my life.

  6. Atul G
    March 11th, 2013 at 5:45 am #


    I read your blog post about about the Berkshire Hathaway Annual ShareHolder Meeting with interest.

    I am hoping to attend the 2013 meeting for the first time, but I had a query – is a 18 month old infant allowed at the events like the cocktail reception and NFM picnic, etc (though I realize, he will not be welcome at the actual Q&A meeting).

    I searched but could not find any info on this, so thought to ask you since you have been to the meeting.


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  1. Berkshire Hathaway Annual Meeting: Notes, Quotes and More
  2. Buffett, Munger and Omaha! My weekend in Nebraska - Rich’s Global Adventures

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