Warren Buffet’s events are known for their immense humor, and the dynamic paring of the opposite personalities of Munger and Buffet. Charlie Munger is acerbic, and throws around words as if they were elephants: he never says anything that is not important. In fact, his statement, “I have nothing to add" is legendary. He’s the dour straight man.
Buffet, on the other hand, is verbose and loquacious. He’s the jokester. He loves to speak and make quips (I’ll share many of these later). But even more so, he is known for his honest, frank, mellow speaking manner. His insights are legend. He bought Coca Cola stock when no one else would, as well as American Express. More recently, he bought PetoChina stock when the market valued it at 35 billion. He disagreed, after reading the share owners report, and pegged it at 100 billion. So he bought in. When the market fully valued it, he sold.
His recent purchases have been Burlington Northern Railways and Wrigley’s Chewing Gum. He has also started a new reinsurance business to insure bonds. This reinsurance business is now $400,000,000. Now, he’s looking at buying family owned businesses in Europe that do not have a new generation that wants to “take over.”
Together, Charlie and Warren have grown the book value of these shares from $19 to $133,008 over the last 40+ years; a rate of 21.1% compounded annually. In the process they have become investment legends. They avoided the dotcom bubble and much of the sub-prime crash and made fortunes for their shareholders and themselves. Buffett is now estimated to be worth $62 billion. He remains almost studiously humble, living in the same modest home and eating regularly in Piccolo Petes, a no-frills Omaha restaurant.
Now, Warren wasn’t always an extrovert. In high school, he was extremely shy and introverted. However, he knew that to be successful he had to know how to speak in public, so he paid a friend $100 to teach him how to speak. Since then he has become one of the best known speakers and has rightly earned the name, the Oracle of Omaha.
Now, let me go the meeting. It began promptly at 8:30 with the famous Berkshire Hathaway movie. A very funny cartoon that had Walter Kronkite announcing Charlie Munger running for President as an independent. He names Warren Buffet as Secretary of Commerce, Secretary of the Treasury, and Chairman of the Federal Reserve, all at once. He also names GEICO as Secretary of the Environment. His solution for global warming – eat a DQ blizzard everyday. His answer to health care crisis - eat more See’s candy. For his cabinet – Nebraska Furniture Mart. The White House would be taken care of by Benjamin More paints. To combat airport delays – Netjet. For financial advice – American Express. And at the end – there is a huge disclaimer – that no animals were hurt making this film.
Then came a very funny discussion by two British commentators on what they called “doggy debt.” They explain that they’ll lend money to buy houses to those who can’t afford it.
The scenario goes like this. A lender goes around looking for someone sitting on the porch of their house. They have no money and are obviously poor. The lender asks them if they’d like to buy their shack before it falls down.
The lender then sells this derivative debt to many institutions as a hedge fund. They do this by giving the fund a great name like the Enhanced High Grade Structured Leverage Fund. When the problem gets realized, the government gets called on to bail it out. Not to reward greed and stupidity, but to reward ingenuity.
Next, Warren Buffet gets a great idea called “the Internet” and tries to convince Charlie. Charlie says, “No way” and then asks Buffet “Have you been drinking?“
Unperturbed, Warren calls Jamie Lee Curtis, who is at home in bed. She agrees and phones Charlie “Hunger” I mean Munger. He agrees with everything she says, as long as he can star in her next movie. She demurs, as she’s promised Buffet that job.
The crowd went wild with this.
Then another cartoon. Julie Andrews singing about her favorite things – of course, all things Berkshire Hathaway owns.
Next, was a short piece where Warren is called by a girl who wants him to save her friend in jail. He agrees to see her and help her. He does – teaching her bridge to pass the time until she gets out. (Humbly, I think this piece missed the mark. The next acts were better, much better.)
Then there was a replay of last years opening, where Mr. Buffet was announced and Jimmy Buffet came out on stage. They rewrote and played his song as “Wasting away in Warren Buffetville.”
Then a news flash appeared. It stated Warren Buffet was stepping down as head of Berkshire Hathaway to take up an acting career. He would trade places with Susan Lucci from All My Children. She then comes on stage as the new head of Berkshire Hathaway, declaring dividends for all share owners and many other changes. Warren gets wind of this and comes on stage.
He rips up his acting contract and declares that Berkshire Hathaway is his show. “I can’t live without Berkshire” he cries.
With that, the 2008 meeting, the “Woodstock for Capitalists” was declared open. He and Charlie then took questions from the audience.
Want to know the questions and answers? Want to know what will happen to commodities, the stock market, YOUR FUTURE? You’ll have to stay tuned for Part 3.
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