by L.J. Rittenhouse
On the plane to Omaha two years ago to attend my first Berkshire Hathaway meeting, I remember how self-conscious I felt reading Roger Lowenstein’s biography of Warren Buffett. Suspicious of large gatherings and charismatic leaders, I was nervous about being labeled a "Berkie" (the name used by local taxi drivers to describe the influx of visitors on Berkshire’s shareholder weekend). Last year, 10,000 shareholders showed up. This year I joined 15,000 other shareholders and guests. More like a happening than a meeting, I noticed the term cult leader creeping into this year’s media coverage.
Since I had so much fun at this year’s event, it’s made me wonder whether I’d gone over to the dark side. Here’s evidence for and against:
Friendly: Berkies might be mistaken for cultists because they are friendly and polite. We were easy to spot this year, because we were all issued laminated badges which we hung round our necks on shoelace like cords emblazoned with the Berkshire Hathaway name. It’s easy to strike up conversation with fellow Berkies. Not even the Wall Street types seem to take themselves too seriously. The diversity is striking – pin stripes and blue collars, young and old, primarily white, but with a mix of black, Asian and Hispanic. So is the civility. It was tested Monday morning as hundreds of people lined up as early as 5 a.m. to get seats in Aksarben Coliseum. When the doors opened promptly at 7 a.m., people filed in as they had lined up, purposeful, but respecting the space of others around them.
Frugality and Fanfare: There’s a touch of the fanatic when it comes to Berkshire frugality and consistency. I was surprised to find that the hour-long kick-off movie included a lot of the same Monty Python-like material from last year’s movie -- a testament to Berkshire economy. Artfully mixing home videos of Buffett playing the ukulele and Charlie Munger’s 75th birthday party with Coca Cola commercials must also have helped to cut costs.
Caught in a rare act of over promising, Buffett threw what he likes to call his fast ball to start the Saturday night Omaha Royals game. He then patiently posed for photos and signed autographs for five innings. With less fanfare, Buffett was spotted driving a late-model Lincoln to Aksarben Coliseum for an early start to the Monday morning shareholder meeting.
Certain to place on the list of most rumpled, Buffett described his fashion statements and life style as that of a college student. He drives the same kind of car, eats the same food, watches the same TV, but admits to traveling a lot better. I met people at a party who live down the block from the house where Buffett has lived for 35 years. Their son goes to public school with Buffett’s grandson. His compensation places him near the bottom of corporate chieftains, but he’s not stingy when it comes to reputation. In a film clip from 1991, testifying as interim CEO of a then teetering Salomon Brothers, sparks flew as Buffett declared employees would be forgiven for losing money, but not for losing one shred of the firm’s reputation.
Fun: Cultists are not known for their sense of humor. This is reassuring. I don’t know of another annual shareholder meeting where there is as much laughter and as little confrontation. The geezer and the geyser is what Buffett calls the photo of himself on a cell phone standing in front of Old Faithful in Yellowstone. When asked if he preferred to be rich or wealthy, he replied, "At the risk of sounding like President Clinton, would you mind telling me, what is the difference?"
Of course, he has the perfect straight man in Charlie Munger. The concept of investor-partner is happily evident in six-hours of answering questions, trading jokes and munching on See’s candy. Buffett’s affability is reinforced by Munger’s acerbic stoicism. At Berkshire, it’s important to have fun. Money is a key goal, but it’s not management’s principal motive. Buffett says waiting to do what you really enjoy doing is like saving sex for your old age.
Fair: Fair play is serious business to Buffett and Munger. This year, I overheard the publisher of Berkshire-owned The Buffalo News good-naturedly complain about the practice of not reserving seats for the Berkshire managers. His dilemma was corroborated by my companion on the plane out of Omaha who said that the president of Helzberg’s Diamonds, drew the short straw among the manager group. This meant he was up outside the Coliseum before 6:30 am waiting in line to save seats for the other Berkshire managers. Even Charlie Munger’s kids wait outside with the rest of the shareholders. Welcoming institutional investors who joined Berkshire through the General Re acquisition in 1998, Buffett encouraged them to attend the annual meeting and to keep current with quarterly financial postings and annual reports. He also told them not to expect him to return their phone calls.
A couple I met from Poughkeepsie, shopping at the Nebraska Furniture Mart, told me they had just decided to buy an expensive motorized chair for the wife’s ailing mother when their salesman advised them to wait until the recipient could test the chair herself. Reminiscent of the moment in cinematic history when R.H. Macy realizes the promotional power of having his Santa send customers to Gimbel’s, this Berkshire Hathaway salesman lost a sale, but gained lifelong customers.
So what’s the difference between a cult and a community? If cultists are known for unquestioning devotion to leaders who end up exploiting their followers, then Berkies don’t qualify. The mindful devotion of people I met in Omaha is founded on leadership that works to minimize privilege. With 99 percent of his net worth tied up in Berkshire Hathaway stock, Buffett’s interests are clearly aligned with those of his followers. In fact, the media missed an important part of shareholder weekend. By dwelling on Buffett’s words and the year’s unusually lackluster stock price performance, they failed to notice what inspires the actions and attitudes of this community of corporate contrarians -- Berkshire’s shareholders, customers, employees and management.
Buffett likes to compare shareholder weekend to a capitalist Woodstock. But when I think back on the weekend, instead of imagining Jimi Hendrix, I’m reminded of Richard Harris playing King Arthur in Camelot, sticking to what he knew to be true. Perhaps that’s what takes us to Omaha in the spring -- a desire to be part of a brief moment in history when what you do counts for as much as what you say.