There are hundreds of books about how to invest like Warren Buffett. For whatever reason, I haven’t read any of them (yet). For one, if really wanted to invest like him, why not just invest with him and buy a share of Berkshire Hathaway? A Class B share recently traded at around $2,300, more than 50% off its high of $5,000. And if I bought a share, I could attend those annual shareholder meetings in Omaha, Nebraska* that I’ve heard so much about. (I have read some of the shareholder letters.) Buffett himself calls it the “Woodstock of Capitalism”.
What’s a Berkshire Hathaway Annual Meeting Like?
That’s the question behind the book Pilgrimage to Warren Buffett’s Omaha by hedge fund manager Jeff Matthews. He first went to the 2007 annual meeting and wrote about it on his blog. I guess people liked it, and so he went back in 2008 and weaved it all together into this book.
A very distinguishing trait of the annual meeting is that Chairman Warren Buffett and Vice-Chairman Charlie Munger not only want their shareholders to attend, but willingly sit down for a six-hour long Q&A session where you can ask any question, and they will answer it personally. Many of the famous quotes you’ve read elsewhere were first spoken in this format, and the best part of this book is probably reading about their thoughtful responses to all these questions.
Another feature I didn’t know about is that the meeting is also highly profitable for Berkshire. Shareholders are given special tours and discounts to subsidiaries like Nebraska Furniture Mart, Borsheim’s Jewelers, and so on. Estimates say that over $100 million is spent there.
What Else Is Inside The Book
A lot of the book is in informal “blog” format, with Matthews recounting his first-hand experiences down to grabbing lunch or renting a car. However, sprinkled throughout the book are also facts and tidbits about the company and Buffett, most of which I didn’t know very well but are things that I’d expect a die-hard fan to know already. It worked well for me and provided some helpful background.
For example, I learned that the businesses with Berkshire Hathaway tend to operate independently and without much oversight from Warren Buffett or Charlie Munger. And it’s a wide variety of stores – from GEICO insurance to See’s Candies to NetJets to Nebraska Furniture Mart. Berkshire also gets the chance to buy many profitable, well-run, private companies at a discount from the individuals and families that created them. Why? Because they are attached to these businesses, and want them to remain under a certain quality of stewardship.
But it’s not a total slurp-fest. Criticisms are brought up, like how Buffett has called derivatives “financial weapons of mass destruction”, but also bought millions worth anyway. Or when he talked up the values of executives for subsidiary General Re who later got convicted of securities fraud.
Summary
This book is well-written, easy to read, and a perfect companion for a cross-country airplane trip or nightstand. However, I don’t think I really learned much of anything practical from a financial perspective. I’d treat it mostly as entertainment.
To be clear, it is not a book on value investing. For that, stick to the classic The Intelligent Investor by Benjamin Graham. Nor is it a book about the personal life of Warren Buffett. For that, there is now The Snowball.
Actually, the book I most want to read next is Poor Charlie’s Almanack, which contains many quotes from Charlie Munger, who seems a bit abrasive but I have come to respect him as an independent thinker. The only problem is that the book doesn’t seem to be in print anymore and used copies are fifty bucks? Time to hit up the library.
I’m still wavering as to whether I want to attend this meeting. Would it be worth the hotel and airfare? Anyone planning on being in Omaha on May 2, 2009? 🙂
* Actually, you don’t even need to be a shareholder to attend any more. Buffett got annoyed that people were scalping tickets on eBay for $100+, so every year he floods eBay with tickets for only $2.50.
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Poor Charlies Almanck is a great book and its only sold through Charlies website since he donates all the money to charity.
Link: http://www.poorcharliesalmanack.com/index.html
BTF is a fund that very closely follows Berkshire Hathaway holdings, about 40%+ actual BH.
I’m a shareholder and am planning on attending the meeting. Fortunately, I can just drive there (I live in Kansas City, MO), so I can avoid paying the airfare. Good luck finding a hotel in or around Omaha if you don’t already have one lined up! Tip – try hotels in Council Bluffs, Iowa – which is very close to the Qwest Center (where the meeting is being held).
Thanks for the tip, JR. I guess the retail is $50. I could have sworn I was about to buy it a few years ago for $10-$20 used.
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In my view, BTF is a leech on BRK’s success. It is a closed end fund that contains at lot of BRK, but also charges an outrageous 2.13% annual expense ratio. 2.13% for mostly doing nothing but hold BRK?! No wonder it trades at a discount to NAV.
Thanks for this review, and the references to the other books. I usually get my information from websites.
Do you think it’s better to learn from these books? Any other books that are must-reads? I’m trying to be selective with my purchases so I don’t want to waste money and not learn anything.
I went to the meeting last year. We got there well before the meeting started but the whole arena was already full. We had to go into overflow conference rooms to watch the meeting on video. These rooms were overfilled themselves. Listening to the 2 of them is worth it. The rest of it is nothing special. They have a showroom where each of their companies has a booth set up. It’s pretty boring to tour a manufactured home or pick up pamphlets from Geico.
I bought Charlie’s book about a year ago. I really enjoyed it. Another good book is Seeking Wisdom by Peter Bevelin.
Yay, Berkshire Hathaway!
I work at GEICO, and we get our profit sharing checks tomorrow! I’m not supposed to tell what percent it is, so I’ll just tell you it’s enough that I’m excited to get it!
The first 10% automatically goes into your 401k (whether you actually participate or not) so I like that the company is kind of making people save it. I’m sure they’ve got a huge load of tax/other reasons to do that, but oh well….
Also, they make a video every year and Warren Buffett’s always part of it. He was a DJ this year. For a rap song. Delightful. If only I could leak that to youtube!
I was just about to write that you can get tickets on ebay, but you beat me to it with your edit. 🙂
The book sounds like a regurgitation of all the public domain information. The book’s description on Amazon (where they misspell Buffett’s name! Twice! The horror! :)) lists all of the questions that were already answered in many interviews and in Warren’s auto-biography, “Snowball” (great book, by the way). The convention details are fun, but any of the last year’s 31,000 attendees could tell you the same thing. The only redeeming quality this book might have is a transcript of Q&A sessions from previous years. (Is it in the book?)
As for the convention itself, it’s pretty fun. There’s a reason they call it “Woodstock for Capitalists.” Saw a lot of famous people – Bill&Melinda Gates, Tim Ferriss, stood a few feet away from Buffett himself… The Q&A session is priceless. Unfortunately, last year a lot of questions were from hippie protesters and people who just wanted to chat. 🙁 In his latest letter to shareholders (http://www.berkshirehathaway.com/letters/2008ltr.pdf), Warren said the protocol would change: now at least half the questions will be pre-screened and will be about the actual company. In the first floor’s exhibit hall, there are lots of samples and freebies from Berkshire-Hathaway’s companies, and a lot of their merchandise is sold at deep discount. You can get a box of See’s Candies for just $10, and buy all books about Buffett, Munger, and their company far cheaper than you’d get it in retail (that’s how I got my copy of Charlie’s Almanack).
To sum this up – go! :^D Convention aside, Omaha is a great city with really nice people. Oh, and try the Valentino’s pizza – it’s the best.
P.S.: You don’t have to fly to get there. Your “About me” says you live in the western part of the country. I’m in Reno and I just took the Greyhound bus. It cost ~$300 (will be $150 with my 50% off coupon this year haha) and took 36 hours (!) to get there, but it was a fun trip – and it’s still better than flying. 😉
I am from Sweden will also go to the AGM of BH in Omaha (May 1-3). I will buy my BRK-B this week. I hope the share will be registered on time to get the meeting credentials to access the AGM. Else I will need to buy entrance card via Ebay…
Sarah,
Wow good job! Leak that video here haha.
Update: today I bought one BRK-B share for 2385 USD. AIG, Buffett’s remarks etc probably pressed down the price of the BRK-shares today.
Here are my experiences at the Berkshire Hathaway meeting:
http://willworkforjustice.blogspot.com/2007/06/warren-buffett-and-berkshire-hathaways.html
If you like Charlie Munger, you can have him all to yourself at the annual Wesco meeting in California:
http://willworkforjustice.blogspot.com/2008/05/wesco-shareholder-meeting-may-7-2008.html
if you need a place to stay, try the settle Inn at bellevue. Great hotel, keep an eye out for the knight in shining armor.
I have a hotel room reservation (2-room suite) at Doubletree just off 72nd St that I cannot use. Our yearly pilgrimage to the annual mtg has been pre-empted by a business trip 🙁 Please let me know if you need a hotel room for Fri/May1 and Sat/May2!!!!
I saw this article saying Warren Buffett has not generated any alpha in 10 years:
Warren Buffett’s Alpha and Returns
Does this make sense to you?