An Audience With the Oracle of Omaha
As members of Washington College’s Brown Advisory Student-Managed Investment Fund Program, we earned this trip by winning an essay and investment research competition offered to the group’s members. Richard Bookbinder P’10, the program’s senior advisor and managing member of TerraVerde Capital Management, traveled with us. Out of 40,000 plus shareholders from across the globe, along with large groups of students from MBA and graduate programs at Columbia, Yale, and Wharton, it was particularly exciting for three Washington College undergraduates to have the opportunity to participate.
Since the Brown Advisory Fund and Berkshire Hathaway have some common investments, including Wal-Mart, Coca-Cola, and Chicago Bridge and Iron, we were excited to learn more about the companies, take part in the “Super Bowl” of company annual meetings, and especially listen to and learn from Buffett and his partner Charlie Munger.
Months before the trip, we started studying to extend our knowledge of Berkshire Hathaway, its subsidiaries, and the well-known chairman/CEO. We read several of the company’s recent annual reports, corporate news announcements, and a Buffett biography. Every week leading up to the annual meeting, we met with Hui-Ju Tsai, the program’s faculty advisor and assistant professor of business management, to discuss the readings and develop insight into complex company aspects.
Berkshire Hathaway Inc. is a multinational conglomerate holding company headquartered in Omaha that became highly visible when Buffett took it over in 1965. Today, Buffett is the third wealthiest person worldwide and is renowned for his philanthropy, frugality, and financial know-how. As chairman, CEO, and largest shareholder, he has molded Berkshire Hathaway into the fifth largest publicly held company worldwide with a market cap of $320 billion. It has also managed an average annual growth in per-share book value of 19.4% over the past 50 years.
Once in Omaha, we were thrilled to see Berkshire Hathaway’s annual report come alive on the exhibition floor where dozens of the company’s subsidiaries set up shop to demonstrate and sell their items throughout the weekend. We enjoyed eating dilly bars at the Dairy Queen cart, touring luxurious Forest River RVs, and eating Buffett’s favorite See’s Candies while taking pictures with Buffett’s Geico Gecko.
However, the most influential part of the trip was the comprehensive, six-hour Q&A during which Buffett and Munger took questions from the shareholders, three journalists, and three financial analysts. While tackling questions and concerns about a variety of holdings, Buffett and Munger offered invaluable advice for students and investors alike. Although Buffett did not reveal any of his trade secrets for investing, he did advise that it is important to keep emotions out of the decision-making process. He pointed out that when evaluating any investment decisions, he asks himself if he would want to be in a partnership with that company’s management.
More than anything, traveling to Omaha instilled a sense of passion in us. While Buffett attributes much of his success to timing and luck, his story is one that demonstrates his commitment to continuous learning, growth, and entrepreneurial spirit. As Chief Investment Officers of Washington College’s Brown Advisory Student-Managed Investment Fund Program, we witnessed the importance of value investing and of researching the companies and industries we plan to invest in. This once-in-a-lifetime experience gave us the opportunity to not only see one of America’s most influential people speak, but also witness the legacy he will leave behind.