The following post is by MPFJ staff writer, Marie. You can read more of Marie’s articles over at her own blog, Family Money Values. Enjoy!
Annual company shareholder meetings are typically pretty boring and infrequently attended. The Berkshire annual meeting has, to date, been an exception. Nicknamed the Woodstock of Capitalism, this meeting has historically been a sell out event in Omaha, NE. Specifically, hotel rooms have usually booked up months before the spring meeting.
I’ve owned some B shares (the cheap shares) of Berkshire for 3 years now and have attended the meeting each year. My family lives just a 2.5 hour drive from Omaha, so for us, the meeting is close enough for a day trip. B shares have only been sold since 1996. Baby B’s, as they are called, currently sell for around $140 per share while the original A shares market price hovers around $220,600 per share.
Attendance History
The first year we attended the meeting, we invited our two grown sons to go with us and since one lives out of town, we all drove up Friday evening and spent the night in a hotel so we could attend the morning activities. We arrived at the meeting well after the doors open (we didn’t relish the thought of standing in line for hours to get in) but prior to the opening ‘show’. The show is just a movie that is played on the multiple large screens in the Centurylink Center in downtown Omaha, NE. That first year it seemed to us to be primarily a promotional movie – entertaining yes, but not what we came for.
In subsequent years, my spouse and I left our home early Saturday and drove up, missing the overpriced hotel rooms and the long lines trying to get into the stadium. But we did arrive in time to listen in on several hours of Buffet/Munger Question/Answer time as well as to peruse the exhibit hall were many of the Berkshire owned companies offer discounts or information about their products.
Over the years, the number of attendees at this annual meeting has risen, from about a dozen in the late seventies to the probably max at last years meeting. Attendance at the event last year was around 40,000 – so not everyone fits in the stadium at the same time (it holds around 20,000). Although the stadium looked pretty full when we headed in after the lunch break, there were empty seats this year (unlike last).
The meeting was live streamed for the first time this year, probably reducing the number of live attendees. You can listen to it until the end of May on Yahoo Finance. I’m betting that 2015 will be regarded as the height of attendance for this event. Some journalists are theorizing that Buffett and Munger are starting a transition phase wherein their predominance at the meetings will begin receding, but most anticipate that for next year, at least, barring unforeseen circumstances, both will still be strongly involved in the meeting.
It’s a Marathon
I’ve been hoping to take my grandchildren to the meeting, but knowing they are too young to take much interest, have avoided it to date. Next year may be their year – I want them to go while Buffett and Munger are still highly involved with it. The kids will be 12 and 9 and may be able to sit still for an hour or so of the meeting itself, and will no doubt enjoy eating Dilly Bars with us in the exhibition hall. I need to take them soon, after all Buffett is 85 in 2016 and Munger is 92, and they appear to be phasing out of the meeting. Not that I blame them!
It’s got to be an endurance test for both – 3 days of being ‘on’. At least 6 hours of impromptu (to them) question answering in front of crowds in the tens of thousands; plus one on one interviews; walking the expo hall; dropping in on Omaha BRK company events throughout the weekend; and more. You can see the full weekend schedule here. I wonder if they are sorry they ever started making such a big deal out of the annual meeting. By the end of the Q &A, Buffetts voice is typically cracking. I couldn’t do it and I’m 20+ years younger than they.
At least they don’t attempt the 5K race on Sunday!
Shopping the Exhibition Hall
Always before, we have waited until the meeting broke for lunch (an hour starting at noon) to hit the expo. This year, my spouse and I went straight there after arriving in Omaha and hiking in from the parking lot ($8 to park plus gasoline was our only cost to attend). It is a huge hall with 43 Berkshire companies exhibiting. While still crowded before lunch (and was also on Friday – according to an employee – an insurance adjuster – of one Berkshire company we met standing in line to walk through the $300,000 Forest River RV), we could at least walk around without having to stop and wait for a break in the flow of people.
Some of the more popular exhibits included Justin Brands, which had a store sized exhibit with lots of different styles of boots available to purchase. Fruit of the Loom was also well attended, with nice discounts on underwear and fun special products like t-shirts saying ‘Future Warren Buffett’ or “BRK Meeting’ or paper hand held fans with Munger’s face on one side and Buffett’s on the other. If you want to wait in line you can walk through the inside of one of the Netjets plane models or (as we did), look inside luxury RVs; campers or mobile homes. See’s candy, Nebraska Furniture Mart and DQ also had discounted wares for sale. Not only were the Dilly Bars 50 cents cheaper, but it was also quick to get – and you could easily walk around with it while strolling through the exhibits. We each had two!
While the BNSF model train exhibit was exciting (yes even for adults), knowing that you own a tiny share of a railroad is also exhilarating, even if maintenance costs still exceed depreciation costs as we learned during the Q & A.
Once the meeting let out for lunch, the floor gets so crowded that if you want to stay together, you’d better be holding hands! We left to make our way to the meeting when the crowds got overwhelming.
The Q & A
Looking around the crowd, I saw mostly white folks, with a sprinkling of other races, evenly distributed between men and women, young and old. Attire ranged from very casual to high heels, with dresses or suits and ties. All of us had the ubiquitous lanyard with our blue plastic meeting credentials hanging around our necks.
Walking into the meeting arena you see at one end, a stage with 3 tables, the center one being where Bufett and Munger sit, the one one the left and right hold analysts and/or journalist who read or ask the questions. Non participating press members sit high in the stands. At the other end of the room this year, was the equipment to live stream the Q & A sessions. On the floor in the middle there are folding chairs holding board members and other privileged attendees nearest the stage and other shareholders further back. Bill Gates is a board member, so it is kind of a thrill to see him in person.
Across the other 20,000 or so seats you could see papers, bags, or signs taped to the backs of chairs or folks sitting in them – all reserving space for when the meeting started back up. Multiple big screens are in place around the front of the arena, no need to bring your binoculars. Taking pictures is prohibited, and you could lose your camera or cell phone by doing so.
Around the room there are 9 different microphone stations from which selected attendees ask questions. The selection happens at 8:30 AM with a drawing.
Attendees get chummy – conversations spring up between folks in line, and folks sitting close by (as in most stadiums, the seats were cramped) and etc. I sat next to a young man who looked like he might be Chinese. He was holding some equipment that I imagined to be a translation device. Some journalists estimate that there were at least 3000 people from China attending. On the other side of us was a young man from Omaha. The folks in front were from New York. It is fun and interesting to see where people are from and why they come to the meeting.
Security officers could be seen pacing the the floor, and yes, you do get your bag checked, and walk through a metal detector upon entry to the Center. Attendees seemed quite comfortable leaving their possessions at their seat while they went elsewhere however.
After Buffett and Munger took their seats following lunch, the lights were dimmed and Warren casually said ” OK lets get started” and named the first person who was to ask a question. He alternated letting questions come from journalist (reading ones pre-submitted by email from shareholders); analysts; or live selected shareholders (which he identified by the microphone station from which they were to ask the question). One young shareholder from Arizona wanted to know what they thought of the cattle business – as his family had a cattle ranch in Arizona. Although Buffett typically talks at length on each question before deferring to Munger, this time he passed it right along. Charles Munger is nothing if not direct (he is also so very funny). His response was something like “It’s among the worst businesses I can think of”. Then there was this dead silence until Warren stepped in to attempt to soften the response just a bit.
For a nice summary of the questions, if you don’t want to sit through the saved feed on Yahoo, check out Market Watch. Many with press credentials post live comments (like this Market Watch post) while they are attending the meeting.
Following the Q & A, the actual shareholder meeting part of the event takes place, again led by Buffett. It has the typical format, do we have a quorum, election of board members, ratification of accounting and etc. At this years meeting, however, a shareholder issue was presented. I’ve seen these being voted on in other company’s proxy votes, but had never witnessed one in person. This one was in favor of reporting by BRK on how climate change would affect the insurance part of the business.
In fact, it was an opportunity for activist to present a case to powerful board members in a highly public venue on why something should be done about climate change (specifically, they wanted carbon fees). It was (as with many of these types of shareholder proposals) an attempt to draw attention to their cause. The written proposal was projected on the screens and the proposers verbally made their case.
Speaking for the cause was a doctorate holder predicting that the seacoast cities would soon be destroyed by melting glaciers making the sea level rise, with multiple speakers following him who made a case for Buffett and Berkshire to get involved with the cause. After each speaker, Warren would comment – typically that yes, he knows that climate change is an issue and needs to be dealt with, but that it won’t be affecting the risk level of the BRK insurance arms in the next few years. Although he probably personally would support the cause, he kept his eye on the mission of BRK and kept coming back to it. The shareholders had already rejected requiring the report.
We enjoy attending this event in person. It is interesting to see some of the other shareholders, knowing that they are probably among the world’s success stories (since we all own the stock) and to be in the presence of two of the countries financial ‘elders’ dispensing their wit and wisdom. Attendees all appear to have a somewhat similar goal – learn from the best investors of our time – almost generating a cult like experience. The shopping’s not bad either!
How about you all? Have you ever been to a stockholder meeting? What was it like?
Share your experiences by commenting below!
***Photo courtesy of https://www.flickr.com/photos/e27sg/6725868673/in/
