Robert G. Hagstrom - Warren Buffet: Inside the Ultimate Money Mind

ROBERT G. HAGSTROM

Copyright 2021 by Robert G. Hagstrom. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

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Library of Congress CataloginginPublication Data:

Names: Hagstrom, Robert G., 1956 author. | John Wiley & Sons, Ltd., publisher.

Title: Warren Buffett : inside the ultimate money mind / Robert G. Hagstrom.

Description: Hoboken, New Jersey : Wiley, [2021] | Includes index.

Identifiers: LCCN 2020055833 (print) | LCCN 2020055834 (ebook) | ISBN 9781119714590 (hardback) | ISBN 9781119714637 (adobe pdf) | ISBN 9781119714644 (epub)

Subjects: LCSH: Buffett, WarrenPhilosophy. | Buffett, WarrenAnecdotes. | Investments.

Classification: LCC HG172.B84 H34 2021 (print) | LCC HG172.B84 (ebook) | DDC 332.6dc23

LC record available at https://lccn.loc.gov/2020055833

LC ebook record available at https://lccn.loc.gov/2020055834

Cover Design: Wiley

Cover Image: Kevin West

O maha, Nebraska. May 6, 2017.

It's the first Saturday in May, and for those who follow Warren Buffett, that means just one thing: the annual Berkshire Hathaway shareholder meeting. In the investment world, there is nothing quite like it.

For five straight hours (not counting a onehour lunch break), Warren, and Charlie Munger, chairman and vice chairman of Berkshire Hathaway, answer questions from shareholders in the audience, from finance journalists on behalf of their readers and viewers, and from securities analysts. No attempt is made to vet the questions ahead of time, and every one is answered fully and with candor, warmth, and the gentle wit that is the trademark of both men. There is nothing on the head table but water glasses, cans of Coke, See's candy and peanut brittle, and two microphones; no notes, no briefing books, just two men happy to answer questions and talk about their ideas. Some 30,000 people hang on their every word. I am one of them.

Earlier that morning I had driven from my hotel to the Century Link Center in downtown Omaha, site of the event. The parking lot was nearly full. The 20,000seat arena was already filled with Berkshire Hathaway shareholders, with thousands more filing into the overflow ballrooms that surround the arena. Many had been in line since 4:00 a.m., waiting for the doors to open at 7:00. Once inside, many of them dash directly for the line of chairs set up at the 11 microphone stations scattered around the arena and the surrounding ballrooms; with any luck, the people sitting in those chairs will get a chance to ask their question.

There was a time I would have been in that early line with them. But I had stopped getting up at dawn years ago, and I was certainly too old to race down the grand hall, up the escalator then hop down the steps into the arena to grab one of the coveted seats. My routine was now more relaxed.

Once inside, I took my time meandering around the giant exhibition hall, with its booths displaying all the businesses Berkshire owns. It's like an indoor shopping mall. You can stock up on snacks like See's Candies, Dairy Queen ice cream, and Coke. You can browse modular homes, boats and recreational vehicles. You can check out the new colors of Benjamin Moore paint and the latest style of Kirby vacuum cleaners. You can even sign up for GEICO insurance.

Near 8:30 a.m., I head up to the second floor and walk into Grand Ballroom B, where I customarily take my seat. Several thousand chairs in the ballroom are divided into two sections, each with a massive television screen that will soon be showing the traditional Berkshire Hathaway movie before live streaming Warren and Charlie answering questions in the arena next door. I settle into the last row on the righthand side, stretch out comfortably, and smile.

So far, everything seems exactly normal. There is no hint that at today's meeting, something remarkable will happen.

The format for the question and answer period is well established. On one side of the main table, where Warren and Charlie sit, there is a station for the three journalistsCarol Loomis of Fortune, Becky Quick of CNBC, and Andrew Ross Sorkin of the New York Times. They will present questions from their readers and viewers. On the other side is a station for the equity analysts: Jonathan Brandt, research analyst at Ruane, Cunniff & Goldfarb; Jay Gelb of Barclay's; and Gregg Warren, senior analyst at Morningstar. And at those 11 stations, dozens of eager shareholders sit nervously in their chairs, mentally rehearsing their questions.

Warren serves as master of ceremonies, calling first on one of the journalists, then one of the analysts, then one of the audience stations, in numerical order; then back to the journalists for the next cycle.

The morning session begins as usual. There's a question about driverless trucks and the threat it may pose to BNSF Railway or GEICO. Another question about Berkshire's reinsurance deal with American International Group. A discussion about technology stocks including IBM, Apple, Google, and Amazon. Warren was asked about the competitive nature of the airline industry, his thoughts on CocaCola, and the continuing struggle with Kraft Heinz.