What actually happens at the Berkshire Hathaway shareholder's meeting? What's the point of it all?
It's primarily an event where the Berkshire Hathaway shareholder is appreciated and honored. You are my business partner, Buffett tells them. That's why there's such a passionate following. The shareholders worship him because they are treated so well by the company. It's like a religious experience. Everyone is happy to be there with the pope.
But what Buffett really wants you to learn when you are there are the intangibles of his business. You learn a lot about Berkshire Hathaway by coming to the meeting. And Buffett wants people around him who are going to join him for a lifelong investment relationship. There are shareholders at the meeting who've held his stock for 40 years when it was $100 per share. Now it's $190,000 per share. No wonder they're so loyal.
How has the event evolved over the years?
About 30 years ago, there was something like 50 people in a room. The event kept outgrowing itself and these shareholders became fabulously wealthy. Now, all 80 subsidiaries of companies owned by Berkshire Hathaway are represented there. They'll all have booths, like at a carnival, presenting their wares. Sometimes they'll sell things at a discount. There'll be a See's Candies booth that will sell discount candy. There will be a Fruit of the Loom booth peddling boxers and t-shirts. Buffett just bought 50 percent of Heinz Ketchup, so they'll be there. Dairy Queen will be handing out ice cream. Every one of his businesses will be there and the people who go will get to learn all about them. The event is a great way for his businesses to get exposure for their brands.
Why does Berkshire Hathaway go through all this trouble?
It reinforces the principles and the brand of the company to its most loyal customers. It's Berkshire Hathaway saying "This is who we are." It celebrates a great American story and what Buffett has done with this company.
It's really like no other company out there. Most other companies have a caste system. The upper management rewards themselves and leaves everyone else out. But Buffett's salary is $100,000. He has no stock options, no perks, nothing. Most of these CEOs at other companies are like royalty, but not Buffett.
How does Buffett's image come across at the event?
He's got a great sense of humor and a great sense of fun. He sets the tone. He's a real down to earth midwestern-type of guy. When I get into town, I always drive by his house that he bought for $31,500 in 1958. He's worth over 60 billion dollars now and he still lives in this house. He's giving all his money to charity. He's giving to foundations to improve society. He's like a modern-day Andrew Carnegie.
So why has this meeting become such a big deal?
It all boils down to this: A lot people really admire Buffett. They like and respect him and learn a lot from him. So a lot of the people who've made a lot of money like to come and hear him speak. People come from all over the world, from as far away as Australia and Asia. As Buffett says, the event really is like a Woodstock for capitalists. But every Woodstock needs a rock star and that's the role he fills.