I first came across the concept of value investing from reading Benjamin Graham’s The Intelligent Investor. This was followed by poring over the annual Berkshire Hathaway ‘Letter to the Shareholders’ and The Snowball: Warren Buffett and the Business of Life.

This year I decided to make the pilgrimage to attend the annual shareholders meeting, and to be honest, I was very keen to attend as soon as possible as Warren and Charlie aren’t getting any younger.

Credentials

Despite holding BRK.B shares (the affordable version of the c. $300k BRK.A shares) I struggled to obtain a physical copy of the annual report from my broker, which has a form in the back to apply for shareholder meeting credentials.

Ultimately I ended up buying some credentials from eBay as the required paperwork did not look to arrive in time.

Alternatively you can queue during the weekend, along with proof of ownership, to obtain credentials. The ‘will call’ lines for credentials did not appear too long (at least compared to the See’s Candies line…).

Shareholder shopping

Shareholder shopping expo was held on the Friday and Saturday and really gave you a clear view of the breadth and depth of BRK assets. Everything from Coca-Cola and Netjets to Clayton Homes and Justin Brands. There are some quite fun Berkshire branded products available for purchase and deep discounts ($1 Dairy Queen anyone?). However the most fun was simply talking to any of the vendors, who were all deeply passionate and proud to be owned by BRK.

Wandering the expo floor it was interesting to reflect on the relative normalcy of these companies; no flash ‘high-tech’ companies, just companies executing very well and serving a niche. See’s Candies for instance, is a well-known BRK investment and generates ‘reliable’ annual profits of >$80m per year (See’s was acquired in 1972 for $25m).

The Meeting

We debated on what time was appropriate to queue up for the actual meeting on Saturday. The consensus from perusing various online forums and talking to a few other punters indicated that queueing between 4am and 7am to get a ‘good seat’ was required.

We arrived at the center at about 5:20am. There were three doors in operation and we promptly chose the shortest one - with about 150-200 in front of our queue. All the fellow shareholders in queue are very friendly so the time quickly passed, discussing their previous shareholder meeting experiences and value investing.

Once seated you truly recognise that this is an annual general meeting like no other, with tens of thousands of buzzing and excited private shareholders (mixed with a few ‘Patagonia vest’ wearing investment professionals).

We were very pleased to secure seats in the lower-bowl area - well worth the early morning wait! Complimentary coffee and snacks were available for shareholders (all BRK brands of course) before settling into the (very entertaining) company movie.

Q&A

The majority of the actual meeting is open Q&A. Buffet indicated that the purpose of this is to educate the investors and no answers were rehearsed. Warren would call on Greg or Ajit to answer any operating specific Q&A or clarify any points. All Q&A was answered in a genuine and open manner which often generated a few laughs, particularly when Charlie dropped a blunt comment or anecdote quite unlike a typically well rehearsed director in a typical shareholders meeting.

There were a number of points for me from this Q&A:

  • Apple is viewed as a consumer company by Buffet (much like Kraft-Heinz, See’s Candies). This actually makes sense as there is undoubtedly a lock-in to the ecosystem with services (‘moat’) and a truly aspirational brand.

  • The investment thesis for Amazon is still within the realms of value investing. Value investing is about valuing potential future cashflows.

  • Buybacks will continue to occur where the share price is below the ‘intrinsic value’ of the stock. Interesting to see this continue to happen at Apple as well as BRK.

  • Opportunities are few and far between, reflective of the stage in the economic cycle. Buffet is happy to wait (and sit on the cash hoard) until the right opportunity comes along. This is the style of investment fund they are willing to run.

  • Big is hard. It is difficult to find deals of significant magnitude to use the BRK cash hoard

Accomodation and Transport

We booked accomodation about 4-5 months early but still got stung with prices and limited availability. We found Uber/Lyft pretty easy to get around Omaha as the town is quite spread out. Alternatively it is well worth considering renting a car and exploring the sights around town at your own leisure.

Other weekend events

The (Berkshire Hathaway ‘Invest in Yourself’ 5K) run/walk the next morning was great fun with plenty of interesting characters out on course and a chance to get some more BRK merchandise.

The shareholder steak night at Gorat’s is a must do - but make sure you book a table well in advance.