Is a Million-Dollar Lunch With Buffett a Bargain?

Buffett's annual charity lunch is on auction now.

Jun 3, 2014 at 10:15AM

U.S. stocks finished at (another) record high yesterday, but they may not repeat the feat today, if this morning's small losses persist. The benchmark S&P 500 and the narrower Dow Jones Industrial Average (DJINDICES:^DJI) are down 0.1% and 0.19%, respectively, at 10:18 a.m. EDT. While the stock market is repriced on a near-continuous basis during the trading day, one unique, illiquid asset with an extremely limited supply is on auction as we speak. The auction, which is held annually, is only open for five days; with just three-and-a-half days remaining, the current high bid stands at $370,100. What is the asset in question? A steak lunch in New York (travel expenses not included) with billionaire investor Warren Buffett, CEO of Berkshire Hathaway (NYSE:BRK-A) (NYSE:BRK-B). My question today: Is it possible on an economic basis to justify paying six or seven figures for lunch with Buffett?

In Good Will Hunting, the self-educated prodigy Will Hunting embarrasses an arrogant Harvard graduate student in a Cambridge bar before concluding his withering put-downs by observing that: "You dropped a hundred and fifty grand on an education you coulda' picked up for a dollar fifty in late charges at the public library."

I can't help but recall that scene when I think of a wealthy investment manager plonking down hundreds of thousands or millions of dollars to have lunch with Buffett. I'm tempted to paraphrase Will Hunting with: "You dropped $3.5 million [the winning bid in 2012 and record price to date] on some lunchtime wisdom you coulda' picked up for $20.62 at"

The latter figure is the cost of a complete compilation of Buffett's annual letters to his investors, beginning in 1965 through 2013. Reading, working through, and understanding those letters will put you well ahead of most investors -- including many professionals -- in terms of understanding intelligent investing and sound corporate governance.

Naturally, having Buffett's attention for several hours is worth a premium over reading his letters. After all, it's sort of like showing up at the Berkshire Hathaway annual meeting Q&A session and finding you're the only person there -- you get to set the agenda for the discussion.

In fact, based on the winning bid for the last year's auction (approximately $1.23 million), the value of the Buffett lunch has compounded at an annualized rate of 35% since 2000. That's an impressive return, particularly once you factor in a nearly two-thirds decline in the value of the winning bid between 2012 and 2013 (it seems there was a bit of a Buffett lunch bubble in 2012).

There are several purely economic arguments for paying a multimillion-dollar sum to have lunch with Buffett. For one thing, winning bidders are invariably investment managers -- typically hedge fund managers. A nugget of wisdom gleaned during the lunch that produces even a small improvement in investment approach or process can be very valuable indeed when it is deployed over the right-size asset base and the right investment period.

Furthermore, the supply of these lunches is becoming increasingly limited. With Buffett now 83, it's unlikely that there will be more than 10 to follow. Combine that constrained supply with some deep-pocketed bidders and it's no wonder the price of the asset skyrockets. Even with a million or multimillion-dollar price tag, winning bidders may yet be getting value for their winning-bid dollar.

Finally, the meetings can be serendipitous: Ted Weschler paid a total of $5.2 million to win the auctions in 2010 and 2011. He ended up closing his hedge fund and now works for Buffett, managing a billion-odd dollars on Berkshire Hathaway's behalf.

Warren Buffett just bought nearly 9 million shares of this company
Imagine a company that rents a very specific and valuable piece of machinery for $41,000 per hour (That's almost as much as the average American makes in a year!). And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report details this company that already has over 50% market share. Just click HERE to discover more about this industry-leading stock... and join Buffett in his quest for a veritable landslide of profits!

Alex Dumortier, CFA has no position in any stocks mentioned. The Motley Fool recommends Berkshire Hathaway. The Motley Fool owns shares of Berkshire Hathaway. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers