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May 3, 1999

Pilgrimage to Omaha:
Dispatches From the "Woodstock for Capitalists"
Part 1

by Yi-Hsin Chang (TMF Puck)

OMAHA, NEBRASKA (May 2, 1999) -- Greetings from Omaha, home of great steaks, Nebraska Furniture Mart, and, of course, Warren Buffett and Berkshire Hathaway (NYSE: BRK.A). Before I give a thorough account of my whereabouts and activities in the last 48 hours, I'd like to offer a brief prologue.

Like a pep rally before the homecoming football game, Dale Wettlaufer (TMF Ralegh) and I drove up to Wayne, Pennsylvania, just outside of Philadelphia, from Fool Headquarters on Friday to talk to Robert Hagstrom, the author of The Warren Buffett Way and now The Warren Buffett Portfolio. Working out of a small office facing the main street in downtown Wayne, Hagstom runs the Legg Mason Focus Trust modeled after Buffett's investment strategy of focusing on a few key, solid businesses.

Hagstrom was great to talk to. He's very nice and extremely knowledgeable about Buffett, about Berkshire Hathaway, and about Berkshire Vice Chairman Charlie Munger. Hagstrom's latest book -- originally to be called The Last Intelligent Investor, playing off of the title of Ben Graham's book -- is definitely worth reading. We will have a transcript of our 1 1/2-hour interview with Hagstrom next week.

Now on to Omaha for Berkshire's annual meeting, which Buffett calls the "Woodstock for Capitalists."

Omaha, Here I Come!

My direct flight from Reagan National to Eppley Airfield on Saturday, May 1, took just over 2 hours thanks to a strong tailwind -- the trip normally takes 2 1/2 hours. The plane was packed, and I wondered how many passengers were Berkshire shareholders who, like me, were making the pilgrimage to Omaha. Later into the flight, I did overhear several people sitting behind me sharing stories about Warren -- as Berkshire shareholders affectionately call him -- and about past annual meetings and the offerings at Nebraska Furniture Mart, a Berkshire subsidiary. They sounded like experienced "Woodstock" attendees.

I saw an ad for Borsheim's, Berkshire's high-end jewelry store, while flipping through the in-flight magazine. That's when I knew without doubt that I was headed straight for Omaha.

It was sunny and warm in the city when we arrived. There were long lines at most of the car rental counters, largely because of Berkshire shareholders. I then drove across town to check into my hotel, the Best Western Central on 72nd Street. While checking in, I noticed on the counter an Omaha World-Herald, compliments of Dillard's and H.H. Brown, "A Berkshire Hathaway Company." There was also a flyer for Nebraska Furniture Mart, touting special sales and events for Berkshire shareholders, including employee discounts for all shareholders, special displays and food tastings -- free samples of Coke and See's Candies. (Berkshire owns 8% of Coke and all of See's.)

The Yellow BRK'ers

At a little after 4 p.m., I donned my FOOL cap and headed to the French Cafe at the Old Market, an historic district in downtown Omaha with brick-lined streets, horse-drawn carriages, and quaint shops and restaurants. Mrs. Buffett, who's a singer, used to sing at the French Cafe, and Warren's companion, Astrid, used to work there. I went to the French Cafe to attend a party organized by posters on the AOL Berkshire Hathaway message board. Apparently, this is one of the best online discussion groups on Berkshire -- Warren's daughter Susie and his assistant Debbie Bosanek both participate on the messsage board. The word was that Warren and Susie would drop by the party as they did last year.

The "Yellow BRK'ers," some of whom I had been e-mailing, were all very friendly. Two were wearing gigantic yellow hats that said "The Yellow BRK'ers" in black letters. One of these "Madhatters" was John Gartmann, who was holding a stuffed animal someone had given him that resembled Speedy Gonzalez complete with its own huge yellow hat. It also wore a white shirt labeled "Little Johnny Gartmann." Speedy, the hats, and the colorful cityscape painted on the side wall created a rather surreal atmosphere.

John explained that the name "Yellow BRK'ers" came about three years ago, in 1996, when the posters from the message board were trying to figure out how to meet each other face to face at the annual meeting having never seen each other before. Someone suggested that everyone wear yellow. Later, John stumbled upon a big yellow hat and told everyone to just look for his hat and gather around him. Then someone else came up with "The Yellow Brick Road" as a name for the group, since Buffett is sometimes referred to as the "Wizard of Omaha." This got shortened to "Yellow Brickers" and then "Yellow BRK'ers," which stuck.

Indeed, as I soon found out, the big yellow hats are very effective in attracting attention from all quarters and are a common topic of conversation among shareholders.

Ms. Sec 2U

The Yellow BRK'ers presented T-shirts to the guests of honor. First, Lyle ("BRK Farmer") gave Debbie, Warren's assistant, a heather gray T-shirt that said "Ms. Sec 2U" (as in Ms. Secretary to You, with the emphasis on "Ms.") on the front and on the back, "My Secret... I Read ALL WEB's Mail" (WEB being Warren's initials). Debbie got a real kick out of it.

Warren and his daughter Susie showed up a little later on their way to the Omaha Golden Spikes minor league baseball game. Warren, who was scheduled to throw out the first pitch, was wearing a baseball cap and a white baseball uniform with "Berkshire Hathaway" written across the front in navy blue. His gift from the Yellow BRK'ers said "5 Cokes A Day Will Keep the Hair Away" and featured a picture of a bald Buffett as he appeared as Daddy Warbucks in a local rendition of Annie.

Warren was accompanied by a bodyguard and baseball Hall of Famer Ernie Banks, once known as "Mr. Cub," who was also taking part in the first pitch of the game as the designated hitter. Immediately after the presentation of the T-shirts (Susie got one, too) and a copy of Bill Gates' latest book signed by the Yellow BRK'ers, Warren & Co. were outta there. The party broke up soon thereafter as people scrambled to get to the ballpark in time for Warren's pitch.

Warren "The Whip" Buffett

I spent the next 30 minutes driving to Rosenblatt Stadium -- a drive that would've taken about five minutes if it weren't for the congestion caused by the flood of Berkshire shareholders descending upon the ballpark. I missed seeing Warren throw the first pitch, or rather the first four pitches, from what I gathered. There was no mention of his performance in the World-Herald's sports coverage the next day.

Berkshire shareholders got a free commemorative baseball cap, hot dog, and soda. Many jokingly call this their "annual dividend" -- Berkshire doesn't pay dividends; instead, it reinvests its earnings into its businesses.

I met an interesting woman from Los Angeles named Marsha Tate, who actually isn't a shareholder but got special permission to attend the festivities. Last August, she wrote a letter to Buffett requesting permission, explaining that her goal before turning 40 was to become a shareholder of Berkshire Class A stock and that she had worked as many as five jobs at a time to save up enough money. Buffett wrote her back, invited her to attend the annual meeting, and offered to pay for her plane ticket to Omaha! Marsha, who turned 40 in February and whose AOL screenname is fittingly "GUTSYOK," said she now has enough money to buy the Class A stock.

Men of the hour- Buffett and Munger
Flanked by three or four bodyguards by this time, Warren graciously spent an hour or so at the game signing autographs and taking pictures with what ended up being nearly 200 shareholders. Many people brought Buffett or Ben Graham books for him to sign -- one shareholder had an original 1934 copy of Graham's Security Analysis. One guy had him sign a $20 bill; another had him sign his ball cap. Some others handed Buffett what looked like scraps of paper. He patiently signed anything and everything -- unfazed.

I managed to get my picture taken with Warren. It was done by some professional photographer, and I'm to order copies by mail. I can't wait. Though I didn't think ahead to bring something meaningful on which to get his autograph, my plan now is to get a copy of the picture and have Warren sign that -- maybe next year.

Seeing as it's past 2 a.m. Central time and I have to get to the annual meeting in a few hours, I will sign off for now and continue my account tomorrow. One shareholder, "BRKfan," who was first in line last year, apparently said he intends to be in line at 4:30 a.m. I heard several other shareholders say they're going at 5:30. Mind you, doors open at 7 a.m., and the meeting doesn't start until 9:30. I think I better get some shut-eye.

Next -- Sunday and the Meeting

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