May 5, 1999

Pilgrimage to Omaha:
Dispatches From the "Woodstock for Capitalists"
Part 3

by Yi-Hsin Chang (TMF Puck)

OMAHA, NEBRASKA (May 4, 1999) Continuing from where I left off in my second report from Omaha, when the press conference with Warren Buffett and Charlie Munger was over, I approached them to give them a small token of appreciation from The Motley Fool: a Fool polo shirt, a Fool golf towel and, of course, a "FOOL" ball cap. Charlie accepted the gift, but in classic Munger fashion didn't really say anything. Warren said: "The Motley Fool? Great. Say hi to Dale." Dale Wettlaufer, who has written extensively about Berkshire Hathaway (NYSE: BRK.A) on the Fool site, is without a doubt the most knowledgeable Fool when it comes to Berkshire and Warren Buffett.

Warren's Favorite T-Bone

I left the Marriott and headed straight for Gorat's, Warren's favorite steakhouse. It is traditionally open only to Berkshire shareholders the night before the annual meeting, and reservations are hard to come by. I met several shareholders who gave up after getting repeated busy signals when they called on April 1, the day Gorat's started accepting reservations. I also heard that the "buzz" is that if it weren't for Buffett, Omaha's most well-known citizen, who commonly eats at the steakhouse several times a week and often brings guests from out of town, the place couldn't stay in business.

Dale had hooked me up with some of the Yellow BRK'ers who had reservations at 5:00 p.m. I arrived just in time to be seated. I was surprised to see protestors outside the restaurant. There were about half a dozen anti-abortion protestors armed with signs voicing their disapproval. The Buffet Foundation has given donations to organizations involved in population control, family planning, abortion, and birth control.

Inside, the restaurant was noisy and bursting at the seams. There was barely enough room between tables for people to walk. There was a special scaled-down menu for the evening that on the front had a drawing of Warren wearing a tie with dollar signs on it and holding a steak on a fork in one hand and a Cherry Coke in the other. While you could choose from nine different entrees, most shareholders ordered what's listed as "Warren Buffett's Favorite," the T-Bone for $18.50. I ordered a T-Bone and a Cherry Coke to ensure an "authentic" Buffett experience.

While we were eating -- we had a table near the entrance so we could see people coming in the front door -- Charlie Munger came in with his family and proceeded to another dining room. Later, I heard that Warren had come in the back with his family. We did see Walt Disney Co. (NYSE: DIS) CEO Michael Eisner and PBS talk show host Charlie Rose.

As I was leaving, with my free Coca-Cola glass firmly in hand, a Gorat's employee standing just outside the entrance told me that Buffett goes to the restaurant "all the time." He said one day when Buffett was waiting to meet someone outside, he ended up greeting and opening the door for customers, some of whom would go in and ask, "Was that Warren Buffett who just opened the door for me?"

Jet-Setting Plane

I proceeded to Aksarben -- "Nebraska" spelled backwards -- Omaha's primary convention center, to get a quick tour of a mockup of recently acquired Executive Jet's new 737 Boeing Business Jet. The mockup was simply the body of a plane without the tail or wings. Inside, the plane was indeed well-appointed. At the annual meeting Monday, Warren said that he tells college students that he eats the same thing they do (i.e., Dairy Queen) and dresses about the same. The only difference is that he travels better, thanks to Executive Jet.

Inside the plane, there's a bedroom with a full-sized bed, two baths with showers, a large living/dining/meeting area, and two smaller rooms with sofas that could serve as beds. Showing great attention to detail, the Executive Jet staff had furnished the plane with Berkshire-related products: Gillette razor and deodorant in the bathroom, a Cherry Coke served on a silver platter, Disney's movie A Bug's Life on the large flat TV screens, World Book Deluxe on CD-ROM, a Borsheim's catalog, and See's Candies memorabilia.

A couple of shareholders told me that they went to see the mockup jet on Saturday afternoon, and guess who was behind them in line? None other than Warren Buffett, who was characteristically standing in line like everyone else to tour the plane. He happily had his picture taken with these lucky shareholders.

A Blizzard With Charlie

Next, I headed to the Dairy Queen on 114th and Dodge, one of the ones frequented by Buffett. The restaurant's sign said "Welcome Berkshire Shareholders." Inside, I wasn't sure what to get, so I turned to some people who were already consuming their Dairy Queen desserts -- a Dilly bar and a sundae. As they were telling me how good their desserts were, who walked up but Charlie Munger with a Blizzard in hand. Apparently, they were friends or relatives of his. He said the Blizzards are so good that McDonald's has copied them, referring, of course, to the McFlurry -- a fact I hadn't realized.

Not wanting to bother Charlie and his family, I quickly turned to the counter to order my own dessert. I got a Mint Hydrox Blizzard, which is essentially mint ice cream blended with Oreo-like cookies. Yummy. You can't get that at McDonald's.

I ended up talking to a Berkshire shareholder from Phoenix who has owned the stock for five years, and we swapped stories about Berkshire and about Buffett. That happens a lot during the annual meeting weekend. People exchange stories about how long they've owned Berkshire, how long they've been coming to shareholders meetings, and their encounters with the man of the hour, Warren Buffett.

In that sense, the annual meeting is really like a "Woodstock for Capitalists," as Warren calls it. During this one weekend before the first Monday in May, the 68-year-old Buffett and, to a lesser extent, his partner Charlie Munger attain rock star status. Thousands of people are trying to take pictures of them and get their autographs. I saw one sixty-something woman yell out "I love you!" to Warren as he was passing by, as if she were a star-struck teenager who had just seen Leonardo di Caprio.

"Woodstock for Capitalists"

After getting less than two hours of sleep (I had stayed up to file my first report for the Fool), I rushed over to Aksarben, the site of the annual meeting, at around 5:40 a.m. on Monday, May 3. It was still dark out -- I was just glad it wasn't raining. There were already about 60 to 80 people in line to get in, even though the doors wouldn't open until 7:00 a.m. These were the diehards among diehards who wanted to sit as close to the stage as possible. The first person in line told me he got there around 4:15 a.m.

People chatted in line, and the time passed fairly quickly. Warren arrived about 6:30 a.m. Believe it or not, he drove his own car up to the front door with the security guards behind him in another car. Warren made a point of coming to the front of the line to briefly say hello to the diehard shareholders.

I used the press badge Berkshire had issued me to go inside Aksarben at around 6:45 a.m. The main auditorium was huge with a main floor of red chairs plus elevated blue chairs around the perimeter. I was lucky enough to plant myself in the third row, right in the center of the auditorium -- the first two center rows had been reserved for the company's directors, CEOs of Berkshire subsidiaries, and special guests. I was sitting directly behind the chairs marked for Mr. and Mrs. Eisner, as in Disney CEO Michael Eisner.

There were also seats reserved for Mrs. Buffett and Mrs. Munger, for Warren's kids Susie, Howard, and Peter and their spouses as well as Charlie's kids. I also noticed a chair reserved for Warren's grandson, Howard Warren Buffett.

At 7:00 a.m., the doors to Aksarben were opened to shareholders, and people started running into the auditorium in search of the best seats in the house. I dare say this is not a sight you see at annual meetings in the rest of corporate America. Lest you get the wrong impression, most shareholders did arrive after 7:00 a.m. I talked to at least one shareholder who got decent seats in the main auditorium even though he didn't show up until around 8:00 a.m.

By Warren's estimate, about 15,000 of the 280,000 shareholders of Berkshire Class A and Class B shares attended the meeting, up from roughly 10,000 attendees the year before. The General Re merger last year actually doubled the number of Berkshire shareholders. To accommodate the increasingly large crowd, Berkshire rented offsite facilities that were linked in via closed-circuit TV. Even in Aksarben, close-up camera shots of Warren and Charlie were projected onto large screens so that people sitting farther back could see their faces.

Berkshire R Us

Free continental breakfast -- doughnuts, bagels, muffins, juice, Coke, Diet Coke, and Sprite -- was served upstairs, and various Berkshire subsidiaries and investment holdings also passed out freebies. Coca-Cola gave out large red "Coca-Cola" shopping bags -- perfect for holding free goodies and purchases -- plus certificates for a free specially made bottle of Coke commemorating this year's annual meeting. Disney passed out rectangular buttons that said "I love Berkshire Hathaway," with a red Mickey Mouse head in place of a heart to represent the word "love." Meanwhile, GEICO gave away pens and flashlight keychains, and See's Candies passed out individually wrapped pieces of chocolate.

Of course, Berkshire companies also did a lot of selling, too. Shareholders loaded up on boxes of See's Candies, Berkshire shirts and caps, Disney shirts and keychains, Peter Buffett's latest CD, and Dairy Queen ice cream bars. GEICO representatives were giving free estimates on car insurance. Everyone ended up with these large Coca-Cola bags filled with Berkshire products.

The Berkshire movie started at 8:30 a.m. with a modified version of the "Always Coca-Cola" commercial rewritten to celebrate Berkshire and its "stocks that always rise." The funny hour-long movie profiled Buffett and Munger, and even showed Warren singing on several occasions, including when he played Daddy Warbucks (or "Warrenbucks") in a local charity production of Annie. It also showed the clip from Warren's cameo guest appearance with Tom Murphy on ABC's All My Children.

The movie had a slew of ads for various Bershire products, including GEICO, Borsheim's, Helzberg Diamonds, and, of course, Coca-Cola. One Coke ad featured Buffett friend Bill Gates standing in front of a Coke machine in an empty corridor, trying to scrape together enough change for a Coke. He even pushes the change return button in hopes of finding a few coins. Finally, he says: "Does somebody have change for a Coke? I'll pay you back."

Another hilarious segment featured Gates and Microsoft President Steve Ballmer as the two outrageous guys from A Night at the Roxbury. Imagine nerdy Bill Gates wearing a shiny blue suit bopping to an early '80s tune, cruising in a convertible with Ballmer, who's wearing a shiny red suit. That alone was well worth the trip.

Another highlight of the movie was a long-time shareholder who had been made a millionaire many times over from his investment in Berkshire listing the most important figures in his life: God first, his wife second, and Warren Buffett third -- "and I'm not sure which is second or third," he says.

Next -- Details of the Meeting