Teachings from Warren Buffett and Charlie Munger :My Pilgrimage to Omaha to Attend the Berkshire-Hat

By Linda S. Koffman, Esq., Smith Gambrell Russell

Berkshire-Hathaway Annual Shareholders meeting

A few months ago, I flew to Omaha to join 40,000 other individuals to attend the Berkshire-Hathaway Annual Shareholders meeting. The Berkshire-Hathaway Shareholder’s meeting is known to some as the “Woodstock for Capitalists."  To the extent I have a “bucket list,” attending the annual meeting and learning from Warren Buffett and Charlie Munger (the Oracles) in person was definitely on it.

I arrived a day early and stayed in the Old Market Historic District in Omaha. This area is on the National Register of Historic Places and did not disappoint – lots of art galleries, hip bars and restaurants, and the best collectible shops I’ve ever seen, including the Old Market Emporium, Ashley’s Vintage, the Amazing Imaginarium, Joe’s Collectibles and many more. If you are a serious collector, it is worth a special trip to Omaha just to visit these stores!

After exploring the Old Market area, I moved to the Hyatt where most of the action takes place prior to the annual meeting. I’ve been to a lot of high-profile events in my lifetime but this one was definitely different. There were probably more celebrities (business leaders and entertainment) at the Hyatt than I usually see during the entire Academy Awards week in Beverly Hills!

It was interesting though because most of the male celebrities had COVID beards, wore jeans and hats, and were so low-key and disguised you wouldn’t even be able to pick them out of a line up. The women were similarly underdressed. Most of the crowd were those “millionaires next door” you read about.  I even ran into a member of the Kennedy family at the coffee machine at the private air terminal for corporate jets and could only recognize him from his name on his luggage tag. After all the “see and be seen” events I’ve attended over the years, this was a refreshing change and definitely reflected the tone of the Oracles.

Our group was offered a private tour of Borsheims (no, I didn’t buy anything) then on to the National Furniture Mart where we learned about the history of the company from the founder’s grandson. That evening, we attended Shabbat services at the Hyatt and a Shabbat dinner hosted by Chabad of Nebraska. Yes, Chabad is everywhere!  There were about 60 people from all over the world at this Shabbat dinner – some from Australia, South Africa, Israel, Asia – all coming together for what we hoped wasn’t the last opportunity to see Warren Buffett and Charlie Munger in person. The Rabbi had each person stand up and say where they were from and something about themselves. I found out I was sitting next to one of the members of the Board of Directors for National Indemnity, a subsidiary of Berkshire Hathaway. It was fascinating to learn what it was like to work for Warren Buffet for the past few decades.

The Meeting

The next morning, we lined up early at CHI Health Stadium for the annual meeting. For so many, the highlight of the Berkshire-Hathaway meeting is the 8:00 a.m. movie. Sometimes informative but always humorous, this year did not disappoint - Jaime Lee Curtis even made a cameo appearance. But the real highlight of my weekend was what I learned and took away from this incredibly unique experience.

It was inspirational to see Warren Buffet (age 92) and Charlie Munger (age 99) live in action and still doing what they do best. It’s truly a lesson that lifetime learning and making a valuable contribution in this life doesn’t have an expiration date. I’m keeping this in mind as this is my “birthday month.” I couldn't help but jot down some of my favorite lessons.

Below are my “Top 12” list of things I learned from the Oracles over the weekend:

1. Sometimes portfolio diversification is "deworsification." Charlie Munger insightfully said: "One of the inane things that's taught in modern university education is that a vast diversification is absolutely mandatory in investing in common stocks. That is an insane idea. It's not that easy to have a vast plethora of good opportunities that are easily identified. And if you've only got three, I'd rather be in my best ideas instead of my worst."
2. Don't grow just for growth's sake.
3. Admit your mistakes. Berkshire sold some of its shares in Apple a few years ago. Warren Buffett said: "I made a mistake a couple of years ago and I sold some [Apple] shares. I had certain reasons why gains were useful that year from a tax standpoint, but having heard me say that it was a dumb decision."
4. We may continue to see the "extend and pretend strategy" from lenders. Commercial real estate is starting to see the consequences of high borrowing rates. Mr. Buffett said that value in the commercial real estate market mainly depends on how much you can borrow non-recourse, and the market is starting to see the consequences of that. He went on saying: "That's the attitude of most people that have become big in the real estate business, and it does not mean the lenders are the ones that [will] get the property. . .and, of course, they don't want the property. . .the banks tend to extend and pretend."
5. Stay in your lane - or, as Mr. Buffett plainly put it, "Don't do stuff you don't understand." By example, Mr. Buffett said that Berkshire would not take full control of Occidental Petroleum. Why not? “We wouldn’t know what to do about it.”  That's pretty clear and honest, Mr. Buffett!
6. Know yourself and know your abilities. Mr Buffett lamented, "We're not so smart, but we know of know where the edge of our smartness is. . .That is a very important part of practical intelligence." He drove home the point that know and self-admitting one's own limitations is a strength; not a weakness.
7. One of the benefits of age can be wisdom. According to Mr. Buffett, "We don't get smarter over time, we. . .get a little wiser, though, following it over time." 
8. The key to happiness in life is to manage your expectations. Mr. Munger chimed in with this gem: "The best road ahead to human happiness is to expect less."
9. Don't overestimate or underestimate others. According to Mr. Buffett, "Opportunity in value investing comes from others doing 'dumb things'".
10. While Artificial Intelligence will rapidly transform many industries, it isn't a substitute for human intelligence.
11. Emotions don't have a place in making investment decisions.
12. Write your own obituary. Perhaps knowing that you can't take it with you, Mr. Buffett quipped, "You should write your own obituary and then figure out how to live up to it."

To say that the Berkshire-Hathaway annual meeting fulfilled my expectations as an “experience” is an understatement. Although, a lot of what was said is not new, hearing it from two really smart, successful, and down-to-earth Oracles of Omaha is a good reminder that success is about focusing on the real basics, planning to succeed, self-awareness, self-honesty, and, of course, follow-through. These are things I will certainly never forget!

The author, Linda Koffman is a partner with the law firm of Smith, Gambrell & Russell, LLP.  This article was first published in “Trust the Leaders 2.0” magazine and has been reprinted with permission from Smith, Gambrell & Russell, LLP.  For more information, contact Linda Koffman, Partner, at (213) 358-7218 or visit the firm’s website at www.sgrlaw.com.