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Warren Buffett's Woodstock

What's happening at Buffett's annual meeting
The Associated Press

 

 


Dubbed "Woodstock for Capitalists," Saturday's annual meeting of Berkshire Hathaway shareholders revolves around Warren Buffett, the company's chairman and CEO and a billionaire investor. Here's a rundown of what happened at the day-long event in Omaha, Nebraska:

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BUFFETT'S SUCCESSOR:

Berkshire's board knows who it would pick as CEO if Buffett died tonight, but the top candidates could change over time, Buffett said. He has no plans to retire.

He spends plenty of time thinking about the future of his company after he is gone, he said. He told shareholders Saturday that he's confident that the conglomerate will continue to thrive.

The leaders of Berkshire's roughly 80 subsidiaries and all the operating companies would reject a leader that tried to change the way the company works, he said.

Buffett leads Berkshire with a tiny staff of roughly two dozen at its headquarters, and he largely lets the CEOs of all Berkshire's subsidiaries make all the operating decisions.

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BUFFETT'S BENEVOLENCE:

Warren Buffett has pledged to eventually give away all of the Berkshire Hathaway stock that made him one of the world's richest men, but he doesn't want to spoil his children.

At Saturday's Berkshire shareholder meeting, an estate planning lawyer asked Buffett for advice on how his clients should determine how much is too much to leave their children.

Buffett says the size of an inheritance probably isn't the most important factor in determining what kind of people children grow up to be.

"I think more kids are ruined by the behavior of their parents than by their inheritance," Buffett said.

The 82-year-old Buffett says he has been getting more generous as he ages, so every time he revises his will these days he tends to leave more to his children.

And Buffett says he lets his kids read his will each time it's changed.

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GREENHOUSE GAS PROPOSAL:

Berkshire Hathaway shareholders again rejected a proposal to require the company's utilities to set goals for reducing greenhouse gas emissions. Berkshire owns several utilities through its MidAmerican Energy Holdings subsidiary.

Backers of the measure urged Berkshire officials to take a leading role in reducing utility dependence on coal.

Berkshire CEO Buffett and the board oppose the idea of setting goals for reducing greenhouse gas emissions because it remains unclear how those emissions will be regulated.

Buffett and the board control 39 percent of the voting power. The proposal gained only 57,569 votes. Berkshire said 598,162 votes were cast against the measure.

Shareholders rejected a similar measure in 2011.

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MAKING BONBONS:

Before facing questions from a crowd of more than 30,000, the 82-year-old Buffett toured the meeting's 200,000-square-foot exhibit hall. A pack of security guards created a buffer around the "Oracle of Omaha" as he visited displays that sold Berkshire's See's Candy, explained BNSF railroad's virtues and highlighted some of the company's other 80-plus subsidiaries.

At the See's booth, Buffett got a lesson in making hand-dipped bonbons. Then See's manufacturing manager Steve Powell got Buffett to autograph his white uniform coat, demonstrating that employees are nearly as excited about meeting Buffett as shareholders.

"He was right there. Why not? It's Mr. Buffett," said Powell, explaining why he asked for the autograph. "He's wonderful."

Powell said he'll probably frame the coat and display it at work when he returns to California.

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MINERS PROTEST:

Dozens of Utah coal miners picketed outside the doors of the annual meeting in downtown Omaha.

The protesters are members of United Mine Workers of America who work at Deer Creek mine near Huntington, Utah. The mine is run by a subsidiary of Berkshire's MidAmerican Energy Holdings Co.

The union's contract expired in January. The company and union are negotiating, but disagree on health care coverage and safety checks. The protesters hope to influence Buffett.

Bernie Morris of Price, Utah, stood in the rain with others Saturday to hand out flyers. The 67-year-old Morris said he's worked for the coal mine for 28 years. He feared that he and his wife won't be able to afford the monthly health insurance premium the company wants to charge miners and retirees.

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PAPER PROFITS:

Berkshire shareholders should expect decent returns on the newspapers the company has bought in recent years, Buffett said. But he doesn't expect the papers to generate enough profits to make much difference to Berkshire.

Berkshire has paid cheap enough prices for the newspapers that Buffett expects them to deliver 10 percent returns every year, but he also expects their earnings will keep declining.

Berkshire has acquired 28 daily newspapers over the past two years.

Berkshire Vice Chairman Charlie Munger pointed out that Buffett made an exception to his usual investing habits for newspapers because he likes them.

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'GANGNAM STYLE' WARREN:

Buffett again poked fun at himself in the humorous movie that begins the Berkshire Hathaway annual meeting.

A cartoon version of Dancing With the Stars opened the hour-long movie.

Buffett and Munger served as judges on the dance show as representatives of different Berkshire companies competed.

In the end, Buffett and Munger won the competition themselves with their version of "Gangnam Style" dancing.

In a live-action video later, Buffett tried to pull strings to win a part in Arnold Schwarzenegger's new Terminator movie.

But Schwarzenegger, who once relied on Buffett's financial advice as California's governor, decided that Munger would make a much scarier villain.


 

JOSH FUNK,AP Business Writer

 

 


OMAHA, Neb. (AP) — Part rock concert, part investment workshop, the annual gathering of Berkshire Hathaway shareholders is an odd mix.

But that's just how the faithful crowd of more than 30,000 who attended Saturday's version likes it.

Getting the chance to learn about business and life from Berkshire CEO Warren Buffett and spend the day with like-minded investors made it worthwhile to brave Saturday's cool, rainy weather in Omaha, Nebraska.

The level of appreciation shareholders have for Buffett becomes clear as he tours the meeting's 200,000-square-foot exhibit hall each year.

Admirers held their cell phones and iPads in the air as they surrounded the billionaire Saturday morning. A pack of security guards created a buffer around Buffett as he visited displays selling Berkshire's See's Candy, explained BNSF railroad's virtues and highlighted some of the company's other 80-plus subsidiaries.

Josh Miller, 11, of Maple Grove, Minn., couldn't see over the throng of people, reporters and cameras that moved through the exhibition floor crowd. But he knew who was at the center.

"Warren! Warren!" he called, holding up his iPad to get a shot of the Oracle of Omaha.

At the See's booth, Buffett got a lesson in making hand-dipped bonbons. Then See's manufacturing manager Steve Powell got Buffett to autograph his white uniform coat.

The Berkshire Hathaway annual meeting began humbly in 1982 with a crowd of 15 in an insurance company cafeteria. It has been growing steadily just as the company's stock price rose to become the most-expensive in the U.S., reaching $162,904 for a Class A share on Friday.

Now the meeting regularly fills Omaha's 18,300-seat arena and every nearby overflow room. Buffett likes to call it "Woodstock for Capitalists."

It's the one day of the year when the 82-year-old Buffett gets treated like a rock star while his friend Bill Gates, who serves on Berkshire's board, can wander through the crowd without much recognition.

Shareholder Larry Cundiff has seen a lot of change at the meetings since he started attending about 15 years ago. He said it's hard to get within 15 feet of Buffett now.

"I met him once at a meeting in — I think — 1997," Cundiff said. "I was sitting at a booth, and he just walked up and sat beside us in the next booth. He autographed a dollar bill for me. I don't think he even had security then."

Buffett again shared the stage this year with his 89-year-old business partner, Berkshire Vice Chairman Charlie Munger, to answer questions from shareholders, journalists and financial analysts for six hours.

The questions seemed somewhat tougher and more detailed because of the addition of a panel of investment professionals, including Doug Kass, who has a negative view on Berkshire's stock.

But the bulk of the questions explored familiar themes, such as the future of Berkshire after Buffett and Munger are gone. The questioners also wanted to hear what the two men thought about the economy, the Federal Reserve and life in general.

Buffett said he thinks Berkshire will continue to thrive after he's gone because the company's employees and managers will resist any attempt to change the way it runs.

"The key is preserving the culture, and having a successor as CEO who is smart and energetic," Buffett said.

The U.S. economy should continue growing at a steady pace just as it has since the fall of 2009, Buffett said, but the Federal Reserve's efforts to stimulate growth are likely to eventually create inflation.

"We've encountered far worse problems than we face now," Buffett said. "This is not our toughest hour."

Not everyone at the meeting was applauding Buffett. Outside, dozens of Utah coal miners picketed in the hopes of winning a better contract offer. A handful of environmental activists left disappointed after shareholders rejected a proposal to require Berkshire's utilities to adopt goals to reduce greenhouse gas emissions.

Bernie Morris, of Price, Utah, stood in the rain to hand out flyers Saturday morning. The 67-year-old said he's worked for the Deer Creek coal mine for 28 years, but fears he won't be able to afford the monthly health insurance premium the company wants to charge.

A spokeswoman for the mine, which is owned by a subsidiary of Berkshire's MidAmerican Energy Holdings Co., said the company is committed to a fair solution but won't comment on specific proposals.

But the protesters didn't deter the thousands of people who came to hear Buffett and Munger.

Amaury Fernandez and his best friend Rick Cabrera said they had traveled to the meeting from Miami because Fernandez is interested in investing.

"They are two of the most remarkable men I've ever learned about," Fernandez said. "We don't know how much longer these gentlemen are going to be alive."

Jim Weber, CEO of Berkshire's Brooks Running company, said he has been reading Buffett's annual letters to shareholders since the 1980s — long before Brooks became part of Berkshire. Weber had even attended four Berkshire annual meetings before Brooks was acquired in 2006 along with Russell Athletic.

"If you're in the business world, it's a bucket list item. There's no other annual meeting like it," Weber said.

 

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