Often dubbed "The Woodstock for Capitalists" the annual Berkshire Hathaway meeting in Omaha attracted just 12 shareholders in 1981. Now upwards of 40,000 people from around the world make the pilgrimage to Nebraska to see and hear from Warren Buffett.
Andy Lin, CEO of China Universal Asset Management, traveled 20 hours from Shanghai. This year was his third visit, “It is a big party for believers of better investing globally and believe it or not there are so many believers of Warren Buffett in Shanghai, in China.”
“It’s not so much that you learn new things,” explained R.J. Meurer of Fat Pitch Capital, “It is more like you go to church. Why do people go to church every Sunday to hear the same things over and over again? It is a reinforcement technique to understand the proper investment framework to view things from in order to make the right decisions and have the best investment process."
WEB EXTRA: Investing tips by Warren Buffett
Shareholders told Local 10's Christina Vazquez it wasn’t just Buffett’s investment prowess that attracts them to the meeting but his down-to-earth presence, folksy charm and authenticity. A billionaire who still lives in the same home he bought in 1958 for just over $30,000; who dines at Gorat’s, a modest midtown Omaha restaurant once owned by a childhood friend; and, who still drives his own car, “It's a Cadillac” he told me, “I bought it 6 or 7 years ago.”
“That is part of his Midwestern charm,” said Meurer, “he doesn't have this East Coast Ivy League pretension that is so common on Wall Street.”
Neighbor Eric Andrews puts it this way, “The way he presents himself, like if you didn't recognize him then he would be some guy walking down the street in a suit.”
Tour buses now drop dozens of shareholders off at Buffett’s modest Omaha home to pose for pictures. Andrews said the biggest surprise for visitors is its size, “It really is just a small humble house. It fits in with the neighborhood. It’s not gaudy, it’s not out of place and most of the people in Omaha drive past it and don't know he lives there. I think it is symbolic of Midwestern values and lifestyle for the most part; he doesn't feel like he has to flaunt it, he doesn't feel like he has to show off.”
The man they call the Oracle of Omaha takes it all in stride.
Vazquez: “Tour buses stop at your house now.”
Buffett: “Well, yeah, I'm trying to figure out how to monetize that one.”
Buffett’s Berkshire Hathaway recently announced its intention to purchase WPLG-Local 10. The deal is pending FCC approval. Buffett invited Local 10’s Christina Vazquez to the company’s annual meeting and offered a one-on-one interview.
Vazquez had the opportunity to speak with Buffett about South Florida’s economy, Miami’s challenge with income inequality, and the South Florida real estate market.
Here’s a transcript from part of that interview:
Vazquez: EWM, the South Florida realty company, that's a Berkshire Hathaway Affiliate and now you are with us, WPLG. What is it about South Florida, Miami that catches your eye - what makes our community different than other communities?
Buffett: You are going to do well, (laughs) but so are other communities too, but Miami is big, it will be great to have a station there but you look for, you generally look for growth, you look for prosperity and like I said there are a lot of places where you can find that, you can find that right here in Omaha too, but we want to keep doing things and this fit in very well.
Vazquez: Speaking of that, if you were to go to Miami, and hopefully you do
Buffett: Yeah, (chuckles)
Vazquez: Take me up on an offer for a cafe con leche, but when you get there you will see cranes all over South Florida, particularly in the Downtown Miami area -- condos are rising -- but a recent analysis by Bloomberg found that out of all US cities with the most income inequality Miami ranks number three. What can business leaders do, or businesses do, what is their responsibility when it comes to this issue of income inequality?
Buffett: I think it's much more a government problem than it is business I mean if business grows it creates more jobs obviously and that's going to happen in Miami but in terms of the spread between the top and the bottom there's not much individual businesses can do about that.
Warren Buffett: At the very lower end I would certainly expand the earned income tax credit, I mean that puts more money in people's pocket who are going to spend it immediately and who need it than any other policy, we already have it in place but we could expand that significantly and it would have a, well it would make a lot of people's lives better which is the most important thing, it would also help the economy but that's, that's secondary. The important thing is that in a country as rich as ours that nobody at the bottom is lacking food, lacking medical care, and really lacking the opportunity of a job.
Vazquez: You recently said you are optimistic about the US economy and I'm going to quote from your annual report, you said, "America's best days lie ahead."
Buffett: You bet.
Vazquez: What are you looking at? What are the markers that inform that optimism?
Buffett: I'm looking at history I mean since 1776 what has it paid not to believe that we've had little setbacks here or there but this country moves forward it works I mean just look around you, go to Miami and think at what it looked like 200 years ago and then look at it now, look at those cranes that you see, I mean, this country moves forward dramatically and one problem we have is making sure that are of our citizens move with it.
Buffett recently said the housing market has not recovered as quickly as he had expected telling CNN and CNBC, “I was expecting more new home construction and even with these rates, these are bargain rates for a 30-year mortgage…It may have just been the weather for all I know but it is a fact that mortgage applications are certainly lower than I would have expected but that doesn't go on forever. Hormones are still out there and that will cause people to form families and families that are formed will get tired of living with their in-laws, you have some things going for you.”
Vazquez: Is it a good time to buy a home?
Buffett: I do think it is a good idea if you are going to live in the locale that you are looking for a home, if you are going to live there for a significant period of time. If you try and buy and sell homes that can get very expensive because of the costs involved but if you are going to live in a place for 10 years, if you are going to live in Omaha for 10 years, I would buy a house today.
Vazquez: How about South Florida?
Buffett: In fact one of my sons just made a bet on a house here too but yeah it would be the same way in South Florida and if I was going to live there for a reasonable period of time. Housing prices are still reasonable, the financing is fabulous.
Vazquez: So it sounds like your home-buying philosophy is a lot like your investment philosophy, it is look long term.
Buffett: Well I bought my house in 1958 and I haven't flipped it yet (laughs) it's been 56 years and I've had 56 years of pleasure out of it.
Coming up on Tuesday on Local 10 at 11 p.m., Buffett talks to Local 10's Christina Vazquez about LeBron James. As it turns out, the billionaire and NBA star are good friends.
WEB EXTRA: The Annual Meeting: Boxers & Bling - From Buffett’s signature laser-inscribed into loose diamonds to his picture on boxers and bottles of ketchup; a look at this year’s commemorative items.
In what has been considered the largest philanthropic gift in US History, Buffett has pledged the bulk of his wealth to charity. He's also an advocate for income tax reform. Famously stating that he thinks it is unfair that his income tax rate is lower than his secretary's. The father of three once said "a rich person should leave their children enough so they can do anything, but not enough so they can do nothing."