Warren Buffett's "Berkshire University": Reflections from the Early Days

Signs from Omaha

After the recent Berkshire Hathaway shareholder meeting, we asked Tom Quinn to reflect on his experiences as a participant in those meetings in the early days. In this blog post, Tom shares some of his intimate stories, as well as how his relationships there have shaped CornerCap’s investment approach.

A few weeks ago Berkshire Hathaway had their traditional annual meeting in Omaha.  As has been done for many years, the meeting was led by its 86 year old chairman, Warren Buffett, along with his 93 year old sidekick, Charlie Munger.  There were tens of thousands of shareholders and visitors in attendance, and many more who joined the meeting via an internet livestream that was initiated last year.

Starting in the early 1990s, for many years I had the privilege of attending these meetings.  A client and good friend of ours was recruited by Buffett to become Berkshire’s director of tax, one of only 15 employees at the firm.  These few employees handle the administration related to aggregating data from all of the Berkshire subsidiaries.  As my friend advised me, their job was to protect and free up Warren’s time.  His time was focused on financial readings; talking to analysts in Berkshire’s insurance companies; and working with the CEOs of their subsidiaries.  I thought that it was interesting (and probably reflective of Buffett’s intent) that my friend called me at the start of the interview process and asked if I had ever heard of Warren Buffett.  I had admired and followed Buffett for 20 years, but his newly hired employee had never heard of him.

I can honestly (but unproudly) say that we have never owned the Berkshire stock.  But I was pleased when our client invited me to join him for these meetings.  I remember the first couple of shareholder meetings were in a downtown Omaha movie theater (Orpheum Theater) with maybe 200 to 300 in attendance.  The format for these early meetings was essentially the same as today - a 10 minute official “rubber stamp” shareholder meeting followed by an excellent four hour “Investment 401” class, essentially a Buffett/Munger question & answer session with the audience.  Of course, the uniqueness was having this very academic class led by the most qualified professors on the planet.  I always took copious notes that I summarized and would share with others later.

Sometime in the late 1990s, I remember being given a tour of Mr. Buffett’s office.  There was no computer, no stock quote machine, and no calculator that I saw.  Regardless of Buffett’s billions, he was always very thrifty, driving an older car and living in the same house for over 50 years.  Having only 15 employees and being unwilling to contract for help with setting up the annual meetings, in the early years I helped the other employees to set up the meeting and distribute documents to the entering attendees. 

The attendees and venues grew rapidly over these years.  My last meeting was in the very large Omaha Civic Center.  As usual, I was able to enter early.  When the doors officially opened at 8am, I enjoyed watching the investment nerds, with briefcase in hand, charge full speed down the aisle to get a prime seat.  I would label this behavior as ridiculous except that I would be talking about myself if I did not have the early admission and preferred seating opportunity.

I only met Mr. Buffett a couple of times.  However, Harriet and I frequently attended the annual Berkshire Hathaway employee dinner that was held the evening after this meeting.  We were the only non-employees there … and Mr. Buffett was the only employee who was never there.  Harriet and I have not attended a Berkshire annual meeting since our client retired and moved away.

I enjoyed our annual trips to beautiful Omaha in early May.  More importantly, I believe that I have learned and shared many important principles of investing from the most successful investor of all time, primarily on matters of philosophy, culture and discipline.  Relative to the broad market indices, Berkshire Hathaway has not performed well in the post-financial crisis era.  Mr. Buffett’s most obvious failure has been his inability or unwillingness to transition investment decisions to a younger generation.  At CornerCap, we are well down this path.  Maybe this will be our last and possibly most important lesson-learned from this otherwise very wise “professor”.