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Cobas Asset Management Commentary: Impressions of Omaha

- By Holly LaFon

A couple of weeks ago I had the chance to attend, together with other colleagues and customers from Cobas AM, the shareholders meeting of Berkshire Hathaway in Omaha, United States. A series of conferences, presentations, dinners and events are organised in parallel with the meeting to complement a weekend dedicated to value investing. Our programme included two talks by Francisco Garcia Parames, who presented his book in two major forums: GuruFocus and Value Investor Conference (VIC) at the University of Nebraska.


I'll begin with the conclusion: a fantastic and enriching experience! The atmosphere is something special. Positive energy and good vibes, as they say.

As for the Berkshire meeting, I imagine that at this stage of the game no one expects to hear anything new from Buffett and/or Munger. That is probably part of the big secret: there are no surprises, but an insistent repetition of basic principles that go far beyond merely an investment philosophy to represent an entire way of life. I wonder what the odds are, in terms of probability, of two such brilliant and well-matched people being born just a few years apart in an out-of-the-way city in the American Midwest, and of their succeeding in revolutionising the investment world (and beyond...). I can't believe the odds would be very high...

I noticed particularly some simple things, but which were significant to me:

  • "The Woodstock of Capitalism". Once you're there you understand why this event is known by this affectionate nickname. The place was totally packed with crowds of devoted and enthusiastic people. It seems incredible that so many people would take part in a company's general shareholders meeting... 12,000 in person and many more following the event from screens in hotels and venues throughout the area. But, at the same time, given the track record of the protagonists, there were actually not that many of us! How can, with the enormous success accumulated over 55 years, be there not a lot more people? Or, how can even someone consider investing another way?




  • Democracy in its purest state. The event is a great exercise in real and practical democracy. People of all origins, colours, ages and social conditions (many, many Chinese...). Anyone who wants to get a good seat must arrive early and queue, regardless of how many millions of dollars he or she may have... Only the Berkshire board members and the executives of their many subsidiary companies have reserved seats. The rest have to fend for themselves. The person sitting in front of or behind you may have 230 dollars (if they own a single class B share) or 100 million...





  • Order and respect. The entrance is extremely orderly, even though everybody wants to get a good seat. No pushing at all. There are elderly people who are less mobile than the young. But I don't think they feel pressured or threatened by the faster ones. People let them through and give them their space, as it should be. One couple arrived quite a bit later than us, and seeing that in front of us there were several free seats, they feigned ignorance, removed the jackets and rucksacks other people had left there previously and sat down. When the rightful owners of the seats returned and found their places taken, they spoke politely with the squatters, who then got up and left; also, as it should be.




  • Swiss punctuality. The doors opened right on time. Not a minute early, not a minute late! Exactly like the institutional video that kicked off the event (which was fantastic, by the way). The questions began at exactly the scheduled time and finished when announced. As I said before, no surprises, exactly as expected.




  • Great respect to the shareholders. Buffett and Munger politely answered 50 questions over five hours, with no signs of tiredness or impatience. Buffett expanded with educational explanations, Munger ended with his typical "I have nothing to add" or made pointed comments, always pertinent. Some questions were more technical, others more philosophical. A father with his son asked about the most fun investment they had made. Some people asked for advice about how to start managing a fund while others wanted recipes for success in life... They answered all of them, taking the opportunity to always reiterate basic principles.




  • Buffett, a Democrat, Munger, a conservative Republican. Despite this they have been partners for 50 years, and in their hearts, they defend the same principles! What a great lesson of respect in these times of political confrontation and immediate and unjustified disregard for anyone who thinks differently (also in the United States)!




  • Trust and generosity. They reiterated on various occasions that a large part of their phenomenal success together is due to never having second-guessed the other's decisions.




  • An invitation to read. They mentioned several times their great interest in reading and encouraged everyone to read to expand their circles of competence, "if you can", said Munger. (Munger is known as a "book with legs" and Buffett is said to devour 500 pages a day).




  • Berkshire customer. I suddenly realised that for some years I have been a customer of several of the companies owned or part-owned by Berkshire (American Express, Geico...). All of them have fantastic customer service. From what I saw in the meeting, it does not seem to be a coincidence...



The "Buffett and "Munger" experience (Munger generally receives much less credit than his partner) was complemented by attendance at two talks in which Garcia Parames presented his book: GuruFocus and Value Investor Conference (VIC) at the University of Nebraska. An audience of around 200 at each one, of investors from different parts of the world. People who are very familiar with the value investing philosophy.

His fresh and simple way of thinking sparked significant interest (to judge from the questions asked after the presentations and the queue of people to greet him and exchange opinions after each talk). I would go so far as to say that the most surprising part was his recommendation in his conclusions: "Don't make models (of economic analyses). Read, think". This may helpunderstand what I've always believed are some of his most important added value: his capacity to simplify things (keeping the essential, getting rid of the "noise") and of "thinking out of the box".

As Buffett says, PRICE is what you pay, VALUE is what you get. I can assure you that the Omaha experience is VERY GOOD VALUE!

This article first appeared on GuruFocus.