Category: Warren Buffett

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Cunningham “Buffett Shareholder” Omaha Events 2018

Following are the public events during this year’s Berkshire Hathaway Annual Meeting surrounding the launch of our new book, The Warren Buffett Shareholder.  Hope to see some of you there, and regrets that our New York book launch event is already sold out.

Thursday Friday — Daytime Friday — Evening Saturday Sunday
U. Nebraska Mammel Hall

Berkshire System Summit

11:40 to 12

(talk 11 to 11:40)

CenturyLink Center

Shareholder Shopping Day

Bookworm

11 to 6

 

Embassy Suites

Yellow BRKers

4 to 7

(greetings at around 5)

 

CenturyLink Center

BRK Annual Meeting

Bookworm

7 to 4 pm

Hilton Hotel

Markel Brunch

8:30 to 10:30 a.m.

U. Nebraska Mammel Hall

Value Investor Conference

3 to 4 & 6 to 6:30

 

Creighton University

Value Investing Panel

2 to 3 & 5 to 6

(panel 3 to 5)

 

Hilton Hotel

Tilson/Kase Reception

8 to 12 midnight

 

Hilton Hotel

Tilson/Kase Reception

4 to 6

 

 ALSO: Visit the Bookworm in town and the Hudson bookstore in the airport for special displays and offerings around the book.
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New Book: Jack Bogle Appreciates Warren Buffett’s Surprise Shout Out

From this morning’s Omaha World Herald.  Editor’s note: In a new book, “The Warren Buffett Shareholder,” Buffett-watchers Lawrence Cunningham and Stephanie Cuba have compiled essays by 43 people about Berkshire Hathaway’s shareholder meetings, which now draw more than 40,000 people to Omaha each year. We will excerpt some of those essays each Sunday in print before this year’s May 5 annual meeting. Today’s comes from Vanguard Group founder Jack Bogle.

Late in December 2016, I received a note from my good friend Steve Galbraith asking me to put a “save-the-date” marker on my calendar for the weekend of May 6, 2017. He and his wife, Lucy, had a plan, undisclosed, to celebrate my 88th birthday on May 8.

At a dinner in Omaha with Warren and his new team of money managers (as Steve later told me), he had mentioned our friendship. Steve offered to bring me to the upcoming annual meeting of Berkshire Hathaway shareholders. Warren thought that was a great idea, and so the plot was hatched.

Unbeknownst to me, Steve had checked with Emily Snyder, my assistant at Vanguard, and with my wife, Eve, and told them of his plan to fly me out to Omaha and attend the annual meeting, something I had never done before.

So when the morning of May 5, 2017, arrived, Eve and I, with daughter Barbara and son-in-law Scott Renninger in tow, drove to Atlantic Aviation, Philadelphia’s terminal for private planes.

No sooner had we arrived than a Citation jet with Steve and Lucy aboard swooped down and scooped up our quartet. We were on our way! (Son Andrew and his friend Kathryn would meet us in Omaha on Saturday morning.)

After a short hop (that jet is fast!), we landed in Omaha. As Vanguard’s founder, I’d attained a modest celebrity status in the world of investing, but that hardly prepared me for the reception I received when we entered the Omaha Hilton.

At least 10 guests, armed with camera-ready iPhones, immediately snapped away at the new arrival.

Later, when our sextet dined at the hotel, scores of celebrity hunters continued to take photos, asking politely and working smartly. (I quickly learned that saying “yes” was infinitely more efficient then saying “no” and then arguing about it.)

When I awakened on Saturday morning and looked out of my hotel room window, I could hardly believe what I saw. A line, maybe four people wide, stretched from the CenturyLink Center, site of the annual meeting, to as far as I could see.

All told, 40,000 people would attend the 2017 annual meeting, almost half of whom were in the arena, with the rest of the throng watching on video from a remote site. Our now octet was ushered to premier seating in the arena, right behind the space reserved for Berkshire Hathaway longtime shareholders, and next to the company’s directors.

Warren and Charlie Munger were seated on the stage immediately before us.

As Warren gave his opening remarks — a summary of Berkshire’s 2016 results — I couldn’t help wondering why Steve had brought us to Omaha. My question was soon answered, as these excerpts from the meeting transcript reflect:

Buffett:

“Jack Bogle has done probably more for the American investor than any man in the country. Jack, could you stand up? There he is.

“Jack Bogle many years ago, he wasn’t the only one talking about an index fund, but it wouldn’t have happened without him. …

“I estimate that Jack, at a minimum, has saved, left in the pockets of investors without hurting them overall in terms of performance, gross performance, he’s put tens, and tens, and tens, of billions into their pockets.

“And those numbers are going to be hundreds and hundreds of billions over time. It’s Jack’s 88th birthday on Monday. So I just say, Happy Birthday, Jack. And thank you on behalf of American investors.”

Despite my surprise and delight, I was able to stand up and wave to Warren, Charlie and the cheering crowd. I confess to being deeply and emotionally touched by Warren Buffett’s generous words — a “red-letter” day in my now 67-year career.

After Warren’s shoutout, the number of photo seekers soared, to the point where I found it useful to leave each session 5 or 10 minutes before the intermission.

Even then, I began to understand why rock stars among our entertainers are so eager to avoid the paparazzi who follow their every move.

But I confess that, on this one grand occasion, I found huge satisfaction in being recognized for my contribution to the world of investing, and to the wealth of the human beings who have entrusted their assets to Vanguard’s index funds. (I’m only human!) …

This was hardly the first indication that Warren and I operated on investment principles that, while a long way from identical, have a certain commonality. …

Accolades are nice, and endorsements are, too, but human connections are what life is largely about. I celebrate the friendship and mutual admiration that I’ve shared with Warren Buffett and Steve Galbraith, men of integrity, wisdom and class.

Excerpted exclusively for The World-Herald from “The Warren Buffett Shareholder: Stories From Inside the Berkshire Hathaway Annual Meeting,” edited by Lawrence Cunningham and Stephanie Cuba. (Cunningham Cuba LLC & Harriman House Ltd., 242 pages, $25)

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Contract Interpretation 2.0: Not Winner-Take-All But Best-Tool-For-The-Job

In a centuries-old debate among contracts scholars, one group supports a presumption favoring a text-centered approach to the interpretation of a written agreement — the plain meaning taken from the four corners — while opponents urge a broader understanding of context — what the parties intended and the circumstances of their negotiation. The contending positions have so hardened that, in a jarring juxtaposition my new Essay will reveal, recent academic classifications of the same state laws are exactly opposite to each other: contextualists classify certain states as contextualist that textualists say are textualist!

Yet despite the persistence of acute polarization, the author also documents — and applauds — promising trends in the literature toward hybridization and compromise, a search for factors to guide the selection of interpretive tools rather than putting some off limits or setting up default rule presumptions. While scholars have thus long obscured a common-sense reality, a new wave of research is making it clearer to all sides that text and context are both useful, depending on the details of different jobs.

More modern, advanced, and sensible, this new view of contract interpretation replaces a stubborn “winner-take-all” approach to the debate with a flexible and practical “best-tool-for-the-job” approach. To illuminate its importance and value — call it contract interpretation 2.0 — my new Essay turns to Warren Buffett’s contracting philosophy and practices. The famous investor and businessman is also a polyglot teacher, and his approach to contracts, especially acquisition agreements and employment arrangements, illustrates the imperative of using the right tool for the job.

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What’s Buffett’s Secret to Great Writing?

symposium-coverWe all write more than ever today, but do we communicate well?  As one group, corporate directors, pondered how to communicate effectively to shareholders, they  turned to the gold standard.  They wondered, what most distinguishes Warren Buffett’s annual missive to Berkshire Hathaway shareholders, and asked me, as a student of these writings for two decades, for the answer.

Clarity, wit and rationality are hallmarks to emulate, I said, along with how Buffett personally pens lengthy sections to read more as literary essays than corporate communications.

But, far more important, these attractive qualities are products of a deeper distinction with greatest value. Every Buffett communiqué has a particular motivation: to attract shareholders and colleagues—including sellers of businesses—who endorse his unique philosophy. Tenets include fundamental business analysis, old-fashioned valuation methods, and a long time horizon.

A recurring motif of Buffett’s writing is the classic rhetorical practice of disagreement. Buffett recites conventional wisdom along with multiple reasons why it is inaccurate or incomplete. He then differentiates Berkshire with themes like autonomy, permanence, and trust.

In a new article I wrote at the request of the National Association of Corporate Directors (available free here), I parse recent examples to show that Buffett’s dispatches often work on several levels simultaneously. Think of circles on a dartboard, with the bull’s-eye as Berkshire’s distinctive practices, which Buffett relentlessly explains. Surrounding that core explication, in concentric circles, Buffett lauds specific Berkshire businesses or personnel, contrasts their industry or competitors, and opines on related public policy debates.

By arguing in this artful manner, Buffett hones Berkshire’s corporate culture while answering rivals and critics alike. Leaving an unmistakable effect on the conglomerate’s millions of owners, managers, and employees, Buffett’s essays are a model of tone-at-the-top governance.

Buffett’s essays are rich with history, putting current debates in broad context, and steeped in statistics, anchoring argument in data. Buffett contrasts and compares; jokes and quips; and prefers to praise by name but criticize by category. Even when confronting critics, Buffett’s essays avoid sounding defensive.

Above all, the work expresses who Warren is—a confident, astute and joyous capitalist. Yale University writing professor William Zinsser says that “Motivation is at the heart of writing.” Buffett loves Berkshire, his curated life’s work defined by unusual shareholders, adroit managers, and idiosyncratic principles. Munger has commented: “Warren’s whole ego is poured into Berkshire.”

More than the elements of style, such motivation is a gold standard worth aspiring to.

Download the full article free here.

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In 1996, based on a law review symposium they led together, Warren Buffett chose Lawrence Cunningham to compile his famous shareholder letters into the book, The Essays of Warren Buffett: Lessons for Corporate America, now in its 4th edition and sold worldwide in a dozen languages.

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Berkshire’s Blemishes: Lessons for Buffett’s Successors, Peers, and Policy

Columbia University has published my most recent research paper, available free on SSRN (registration required): “Berkshire’s Blemishes: Lessons for Buffett’s Successors, Peers, and Policy.” Here is the abstract.

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Berkshire Hathaway’s unique managerial model is lauded for its great value; this article highlights its costs. Most costs stem from the same features that yield such great value, which boil down, ironically, to Berkshire trying to be something it isn’t: it is a massive industrial conglomerate run as an old-fashioned investment partnership. An advisory board gives unchecked power to a single manager (Warren Buffett); Buffett makes huge capital allocations and pivotal executive hiring-and-firing decisions with modest investigation and scant oversight; Berkshire’s autonomous and decentralized structure grants operating managers enormous discretion with limited second-guessing; its trust-based culture relies on a cultivated vision of integrity more than internal controls; and its thrifty anti-bureaucracy means no central departments, such as public relations or general counsel.

Delineating the visible costs of Berkshire’s model confirms the desirability of tolerating many of them, given the value concurrently generated, but also reveals ways to improve the model—a few while Buffett is at the helm but mostly for successors. Current reform suggestions include hiring a full-time public relations professional at headquarters and more systematically developing senior executives; suggestions for future reform include enhanced subsidiary compliance resources and separating the identity and personal opinions of top executives from the corporation and its official policy.

Besides helping Berkshire, the review and suggestions will help managers of other companies inspired by Buffett’s unique managerial model and policymakers who should study it. Implications for peers and policymakers include highlighting flexibility in corporate governance, the efficacy of the conglomerate form, and especially the value of strategies that produce long-term thinking among shareholders and managers alike.