Warren Buffett to Draw Biggest Crowd Ever

By Reuters -  |  Posted 2008-05-01 Email Print this article Print
 
 
 
 
 
 
 

The "Woodstock for Capitalists" is about to grab the economic spotlight as the annual shareholder meeting for Berkshire Hathaway is almost here.

OMAHA, Nebraska (Reuters) - Few 77-year-olds could hold thousands of people in rapt attention for five hours. Sean Connery, maybe; Clint Eastwood, perhaps. Warren Buffett? Definitely.

Buffett will be the center of attention on Saturday at the annual shareholder meeting for Berkshire Hathaway Inc, his roughly $200 billion holding company.

Berkshire estimates that 30,000 to 32,000 people, up from 27,000 last year, will fill the Qwest Center in Omaha for what has become known as "Woodstock for Capitalists."

Shareholders will listen to Buffett and his effervescent sidekick, 84-year-old Berkshire Vice Chairman Charles Munger, answer questions on business, the economy and life.

"It restores your enthusiasm for what we know in our heart is right in investing, management ethics and everything that is good about capitalism," said Frank Betz, a principal at Carret/Zane Capital Management LLP in Warren, New Jersey. "I hate to sound so corny, but that is exactly what happens."

Berkshire had a good year in 2007. It boosted profit 20 percent to $13.2 billion, and revenue the same amount to $118.2 billion, despite increased competition in insurance and several of its more than 70 businesses hurting from the housing slump.

Shares of Berkshire, meanwhile, rose 29 percent. Buffett is worth $62 billion, making him the world's richest person, Forbes magazine said. Most of that amount is in Berkshire stock, and all of that stock will someday go to charity.

The meeting may have less controversy than last year, when some shareholders demanded that Berkshire divest its stake in PetroChina Co because of the oil company's links to Sudan. Buffett later sold the stake based on valuation.

SPENDING CASH

Berkshire sells such items as bricks, candy, car insurance, carpets, ice cream, jewelry, knives, paint and underwear. About half its business comes from insurance and reinsurance.

The company ended the year with $44.3 billion of cash, but has since agreed to spend some.

In March, it paid $4.5 billion for three-fifths of Marmon Holdings Inc, whose products are used in construction and energy. Then on April 28, it deployed $6.5 billion tied to Mars Inc's purchase of chewing gum maker Wm Wrigley Jr Co.

Berkshire's $75 billion stock cache has included blue-chip names such as American Express Co, Coca-Cola Co Procter & Gamble Co and Wells Fargo & Co.

Buffett may weigh in on how politicians, regulators and greedy investors mess up the markets.

Shareholders may want to know more about Berkshire Hathaway Assurance Corp, a bond insurer that Buffett created late last year as rivals struggled with subprime mortgages. Berkshire's bond insurer quickly won "triple-A" credit ratings.

"He's prepared to share state secrets," said Thomas Russo, a partner at Gardner, Russo & Gardner in Lancaster, Pennsylvania, attending roughly his 25th meeting. "People won't duplicate him because they don't invest as patiently."

Succession will also be on people's minds. Buffett has said Berkshire has three internal candidates to replace him as chief executive officer, and four "young to middle-aged" candidates to become chief investment officer.

And Buffett could offer his views on the 2008 elections. He has said he plans to support the Democratic Party, but has not endorsed either of its leading candidates for the presidency, Barack Obama or Hillary Clinton.

"I go to hear the 10 or 20 percent of new stuff," said Steven Check, chief investment officer of Check Capital Management Inc in Costa Mesa, California, a 15-year attendee. "You get reinforced by the other 80 to 90 percent."

Even so, Buffett gets some things wrong.

Last year, he said subprime mortgages did not pose a "huge danger" to the economy, and that absent surges in unemployment and interest rates, "it's unlikely that that factor triggers anything of a massive nature in the general economy."



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