The Warren Buffett and Charlie Munger Show

A friend told me that he doesn’t go to the Berkshire Hathaway annual meeting – or what is also known as the Warren Buffett and Charlie Munger Show – because it has turned into a cult over the years. (He is also frustrated with what he sees as Buffett’s hypocrisy on issues of taxes and corporate governance). Let me make it clear that the Warren and Charlie Show is not just a cult; it is a cult on steroids. Forty thousand people come from all over the world for three days to a place most cannot find on the map – it has got to be a cult.

At Omaha, Nebraska’s CenturyLink Center, where the event is held, you’ll find Buffett’s and Munger’s faces splashed all over boxes of chocolates, T-shirts and even underwear. Yes, Fruit of the Loom, which is owned by Berkshire Hathaway, sells boxers emblazoned with images of Buffett and Munger. My son Jonah, who joined me for this year’s meeting, bought a pair; he says he’ll wear them when studying for hard tests.

The definition of a cult is “misplaced or excessive admiration for a particular person or thing”; and while you can argue that admiration for Buffett is at times a bit excessive, it is hardly misplaced. There are tens of thousands of people (including yours truly) who’ll openly admit that Buffett’s popularization of Benjamin Graham’s teachings has had a tremendously positive impact on their lives.

Yes, many attendees may treat every word that passes Buffett’s lips as eternal truth and put him up in heaven with the other saints, but that is the wrong approach to Buffett and the Berkshire Hathaway weekend. Buffett is far from being a saint – he is as flawed as anyone else – but that doesn’t make the Warren & Charlie Show less worthwhile. Despite having gone to this event for eight years in a row, every single time I learned something new. You just need to have an open mind and be willing to listen and learn.

Here are some of my takeaways from this year’s weekend in Omaha:

On the question “How do you make friends, and how do you get people to like you?” Buffett responded: “You should get smarter about human behavior as you move along. Try to list the attributes you see in people you like, and try to change your behavior accordingly.”

Buffett was asked about which stocks or other assets do well in times of high inflation. He answered, “Companies that buy assets only once.” In other words, companies that have significant fixed assets and small incremental capital expenditures would fit the bill.

A few years ago when Buffett was asked the same question, he offered a different answer: “Companies that have royalties on someone else’s revenues.” Visa and MasterCard are perfect examples: As prices go up, the fee they collect from each transaction goes up too. (A franchisor like McDonald’s would be another example.)

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Vitaliy Katsenelson

I am the CEO at IMA, which is anything but your average investment firm. (Why? Get our company brochure here, or simply visit our website).

In a brief moment of senility, Forbes magazine called me “the new Benjamin Graham.”

I’ve written two books on investing, which were published by John Wiley & Sons and have been translated into eight languages. (I’m working on a third - you can read a chapter from it, titled “The 6 Commandments of Value Investing” here).

And if you prefer listening, audio versions of my articles are published weekly at investor.fm.

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