The stock investor is neither right or wrong because others agreed or disagreed with him; he is right because his facts and analysis are right.”

–Ben Graham, The Intelligent Investor

 

May 7, 2025 — Note from Andrew: In 2010, I had the opportunity to trek out to Omaha, Nebraska, to attend the Berkshire Hathaway annual meeting.

Below is the first of two parts regarding my trip, which I wrote for one of our predecessor publications, The Sovereign Individual.

With the announcement of Buffett’s retirement, reviewing this old article feels both timely and timeless. Enjoy!

A Sovereign in Omaha:

Lessons from Warren Buffett at

Berkshire’s Annual Meeting

“We’re about to drive past Warren’s favorite Dairy Queen,” my generous host pointed out to me this past Thursday afternoon.

It seems all the locals in Omaha, Neb., are on a first-name basis with the world’s most-famous investor and second-wealthiest man on earth, Warren Buffett.

Braving red-eye flights, a brief trek through Iowa and a typical Midwestern spring thunderstorm, your humble editor journeyed to Nebraska for the world’s best-attended shareholder meeting: Berkshire Hathaway.

It’s one part family reunion, one part carnival and, for about 15 minutes, an actual business meeting.

For many investors, it’s the most-important 15 minutes of their year.

Up to 30,000 people DO NOT attend the annual Berkshire Hathaway shareholders’ meeting just to hear Warren Buffett talk for 15 minutes…

This isn’t your ordinary family reunion. You have to fly in on your own dime, and there’s no such thing as a free lunch — although Warren will often list a few of his favorite restaurants — much less hotel room or any of the other amenities Omaha has to offer.

And with upward of 30,000 shareholders showing up, it’s cheaper to fly to Paris from New York than it is to Omaha for this investing event.

Despite that, there is a kindred spirit here — starting with signs everywhere saying “Welcome Berkies.” Try getting that reception when going in for the Goldman Sachs annual meeting. (I don’t think they have the humor to appreciate the term “Goldies.”)

And then there’s the site of the shareholder meeting itself. The Qwest Center, loaded with seating for 30,000 and full of booths, looks like nearly any other business convention — except each booth represents just one Berkshire subsidiary.

And even then, not every subsidiary was there.

It’s stunning to take in the breadth of the company, although it is also a good reminder that its future growth prospects will be limited to larger acquisitions.

The actual business ran from 3:30 p.m. to about 3:45 p.m., if that.

That’s it — 15 minutes on a Saturday to go over the shareholder votes and cover any new business.

The real value has always been with the Q-and-A session, where Buffett interacts with his fellow shareholders on the business, investment philosophies, and the like.

What Inquiring Minds Wanted to Know: Is Goldman Good?

With thousands of questions submitted, including one of my own, but only enough time to elaborate on about 60 questions, it was pretty clear on two fronts: Buffett was ready to defend his investment in preferred shares of Goldman Sachs, and shareholders wanted to know all the dirt.

Buffett first went into the background on the latest SEC complaint and criminal probe, and how he thought it wouldn’t affect the firm in any substantial manner. He elaborated on his 40-plus-year relationship with Goldman.

Here’s what you need to know: In 2009, Berkshire bought $5 billion in warrants from Goldman, yielding $500 million, or 10% per year.

Now, as a regular reader of the A-Letter, you know that Goldman Sachs can borrow money essentially for free because it restructured itself into a bank holding company.

So, who got the better deal here: Berkshire Hathaway’s 10% yield, or Goldman Sachs’ ability to tout this deal?

What Goldman most needed in 2009 was a change in culture away from the rampant greed that nearly ran Wall Street into the ground.

Instead, it got Warren Buffett’s seal of approval on the company.

When you look at it that way, beyond the dollars and cents, Goldman got the real steal. It didn’t have to change its corporate culture, and indeed took home record bonuses in 2010. (Nice to see Goldman put the $5 billion it got from Buffett to good use.)

Indeed, one of the questions later in the afternoon — well after concerns about Goldman abated — related to how one changes bad culture in an organization. Both Buffett and Berkshire Vice Chairman Charlie Munger were clear: You won’t be able to succeed, so it’s best to focus your efforts elsewhere.

But Buffett’s happy, and he’s more than welcome to put his spin on things. After all, that $5 billion at current money-market rates would return maybe $200 million per year. And with a market cap of around $175 billion, the $5 billion represents less than 5% of the company’s market cap.

As sovereign investors, however, we know that Goldman is part of the problem that wrecked Wall Street, and will be again. Of course, having the seal of approval from one of the most admired CEOs among Main Street America certainly puts a good image on things.

Considering the shareholder meeting kicked off with a video including, in part, Buffett’s testimony regarding illicit behavior at Solomon Brothers back in the 1980s, I would expect Buffett to react a little differently. Had I made this preferential deal with Goldman, I’d be a little uneasier about it.

Nevertheless, Buffett did a deft job defending this controversial investment. It wasn’t the first time he’s done that, and it won’t be the last.

All That Queries Is Not About Goldman

Outside of Goldman, it’s been a good year for Berkshire. But even the sharp bounce-back in equity markets and improving business trends of late aren’t enough to satisfy Berkshire’s shareholders. They’re concerned, and — considering how precarious the economy really is behind the numbers — rightly so.

What astounded me during the Q-and-A of the annual meeting was how informed the shareholders were with current news events, potential global investments, and the state of the U.S. economy.

Aside from the grilling on Goldman, the next few questions dealt with the problems of sovereign default, certainly one that all our editors at The Sovereign Society are paying acute attention to.

Ultimately, on the issue of sovereign default, Buffett rightly points out that the printing press makes this a non-issue. But for countries stuck in the Euro — like Portugal, Spain and Greece — unfortunately it is, because it means that the healthier economies of Europe have to suffer so the worst can pay their bills.

Outright default or not, it’s plainly clear that inflation will ramp up, as will tax rates when politicians run out of ways to simply finance with debt and have to fill their coffers with revenue in some way.

And international value was definitely in the minds of shareholders — several from India and one from China asked questions about how Buffett felt about their home countries. He’s bullish on both, and you can probably expect to see more focus on the international side of Berkshire’s investments.

It’s Always Sunny in Omaha

Even with all these different concepts swirling around, this shareholder meeting was about one thing above all else: the celebration of compounding wealth. And that’s something we should all take the time out to recognize sometime, rather than simply try and move on to the next trade.

It’s a wondrous thing, and rarely done right. As investors, we’ve all been known to sell at the wrong moment or buy into something we don’t understand and see it fail.

While most companies that engage in mergers and acquisitions tend to destroy rather than create value, Buffett does the opposite.

Rather than run an “imperious headquarters,” it’s kept as lean as possible, and Buffett will only step in on a rare occasion where a subsidy manager can’t do the job.

It flies in the face of modern corporate America, and it works.

I’ll be back Thursday to dig a little deeper into the investment style of the “Oracle of Omaha” and compare it to the vein of value investing that’s used to deliver the best investment opportunities in each month’s issue of The Sovereign Individual.

Disclosure: The author owns “B” shares of Berkshire Hathaway.

Andrew Packer
Grey Swan Investment Fraternity

P.S.: I still own those “B” shares, which are up 565% since May 2010, compared to 372% gains for the S&P 500. At 94 and turning in his badge, it’s fair to say, Buffett’s still got it.

Program note: Mr. Packer will continue with part two of his writeup, comparing Berkshire Hathaway’s investments to gold, circa 2010. You won’t want to miss how that analysis has fared in 2025.