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Bus to Omaha: State students visit with Warren Buffet

When you get an invitation to visit with Mr. Warren Buffett, the famous billionaire investor, you don’t turn it down.
I had been to a Berkshire Hathaway annual meeting about 15 years ago and understood what an opportunity this was.

Finance students from Mississippi State University were going on a field trip to Omaha, Neb. Dr. Larry White is their sponsor and had arranged it, planning to visit a few other notable Omaha business people along the way. Dr. White needed a female chaperone. I happened to be handy, and, as I said before, an invitation to visit the Oracle of Omaha is a command performance.

Of course, I didn’t quite know what I was getting in to. This was a bus trip. We were leaving Starkville at 9 p.m., and it was cold. Did I mention that Omaha is in Nebraska?
On Wednesday night, I climbed onto the bus, my blanket and pillow in tow, ready for the long ride. Dr. White and Dr. Highfield were the leaders of this group of 25 students, bravely facing a midnight ride and hoping for a true learning experience for this fresh-faced group of business hopefuls. We started the ride with the kindly Mr. Sam, our bus driver. Later, a no-nonsense drill sergeant, named Everett, took over the reins.

This was no ordinary bus. It was the newest, finest, MSU emblazoned, state-of-the-art piece of machinery I had ever laid eyes on. No, this was no ordinary bus. But despite the plush seats, the DVD player and the satellite television, it was still a bus. And I was not made to sleep on a bus.

Fourteen hours later, we arrived at our hotel, looking a little worse for the wear. There was just enough time for a quick nap and a shower before we donned our business attire. I was shocked when I made it to the lobby to find these young students looking like they were ready for Wall Street. Could this be the same motley crew I spent the night with on a bus?

Our first meeting was with Mr. Wally Weitz, the manager of six mutual funds under the Weitz name. His staff set up chairs in his office and invited us to spend a couple of hours asking him questions. I was amazed at the students. They listened attentively. They asked wonderful questions. They acted like real, live business people.

By this time, evening had set in, and it was time to head back to the hotel. I was thankful I’d be sleeping in a real bed on the second night of the trip.

The next morning, we headed to the Nebraska Furniture Mart, a famous retail furniture store owned by Berkshire Hathaway. The store was started by Miss Bea in the 30s and caught the eye of Mr. Buffett in 1983. Mrs. B’s grandson, Bob, gave us the tour of this gigantic and successful retailer.

Listening to him was like getting an entire business course in one two-hour session. He spilled over with words of wisdom about customer service, personnel management, product display, advertising and the global economy. Every word out of his mouth was a gem.

While the guys would have liked to hang out a bit more in the electronics section playing with the flat screen televisions, it was time to head to the main event, a meeting with Mr. Buffett. We gathered in The Cloud Room, the top floor of his building, overlooking the Omaha skyline. Mr. Buffett stood at the front of the room, looking like someone’s kindly grandfather. He’s 75 years old now.

For two hours, he answered questions, peppering his responses with jokes and gently laying out pearls of wisdom about life. For a student of business, this was like sitting at the feet of The Master. We soaked up every word.

Words like…

“Take the job that turns you on.” He used the word “fun” many times during that two hours. He was having fun, and he advised students to find a job they loved. As for Buffett, he “tap danced to work every day.”

“Always surround yourself with good people.” He said getting employees for your business is like arranging a lineup for a ball team.

On competition… “The world will find ways to snap you at your weakest link.” The message was clear. No business can afford to get lazy.

On the ailing airline business… “If there had been a capitalist at Kitty Hawk, he would have shot them down.”

On the global economy and the loss of manufacturing jobs… “It’s the world we live in.” He advised politicians to understand these changes, take the long view, and avoid trying to use protectionist measures to stave off the inevitable. At the same time, he expressed great optimism in America’s ability to find new ways to compete in this new world.

On the recent hurricanes and the impact on his reinsurance business… “We are willing to lose more money at Berkshire Hathaway than anyone, but we want to be compensated for it.”

And what does Buffett say makes a good business? One that has a “durable competitive advantage.” That can be seen in pricing. “A wonderful business is where you have price flexibility.” He cited See’s Candy. At the end of every year, he “looks in the mirror and says, Mirror, Mirror on the wall, what should I do with the price of chocolate? Raise it!” The business that can steadily increase its prices is destined to be a “cash cow.”

On investing… “I like it when the price of one our stocks go down. We buy more.” “Be fearful when others are greedy and greedy when others are fearful.” And, “the only reason to buy a stock is because it’s cheap.” He even asked his assistant to bring up some of the information on Korean stocks he owned. It was a mini-lesson on stock research and financial analysis.

Time for lunch

At noon, he said, “Let’s go to lunch.” Four students rode in his car with him to the restaurant. He pulled into the parking lot with his vanity tag, reading “Thrifty.” While we were thinking of who would sit at the head table with the famous Mr. Buffett, he plopped down in the middle of a table of our students. They talked about all kinds of things, and they laughed, a lot. Later, the students described him as a fun guy and a regular guy, you know, not like other billionaires they know. He talked to them about his pet subject, the capital gains tax. He thought it should be raised, so that the billionaires (who had money to spare) would not be taxed at lower rates than the regular working guys. This surprised these young people. Isn’t it all about just getting richer?

At the end of the meal, he suggested we go outside for a picture taking session. As he jumped out of his chair he chuckled and said, “Last one out picks up the check.” Of course, he paid.

Patiently, he stood in the middle of this group of students, allowing each one to get a personal picture with him. I joined in the fun. He donned an MSU baseball cap, a gift from Dr. White, for another picture and stood with us in a group picture in front of the school bus.

At the end of the afternoon, he waved and smiled and jumped into his car, leaving us to ponder the experience.

The final event of the trip was a visit to another Berkshire Hathaway company, Borsheim’s Jewelers. There, we met and talked with Buffett’s long-time manager of this company, Susan Jacques, a woman who stepped into a male-dominated world at Mr. Buffett’s request.

By five o’clock, we were exhausted, but exhilarated. It had been an unbelievable day. One student summed it up by saying that the experience had brought together everything they had been learning in class. Wow!

A life-changing event

No, I really didn’t know what I was getting in to. As an investor, I was reminded to depend on solid financial principles and avoid getting caught up in the stock of the day.

As a business owner, I was motivated again to concentrate on my customers and stay within my “circle of competence.” I greatly benefited from the experience.

But the greatest gift came in watching these young people. Buffett’s enthusiasm and sincerity spilled over to them. I could see by the looks in their eyes that this had been a life-changing event.

So…

If you ever get an invitation to visit with Mr. Buffett, don’t turn it down. Ride all night on a bus. Heck, ride on the back of a donkey, if you have to. Just get there. You will learn about business, but, more importantly, you will learn about life. And you’ll walk away ready to take on the world.

Nancy Lottridge Anderson, CFA, is president of New Perspectives Inc. in Clinton. Her e-mail address is nanderson@newper.com, and she’s online at www.newper.com.

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