Warren Buffett Is a Hero to Chinese Investors,
But Americans Hold Him in High Regard, Too
May 6, 2008 1:32 p.m. WSJ.com
The Chinese version of this column is available here.
In China, Warren Buffett is invariably referred to as the "god of stocks." Chinese can't get enough of him: Two of his biographies are the No. 1 and No. 2 best-sellers on dangdang.com, China's equivalent of Amazon.com, ranking ahead of bios of such notable people as Jack Welch, Bill Clinton and Bill Gates. I read my first Buffett book, the Chinese translation of Roger Lowenstein's "Buffett: The Making of an American Capitalist," in 1997. It was impossible not to -- everybody was talking about it.
From one perspective, Mr. Buffett's popularity is a bit odd: China's stock markets are known for their speculative, occasionally manic trading and are derided by some as "casinos." Mr. Buffett has a very different style -- a calm search for long-term investments that offer value. That style is widely admired by some Chinese because it's more in line with traditional Chinese philosophy of maintaining one's focus while tuning out the distractions of the outside world.
Mr. Buffett's choice to live in Omaha, Neb., instead of a larger American city also appeals to many Chinese. We grew up reading about famous political figures in Chinese history and fictional kung fu masters who chose to live deep in the mountains or on islands so they could better focus on improving their thinking and skills.
Having come to America in 2002, I wanted to see Mr. Buffett up close to get a sense of what makes him so appealing to investors beyond his successful track record, and to see if American investors responded to him the way Chinese investors do. So last Saturday I sat in the Qwest Center in Omaha, along with 31,000 eager Berkshire Hathaway shareholders, listening to Mr. Buffett and his long-time partner Charlie Munger dispensing wisdom about everything from investment principles to life philosophies.Shareholders' meetings are fairly new to me. I've never been to one in China, though I did cover Motorola's annual meeting in Chicago last year. The company was trying to fight off activist investor Carl Icahn, who made a speech meant to embarrass the management. It was like being on a battlefield.
Berkshire's shareholders' meeting felt very different. It started with a cartoon, "Charlie for President," which imagined Mr. Munger running for the White House because the U.S. needs a leader who knows how to make money instead of spending it. In the cartoon, Mr. Buffett was commerce secretary, treasury secretary and the Federal Reserve chairman. Bill Gates was the secretary of technology. (The real-life Mr. Gates was there -- he's on Berkshire's board of directors -- and played bridge with attendees.)
Unlike the Motorola meeting, few people asked tough questions. When members of an Indian tribe heckled Messrs. Buffett and Munger about a dam being built by a Berkshire-controlled company, the audience booed. There weren't many questions about Berkshire businesses. Instead, foreigners asked when Berkshire is going to invest in their countries (I was amazed how many Germans asked questions), a teenager asked what she should read, and an educator asked how introverted people can succeed in their careers.
For five hours, Messrs. Buffett and Munger offered answers -- not just about how to invest your money, but also about what to do with your life:
• Charlie and I don't have the faintest idea where the markets are going.
• If you're in the position to make choices, go to work for organizations and people you admire.
• If you find something that turns you on, you're probably good at it.
• Read daily newspapers and learn as much as you can about the world.
• $700 million is probably too much to pay for the Chicago Cubs.
Their answers were straightforward and often funny -- there was a lot more laughter than financial jargon. And certainly Mr. Buffett's investment philosophy has been a simple and consistent one. But after a couple of hours, I started wondering again about the questions that had brought me to Omaha.
Why was there a delegation of 20 CEOs from China in the audience? What did they want to learn from Messrs. Buffett and Munger that they didn't already know? And did they want to learn different things from Mr. Buffett than their American peers did?
Edward Zhu, chief executive of Shanghai's China Holdings in International Commerce, told me he always carries an audio book of Mr. Buffett's investment principles when he travels. "Mr. Buffett does help me get away from all the noises in the marketplace," he said.
Bingxian Zhao, chief executive of Beijing's Capital Investment Group Co., said he's studied Mr. Buffett for more than a decade and has read the Chinese translation of Mr. Buffett's letters to shareholders more than a dozen times. He said he admires Mr. Buffett's ability to stick to a very simple investment method for more than 50 years.
Andrew Mao, a Chinese banker in New York, was traveling with a copy of "The Intelligent Investor," by Mr. Buffett's mentor Ben Graham -- a book he said is "like my bible." He said he plans to return to Omaha next year: "A Christian won't go to church only once in his life. As a value investor, I can't go to the most famous meeting of value investors only once in my life."
I'd expected reactions like that from Chinese investors -- that's what had brought me to Omaha in the first place. But I heard very similar things from American shareholders I interviewed at the meeting. Robert Harte, a Californian, said he's been to three Berkshire meetings. He said Messrs. Buffett and Munger tend to repeat themselves, but he also said that "the nature of learning is to listen over and over again."
"It's kind of like going to church -- I know what he's going to say," said Brian Henderson of Glencoe, Ariz. But he added that "I need to listen to him say it every year" because such principles are hard to live by.
Finally, I asked the oracle himself: Why do 31,000 shareholders from all over the world come to the meeting to listen to his message?
As usual, Mr. Buffett turned to (or repeated) one of his principles: He and Mr. Munger view Berkshire shareholders as partners who have entrusted their money to them. And they come, he said, "because they feel they're part of the team with Charlie and me. "
Write to Li Yuan at li.yuan@wsj.com.
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