A story in today’s Wall Street Journal details the complex ploy staffers from Fidelity cooked up to win some face time with Warren Buffett during this spring’s Berkshire Hathaway annual meeting, one of the very few times a year investors can ask Buffett questions directly. Fidelity’s tactics allowed the firm’s representatives ask about 20% of the questions allocated to the annual meeting crowd.
A few Buffett followers previously had an inkling of Fidelity’s ploy to get in front of Buffett, but perhaps not the full extent of the scheme, which irked (and sort of impressed) Buffett.
Berkshire shareholder and Buffett book author Jeff Matthews noted on his blog earlier this year that a unusually high number of questions were from “bright young financial analysts from the Greater Boston Area, which suggests somebody figured out how to game the ‘lottery’ system,” used to select questioners from the Berkshire annual meeting. (An anonymous commenter on the site also noted what Fidelity did.)
Matthews, as it turns out, sat next to a young Fidelity analyst who had a list of prepared questions and picked one that Buffett complimented during the meeting, according to his notes.
She asked: If Buffett and Munger were to live another 50 years, what sector or asset class would they add to their circle of competency and why? Their answers: technology or energy. (Months after the meeting, Buffett disclosed a massive investment in IBM.)
Other Fidelity queries included Buffett’s view on the outlook for Wells Fargo and U.S. Bancorp, stocks that Berkshire owns, and a poser about Ajit Jain, who runs Berkshire’s reinsurance business and is a rumored successor to Buffett. The latter question, which according to shareholder Ben Claremon’s notes was read out by a journalist, was about how Jain thinks. Buffett launched into a description of how Jain puts Berkshire first and is a “remarkable human being.”
Not every question was about Berkshire or investing. Sumit Mehra, a Boston-based Fidelity analyst who grew up in the Kashmir region of India, asked how Buffett and Munger would incentivize a child born in a country like the U.S. to compete against motivated kids from emerging markets. Buffett and Munger’s response: help him or her find an interest to pursue.
So why did Fidelity go to such lengths to speak to Buffett when he seldom says anything new at the annual meeting, and there may not be an investing advantage to gain? Like other shareholders, some Fidelity staffers wanted to get the most out of the experience and thought they had better questions than others, according to people familiar with the matter.
Regular attendees of the annual Buffettpalooza and value investors say nothing beats getting in front of Buffett.
“It’s priceless” to see and hear Buffett in person, says Shai Dardashti, managing partner at Dardashti Capital Management in New York who has made annual pilgrimages to Omaha for a decade. “It’s like asking Albert Einstein a math question—you know the answer but he’s telling it directly to you.”
Read the full transcript of the March 2 Squawk Box Interview with Warren Buffett
Download the 2010 Berkshire Hathaway Annual Report
Download the 1977 - 2010 Warren Buffett Letter's to Berkshire Hathaway Shareholders
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