CNBC's Becky Quick sits down with Warren Buffett to discuss the upcoming shareholder meeting, which starts Friday night and runs through Monday. Buffett refers to the annual event as "Woodstock for Capitalists."
Buffett: It's a gathering of partners. And-- you know we have a lot of partners, but-- I like the fact they feel part of the can't. And to see it's a real company, real products, real people. And-- and I get to see real stockholders, so it's -- it's-- it's a gathering.
Quick: It-- it started out as a very small event. When was the first-- when was the first one?
Buffett: Well, if you go way back we used to hold 'em in New Bedford, Mass.-- where Berkshire Hathaway started. So I would go back there. And-- and it was me and somebody taking the minutes. (butt to)) 10:34:44;11 And we would have about anywhere between eight and 12 people-- for the next 10 or so years until about 1981. And my aunt Katie would come and my Uncle Fred. I always packed the audience with people that would be sure to nominate me.
Quick: Eight to 12 people in the lunchroom at National Indemnity. It-- it's a-- very modest beginnings for what it's turned into. A huge, huge event.
Buffett: Yeah. Just-- just-- we-- we held it down there because I had a canteen that had to buy their own coffee or (LAUGHS) candy or something like that. I was always trying to turn a profit on the meeting. And then-- when we merged with Blue Chip Stamps we-- we moved to a-- room at a hotel here where we maybe had 100 people. The sound system didn't work right or anything. But-- but it was fun-- seeing shareholders and having 'em ask questions. And-- I liked it. My partner Charlie Munger (PH) liked it. And-- we're kind of hams. So-- it was a chance to get an audience.
On the Go and Having Fun
Buffett: It's interesting, there are a lot of events. And-- after the meeting which-- well, I get to-- I get there about 6:00 in the morning and then I walk around for a while and then we conduct six hours or so of questions. But then we have the international group for-- a few hours and then we have parties afterwards and all kinds of things. ((butt to)) 10:52:10 I don't get tired at all. And the interesting thing is Charlie doesn't get tired. And Charlie is 84. And he loves it. I mean when-- when we're up there with the international group and they're coming through he is-- you know if-- if they're from-- if they're from France he tells 'em about 28 things about France that they didn't know. And-- (LAUGHS) he's-- he's enjoying it too.
Quick: You know it-- it's something a lot of-- CEOs I would guess probably don't-- have quite as much of a grasp for the planning for their annual meeting as you might. You're paying pretty keep-- close attention to how many people are coming, the responses you're getting back, aren't you?
Buffett: Yeah, no, it's fun. Yeah, no I-- oh, I can tell you every day. And I-- I can tell you where they're from. And I compare it to the previous year. Now this-- this is-- this is a big event for us.
Quick: When do things really get busy for you? What time of your do you start picking up for this?
Buffett: They don't get busy for me. Kelly-- just does a fantastic job. I-- I don't even think about it. And my daughter does a great job, for example, on the movie. And we-- we've got-- the people in this office, they take care of everything. So I-- it doesn't really require time. I'm-- I'm very interested in it but-- but-- I don't have much to do.
Quick: OK, now you said the people in this office take care of it and people may think you have hundreds of people who are working behind the scenes, but this is a very small, tight group.
Buffett: It's-- it's 19 people. And they all have jobs and everything. But every one of those 19 will be participating in the meeting in some way.
Quick: I am amazed at the number of events. I mean you could start Thursday night and there are going to be events from Thursday through Monday that other people are holding. How many of those can you actually make it to?
Buffett: Well, I make it to as many as I can. ((butt to)) I am on the go-- every evening. You know Friday evening-- well, Thursday and Friday evening, Saturday evening and Sunday evening. And I'm enjoying myself?
Quick: And are-- do you like knowing that all these people are having-- the dinners and the gatherings and things, even the stuff you can't get to?
Buffett: Oh, yeah. When I'm Papa Bear, you know, I get to have a lot of fun with it. l(LAUGHTER)
Quick: How many people are you potentially expecting this year?
Buffett: I think we'll have about 30,000 based on the number of tickets we sent out.
Quick: Which is phenomenal?
Buffett: Well, it's-- it's-- they're real owners. I mean they-- they come to this-- they wanna learn more about the company. There's two different kinds. We got the very sophisticated type and they wanna ask kind of sophisticated questions. And then-- then they have-- we have the type that they put their-- a little bit of their life savings in it and they planned on it 'til they died. Just like they'd buy a farm or an apartment house.
And-- and they may not understand all the jargon that gets talked about by some of the shareholders but they-- they still got a feel for the business. They-- they-- we got 200,000 square feet of our products and-- on display. And they-- they feel they own part of a company, which is exactly how we want 'em to feel. It's not some little ticker symbol that moves around or something on a chart or something that gets recommended by some analyst or something. It's a real, honest-to-god business that they've bought into and that they're going to be of the rest of their lives.
How Many CEOs Look Forward to Annual Meeting?
Quick: What's it mean for you to have-- to have these people that have been showing up for years and years and who come back every year and who are so excited to be here. And they-- this is not just a-- another weekend for you.
Buffett: Oh, it's-- it's fun. It's a-- it's-- it's a weekend I look forward to, actually. I-- I'm not sure how many CEOs look forward (CHUCKLES) to their annual meeting. But so-- some of these people came from a partnership that I first started in 1956. In fact up until about 10 years ago I could recognize some member of the family of 90 percent of the shares of Berkshire.
Buffett: Obviously there's a bunch of things we wanna have. We-- we wanna have this little bookstore there. That's the one outside party that we have come in because they-- they do a great job for us. And we put them in a given corner. And, you know, but-- and an outfit like Justin Boots will-- they'll do something on a bigger scale so they'll take a fair amount of square footage. And just the act of-- of fitting shoes on people like takes a-- a fair amount. We-- we will sell probably three pairs of shoes a minute during-- that Saturday. And that--
Quick: Three pairs of shoes a minute?
Buffett: Yeah. And-- and-- you know and not everybody decides in 20 seconds what shoe to buy or (LAUGHTER) even to put 'em on. So it-- that takes more square footage than something else. We'll-- we'll sell 10,000-- either Dilly Bars or an orange-- type of bar. I like the orange--
Quick: Oh, the Dreamsicle bars.
Buffett: 10,000 of those. We'll sell four or five-- well, we'll sell-- no, what's that? About 8,000 pounds of candy. You know we'll-- so there's a lot of action going on. And just the physical aspects of it keep everybody pretty busy.
Quick: It's not just the stuff that's happening on the-- on the floor of the Quest Center. It's also-- out at the furniture mart. And at Borsheim's (PH). You have events that take place there too. What's it mean for those operations?
Buffett: Well, those-- the furniture mart last year did about $30 or $31 million of business in the five or six days. And on a Saturday, the-- the day of the meeting actually-- I hate to think of all those people out shopping that should have been in the meeting, but we set a record last year. We did six and half million roughly in one day. That's a lot of business for a home furnishings store. ((butt to)) 10:56:01;16 That would be more business by far than a Costco's ever done in a day or anything like that. And though-- and we'll beat that record again this year. And the-- those people-- but they're all having fun. And-- and-- and-- the jewelry store-- we wrote a ticket every nine seconds-- you know for three days.
Quick: You know you can't get a hotel room in Omaha. Forget about Omaha. In half the state you can't get a hotel room.
Buffett: Yeah, no, you-- Lincoln will sell out. And-- no, you'll-- you'll have to go a 100 miles or so-- the-- if-- if you come in late.
Quick: 30,000's gonna be the most people you've ever hosted. Is there a point where it gets to be too big for Omaha?
Buffett: I wonder about that. We're gonna keep holding it in Omaha. I don't know how we'll do it, exactly, but maybe we'll get a football field or something and have the managers trot onto the field and-- with the age of some of them they'll only get about into the 10 yard line but that's another problem. (LAUGHTER) But it's-- I'm not sure exactly how we'll handle the future. It-- it has grown (CLEARS THROAT) just about every year, so-- so who knows.
Quick: But it-- they're-- seriously I mean there's a point where you can't get a room if you don't book six months in advance. You can't get other things. How do you accommodate for more and more people?
Buffett: You know well-- I've thought about-- there're all kinds of people in town be willing to let people stay with 'em for a couple of days. We get-- we get offers on that. A lot of offers. But I'm not sure exactly what we do, Becky. I'm-- I'm-- you know that's-- that's in the too hard pile to think about right now. (LAUGHTER)
Quick: And the too hard pile is just like your filing system here, right?
Buffett: That's right. That-- that is definitely too hard. What does it say? (LAUGHS)
Quick: I know we touched on this before but just the idea of-- your ideal meeting. If you did ever change the venue, if you had your favorite place that you'd put it, if you had some sort of a fantasy, what would it be?
Buffett: Probably the Super Bowl. (LAUGHTER) And then they-- they can have the Super Bowl first then we can have our meeting. I-- no, I would-- I would have this-- I would have a portal down there, this bit football field. And it would be covered with smoke or however they do it. And the-- and some paper mache thing.
The-- and then I would-- I would have our managers trot out on the field like one of the great football teams. And I would say, "And number 76 from See's Candy, Brad." And-- and then I'd just go was the line. And-- and-- the crowd would go wild. (LAUGHTER) Don't count on that happening.