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Buffett, Munger Fill Arena for Berkshire Meeting

Billionaire Warren Buffett's shareholders always look forward to the time he spends answering questions at Berkshire Hathaway's annual meeting, a chance to learn from one of the world's most successful investors.

Buffett said the question-and-answer period, when he and Berkshire vice chairman Charlie Munger field any and all queries, is his favorite part of the meeting too because he likes to know what's on shareholders' minds.

"Our attitude is partnership. These people are our partners," Buffett said during interviews about three hours before he was scheduled to take the stage.

Buffett and Munger spoofed the presidential campaign in Berkshire's annual cartoon, which is part of the humorous movie at the start of the meeting.

The cartoon depicted Munger running for president as a write-in candidate. Munger's fictional "Financial Independence Party" was born over a lunch between Munger, Buffett and Bill Gates, who is a Berkshire board member.

At a campaign event, the cartoon Munger delivered real change by offering a boy two dimes for a quarter. Munger had an answer for all the nation's ills, and all of them involved products made by Berkshire subsidiaries.

Global warming? Munger recommended eating a Dairy Queen Blizzard a day. Health care? Munger said eat more See's Candy.

Economic problems? Munger promised to put Buffett in charge of the Federal Reserve, the Treasury Department and the Commerce Department.

Cartoon versions of the real Democratic presidential candidates scoffed at the notion of Munger's candidacy. An animated Hillary Clinton simply laughed while Barack Obama lamented that he thought he was the candidate of change.

But the cartoon of Republican John McCain celebrated Munger's candidacy: "Excellent! A candidate older than I am."

At the meeting later Saturday, shareholders will likely ask about the state of the economy as well as Berkshire's latest earnings report.

On Friday Berkshire reported first quarter net income of $940 million, or $607 per share, in the quarter ended March 31. That's down significantly from the net income of $2.6 billion Berkshire generated a year ago.

The biggest reason for the drop in net income was an unrealized $1.6 billion pretax loss Berkshire recorded on its derivative contracts.

Including the derivative losses, Berkshire's net investment losses in the quarter totaled $991 million. A year ago, the Omaha-based company recorded a $382 million investment gain.

Berkshire officials predicted the crowd at the Qwest Center Omaha would top 30,000 Saturday. The crowd has grown bigger every year as shareholders bring family and friends to hear Buffett and Munger, and more business school groups make the trip to Nebraska an annual pilgrimage.

Some shareholders, like Jack Smith, are attending the Berkshire meeting for the first time. Smith said he traveled from Springfield, Ill., partly out of curiosity and partly for the "entertainment value" of the weekend.

"And for the opportunity to listen to Warren and Charlie," Smith said.

But the age of the two men has some shareholders wondering how many more times they'll be able to listen to Berkshire's chairman and vice chairman hold court. Buffett is 77, and Munger is 84.

That's part of why Michel Paquet and Lorie Armstrong made their second trip to the annual meeting from Calgary in Canada. "We came here to support Warren," Armstrong said.

But that doesn't mean shareholders are all that worried about what will happen to Berkshire once Buffett is gone because of the strong corporate culture Buffett and Munger have established.

"I will expect some volatility on the transition, but I'm ready for that," said Paquet, who plans to hold his Berkshire stock for many years to come.

Smith said the key question is how will the public and the stock market judge Berkshire whenever the transition happens.

"I'm pretty comfortable the company is in good hands once they're (Buffett and Munger) no longer here," Smith said.

To replace Buffett, Berkshire plans to split his job into three parts -- chief investment officer, chief executive officer and chairman.

In his letter to shareholders, Buffett said the company's board now has three internal candidates for CEO and four external candidates who could take over managing the company's $75 billion stock portfolio and $35.6 billion cash.

Berkshire's board knows who to choose for the jobs once Buffett can no longer do the job. Buffett has refused to publicly identify the candidates.

Buffett has said previously that when he dies, his son will take over as chairman to ensure Berkshire's culture is preserved. Howard Buffett already serves on the board.

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