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There and Back Again
Extraordinary Popular Delusions and the Madness of Crowds

--Day 2-- The Annual Meeting

My hotel is providing a free shuttle service to the Qwest center, but the shuttle will not be picking up its first guests until 6:30 am. When reading past accounts of the annual meetings, I had read that Warren has shown up around 6:30 to say hello to the hardcore fans that have been waiting in line since some unreasonable hour in the early morning. I wasn't sure I would get to see Warren at all this weekend since there were 20,000 people expected to attend, and so I find myself with a decision to make. I can take the shuttle which 1) is free 2) allows me to eat breakfast (also free) and 3) will get me there by 7 am (still 30 minutes before doors open). Or, I can take a cab which 1) will cost $30 2) I will have to forgo breakfast and 3) I will have to wait outside longer in the dark and the cold.

I decide the chance for a picture with Buffett is worth it, and I schedule a cab for 5 am. I wake up at 4:10 (I didn't get to bed until 1am) to get showered, dressed, and to make sure I bring my book, notepad, and brokerage statement to get my credentials at will call.

When I arrive at the Qwest center at 5:30am, I discover I am not even close to being the first one there. There are probably 75 people already waiting in line. They span both genders and all ages, but I noticed there were a lot more young people than I was expecting. I wish I would have asked the first person in line how early he got there, but I'm guessing it was around 4am (for a 9:30 meeting).

As I walk up to the door, people representing the Financial Times and the Omaha World Harold each give me a complimentary newspaper. By 6am, Justin Boots had set up a display outside, and had cowboys walk around handing out free coffee and breakfast tacos, which I thought was a nice gesture. Being from Texas, I don't think much of seeing cowboys in the city, but to most people (especially the international guests) it seemed quite amusing. There was even a young lady riding a longhorn steer down the street as if it were a horse. Also, being from Texas, I didn't think to bring a jacket. It was around 40 degrees when I first arrived, so the free coffee was much appreciated.

By the time the sun starts to rise, there are already 1,000 people in line. In support of the “herd mentality” theory, I found it amusing that everyone gets in one huge line behind the first people, despite there being 2 other sets of doors not 100 yards away that will also be opened at the same time. I found out that will call had its own separate doors that will also open at 7am. I assumed it would be a separate place where I would go to get my credentials and then go stand in the regular line that was waiting to get in. This was not the case. As a result, I was in my own separate line by myself for an hour.

It turns out that my early morning gamble was a poor one. Buffett never came by, and I could have shown up 15 minutes before the doors opened and been the first in line. The thought crosses my mind that next year I should intentionally skip getting credentials so that I can show up late and still be one of the first in the building. However, I still enjoyed my time reading outside and participating in the excitement and anticipation along with the crowd. I can sleep at home.

At 7am, the doors open. I had several goals for this weekend, and one of them was to see 65 year olds running to get good seats. This particular goal was achieved. Nothing was more amusing than seeing security guards yelling “no running!” to senior citizens.

Here is the line going up the stairs/escalator to get to the seating area. Notice there is STILL a line outside the window in the background. The people I am photographing on the stairs are in that same line. The line goes down the stairs, behind me and to the right, 300 yards to the doors, outside, and another 300 yards to the people you see in the background.

At 7:15am, the arena already looked like this: and this: Being by myself, I had no trouble getting a great seat by filling in one of the one-seater gaps left by groups of people. I ended up just 7 rows behind the directors who were all right in front of the stage.

At 8:30am the lights dim, and we are underway. Susie Buffett came out and read a lengthy statement about her late mother, which was very touching. You could tell she was emotional, and I think many long time shareholders where as well.

Following Susie's remarks, the company movie began, and I of course thought it was wonderful. The opening clip was a talk by Buffett where he says that in the film “we'll take thigh road, and stay away from cheap product placement.” Of course the next 3 minutes are filled with Warren participating in shameful product placement, such as drinking his Coke and commenting on how refreshing it is.

The main attraction was a cartoon parody of the Wizard of Oz (since Warren is often dubbed the Wizard of Omaha). It featured Charlie as the tin man, Bill Gates as the scarecrow, the Geico Gecko as Toto, and Arnold as the cowardly lion. There was plenty of product placement in this as well (they all skip down the road arm in arm singing “follow the Acme brick road.” One of the funnier parts was when Warren (Dorothy) strategically bites an apple and hands it to the scarecrow (Bill Gates). It turns in to a white apple logo and plays the Windows XP logoff sound, as Gates drops it. Gates used a sesquipedalian vocabulary throughout the cartoon. Near the end, Buffett says that to keep Gates from using such “high tech talk,” Buffett awards him with an honorary degree in English from the University of Nebraska.

Several more hilarious clips follow, most of which I believe were taken from last year's company movie. Some of the funnier commercials that aired for Berkshire owned companies were interspersed throughout. One of the clips I found amusing was an episode of Judge Judy where Buffett and Gates fight over a $2 bet that Buffett insists he won over a game of bridge. He says that Gates intentionally crashed his PC at the end of the game to avoid losing. When Buffett starts to dominate the court, Judge Judy snaps at him “I'm the boss, applesauce.”

There was also footage shown of Buffett's testimony to Congress over the Salomon bond-market activities of the early 90s. Applause erupted throughout the arena as the clip ended with Buffett stating “lose some money for this company and I will be understanding, lose a shred of reputation for this company and I will be ruthless.”

The film also included last year's proposition 13 skit where Arnold forces Buffett to do 500 situps.

At 9:30, Charlie and Warren enter the stage as loud applause fills the arena, and the meeting is underway!

I was astonished that Geico added 245,000 new customers in just the last quarter. I was aware that New Jersey was now allowing Geico to sell insurance in the state, but this was a 4% increase of the customer base in a single quarter, and at a 13% underwriting profit.

One of the funnier moments was when Buffett complimented Bill Gates by reading from a survey of Fortune 500 CEOs that asked who they would want on their board of directors if they could pick anyone in history. Gates was number two (behind Jack Welch). Buffett did not mention himself, but he gave the positions of Jesus, Napoleon, etc. and then commented “I think many CEOs of the world would prefer people who are dead on their board.”

During a discussion of Ford's pension problems, Munger deadpanned “if you jump out of the 42nd floor window, you're still doing fine as you get to the 20th. That doesn't mean you don't have a problem.”

Another comment which received thunderous laughter came during a discussion on the state of public education. After Munger stated that we cannot have children attending first grade where “teachers are fornicating on the floor and alcohol is being passed around,” Buffett replied “I wish I went to first grade where he did.”

Another poignant moment came after an audience member asked about social security. Buffett said what was to be expected. He disagreed with private accounts and the “counterproductive policies of the current administration.” This brought a decent amount of applause. Munger followed with “well, that is the opinion of Berkshire's democratic chairman.” He waited for his applause and then continued with “and what's remarkable is that as a republican I feel even more strongly than Warren does. The republicans are out of their cotton pickin' minds.” Thunderous applause again fills the room.

The meeting continues until it's scheduled termination at 3:15. After lunch the crowd is much smaller, and by the time the actual meeting itself begins, the crowd is perhaps 20% of its original size.
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