my Warren Buffett days

During my years in the financial market, I had the opportunity to study Warren Buffett’s career several times. But it was only by personally visiting Omaha – the American mega-investor’s hometown, in the US state of Nebraska – that I was able to capture the true dimension of his legacy. It was there, where Buffett built an empire valued at more than US$860 billion, that Berkshire Hathaway’s annual conference took place on Saturday (4) – or the “capitalist Woodstock”, for those familiar with it.

New York, birthplace of Wall Street, is a pulsating, ad-lit, diverse place where a fast pace is the norm. My experience at Faria Lima taught me that environments like this, with lots of noise, rumors and an excess of information, can overshadow what really matters for a good investment decision. Buffett, for his part, chose the isolation of quiet Omaha to live and work, which significantly benefited his ability to focus on the essentials.

The pandemic has demonstrated that it is viable to work remotely. But imagine adopting this model before the 1980s, when information circulated slowly. Isolation was a strategic advantage for Warren Buffett, allowing him to focus exclusively on his analyzes and convictions. Is this, then, the formula for success?

Probably not. Buffett is a case in point, with a strong conviction in “compounding” — the process of accumulating income on income, which enables exponential long-term investment growth. It’s almost a life principle for him, and he often asks: if you could only have one car for your entire life, how would you treat it? With the utmost care, certainly. The same applies to caring for our mind and body and the way we accumulate not only wealth but also knowledge over the years.

Lots of capital, little social impact?

The strategy of compounding It hasn’t always benefited Warren Buffett. His first wife, Susan, left him because she disagreed with his capital retention policy without making significant donations to the society. Buffett argued that he could generate a greater impact in the future if he continued to accumulate resources under his management.

Susan’s vision resonates with many Omaha residents. In conversations with locals, I noticed the admiration for her daughter Susie, known for her strong commitment to social causes in the community. The necessary reflection is: would it be possible for Susie to contribute in such a significant way without the financial legacy built by her father?

Buffett is known for modest habits, which he maintains to this day. He lives at 5505 Farnam Street. It is a large and beautiful residence – but it could be infinitely larger, if the mega-investor wanted. Acquired in 1958 for US$31,500, its value adjusted for inflation would be around US$340,000. Put up for sale, however, it would certainly reach a much higher figure due to the real estate appreciation over the years and its historical value in the world of investments.

The neighborhood is quiet and tree-lined, with houses that traditionally do not have gates — a common trait in the US countryside. However, due to intense harassment during the weeks of the events, Buffett decided to install a gate on his property.

A man of simple habits

Just a five-minute drive down Farnam Street leads to the Dodge Street McDonald’s, a regular Buffett stop for decades for breakfast. The billionaire, despite his fortune estimated at US$132 billion, has his morning orders well defined according to the market’s performance. On low days, he opts for the most economical choice, the sausage patties, which cost US$2.61. If the market is stable, he prefers the sausage McMuffin with egg, for US$2.95. On high days, choose the bacon, egg & cheese biscuit for $3.17.

Another two minutes by car and Buffett arrives at number 3555 on the same street, where the Berkshire Hathaway office is located. Despite the vast financial empire it coordinates, the company only employs 25 employees directly.

The building, known as Blackstone Plaza, has 16 floors and was recently renovated and painted all black. Despite the modernizations, it doesn’t compare to the imposing skyscrapers of Wall Street or Faria Lima. Built between 1960 and 1961, the building that has housed the company’s office since 1962 is a discreet landmark on the Omaha landscape. Situated in one of the busiest areas of the city, with a few hotels, bars and offices, there are rarely more than 20 people walking down the street.

The quiet town transforms

As the week moves behind the scenes, while recording in front of the building, I saw Guy Spier – renowned manager of the Aquamarine fund, which currently has 22% of its portfolio invested in Berkshire – entering the building.

Omaha is a city where having a car is essential, because everything is far from everything. A good example is Gorat’s Steakhouse, Buffett’s favorite restaurant. The trip from the Berkshire office there takes 7 minutes by car – or 50 minutes on foot.

When I was there, the place was full of tourists excited for the event. Customers often asked the waitress to bring Buffett’s totem to take photos at their tables. Known for its excellent quality meats, Gorat’s has its price – don’t expect to spend less than US$45 just for the main dish.

The week of the event, Omaha is transformed, with a series of secondary meetings and conferences. Investors, who have shown interest by sending letters to the company in previous months, can obtain up to four tickets each. Once the accreditation process has been completed and strict security has passed, participants gain access to the CHI Health Center exhibition space.

It is common for many to summarize Berkshire Hathaway as emblematic investments in companies such as Apple, American Express, Coca-Cola, Kraft Heinz, as well as large cash reserves and treasury bonds. In fact, these assets are fundamental to results. However, the company is taking advantage of the moment to demonstrate its involvement with a diversity of business models beyond the traditional one.

Buffett frequently expresses his firm belief in the American economy, encapsulated in his famous quote: “Never bet against America.” This trust is combined with characteristics common to the business models he chooses: strong brands, efficient management and an emotional appeal that resonates with consumers, creating lasting value.

Motorhomes, speedboats, manufactured homes, jewelry stores, department stores, country boots, ice cream and sports equipment represent just a sampling of the diverse businesses under Berkshire’s control that were present at the conference.

In addition to these fundamental aspects, Buffett also looks for companies that strengthen his results and contribute insights to broader investment strategies. One example is BNSF Railway, acquired by Berkshire in 2009, which operates an extensive rail network covering much of the US. This company plays a crucial role in transporting a wide range of products, from agricultural inputs to consumer goods and industrial materials. The investment in BNSF not only reflects Buffett’s belief in sustained U.S. growth, but also allows him to understand the country’s economic trends and transportation demands.

Another significant investment is in Pilot, a network of gas stations and service centers, acquired in 2017. With more than 800 locations spread across North America, offering fuel, food, rest areas and even showers, Pilot has become essential for drivers and travelers.

Brazilians in Omaha

There were many groups of Brazilians from the financial market, some of whom were veterans of the event. They noted that the movement this year was noticeably greater than in previous years, likely driven by factors such as the reopening of China and, especially, the recent death of Charlie Munger, increasing the anxiety of seeing Warren Buffett, now 93 years old, live. .

On the most anticipated day, I woke up at 4am and arrived in front of the CHI Health Center at 5am, finding a huge line of enthusiasts waiting to get seats close to Warren Buffett. The gates would only open at 7am and with the sky still dark, the 8 degree cold and the strong winds, the wait was not easy. Fortunately, there was free coffee near the entrance, alleviating some of the discomfort.

Because I had a press pass, I was able to enter before the general public, at 6:30 am. I took the time to talk to the first people in line, coming from Taipei, Taiwan, who told me they had arrived at 1:30 in the morning and were already showing clear signs of tiredness. As soon as the gates opened, people passed by the magazine and ran towards the arena, stretching their arms towards tables full of pretzels, cinnamon rolls, cookies, Coca-Cola, Sprite and water available to last so many hours next to inside.

I managed to sit in the fifth row, right behind the area reserved for VIPs – which, as expected, caused an uproar. The most exciting moment was the arrival of Tim Cook, especially because the three large screens at the top of the auditorium broadcast the event live. Shortly before his arrival, Berkshire had announced financial results showing a significant reduction in investment in Apple.

Live footage of Cook alternated on the screens with details of the share sale. Soon after, Bill Gates, founder of Microsoft, stole the show. He and Buffett are good friends. The arena was so full that some people sat behind the stage, with no view of where Buffett would appear.

A tribute

Traditionally, the event begins with the showing of a video lasting around 20 minutes humorously celebrating the company’s legendary figures. This year, the tribute was dedicated to Charlie Munger, showing fun moments shared by the duo, including appearances in scenes with characters from Breaking Bad It is The Office.

After these memorable moments, the lights finally focused on Warren Buffett, who was sitting next to Greg Abel, the future CEO of Berkshire, and Ajit Jain, Vice President of Insurance Operations. In keeping with tradition, Buffett began by discussing recent financial results before opening for an extensive question and answer session, which lasted more than six hours.

Two moments were particularly memorable for me. The first, when Buffett, when giving the floor to Abel, called him “Charlie”, as he referred to his longtime partner. This momentary lapse aroused a warm reaction from the audience, with a collective ‘own’ before effusive applause. The second was the final message, in which Buffett expressed his desire to see everyone again next year, as well as his hope to be there as well.

The weekend ended with a typical Faria Lima-style event: a Sunday morning 5K run sponsored by Brooks, one of the sporting goods companies under the Berkshire umbrella.

The experience of being in Omaha for the Berkshire conference made me agree with something I’ve always heard from others: every stock market enthusiast needs to go there once in their life.