It isn’t always easy being a value investor but any lapse in conviction can seemingly be cured with a one-day dose of Warren Buffett.
Advisors, money managers and shareholders of all ages descended upon Omaha, Nebraska for the Berkshire Hathaway annual meeting over the weekend to hang on every word from the world’s most successful investor.
The pilgrimage was made by more than 35,000 people, including 18,000 who watched it live in the CenturyLink Center and an almost equal number in adjoining rooms who watched the proceedings on big-screen televisions.
Listening to Buffett and his long-time business partner, Charlie Munger, Hathaway’s vice-chair, pontificate on all things investing is the perfect tonic to a world of short-term news and noise.
“It’s an important reminder of sticking to the basics. When you get away from that, that’s when your business can get in trouble,” says Hardev Bains, president and portfolio manager of Lionridge Capital Management, a Winnipeg-based asset management firm.
Focusing on the long run gets the best outcome for clients but it can often lead to “less-than-spectacular” short-term results, he says.
“If you’re not following the crowd, there’s a time when the crowd is looking smart and you’re looking dumb. It makes it harder to build your business. There’s a temptation to start veering away from the (value) discipline for the purposes of appealing to the short-term demands of the market,” he says.
Dave Christie, Winnipeg-based regional vice-president of RBC Wealth Management, agrees on the value of the pilgrimage to hear the Oracle of Omaha.
“It goes back to fundamentals. If you’ve got a strong company, you don’t have to worry about the noise and rumours around it. You do a good analysis of it and if it has some good growth potential, it becomes a consideration (for investment),” he says.
Many of RBC’s high-net-worth clients invest in Berkshire Hathaway stock and hearing the gospel directly from the oracle gives him and his team of private bankers some added cache.
“It’s good for us. When we have that kind of knowledge, we can pass that on to our clients,” he says.
As an added bonus, getting the chance enjoy a frosty cold beverage with like-minded investors and money managers is nearly as valuable as the meeting itself, according to Timothy Vick, Chicago-based senior portfolio manager of Sanibel Captiva Trust Co.
“Some of them become your friends and you exchange investment ideas with them. We can discuss Buffett and value investing. It has become a big workshop for the world’s value investors,” he says.
Considering Buffett’s age and his recent disclosure that he has prostate cancer, Vick said every Berkshire meeting could be the last chance to hear one of the old-school experts.
“He’s the last of the great titans of the investment world. Guys like John Templeton, they’ve all retired or moved on,” he says.