Warren Buffett Speaks His Mind in Burden Auditorium
Adriana Boden (NI), Co-News and Campus Affairs Editor
Issue date: 4/28/03 Section: News
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Before responding to student questions for almost two hours, Warren Buffett stood patiently at the bottom of a standing-room only crowd in Burden auditorium, taking pictures with awestruck students thrilled to share a Kodak moment with the man many consider to be the God of Investing.
Despite his estimated thirty-eight billion dollar fortune, Buffett, an Omaha, Nebraska native, today pays himself an annual salary of a hundred thousand and still lives in the same grey stucco house he bought forty years ago for thirty-one thousand dollars. Denied admission to HBS at the tender age of nineteen, a wisely undaunted Buffett graduated from Columbia Business School instead and went on to work for his father's investment bank and then as a security analyst at Benjamin Graham's investment company. Buffett soon launched his own investment company, the Buffett Partnership, which later emerged as the legendary Berkshire Hathaway we know today. The "Oracle of Omaha" quickly secured his reputation as a master of investing in undervalued companies for the long-term and from whom one can expect direct discussion, mixed with an irreverent Mid-Western sense of humor.
To get a better understanding of the magnitude of Buffett 's success, one need only consider that if one had been lucky enough to invest ten thousand dollars in Berkshire Hathaway in 1956, it would today be worth three hundred and fifty million dollars. Despite these outrageous returns, the firm's investment staff remains small - 15.8 people according to Buffett - with plans to soon expand to 16.8 with the recent addition of a Columbia MBA grad who sensibly enclosed a check for five hundred dollars and offered to work for Buffett on a "reverse salary" basis. Together the firm's subsidiaries, which include Fruit of the Loom, GEICO, International Dairy Queen, Mid-American Energy and See's Candies, employ over one hundred fifty thousand people.
Legendary is Buffett's annual shareholder letter through which he reports his general assessment on the market and the strengths and weaknesses of the firm's various acquisitions, all accompanied by his illustrious wry sense of humor. In his shareholder letter in 2000 for example, Buffett reported, "Finally, there is the negative that recurs annually: Charlie Munger, Berkshire's Vice Chairman and my partner, and I are a year older than when we last reported to you. Mitigating this adverse development is the indisputable fact that the age of your top managers is increasing at a considerably lower rate _ percentage-wise _ than is the case at almost all other major corporations. Better yet, this differential will widen in the future."