The shareholders love it, with 40,000-plus coming from all over the world to hear the investment wisdom of Berkshire Hathaway’s chairman.
The Omaha hospitality industry loves it, one weekend each year when hotels here can charge New York City prices.
But in reality, Warren Buffett acknowledged in an interview, no one loves Berkshire’s annual shareholders meeting more than he and fellow Berkshire leader Charlie Munger.
That made Friday’s decision to call off this year’s shareholder gathering difficult, Buffett said, but it needed to be done to promote national containment of the COVID-19 pandemic.
“Charlie and I, we enjoy this event more than anyone in the world,” Buffett told The World-Herald on Friday. “I can tell you, this is one of the most difficult, but unfortunately the most obvious, decisions I’ve had to make in my life.”
While Buffett relishes the chance to rub elbows with shareholders and enjoys quipping his way through the question and answer session, Buffett said in the end he just couldn’t take the risk that the May 2 gathering in Omaha would lead to further spread of the deadly virus — including within his hometown.
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“It just became obvious that gatherings were not going to be a good idea on May 2,” Buffett said. “There’s no question cases will be occurring all over the country on May 2, in my mind. We don’t want to import any of them into Omaha.”
Buffett said the business portion of the shareholder meeting will still go on at the CHI Health Center Omaha, as required by the proxy on file with federal regulators. It’s likely the only attendees will be Buffett, Munger and several Berkshire employees.
“We will have 18,000 seats and have five of them filled,” Buffett said. “It will be a very surreal type setting.”
Buffett left open the possibility that he will still field questions from a panel of financial journalists and from shareholders, which would be made available for viewing around the world through online livestreaming by Yahoo. He said he would decide on that later, encouraging shareholders to continue sending in their questions.
No doubt one of the biggest questions on shareholders’ minds will be the global economic impact of the coronavirus. As it is, there can be no doubt the virus is already taking a big toll on the economy of Berkshire’s corporate headquarters city.
Buffett’s announcement became the latest in a series of blows dealt to Omaha’s tourism industry by the coronavirus outbreak. Just the day before, the NCAA canceled this year’s College World Series in June and the March Madness men’s basketball tournament games that were set for Omaha next weekend.
The Berkshire annual meeting is worth an estimated $21 million to the Omaha economy; the basketball games $5 million; the College World Series $70 million.
“It is like hit after hit,” said Deb Ward, vice president of the Omaha Convention and Visitors Bureau.
“I didn’t see this coming, but thinking aloud, it does make sense,” said David Scott, director of marketing for the Peregrine Hotel in downtown Omaha. “But this is going to have a major impact on the industry, no question.”
Of the major marquee events set for Omaha in the coming months, now only the U.S. Olympic Swim Trials remain in play.
USA Swimming, the sport’s U.S. governing body, has said it will wait a month to make that decision, Ward said. Omaha Mayor Jean Stothert said Friday that there’s “still a glimmer of hope” that the trials will go on.
“All of these (canceled) events will have a huge impact on the city,” Stothert said. “It may get worse before it gets better, but we’ll get through it.”
Until as recently as Thursday, Buffett was holding out hope that Berkshire would still go forward, too. He told a pair of national media outlets that day that he would wait until April 1 to make his decision.
But events in recent days have been fast-moving. He said, he, Munger and other members of Berkshire’s board of directors all changed their minds around the same time.
“Charlie would have been gung-ho three days ago,” Buffett said. “I talked to him yesterday. He said, ‘Call it off.’ ”
Berkshire shareholders on Friday naturally expressed disappointment that they won’t be able to join Buffett in Omaha this year, though they said they certainly understood the decision.
“It is a highlight of the year,” said Carter Pearl, a Phoenix money manager who has been coming to the meetings for more than two decades. “That makes it difficult for everybody, including him.”
Beyond all the fun of the Berkshire vendors in the convention hall and the laughs during the Q&A, Pearl said it always offers shareholders a level of comfort when they get to see Buffett in the flesh and hear his voice.
“You see he’s healthy and that his mind is sharp as ever,” Pearl said. “That’s reassuring.”
Brian Gongol, a Buffett fan from Des Moines who has been coming to the meetings for a decade, said he’s sure Buffett feels much personal disappointment in the decision.
“This is his March Madness,” Gongol said. “But at heart, what he is, is a risk manager, and he’s saying, ‘Why should we take this risk?’ It’s the rational thing to do, even though it is personally disappointing.”
Buffett analyst Cathy Seifert said she hopes Buffett still goes forward with an online Q&A. Seifert, of CFRA Research, said the information Buffett offers during his meeting is important to both shareholders and the investment world.
“My hope is the level and scope of information is not curtailed, and it doesn’t necessarily have to be,” she said. “There is so much going on at Berkshire, in the market and in the world. I think investors would really crave Warren’s viewpoint and perspective.”
Gongol, too, said he hopes Buffett does stream the Q&A.
“It will be missing the applause and the chuckles, which is half the fun,” Gongol said. “But I will be tuned in. These are interesting times.”
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