Article — From the January 2010 issue

The Church of Warren Buffett

Faith and fundamentals in Omaha

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The story of Warren Buffett has long been a siren song to millions of other desk sitters who believe that, through regular reading of the Wall Street Journal, an average intelligence can beat the Dow. The song goes something like this: Common sense is worth more than inside information. Stocks offer the best returns over the long run. Follow a few simple rules and your money can grow 10, even 20 percent annually. Listening to this song, they then dash themselves against the rocks, handing their money over to an industry designed to make it disappear blamelessly. During the crisis of 2008 and 2009, the money of these “Main Street investors” shrunk at an embarrassingly confiscatory rate. At the worst of the crisis, Berkshire Hathaway stock plunged even faster than the Dow, descending to less than half its peak value.

Yet even as the crisis punished Buffett’s stock, it did little to diminish him as the populist lodestar of American business. If anything, his reputation grew even more lustrous. He began appearing on CNBC, where he would answer viewers’ questions for hours at a time. In the New York Times he urged readers to follow his example and pour their money back into U.S. stocks. President-elect Obama sought him out regularly during the transition period, and for a moment it seemed as though Buffett might be named to the incoming cabinet. Buffett’s eminence during the crisis probably had something to do with his grayness, his banal consistency. In the midst of a deluge we cling to the familiar.

Two thousand nine struck me as an opportune year to attend Berkshire’s annual meeting in Omaha, an event that has gradually become the informal summit of Main Street American capitalism. I wanted to see how the system’s most articulate exponent would explain its greatest crisis. I wondered whether his investors, after watching so much of their money disappear into the maw of Buffett’s buy-and-hold philosophy, would be experiencing a crisis of belief. If they were, then capitalism was in serious trouble indeed.

My single share of Berkshire Hathaway Class B stock, purchased last winter for $2,313, was worth less than one thirtieth of each of the 350,000 Class A shares that Buffett himself then held. Nevertheless, I could now claim a relationship with Buffett, one that transcended the gross disparity of our respective stakes. As owners, we were equals. “Do not think of yourself as merely owning a piece of paper whose price wiggles around daily and that is a candidate for sale when some economic or political event makes you nervous,” Buffett instructed in the Berkshire Hathaway Owner’s Manual. “We hope you instead visualize yourself as a part owner of a business that you expect to stay with indefinitely, much as you might if you owned a farm or apartment house in partnership with members of your family. For our part, we do not view Berkshire shareholders as faceless members of an ever-shifting crowd, but rather as co-venturers who have entrusted their funds to us for what may well turn out to be the remainder of their lives.”

Co-venturers! The remainder of my life! Never before had a billionaire addressed me in this way. Buffett wrote that he would charge me less and tell me more than would his corporate peers, and that he expected in return my unwavering fealty. This was more than an exchange of cash for assets. I had entered into a covenant.

In the months before the meeting, I set about getting to know some of my new Berkshire Hathaway brethren. I began with the self-appointed vanguard of Warren Buffett fandom, the Yellow BRKers—BRK is Berkshire Hathaway’s ticker symbol—who are famed for their raucous pre-meeting receptions and giant stovepipe hats made of canary-yellow foam. One of the hats, when not in use, resides with longtime BRKer Sherrie Gregory in her cottage on the shore of an artificial lake in Lincoln, Nebraska. Arriving at her home in the late afternoon, I found her checking stocks on her laptop as Fox Business blared away on a sofa-sized television.

“The A’s are up five thousand today!” she announced merrily. “I made money! The whole market is up!”

Retired, with nine grandchildren, Sherrie displays the hardened cheer of someone whose optimism has faced its share of tests. She bought into Berkshire in the mid-1990s, a few years after extricating herself from a rich and sometimes violent husband. “I chose to wing it on my own and try to make a buck here and there,” she told me with a simple frankness that stopped short of glib. This style of talking—one I had begun to associate with Berkshire and with Nebraska generally—served Sherrie well as a broker of land deals, real estate, and contemporary American artwork. She called her latest piece of inventory “dirt”: fifty acres of vacant farmland. Much like Buffett, Sherrie never desired to flaunt her success. “He chooses not to complicate his life with things, with stuff,” she said, seated in her home office beside a Rolodex and pictures of her grandchildren. “That would only distract him. I’m kind of like Buffett. I’m minimal. I don’t need clutter in my life.”

In Buffett’s personal philosophy—summed up by the phrase “Every day is exciting to us; no wonder we tap-dance to work!”—Sherrie found a model for how to grow older. Her devotion to Berkshire stock is steadfast; rather than despair during the plunge, she regretted only that she had no money with which to buy more. “It’s as cheap as I’ve ever seen it. We’re in a real good position to do well when we heal up,” she said conspiratorially, upon learning that I too was a shareholder.

Through the window I could see a twisted mass of metal bobbing on the lakeshore: the remains of Sherrie’s dock, which had buckled in a recent storm. Rain had poured through the roof of her cottage’s three-season room, swamping a plastic crate containing the Yellow BRKer paper archives but sparing a pile of custom-made buffalo-hide biker vests, leftovers from an old BRKer skit. As we sat beneath the sightless eyes of her three Warren Buffett bobblehead dolls, Sherrie told me the story of her long-ago visit to the fourteenth floor.

“It was so modest!” she remembered. “You would not believe how modest it was. He has a computer, but all he does on it is play bridge. The door to the office—it looked like the door to a storage room! There was nothing on it, just a door. The conference room was a cheap table and chairs. It was full of boxes. The room was never used. Warren says he’s never had a meeting. He doesn’t believe in meetings. He’s a non-meeting man.”

We drove to a steakhouse. Sherrie ordered the six-ounce sirloin and reminisced about how much the BRKers had changed since the early days, when the group met in a bar and Buffett himself would sometimes show up. He was busier now and security was tighter. It had been a few years since she’d spoken to him in person.

“How do you think he’s changed over the years?” I asked.

“I don’t think he’s changed at all,” she said.

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’s last article for Harper’s Magazine, “The Golden Touch,” appeared in the December 2008 issue.

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