BY VERONICA KALYNA
On chilly January morning, 20 UCLA Anderson students – members of the Anderson Student Asset Management Fund, Student Investment Fund, and the Anderson Investment Association – began the pilgrimage to meet Mr. Warren Buffett, the “Oracle of Omaha”. Along with students from six other U.S. universities and a group of Brazilian business students, we began the day at Nebraska Furniture Mart (NFM), the first of three Berkshire Hathaway-owned company visits. As we walked through the flagship store, we learned about the “Historic Omaha Handshake” and the two-page contract by which Buffett and Rose Blumkin, NFM’s founder, sealed the sale of NFM to Berkshire Hathaway in 1983. Buffett’s simple business tenet of “Sell cheap and tell the truth” positioned the retailer to rapidly expand in the Midwest.
Our next stop was Berkshire Hathaway’s headquarters, inconspicuously located on the 15th floor of the Kiewit Building in downtown Omaha. Stepping off the top floor, we entered the marble-and-wood paneled Cloud Room and enjoyed cold cans of Coca-Cola while waiting for the Oracle to arrive. Soon after Buffett made his entrance, a two-hour question and answer session ensued. With great candor and modesty, Buffett spoke on a wide range of topics. While holding a 1951 Moody’s Manual, he quipped, “People who want to relive their youth buy old Playboys. I buy old Moody’s.” Buffett spoke at length about his philosophy of investing in simple, undervalued firms with solid operations and management teams, and discussed his hands-off management style. He also spoke about how Berkshire Hathaway’s size has led him and his long-time business partner and friend, Charlie Munger, to “hunt for elephants” – a metaphor for deals in excess of $1 billion – as smaller deals, though more appealing, do not provide significant returns to his investors.
However, not all questions were about the markets and investing. Buffet also spoke at length about personal and social matters such as philanthropy and the pointlessness of ostentatious lifestyles among the wealthy. Excerpts from his remarks on a wide range of topics resonated with us all:
On friends: “Associate with people you think are better than you and you’ll start behaving like them.”
On passion: “The degree to which people who love what they do jumps out so much more from the crowd. Too many people are sleepwalking through life…you want to do something you love and do it with people you like.”
On marriage: “The most important investment decision is who you marry.”
On philanthropy: “Every life has equal value… Do things that you know will work to improve people’s lives.”
On his approach to investing: “Emotional stability and guts.”
On his lifestyle: “You [students] and I pretty much wear the same kind of clothes, eat the same sorts of food, enjoy spending time with our friends, watch football, and live in comparable neighborhoods. Other than travel, where I travel on a private jet, our lives are not that different. I hope you too spend your time doing what you enjoy.”
After the Q&A session, we lunched at Piccolo Pete’s, an Omaha favorite that is also owned by Berkshire. Here, we enjoyed the Oracle’s favorite treat, root beer floats, while feasting on steak, salad, and fries. The root beer floats were a first for many of the international MBA students. Before leaving Piccolo Pete’s, our group presented Buffett with a signed copy of Security Analysis by Benjamin Graham and an UCLA Anderson baseball cap, which he kindly wore during the group photo shoot. We thanked Mr. Buffett for hosting us and as we left the restaurant, he drove off in his brown 2006 Cadillac DTS – a symbol of Buffett’s choice to live simply.
Next we visited a shopping center housing Borsheims Jewelry, a family-owned jewelry store purchased by Berkshire in 1989. Borsheims emphasizes its Midwestern friendliness and thrift by striving for the lowest prices and unsurpassed customer service in the high-end jewelry market. Borsheims is also the location of Berkshire’s Annual Shareholder Meeting that takes place each spring. We had the opportunity to shop and receive the “Buffett” discount on designer watches and fine jewelry.
The final stop was to the Oriental Trading Company (OTC), a party supply distributor purchased by Berkshire in 2012. We met Sam Taylor, OTC’s CEO and a Los Angeles native, who presented us with special edition Warren Buffet and Charlie Munger rubber duckies. We toured the company’s impressive 1.5 million sq. ft. warehouse and distribution center, one of the largest and most efficient in North America. Housing over 100 million items and four miles of conveyor belts, OTC processes approximately 40,000 items per hour at a 98.5% service level. For many of us, the aisles after aisles of party supplies brought flashbacks of Operations Management and a greater appreciation for inventory management.
On our return trip to sunny California, we felt fortunate for the unique chance and couldn’t help but to reflect on the Oracle’s advice, “Follow your passion, work for a company you admire, surround yourself with people you love and who love you back.” No words ring truer to aspiring MBAs.
M. Reza Banki (FTMBA 14) with help from Aylon Ben-Shlomo (FTMBA 14) arranged, planned and organized the UCLA Anderson trip to Omaha to see Mr. Buffett and contributed to this article.