Warren Buffett on Teaching, Annual Meetings, and Life Advice

Warren discusses the early days of Berkshire's annual meetings, starting in New Bedford, Massachusetts in the mid-1960s where nobody attended except required officers. After moving to Omaha, meetings were held in National Indemnity's lunchroom with about a dozen people including family members, with maybe three out-of-town attendees.

The 1982 Blue Chip merger marked a turning point with about 100 attendees at the first joint meeting, despite technical issues with microphones. The meetings continued growing, moving through increasingly larger venues including the Joslyn, Orpheum theater, hotels, and civic centers. With webcasting, attendance has now stabilized around 40,000 people.

Buffett explains the unique family atmosphere at Berkshire meetings stems from his and Charlie's partnership background. Seventy percent of shares were distributed from the partnership in 1969 to people in his local community - doctors, neighbors, friends. The open format allows shareholders to ask anything on their minds, creating a genuine connection.

Starting in the 1980s at venues like the Joslyn and Orpheum, shareholders began asking personal life questions beyond business topics. To balance this, media and analysts were brought in for more substantive questions. Warren shares a memorable story about an 11-year-old named Nicholas who corrected him in the annual report for getting his age wrong.

When asked what he wants to be remembered for, Warren says he wants to be remembered as a teacher rather than an investor. He explains this stems from receiving so much from his own teachers and genuinely enjoying talking with groups. He finds it rewarding to talk with bright young people about life beyond just investments.

Warren's teaching practice began when traveling for board meetings at companies like Coca-Cola and Gillette, where he would schedule talks at nearby universities. This evolved into bringing students to Omaha in groups of 10 schools with 20 students each. He instituted a requirement that at least one-third must be women after male students were crowding out female participation.

Students ask everything from marriage to investment questions, with many focused on how to live their lives. Unlike older audiences who just want entertainment and tips without changing, young people actually listen and change their behavior. Warren hears from them afterwards, with many sharing specific ways they've applied his advice.

For six years Warren ran his investment partnerships from a small room off his bedroom. He made the mistake of creating 11 separate partnerships instead of one, requiring him to break every stock purchase into 11 tickets and write 11 checks. He took physical delivery of securities, picked up mail daily, and typed his own letters on an IBM typewriter.

To neighbors, Warren appeared to do nothing since he worked from home. His neighbor Don Keough (who later became president of Coca-Cola) refused to invest $5,000 in Warren's partnership after seeing him spend all day playing on the jungle gym with Keough's daughter Kathy while Keough went off to sell coffee.

Despite increased public recognition, Warren's relationships in Omaha remain largely unchanged - his cleaning lady still calls him 'Warm.' His friend Carol Loomis used to joke he should be a private investigator because he was so forgettable, but television appearances and white hair have made him more recognizable, especially outside Omaha.

Warren was terrified of public speaking when young and couldn't do it. He signed up for the Dale Carnegie course twice - first stopping payment on the check, then paying $100 cash to his friend Wally Keenan to force himself to attend. The course forced him and 30 others to get up and speak, helping him overcome his mental blocks.

After the Dale Carnegie course, Warren immediately went to the University of Omaha to teach investments to maintain public speaking practice. His students were twice his age, including majors and colonels from Strategic Air Command. After his first two-hour class, a 40-year-old major told him 'pal, you ain't Socrates' when Warren claimed to be using the Socratic method.

People are eager for Warren's advice because he and Charlie have been around long time with a decent record, they give the same advice Warren received from his father on life and Ben Graham on investing. The advice is unbiased since he's not selling anything, it works, makes sense, and people can tell when someone believes what they're saying versus reciting talking points.

Warren attended Columbia Business School to study under Ben Graham, who initially wouldn't hire him despite Warren volunteering. After a three-year gap selling securities in Omaha (looking 16, acting 12), he finally joined Graham's firm in New York. He returned to Omaha with two children because it would be a better place to live and raise a family, with both their families and friends there.

Being in Omaha instead of Wall Street helped Warren avoid overstimulation and the tendency to do too many things. In New York, brokers constantly called with ideas trying to get business, creating emotional pressure. Since good investments require only 10-15 good decisions in a lifetime, not hundreds of ideas, and emotions hurt investment decisions, Omaha's distance provided crucial insulation.

Warren's advice is unbiased because he's not selling anything and speaks in his own language rather than using talking points. He finds it infuriating when people try to give him talking points for media appearances. His distance from Wall Street and authentic communication style help people understand he's saying what he believes, which is a step removed from the latest crazes.

In 1977, Warren served on an SEC committee on disclosure and participated in writing a book about plain writing. This inspired him to write letters as if addressing his sisters Bertie and Doris, later changing the salutation to 'dear shareholders.' Having specific people in mind helps - his sisters are bright with money in Berkshire but don't follow day-to-day operations.

Warren receives quite a few letters, with volume increasing over the years due to books written about him and CNBC appearances. Many are handwritten rather than emails, and he considers them very nice. The most meaningful letters come from people who say they were investing or living their lives wrong before and changed their approach.

Warren definitely reads the letters he receives and responds fairly often, but not always. To avoid taking up his assistant's time, he frequently scribbles a line or two directly on the letter and sends it back, or uses small notepaper. He also has note paper for sending separate responses. The decision to respond depends partly on how much else is happening.

Warren's name is sometimes used on internet promotions, particularly outside the United States, to entice people into bad investments - something difficult to police. He doesn't want people to have unrealistic expectations about returns, noting that with huge amounts of money managed now, his returns have declined every decade since the 1950s when he did his best.

The growth in Warren's public profile happened gradually through meeting expansions, annual report requests, and books. Robert Hagstrom's book around 1993 was particularly impactful, selling many copies. While some authors write books that only sell 10-15,000 copies with repetitive content, a few books and TV appearances have had cumulative stimulating effects.

Warren has written Berkshire's annual letter for 53 years, editing it himself with help from friend Carol Loomis. Initially he wrote in a formal mode and sent it to company lawyers at Ropes and Gray, but after receiving heavy edits, he stopped sending letters to lawyers. He writes unvarnished truth in his own way, only saying what he believes is true.