I was at Warren Buffett’s stock party – and now I know how to better get through times of crisis in the stock market
Jonathan Neuscheler, 25, is an avid stock market fan and has already attended the annual general meeting of Berkshire Hathaway, the company owned by legendary investor Warren Buffett, three times.
"You have to think of the annual meeting as probably the biggest party for investors there is," Neuscheler tells Business Insider.
His greatest learning there was to understand that a share is not a short-term speculative object, but a piece of business.
Two o’clock in the morning in Omaha, Nebraska. Five degrees outside, the sky black, it’s deep nightfall. Jonathan Neuscheler, in his early twenties, stands outside an entrance hall with energy drinks and snacks, waiting. It’s cold. He stands there for several hours. Neuscheler wants to be among the first to enter the hall to get the best seat possible. "When the doors opened, there was a push from the back, there was an incredible amount of people," the 25-year-old recalled in an interview with Business Insider.
It’s early May, and for stock fans, that means only one thing: It’s the annual shareholder meeting of Berkshire Hathaway, the company owned by investing legend Warren Buffett. "You have to think of the AGM as probably the biggest party for investors there is," Neuscheler says. The stock event is also referred to as the "Woodstock for capitalists.
More than 40.000 people from all over the world flock to Omaha
Berkshire Hathaway is probably the best-known holding company in the world. A holding company is a business whose sole purpose is to hold equity investments in other companies. Warren Buffett’s holding company includes more than 80 companies – something from every industry. From insurance companies, utilities, retailers to railroad companies. Buffett also has stakes in companies such as Coca-Cola and Apple.
With sales of around $245 billion, Berkshire Hathaway is one of the largest companies in the U.S., making Warren Buffett one of the richest people in the world. His fortune is estimated at around $117 billion. The stock is also doing well: In the past five years, Buffet’s stock has risen nearly 90 percent, and more than 550 percent for the past twenty years. And those who are shareholders not only enjoy the returns, but also have the right to attend the annual shareholders’ meeting.
And it’s particularly popular: Buffet has managed to turn a shareholders’ meeting, which many investors find rather dull, into a kind of stock party that attracts people from all over the world to Omaha. More than 40.000 people are expected to attend each year. For Neuscheler, it’s a "huge spectacle" that motivates him to stay tuned even more. The Berkshire Hathaway shareholder has already been to the event three times, consistently from 2017 to 2019. The last two events had to be virtual because of Corona.
"When you hear Buffet talk, you can tell this joy"
For five hours straight, except for a lunch break, Warren Buffett, 91, and Charlie Munger, his vice, 98, answer questions from shareholders and financial journalists in attendance. In front of the two men on the table are glasses of water, Coca-Cola cans, See’s Candies brand candy and two microphones.
Neuscheler still has one question in particular from a young student in mind. The latter asked Buffett: "What should I do to become as successful as you??" "I can still remember the answer quite well," says Neuscheler. Buffet said that the first thing to do is to see what your "heart is set on". Because if you put your heart into something, then it’s fun. And if you enjoy it, you often become good at it. And if you are good at something, then many "doors and opportunities" open up to achieve a lot.
"When you hear Buffet talk, you notice this joy he has," Neuscheler says. For him Buffet is a "good teacher". "If you engage with it, you can become a better investor yourself," the 25-year-old says. And its a strategy Neuscheler also follows when investing. He’s all about investing for the long term in solid companies with high intrinsic value. He does not think much of short-term gimmicks.
Buffet is an advocate of the value investing strategy. It involves understanding the stock in its true function. A share is not a short-term speculative object, but a piece of business, in whose capital and growth you have a long-term stake. And this is exactly what Neuscheler describes as his "greatest learning" when attending the Annual General Meeting.
Every investor should attend a shareholders’ meeting, says the 25-year-old
For in the adjacent hall there was, as every year, a kind of trade show, of the companies that Berkshire Hathaway wholly owns or in which the company has a stake. "You see there what belongs to you in a very small part," says the young stock connoisseur. That’s where it becomes "visual and tangible" what you have a stake in if you’ve invested in the Buffett company.
The trade show made the basic principles of Buffet’s investment strategy clear to him once again: "All the shareholders together own all the land, buildings, machines, the manufactured products, the brands, in fact all the assets of a company," says Neuscheler. "At that moment, it became even clearer to me than before: I didn’t buy a better lottery ticket that flashes up or down depending on the stock market’s mood of the day, but a piece of entrepreneurial property.If you know that you have a real company in your portfolio, you can get through bad times better," says the young investor.
In order to gain this experience, Neuscheler recommends that every shareholder attend a shareholders’ meeting at least once. And there you do not have to fly immediately to Nebraska, in Germany there are also enough.
This article was last published on 26. January 2022 update. It was held on 18. January 2022 published.
Disclaimer: Stocks, cryptocurrencies and investments are inherently risky. Also a total loss of the invested capital cannot be excluded. The articles, data and forecasts published are not an invitation to buy or sell securities or rights. They are also no substitute for professional advice.