Heed the Advice of Wall Street Legends

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Physician's Money Digest, November15 2004, Volume 11, Issue 21

I was in Omaha, Neb, the first weekendof May with Warren Buffett,Charlie Munger, and about 20,000 oftheir biggest fans. Am I glad I went? Yes,I am. Would I do it again? No, I honestlywouldn't. However, it really is worthgoing at least once.

Middle America's Heart

The annual Berkshire Hathaway meeting,which is held the first Saturday inMay, is boring—at least it was this time. Ididn't learn anything I didn't alreadyknow. When official business ended at9:55 AM (a shareholder wanted to reformthe board because they felt it was tooinsulated), the floor was open to questionsfrom shareholders for the rest of theday until 3:30 PM, with a lunch breakabout halfway through the day.

Slice of life:

Meanwhile, the Qwest ConventionCenter next door was open the entire day.Inside, there were booths from all theBerkshire companies, including GinzuKnives. Did you know thatBuffett owns that company? I met a couplethere who had been to each annualmeeting for the past 25 years. I guess theyhave nothing better to do.

Omaha is a very nice city, but it isn'tgreat enough to come back to that manytimes, and neither is the annual meeting.So much of what is discussed there ispicked up by the press, anyway. However,as I said earlier, it really is worth attendingonce. After all, Buffett is age 73 andMunger is close behind. There's no tellinghow much longer they'll be around.They're both so irascible, though it mightbe one or two more decades.

Financial Validation

I said I was glad I went, and here'swhy. It wasn't because I got to seeBuffett; I got within 6 feet of the Master,who looked a lot older and walked a lotslower than I thought he would. And hewas surrounded by bodyguards whereverhe went—they looked like SecretService agents, and didn't appear tohave any sense of humor. The reason I'mglad I attended is because Buffett andMunger reinforced my own ideas.

Over and over again, I heard thewords "simple"and "patient."In otherwords, the world's finest investing teamwas telling us, "Find a simple strategythat works through thick and thin, bepatient, and give it time to work. Mostimportantly, don't stray from the course,regardless of what others may say ordo."They also advised that asset allocationis basically for the birds and thatsuccessful investors must wait for opportunities,not try to create them.

In fact, Buffett said that if the stockmarket happened to close for 2 yearsand his companies were doing well atthe time, it wouldn't bother him oneiota. Building on this theme, Mungerpointed out that many investors todayfocus on very short-term returns anddon't bother positioning themselves forextraordinary long-term profits.

So, will I change anything about myinvesting style based on what I learnedduring my weekend at meetings inNebraska? Absolutely not.

is chairman

of Staton Financial Advisors

LLC, a money management firm.

Contact him to join his free

weekly Dollar-Bill Club and

receive a no-obligation trial to

his weekly "E-Money Digest."He welcomes

questions or comments at 704-365-2122,

bill@billstaton.com, or via fax at 704-365-1910.

Mary Staton recently coauthored with Bill

Worry-Free Family Finances (McGraw-Hill;

2003), which is available at www.billstaton.com

and at all bookstores.

Bill Staton, MBA, CFA,