Beyond The Klamath

If it were any other time of year, you'd wonder why 31,000+ went to Nebraska for a single event. This weekend, however, thousands converged on the surprisingly pleasant city of Omaha for the Berkshire Hathaway shareholders' meeting. Most came to hear from Warren. A handful came to protest. The protests did impact the mood.

The event continued. Despite efforts by the misguided few to protest the Klamath river hydroelectric dams of Pacificorp, a Berkshire-owned regulated utility. Capitalism and modernity never please all parties.

The trip to Omaha is a yearly journey thousands make in hopes of hearing the next piece of investment wisdom, thoughts on the economy, and political opinion. Many learn. Most of us, however, listen and forget. Advice, when truly needed, is seldom heeded. To paraphrase Munger's past comments on this, when people ask for advice, they often mean: spoon-feed me advice so I can be rich, only more quickly.

It is valuable time for friends and investment advisors to reflect on the past year and to consider their next capital allocation decisions.

The questions, however, were surprisingly poor given the financial hurdles of ownership and the intellectual make-up of the party-goers. Most of what was asked is found in past annual reports, books, or public comments. The true gems stemmed from the inspiration of the simple economic truths of Buffett's approach of analyzing people and businesses.

Below is a summary of a few points Buffett and Munger (Co-Chairman) made that I pondered both on Saturday, and on the return flight.

Noise

We ignore 99.9% of what we see in the market (stocks)

Communication

Communication--written and oral--is enormously valuable and under-taught.

What determines dividend policy

Whether you can earn more than $1 of market value per $1 of retained earnings.

Integrity

When we make a deal, there are no special clauses.....Whether Ben Bernanke runs off to Brazil with Paris Hilton, or if a nuclear bomb explodes over NYC, the deal will go through.

It's refreshing to hear such simple advice from a candid, smart, but imperfect man. Hopefully we listen. And hopefully we learn when, where, and to whom we protest.

Disclosure: none