Every May, a ritual unfolds in Omaha, Nebraska that I have never quite understood. Thousands of investors fly to a shareholder meeting in the middle of the American Midwest to hear a wise old man explain that smart investors can probably find better uses for their money than flying to shareholder meetings in the middle of the American Midwest.
This year, that message finally seems to have landed.
The so-called Woodstock for Capitalists was noticeably quieter this weekend. “I’d guess there are half as many visitors this year,” one investor, who makes the annual pilgrimage from Europe, told me. “The restaurants are much emptier, and I barely have to wait for an Uber.”
The reason is not hard to find. Warren Buffett, the Oracle of Omaha, stepped down as chief executive in January. Shareholders must now content themselves with his successor, Greg Abel. The businesslike Abel is no folk hero. As the man running a company with more than 1 trillion dollars in market value, he is, above all, an efficient manager. The magic is gone.
And that, oddly enough, may be the final triumph of Buffettism.
Under Buffett, it was not just Berkshire Hathaway’s portfolio that grew to mythic scale. So did the personality cult around the man himself.
Now that part is fading, Berkshire’s followers can return to the actual doctrine: cut costs, avoid emotion and allocate capital rationally. Under Abel, Berkshire is becoming what it arguably always was beneath the mythology: a boring, exceptionally well-run, deeply cautious capital allocation machine, sitting on more than 380 billion dollars in cash and showing little urgency to do anything especially thrilling with it.
Berkshire Hathaway may never have been this Buffettian.
That said, Buffett could not resist leaving one final prophetic flourish from the wings. In a CNBC interview on Saturday, while insisting he was “not a religious guy,” he offered what he sees as the most important lesson of the past 2,000 years: shareholders and partners should treat others as they themselves would like to be treated, better known as the Golden Rule.
“It doesn’t cost you anything,” he said.
Better still, it probably pays. People treat you better in return, and according to Buffett, there are few principles cheaper than that with a higher return attached.
He has a point. Buffett did not even need to take the stage to deliver that lesson, and I certainly did not need to fly to Omaha to hear it. Which is, when you think about it, exactly the sort of efficiency and cost discipline Buffett has always liked best in his holdings.
Max Severijns is a journalist and lives in New York. He is a correspondent for Investment Officer. He studied communication and Japanese and earned his master’s degree in international relations at the University of Milan.