10-05-2015, 08:51 PM
China buyers like Buffett
1095 words
4 May 2015
The Australian Financial Review
AFNR
English
Copyright 2015. Fairfax Media Management Pty Limited.
Star power Investors from a state-controlled economy flock to the 'Woodstock of capitalism', writes John Kehoe.
When the 15 Chinese nationals boarded a domestic flight in the United States on Friday, their travel itinerary did not list visiting the White House in Washington, nor climbing the Empire State Building in New York, nor rubbing shoulders with stardom along Hollywood Boulevard in Los Angeles.
The neatly dressed Mandarin-speaking men and women from Shanghai were transiting out of Detroit bound for the usually sleepy city of Omaha in the US mid-west to catch a glimpse of another American icon, Warren Buffett.
"I heard many people talk about Buffett," said 29-year-old tour guide Xinyu Guan, seated on the plane before takeoff. "They told me about the money. Many people want to be him and we can listen to him speak and maybe we learn."
The Berkshire Hathaway annual shareholder meeting may be the Woodstock of Capitalism, but it is fast attracting a cult of investors from state-controlled China which is flirting with elements of the American market model.
Alongside a few dozen Australian investors, up to an estimated thousand Chinese visitors were among more than 40,000 Buffett devotees. They queued before sunrise outside a basketball arena on Saturday to watch the world's most successful investor appear at Berkshire's 50th anniversary meeting.
Until just a few years ago, barely any Chinese attended.
Chairman Buffett, 84, and his 90-year-old business partner Charlie Munger, appeared for eight hours in a part rock concert, part comedy duo act, answering questions from investors and journalists.
Oliver Stevens, a former Perth stockbroker and confessed Buffett fan who made the trip from his temporary home in France, said, "There's only one Warren Buffett".
"He's Like the Don Bradman of investing," Stevens says over a beer at the Doubletree Downtown Hilton in downtown Omaha.
"He's the Babe Ruth [baseball legend]," interjects fellow Australian financial planner Stephen O'Halloran. "Fifty years of track record is phenomenal; it will never be repeated."
Buffett has amassed a personal fortune of $US70 billion ($90 billion) and Berkshire's annual report says the conglomerate's market value of $US354 billion has soared by 1,826,163 per cent since Buffett took over a struggling textile mill in Massachusetts in 1965. For an original shareholder, $US1 invested half a century ago would be worth $US18,261 ($23,250) today.
Berkshire privately owns outright nine of the most valuable 500 US companies and has large stakes in publicly traded firms including The Coca-Cola Company, bank Wells Fargo, computer giant International Business Machines, credit card provider American Express and retailer Wal-Mart stores.
It's little wonder Chinese and other foreign investors hope to get rich by listening to the Oracle of Omaha.
About eight years ago when O'Halloran first made the annual pilgrimage from Melbourne, he was one of only about 100 overseas guests.
On the ground at The CenturyLink Centre and surrounding events, The Australian Financial Review came across Australians from Auscap Asset Management, Blue Sky Alternative Investments, Citigroup, Magellan Financial Group, Peters MacGregor Capital Management, RBS Morgans, BKI Investment, Treadstone 71, Washington H Soul Pattinson and Teaminvest.
Despite the Australian accents ringing out around the Old Market restaurants and bars on Friday and Saturday nights in downtown Omaha, they were easily outnumbered by the Chinese contingent.
Stevens say he drove past the billionaire's modest home on Friday, spotting about 15 to 20 Asian tourists camped on the nature strip taking photographs.
"You wouldn't barely have seen any Chinese here five years ago," O'Halloran adds. "But now ... "
The Chinese groups booked out private dining rooms at the local Chop House, ate at Buffett's favourite Italian steakhouse Piccolo's and visited the Berkshire headquarters on Farnam Street. The cashed-up visitors shopped till they dropped at the exhibit hall selling Berkshire paraphernalia such as "Berky" boxer shorts, Coca-Cola memorabilia cans and Brooks running shoes. Berkshire holds big stakes in the companies.
At the event Buffett was asked publicly by a Chinese man, who spoke broken English, if it was wise to apply his famous long-term value-investing philosophy to the volatile Chinese sharemarket, which has doubled in value over the last six months. Many fear it could crash.
"I would invest in China or any place else ... [and] I would apply exactly the same sort of principles," Buffett counselled.
"The more people respond to short-term events, anything that causes people to get wildly enthusiastic or wildly depressed, it actually allows you to make lots of money."
The business magnate told the investor, and doubtless hundreds of other Chinese in the stadium listening intently, to think of stocks as a small piece of a business, believe that market fluctuations are a benefit, and focus on firms with a competitive advantage over five to 10 years.
A Chinese translator relayed Buffett's messages in a hotel across the street to a couple of hundred Chinese people watching video footage.
Daniel Lee, managing director of the Shanghai Strategic Investment Management Co, travelled for the one-day meeting hoping to gain investing insights from Buffett. He was accompanied by China-US Chamber of Commerce assistant Evelyn Peng, a Chinese national now based in New York.
A few dozen Australians were among the throng of international disciples who flew halfway around the globe to be at the all-day master class from Buffett, as Berkshire director and Microsoft founder Bill Gates watched on from near the main stage.
Wayne Peters, head of Peters MacGregor Capital Management and an 18-year veteran of the Berkshire meeting, says coming to Omaha in the state of Nebraska is all about learning from "two of the smartest people in the world".
"You just can't but help improve your thinking when you spend time with people brighter than yourself," he says.
Mark Sowerby, founder of ASX-listed fund manager Blue Sky Alternative Investments, says he was less interested in Buffett's investing tips and listened more carefully on how to build a long-term investment business that is trusted.
"I'm looking at it as a business owner and looking at the things they've done over 50 years from going from a small investor to the biggest investor in the world," says Sowerby.
"To get that level of trust and conviction they've got with their investors, that takes time, to the point they've almost got a football team running with them."
Fairfax Media Management Pty Limited
Document AFNR000020150503eb540000j
1095 words
4 May 2015
The Australian Financial Review
AFNR
English
Copyright 2015. Fairfax Media Management Pty Limited.
Star power Investors from a state-controlled economy flock to the 'Woodstock of capitalism', writes John Kehoe.
When the 15 Chinese nationals boarded a domestic flight in the United States on Friday, their travel itinerary did not list visiting the White House in Washington, nor climbing the Empire State Building in New York, nor rubbing shoulders with stardom along Hollywood Boulevard in Los Angeles.
The neatly dressed Mandarin-speaking men and women from Shanghai were transiting out of Detroit bound for the usually sleepy city of Omaha in the US mid-west to catch a glimpse of another American icon, Warren Buffett.
"I heard many people talk about Buffett," said 29-year-old tour guide Xinyu Guan, seated on the plane before takeoff. "They told me about the money. Many people want to be him and we can listen to him speak and maybe we learn."
The Berkshire Hathaway annual shareholder meeting may be the Woodstock of Capitalism, but it is fast attracting a cult of investors from state-controlled China which is flirting with elements of the American market model.
Alongside a few dozen Australian investors, up to an estimated thousand Chinese visitors were among more than 40,000 Buffett devotees. They queued before sunrise outside a basketball arena on Saturday to watch the world's most successful investor appear at Berkshire's 50th anniversary meeting.
Until just a few years ago, barely any Chinese attended.
Chairman Buffett, 84, and his 90-year-old business partner Charlie Munger, appeared for eight hours in a part rock concert, part comedy duo act, answering questions from investors and journalists.
Oliver Stevens, a former Perth stockbroker and confessed Buffett fan who made the trip from his temporary home in France, said, "There's only one Warren Buffett".
"He's Like the Don Bradman of investing," Stevens says over a beer at the Doubletree Downtown Hilton in downtown Omaha.
"He's the Babe Ruth [baseball legend]," interjects fellow Australian financial planner Stephen O'Halloran. "Fifty years of track record is phenomenal; it will never be repeated."
Buffett has amassed a personal fortune of $US70 billion ($90 billion) and Berkshire's annual report says the conglomerate's market value of $US354 billion has soared by 1,826,163 per cent since Buffett took over a struggling textile mill in Massachusetts in 1965. For an original shareholder, $US1 invested half a century ago would be worth $US18,261 ($23,250) today.
Berkshire privately owns outright nine of the most valuable 500 US companies and has large stakes in publicly traded firms including The Coca-Cola Company, bank Wells Fargo, computer giant International Business Machines, credit card provider American Express and retailer Wal-Mart stores.
It's little wonder Chinese and other foreign investors hope to get rich by listening to the Oracle of Omaha.
About eight years ago when O'Halloran first made the annual pilgrimage from Melbourne, he was one of only about 100 overseas guests.
On the ground at The CenturyLink Centre and surrounding events, The Australian Financial Review came across Australians from Auscap Asset Management, Blue Sky Alternative Investments, Citigroup, Magellan Financial Group, Peters MacGregor Capital Management, RBS Morgans, BKI Investment, Treadstone 71, Washington H Soul Pattinson and Teaminvest.
Despite the Australian accents ringing out around the Old Market restaurants and bars on Friday and Saturday nights in downtown Omaha, they were easily outnumbered by the Chinese contingent.
Stevens say he drove past the billionaire's modest home on Friday, spotting about 15 to 20 Asian tourists camped on the nature strip taking photographs.
"You wouldn't barely have seen any Chinese here five years ago," O'Halloran adds. "But now ... "
The Chinese groups booked out private dining rooms at the local Chop House, ate at Buffett's favourite Italian steakhouse Piccolo's and visited the Berkshire headquarters on Farnam Street. The cashed-up visitors shopped till they dropped at the exhibit hall selling Berkshire paraphernalia such as "Berky" boxer shorts, Coca-Cola memorabilia cans and Brooks running shoes. Berkshire holds big stakes in the companies.
At the event Buffett was asked publicly by a Chinese man, who spoke broken English, if it was wise to apply his famous long-term value-investing philosophy to the volatile Chinese sharemarket, which has doubled in value over the last six months. Many fear it could crash.
"I would invest in China or any place else ... [and] I would apply exactly the same sort of principles," Buffett counselled.
"The more people respond to short-term events, anything that causes people to get wildly enthusiastic or wildly depressed, it actually allows you to make lots of money."
The business magnate told the investor, and doubtless hundreds of other Chinese in the stadium listening intently, to think of stocks as a small piece of a business, believe that market fluctuations are a benefit, and focus on firms with a competitive advantage over five to 10 years.
A Chinese translator relayed Buffett's messages in a hotel across the street to a couple of hundred Chinese people watching video footage.
Daniel Lee, managing director of the Shanghai Strategic Investment Management Co, travelled for the one-day meeting hoping to gain investing insights from Buffett. He was accompanied by China-US Chamber of Commerce assistant Evelyn Peng, a Chinese national now based in New York.
A few dozen Australians were among the throng of international disciples who flew halfway around the globe to be at the all-day master class from Buffett, as Berkshire director and Microsoft founder Bill Gates watched on from near the main stage.
Wayne Peters, head of Peters MacGregor Capital Management and an 18-year veteran of the Berkshire meeting, says coming to Omaha in the state of Nebraska is all about learning from "two of the smartest people in the world".
"You just can't but help improve your thinking when you spend time with people brighter than yourself," he says.
Mark Sowerby, founder of ASX-listed fund manager Blue Sky Alternative Investments, says he was less interested in Buffett's investing tips and listened more carefully on how to build a long-term investment business that is trusted.
"I'm looking at it as a business owner and looking at the things they've done over 50 years from going from a small investor to the biggest investor in the world," says Sowerby.
"To get that level of trust and conviction they've got with their investors, that takes time, to the point they've almost got a football team running with them."
Fairfax Media Management Pty Limited
Document AFNR000020150503eb540000j