Chinese investors and the cult of Warren Buffett
OMAHA, NEB. — On his first pilgrimage to the annual meeting of Berkshire Hathaway shareholders along with 42,000 others, entrepreneur John Li wanted to sample all things Warren Buffett.
At the exhibit hall, he took selfies with cardboard cutouts of Buffett, bought some See’s Candies (a Berkshire company) and ran in the 5k race sponsored by Brooks (also a Berkshire company), choosing number 1999 “because 9 means ‘long life’ in Chinese.” He visited Buffett’s favorite steakhouse, Gorat’s, trying a T-bone and sipping a root beer float. A pained expression revealed his feelings about the sugary drink. But it didn’t spoil his appetite for Omaha.
“People want to see Warren Buffett. He is a genius of the investment world,” said Li, who drove from Naperville, Illinois, bringing an employee from his marketing firm that helps wealthy Chinese make investments and immigrate to the United States. Many Chinese visitors to the shareholders meeting suggest that Buffett, Omaha and Berkshire are symbols of friendly, longer-term, Sino-American economic and political relations.
The current relationship between the United States and China is not idyllic: Pending trade policies would limit Chinese imports, government interventions could stop acquisition deals, a State Department employee was arrested last year for aiding Chinese spies, and some Americans are not welcoming of immigrants. Despite these and other tensions, thousands of Chinese visitors still journeyed to a corporate powwow unlike any other on earth.
They came to network with other investors at breakfasts, lunches, dinners, receptions and mini-investing conferences. They came to listen to six hours of entertaining, folksy banter and financial insight from the resident wizards of Berkshire Hathaway: Chairman and chief executive Buffett and Vice Chairman Charlie Munger.
News reports indicate the Chinese contingent at the Berkshire Hathaway meeting has grown toward 5,000 this year, up from roughly 1,000 in 2014. Many are not Berkshire shareholders. They come for the spectacle, the networking and the learning. Yahoo Finance livestreamed the annual meeting to 3 million people worldwide in two languages: English and Mandarin.
In China, Buffett’s visage has adorned Cherry Coke bottles, mouse pads and phone cases. Two separate Chinese executives gave more than $2 million to a charity to have lunch with Buffett in 2008 and 2015. Buffett’s long-term view, his humility to admit mistakes and his traditional demeanor aligns with Chinese values. His story of growing wealthy through intelligence rather than inheritance inspires many Chinese.
Chinese delegations host their own investment conferences before, during and after the Berkshire meeting. The Sino-American Venture Capital Summit drew hundreds of Chinese attendees this year. New York firm Pinebase Capital hosted several events, including an “Omaha Investment Forum.”
A group called the Omaha Dialogue hosted its fifth annual “Omaha Summit” with 150 Chinese students and business leaders alike from China and the United States discussing topics such as “Buffett’s Wisdom and Inspiration” and “Thinking of Tomorrow: Questions for Warren Buffett, an incomparable investor and philanthropist.”
Attendees heard plenty of self-congratulatory talk about China’s ascendancies as well as some honest assessment of the country’s shortcomings in philanthropy, finance and technology.
Buffett started visiting China in 1995. He invested in PetroChina in 2003 and made seven times his investment when he sold. He holds an 8 percent stake in Chinese electric car company BYD. Many wonder if Berkshire’s more than $100 billion in free cash will go toward investments in the United States or international markets such as China.
During the Berkshire meeting, investors from China asked about Buffett’s view on the impending trade war with China and whether he would invest more there. Buffett said that he would be 88 this year in the eighth month in a year that ends in eight — and that because eight is a lucky number in China, he should look for more acquisitions in the country.
“The United States and China are going to be the two superpowers of the world economically and in other ways over time,” Buffett said. “We have a lot of common interests and, like two big economic entities, there are times there will be tensions. It is a winwin situation when the world trades basically. And China and the U.S. are the two big factors in that.”