Personal Profitability
Personal finance for hustlers and entrepreneurs
The weekend of April 30, 2011 was an exciting one! I spent the weekend in Omaha, Nebraska at the Berkshire Hathaway Annual Shareholder meeting with Warren Buffett himself! Here are some of my favorite and biggest takeaways from the event.
[Read more…] about BRK2011: Berkshire Hathaway 2011 Annual Meeting Recap
To top off Berkshire Hathaway week at Narrow Bridge, I want to talk about the inspiration and enthusiasm from participating in the “Woodstock for Capitalists” in Omaha. Now that we have discussed dividends, leadership, and environmental policies, it is time to focus on something a bit more fun.
Fortune
Sitting in the room with Warren Buffet, Bill Gates, Charlie Munger, the entire Berkshire board of directors, and countless millionaires, I turned to my friend and asked, “Do you think there is a higher net worth in this room than anywhere else on the planet right now?”
I have put a ton of time into my financial education. I have spent countless hours studying and analyzing investment opportunities, stocks, bonds, returns, interest rates, investor psychology, and a plethora of other finance concepts.
Going to the Berkshire meeting is evidence that what I am doing can work quite well. If you work hard, make smart investments, and stick to your principles, you can get rich. It really does work.
NetJets
We took a couple of hours to head out to the Omaha airport to tour the NetJets exhibit. When I get so ridiculously rich that money is not an object, there will be only one way to travel.
I had never been inside of a corporate jet before, and I was able to tour a Cessna Citation and Gulfstream 450. It was really “like a G6.” Wow. That was like walking straight into luxury.
Dreams
We can all dream of great things, but only some of us will actually get there. I intend to be one of those people.
The difference between the perpetual dreamers and those that reach their goals is planning and action. I know some people with a great retirement plan: “win the lotto.” My retirement plan is to work hard and aggressively save so I can retire early.
Some people wait around for their million dollar idea. I have tried a few. One in ten entrepreneurs succeeds, so as far as I am concerned it is a numbers game. Take action and keep trying, while learning from your past, and you can do anything.
I saw a $7.5 million ring at Borsheim’s. I plan to never spend to that level of excess, but it would be great to have the ability to buy that for future Mrs. Eric. I saw a long line of private jets at the airport terminal. I want to be able to do that someday (sooner than the $7.5 million ring.)
I want to be able to live my dreams, and the Berkshire weekend is proof that I can do it. I will. Just keep watching.
Photo by Afrika Expeditionary Force.
So far, we have discussed Berkshire’s dividend policy and future leadership. Today, we are going to focus on a particular shareholder proposal that led to the most contentious moments of the day.
The proposal that started the debate:
Emily S. Coward, 2020 Pershing Street, Durham, NC 27705, owns 62 shares of Class A Common Stock and has given notice that a representative of hers intends to present for action at the meeting the following proposal.
Resolved that Berkshire – in response to strict new EPA regulations – establish quantitative goals for the reduction of greenhouse gas and other air emissions at its energy-generating holdings; and that Berkshire publish a report to shareholders by September 30, 2011 (at reasonable cost and omitting proprietary information) on how it will achieve these goals – including plans to retrofit or retire existing coal-burning plants at Berkshire-held companies.
This is an incredibly complex proposal for a company like Berkshire Hathaway and requires a lot of background knowledge, scientific understanding, and business acumen to fully understand. I will try to give you the executive summary version here.
The scientific evidence that greenhouse gas emissions, such as those from burning fossil fuels like oil, natural gas, and coal, are having a massive impact on our atmosphere, ecosystem, and planet. If you think this is fabricated or not proven, you are either stupid, ignorant, or trust Rush Limbaugh over science. The evidence is clear.
We can debate all day about how much of an impact we are having and whether we need to take actions to avoid our impact. That is subjective. But we are having an impact.
My personal opinion is very strong and clear. We need to, as a global society, do all we can to eliminate greenhouse gas emissions from fossil fuels. However, even if the United States never put out another ounce of carbon into the atmosphere, the impact from China’s coal power plants alone has the potential to impact our planet’s temperature and ecosystems.
The Polar ice caps are shrinking. Ships have used the northern passage for cargo transportation. That would have been impossible just a few decades ago. I have seen the dead coral reefs in the Caribbean with my own eyes.
I have lots of ideas on how to fix this issue, but none are immediate and all are expensive.
Berkshire Hathaway owns several energy focused companies. The largest and best known is MidAmerican Energy. As of a recent initiative in Iowa, MidAmerican is the number one wind electricity generator in the United States. In addition, Buffet is a nuclear energy advocate.
These are two major steps in securing our energy independence in a way that does not destroy the planet. Despite what you may have heard, nuclear is the safest and cleanest energy to meet base load needs. Wind, in combination with solar and hydro, can meet our peak demand needs.
Based on their current track record, I trust that Berkshire Hathaway managers are on the right track for a move to profitable, clean energy forms.
There were passionate speakers both for and against the shareholder resolution. While more people spoke for it, it seemed that the crowd was against it. From my position, it appears that most Berkshire investors either don’t care about the environment or don’t understand it. I am always shocked to hear people say that global warming is not real. It certainly is, and it is not “hot air” as one commenter stated.
However, as an investor and a finance minded person, I am in the camp with Milton Friedman. The purpose of a business is to make money. Warren Buffet and the Berkshire board agree.
I do support moving toward cleaner energy. I am a huge nuclear advocate. However, a shareholder meeting is not the forum to change the world. It is a forum to increase profits.
The resolution failed, as I expected it would. However, I hope Berkshire and other energy companies continue on the path toward more renewable, sustainable energy that will not destroy our planet.
Do you think this was the right thing to do? Is it the responsibility of big business to protect the environment pro-actively?