Mr. Mohnish Pabrai, a manager of a US Investment Fund won the e-bay auction last year to have lunch with Warren Buffet (Time.com). The winning bid was $650,100. He must have been all ears during the lunch, like one of those old EF Hutton commercials. I wonder if Mr. Buffet allowed him to use a tape recorder.
So what does $650K buy these days?. Let me see. Tiger Woods’ purse for winning the US Open a few weeks ago was $1,350,000, so this would be about half of that. $650K could pay the annual salary of a partner at one of those fancy accounting firms (only if he/she is an “average” partner). For baseball fans from Japan and the US, Hideki Matsui makes that much every 8 games (based on his annual $13 million salary). And the recently passed War Funding Bill in Congress allocated $162 billion for the Iraq and Afghanistan conflicts, so $650K will pay for about 50 minutes of fighting. And for those consumers who are stuck with high gas prices, $650K will buy about 144,000 gallons of gas at $4.50.
It matters very little whether Mr. Buffet is the world’s wealthiest or second wealthiest man. It does matter, however, that people do listen to him. And what a bonus it is that his words reflect not only his humble background, but also his devotion to keeping things so simple.
I’ve told all my clients that Mr. Buffet’s annual letter to his shareholders is a must read (take a look here for the 2007 version). For me, the reasons that this letter is so powerful is not because Mr. Buffet is successful, but rather because of its simplicity. Mr. Buffet does not like lawyers. Mr. Buffet is not afraid to admit he made mistakes. Mr. Buffet writes in simple English. Read his letter, and then read letters from other companies. The difference is startling.
For $650,100, I hope that Mr. Pabrai enjoyed his steak. I doubt that he heard anything new from Mr. Buffet that he hadn’t heard before. But perhaps we are missing the point. Mr. Pabrai could clearly afford the lunch. And he clearly made a contribution to charity.
The most important thing is that he will remember Mr. Buffet’s words, because it cost him over half a million dollars. For those of us who simply scour the Internet for Buffet’s words of wisdom, the cost is free. And who ever listens to free advice?
I’ve been a consultant for most of my professional career. Most often we provide advice to management on matters which the answers are staring at them in their faces.
“Mr. Lee, I already know that,” the client would tell me.
“Of course,” I say, “then tell me why you can’t do it.”
The winner for next year’s lunch is apparently someone from China. He bid over $2.5 million for the joy of sharing a table with Mr. Buffet. He may or may not learn anything new. But I am sure he will find a way to make the investment worthwhile.