One of the central tenets of Warren Buffett's investment strategy has been that what matters is where you are in the long run. This philosophy seems an appropriate way to consider the long association between Phillip and Beth Black--co-owners of the Bookworm in Omaha, Nebr.--and the Berkshire Hathaway Annual Shareholders Meeting, which took place last weekend.
The relationship began during the 1990s with Sunday signings after the meeting. "Mr. Buffett has always supported reading and self-education and we were invited to sell books in 2004 when the shareholders meeting was relocated to a larger convention center," Phillip Black recalled. "The Bookworm continues to be the only non-Berkshire affiliated booth at the meeting. We consider this a great honor as well as testament to Mr. Buffett's desire for his shareholders to be educated about their financial lives."
In his annual letter to shareholders this year, Buffett wrote: "Be sure to visit the Bookworm. This Omaha-based retailer will carry more than 40 books and DVDs, among them a couple of new titles. Berkshire shareholders are a bookseller's dream: When Poor Charlie's Almanack (yes, our Charlie) made its debut some years ago, we sold 3,500 copies at the meeting. The book weighed 4.85 pounds. Do the math: Our shareholders left the building that day carrying about 8-1⁄2 tons of Charlie's wisdom."
|Warren Buffett (center) with the Bookworm's staff just before opening last Friday. Beth Black is in front, holding flyers; Phillip Black is on the far right.
Black said the recent gathering was "much the same as previous meetings, except more shareholders seem to come each year. We sell many of the same books and see many of the same shareholders and authors from year to year. It's a reunion."
More than 42,000 shareholders attended, filling Omaha's hotels and restaurants. "They are in a party mood and tend to spend generously, especially where they receive shareholder discounts and special offers," Black said. "A number of other events for shareholders have developed, giving them additional reasons to come and extending activities into a long weekend."
The Bookworm's Loveland Centre location joins in the festivities, offering shareholders with credentials the same discount they receive at the meeting. "Many shareholders will come by the store to shop in a more relaxed atmosphere and to avoid having to carry the books around at the annual meeting," Black noted. "Our sales volume over the weekend is more typical of December than May. We also do some nice bulk sales related to Berkshire and the annual meeting."
At the CenturyLink Center, the Bookworm operates a 30' by 35' booth (reduced from 40' by 40' in past years as Berkshire has acquired more companies and exhibitors). "We plan down to the inch now," Black said, adding that the book selection "would be considered special interest by many booksellers." A full list of titles approved by Buffett for sale at the 2018 annual meeting may be seen here.
Black described the book selection process: "As I go through front list buying throughout the year, I send Mr. Buffett information about books I think he may be interested in for sale at the next annual meeting. He also sends me titles to add to next year's list as he comes across them. In January I send him a list of new titles for his consideration for the upcoming annual meeting. I also send him the sales figures at the last annual meeting, suggesting titles to drop. We always need to drop some of the weaker titles to make way for new titles. I get back the lists I sent with Mr. Buffett's markup of additions and deletions. We also ask Charlie Munger if he has any selections for the next annual meeting--sometimes he does and sometimes not. We will have the list of books approved by Mr. Buffett for sale at the next annual meeting firmed up in February. Sometimes we need publishers to make their book available earlier than their announced pub date in order to get them for the annual meeting."
Staffing presents another challenge. "We set up our booth Wednesday and Thursday, requiring six to eight people each say," Black explained. "For the past three years, Berkshire opens the exhibition hall to shareholders on Friday afternoon, requiring a full staff then. On Saturdays we are open for sales from 7 a.m. to 4:30 p.m. or so. We dropped from ten cash registers to eight this year due to space constraints. We also need a number of people to work with authors, restock and straighten the stacks of books, hand out flyers, etc. We have about 30 staff overall at the annual meeting Saturday, plus we still need to staff the store."
As might be expected, the atmosphere in the Bookworm's downtown store alters during shareholders weekend. "We see people from all over the world," said Black. "We also have people who come back to visit with us year after year. Of course, we still have our book clubs meeting and our usual customer base to serve. It's an interesting mix."
He added that shareholders say one of the main reasons they attend Berkshire's weekend "is to meet people with common interests and make contacts. Our years of selling books at the annual meeting have given us a similar benefit. We've met famous people and many authors, which is interesting as we often learn something new. We have met many of the Berkshire executives, giving us a deeper appreciation of Berkshire and what they do."
After all these years, Black said the adrenaline rush is still there as shareholders weekend approaches: "I will have been working on Berkshire for several months, and need to switch from planning to execution mode. Beth has to get the staff organized and coordinated. But when Berkshire opens the doors to shareholders, we get a second wind. The excitement of the crowd and level of activity energizes you."