Gisela Baur: What 30 years with Warren Buffett taught me (Good Investing Night Munich)

Tilman Versch [00:00:00] Hello everyone. Hello. (Laughter) Hi everyone. It’s great to have you all here for the first Good Investing Night ahead of the European Value Investing Conference. And tonight we’re having five presentations, and the start we’ll do the great Gisela Baur. And yeah, I’m also happy to introduce the great Gisela. (Applause) Thank you, Gisela. When did you meet Warren the first time?

Gisela Baur [00:01:02] ’90… I must have been three or so, ’90… (Laughter) ’96, I guess, or 7.

Tilman Versch [00:01:09] Yeah. So it’s 30 years soon. She wrote a letter to Warren, and at that time he replied quite quickly, and then she came over to Omaha for the annual meeting and since then went every year, interviewed Warren, was one of the non-American journalists who had this privilege. You also had the privilege to often ask the first question at the press conferences. Have also fun, funny stories to share about this. In 2008, I think, you did a Europe tour with Warren. Later ask her at the bar about the cheeseburger and the luxury hotel story. It’s a great story. And when did you publish this book?

Gisela Baur [00:01:52] Oh, it’s some years. I think ’17 or ’18, but the one you have now and the one I’m going to sell, if somebody wants, is just made. It’s refreshed, and there’s… there are two more chapters, because the last five years something happened at Berkshire, you know?

Tilman Versch [00:02:12] Really?

Gisela Baur [00:02:14] Somebody told me. I don’t know.

Tilman Versch [00:02:16] Okay, there’s update, so it’s worth buying a new episode. Is in German, but if you want to learn German, it’s also perfect book to learn German. So, (Laughter) can you get your copy over there after the talk?

Gisela Baur [00:02:28] Put it in your shelf and impress everybody because they think you…

Tilman Versch [00:02:32] You just can pretend to read it and just like, yeah.

Gisela Baur [00:02:34] Yeah.

Tilman Versch [00:02:35] So, it’s… you can get it as a German and as a non-German. That’s the message I wanted to bring across. And without further ado, the floor is yours to share your story with Warren and 30 years of interviewing him.

Gisela Baur [00:02:46] Okay. Thank you. (Applause) So I start being honest to you. I didn’t have a lot of time to prepare this. So I decided I recycled something I did in Omaha this year. And the first people I met here have been in Omaha. (Laughter) So if somebody falls asleep, it’s just because they know what I’m talking, you know. I want to share with you a bit about Warren and I, especially what I learned from Warren Buffett over 30 years and a lot of contact with him.

[00:03:27] As Tilman told you, I was a young financial journalist. I was curious and I was a bit sassy maybe. And during an interview to in New York, I learned about a guy named Warren Buffett. And I was kind of curious. So I started, when I was back, do some research. And please imagine we are in the ’90s. We don’t have internet. It’s not you Google Warren Buffett and get everything you want to know about this guy. So, you actually had to go to the state library and find American whatsoever stuff to find out who he is. And I did, and I got excited.

[00:04:15] And Warren once said, “It just grabs you or it doesn’t. The concept of value investment, it grabs you or you don’t get it.” And obviously, it grabbed me. So I decided we need Warren Buffett in Germany as a role model. Imagine the ’90s in Germany. German people are very anxious. They’re very… they invest in insurance company, in insurance, not companies, and they put their money on bank accounts, and the stock market is evil, and you only can lose and stuff. But it was the beginning of the dotcom bubble. So people went crazy. They didn’t have any experience, but they just invested in whatever. So I thought Warren would be a perfect role model.

[00:05:08] And I learned in New York from somebody I knew that he loves to read. So I put together a long, long letter. I put in as many numbers as I could find somewhere without internet, like the German stock market, the fraud market, the stock market culture, the… I don’t remember, but it was like 10 pages. And two days later, or two weeks later, because it was a letter, a fax arrived in my office saying, “Why don’t you come over to the meeting?” And I thought, oh, why shouldn’t I? So I went to the meeting, and I really wanted to meet him. And again, we talked the ’90s. So the meeting was held in a gym hall, a smell of sneakers, and Warren would approach through the front door. Everybody could go to him and talk to him, but I couldn’t get a hold on him.

[00:06:18] So in the evening there was a baseball game, and I said, “It’s now or never.” So I approached him, and I prepared and trained my little speech: “Hi, I’m Gisela from Germany. I wrote this letter, you might remember or not.” I didn’t have to use it, because after “Gisela” he said, “Oh, Gisela, come over.” And I sat next to him, and the first thing I learned about Warren Buffett, and I’m sorry I can’t copy it, is his memory. He had questions to some of the little numbers in my letter I didn’t even remember I put in, and he wanted more details about it, and he knew on which page, and he knew all the… everything from the letter. And it was for sure not important enough for him to read it more than once, very quickly. So the first thing I learned about him, he’s the only person I know who really has a photographic memory. And of course, this is half of his success. Imagine the ’50s or so. Nobody has a computer, but he has. He has a computer.

[00:07:43] So that was the first thing. The second thing, at the same time, I learned he’s a click person. He sees people, and many, many people approach him every day, and one… everybody was… wants to be connected to Warren Buffett, of course. Yeah. And he’s always friendly. I never saw him being rude or something. But he decides within seconds to let you into his circles or not. And that’s a bit… yeah, it’s a bit tricky, because he did let me in, and I can’t explain you until today why he did, but he did. And the next thing I learned over the years, he then is just holding on. It’s your one… once he knows your name and he let you in his world, you’re going to be there forever. I mean, maybe if you steal his Cherry Coke or something, but… And that was the second thing.

[00:08:54] Now I lost my… I tried to be quick, because I thought maybe we do a question and answer instead of me talking things I already know and I get bored. The next thing: he didn’t give interviews those times, and I did ask him for an interview at this evening at the baseball game, and I was in the office the next day and got a full-size interview with him. And there are some phrases from this first talk I had with him which helped me until today. And one is the sentence: it’s really simple, simple. It’s really simple. He sees the world and a company as a… not as a complex, very hard to look through object, but a simple thing. “A company is an organization which wants to employ capital to make gains.” That’s so, so simple. And if you stick with all the bottom lines of the economic physics, as I call it, with “you got to make gains to survive,” you whatsoever, it’s really helping to reduce complexity and to get a better view of things. So that’s the next thing I learned, I really learned from him.

[00:10:33] And we could talk a lot about numbers, but one thing I really think is a big piece of his success, and I really tried hard to learn, is his approach to other human beings. The one thing is the ability to judge people. And if you think of Berkshire, it’s really a big piece of the success. They do run one of the biggest companies of the world with 20-some… something people. And Charlie Munger said this to me, because I asked him, “What’s the secret? How you do it?” And he said a simple word: trust. It’s built on trust. But you can’t trust if you can’t judge. So judge first, then trust. And that’s something I really trained myself, to find out what kind of people do I like. And Warren said to me, “I would never work with somebody I don’t like.” And just find out who is your person and try to stick to those people. You don’t need 2,300 likes on whatever. You need some people you work with and you trust because you like them and judge them, right? Yeah.

[00:12:02] So, I have some more things, but I think, because Tilman said 10 minutes, and he’s a hard one…

Tilman Versch [00:12:12] I’m sorry.

Gisela Baur [00:12:13] Yeah. You know, I don’t like you. I know it.

Tilman Versch [00:12:18] Yeah. I’m not going away. I’m sorry.

Gisela Baur [00:12:20] I know. That’s what I know. Yeah. Yeah. Maybe one more thing, and then we do a question and answer. One more thing I learned from Warren Buffett. If you look at his life, he’s such a happy person. How can he be such a happy person? I mean, we’re talking about wealth, but over Warren and over my job, I met many people with many money, much money, not (Laughter) many, and not everybody is happy. How does he manage? And okay, he always gives, or we give ourselves the answer: it’s hamburger, Omaha, of his simple life.

[00:13:04] It’s part of it, but if you look at his life, he always had some really exciting things in his life. In the older days, it was with Katharine Graham. He would travel, he would meet the vice president, and he would, you know, dive in the high society life of the US, coming back to Omaha. Then it was later on, when he was friend with Bill Gates, the travel to China, to South America, to wherever. And when we made the film with him, it was for half an year or a year. The film thing, that was his thing. He did everything, and he came with us, and he had fun finding out how it works and what we need, and that was really…

[00:13:59] But you can only do that… What he does is having his space in Omaha, a simple life, and doing his extras, but you can only do it if you give them up at a certain time. And that’s something I learned. We all do the things we like, and we do them and do them, and we miss the moment. We just do them because we feel an obligation, or we’re too lazy to think about it or something. So what I learned from him is: give things up. Just, you did it. It was great. It made you grow. But now it’s over. So, and “over” is a good buzzword. Now it’s time for question. (Applause)

[00:14:55] Question: So I imagine that you had like many contacts for many years, and you covered also maybe the company, not only himself. Did you personally became a shareholder?

Gisela Baur [00:15:09] When I started as a financial journalist, my colleague, my ex-colleague back there remembers, we had a… we had a… the word is missing… a rule: you shouldn’t own what you write about. Which makes perfect sense, because it just, you know. So my decision was ’90-some, I knew I should have Berkshire, but I decided I want to have the contact and all the things I can do with him. And now I… no, I don’t buy it anymore.

[00:15:51] Question: An additional question. So you were an analyst covering the company?

Gisela Baur [00:15:57] No, I’m a journalist.

[00:15:59] Question: Journalist.

Gisela Baur [00:16:00] I wrote for Börse Online, a stock market magazine.

[00:16:03] Question: Okay.

Gisela Baur [00:16:04] And I, yeah, just wanted the Berkshire story in our magazine. That was the reason, or the Warren story.

[00:16:10] Question: And I imagine that there were not so many people covering Berkshire, because few years ago, still today, not many banks covered the stock of Berkshire Hathaway.

Gisela Baur [00:16:23] No, no, no, no.

[00:16:26] Question: Okay. In 2007, for example, Credit Suisse didn’t have any coverage of Berkshire Hathaway.

Gisela Baur [00:16:35] Uh-huh. Okay.

[00:16:37] Question: So, thank you.