Buffett Faithful Gather for Stockholders Meeting in Omaha

After a year of corporate scandals and terrorist attacks that rocked the insurance industry, Berkshire Hathaway Inc. shareholders say they're thankful for the steady hand billionaire investor Warren Buffett uses to guide the company through troubled times.

About 10,000 stockholders are expected in Omaha this weekend for the company's three-day, self-described "Woodstock for Capitalists" that Buffett and Berkshire vice chairman Charlie Munger have created out of their annual shareholders meeting.

"In the shadow of Enron, people will find it refreshing to have a CEO who is honest and forthright," said Robert P. Miles, a Berkshire stockholder and author of "The Warren Buffett CEO: Secrets from the Berkshire Hathaway Managers."

The 71-year-old Buffett keeps a whirlwind schedule, showing up at most stockholder events that range from him throwing the first pitch Saturday night for the local minor league baseball team he partly owns to a dinner at his favorite steakhouse Sunday night.

On Friday night, Buffett chatted with stockholders and signed autographs for 30 minutes at an International Dairy Queen restaurant, one of the companies that he owns. Later, he appeared at Berkshire-owned Borsheim's jewelry, which held a cocktail reception and open house.

"I think it's the most fantastic, stable investment that the world has to offer," said Payson Ripley, who drove from Santa Fe, N.M., to attend his first Berkshire stockholders meeting and had Buffett sign Miles' book for him.

Buffett and Munger spend six hours Saturday using wit, wisdom and frankness as they answer all questions posed to them in a 10,000-seat auditorium packed with shareholders.

Those questions center around the performance of Buffett's investment vehicle, Berkshire Hathaway, which is coming off a tough year but appears to be on solid footing going into the future.

Largely because of insurance losses stemming from the Sept. 11 attacks, Buffett's Berkshire lost book value last year for the first time in its history. Its $3.77 billion loss in net worth in 2001 was a 6.2 percent drop in per-share book value from the year before.

At the same time, Berkshire made $795 million, or $521 per share, and outperformed the S&P 500, which showed an 11.9 percent loss in per-share book value.

Over 37 years, Buffett has taken Berkshire from a textile company worth about $7 per share to a powerhouse of insurance companies and other holdings that sold for $73,000 per Class A share Friday.

Many of his shareholders have grown rich right along with Buffett. At $35 billion, he is the second richest person on the planet behind his friend, Microsoft Corp.'s Bill Gates, according to Forbes magazine's 2002 rankings of the world's billionaires.

Berkshire's holdings include stock in well-known companies like Coca-Cola Co., American Express and The Washington Post. It owns furniture stores, carpeting, paint and shoe companies.

But Buffett's main business is insurance, and he turns the cash policy holders pay for coverage into lucrative investments.

Berkshire suffered losses in the Sept. 11 attacks, but it is poised to profit from the aftermath as insurance rates rise in wake of the terrorist strikes, said John Roberts, an analyst with Hilliard Lyons in Louisville, Ky.

"Companies are able to charge up to 30 percent more and exclude terrorist activity because they can't insure it," Miles said. "So it's short-term pain, long-term gain."

In addition, Buffett was questioned two years ago about his refusal to invest in soaring Internet stocks. When the sector collapsed, Buffett's standing as a visionary only increased.

"Time has proven Warren to be right," Miles said.