Thank yous!

Just like the ending credits in a movie acknowledge the support and involvement of those who made it possible, so this blog recognizes the people who helped make this trip a reality. The UM MBA and MAcct students and faculty would like to say "thank you" to the following:

Senator Max Baucus, for extending the invitation to the UM MBA program to visit with Mr. Buffett.
JJ Adams, Economic Develop Advisor with the Committee on Finance, for his guidance and coordination efforts.
Dean Larry Gianchetta of the University of Montana, School of Business Administration, for his support for this once-in-a-lifetime opportunity.
Cindy Williams, SoBA's Director of Development, for helping to coordinate fundraising efforts, and Kathy White for her assistance in processing payments.
Russ Piazza and David Wild from Front Street Capital, Dr. Richard Erb and Dr. Keith Jacob for preparing the students with valuable tools and insights on the financial markets, investing, and Mr. Buffett in general.

Thank you, folks.

A Day with Warren Buffett - Part II

Lunch on Mr. Buffett! Yes, indeed, the Oracle of Omaha invited the entire crew of 150+ students and faculty for a bite at his local favorite. One of our MBA students, Donald Rome, had the opportunity to ride in Mr. Buffett's Cadillac. Talk about service...being driven around by Mr. Buffett himself! The lunch provided a chance for our students to mingle with those of the other schools, compare notes, exchange stories, and make plans for a meet-up later in the evening. After lunch, Mr. Buffett made himself available for INDIVIDUAL pictures with all students...incredible! What a privilege, and everyone appreciated the photo op (as you can see by some of the postings of our students posing with Mr. Buffett).

Fueled by food, students bid "Adieu" to Mr. Buffett with great gratitude...and the UM students got a Griz hat on his head (Go Griz!). The last order of the day was a visit to Borsheim's, Mr. Buffett's jewelery store acquired in 1989. CEO Susan Jacques, welcomed us to the retail location on the outskirts of downtown Omaha, and proceeded to give us insights into the business, its role in the Berkshire Hathaway portfolio, and Mr. Buffett's involvement (yes, he helps out with retail sales at the annual shareholder's meeting).

After a packed day of activities and meetings, our students headed back to the hotel for a quick breather...and then, to dinner to digest the memories of the day. I think it's safe to say that, for some time to come, many of us will chew over the information and observations gained over the course of the day. What a once-in-a-lifetime opportunity...thank you, Mr. Buffett.

A Day with Warren Buffett

What does the University of Montana have in common with Texas A&M, UC Davis, University of Missouri, University of Kansas, UC Berkeley, University of Maryland, and Purdue? Well, a select number of graduate business students from each school spent the day with Warren Buffett. And what a day indeed...

The morning started with about 150 dapper-looking students assembling in the lobby of the Doubletree Hotel in downtown Omaha. The UM group of students and faculty, looking smart themselves, piled into their three vans and headed for an 8:30 AM visit with the Nebraska Furniture Mart, an early Berkshire Hathaway portfolio company purchased in 1983 from the Blumkin family. Upon arrival, we were greeted by members of the family who to this day manage this discounter of furniture, electronics, and appliances. Then, the entire body of 150+ students was invited to lounge comfortably in recliner chairs and sofas on the sales floor as Juan Blumkin shared the ins and outs of the furniture retail business in a global economy and what it's like to be a Warren Buffett acquisition that, incidentally, was made on a handshake deal.

With the students primed for visit with Mr. Buffett himself, we drove a short distance to the Berkshire Hathaway headquarters in the Kiewit building. Lucky for our group, our early arrival (and some strategic nuggets attained in preparation of the trip) provided us with front-row seats in the conferenc room. It wasn't long until everyone was settled in and Mr. Buffett walked to the front of the room. Silence fell over the crowd as Mr. Buffett wired up with a microphone and laid out the plan for the rest of the morning: for the next two-and-a-half hours, the schools would take turns asking questions that he would answer. And then, we were off and running...

The questions posed by all schools were sharp and well-thought out. Two UM students, John Beltrone and Casey Chumrau, lobbed questions into the mix that reflected challenges, concerns and viewpoints particular to Montana (see Comments for the questions). Of course, it was incredibly fascinating to have Mr. Buffett at the front of the room in person, sharing his wisdom and knowledge on topics ranging from regional economic development to ethically evaluating a business' to addressing wage inequalities in the U.S. Just as interesting was watching the crowd of students - tomorrow's business leaders - completely transfixed and hanging on to every word Mr. Buffett spoke. Mr. Buffett, who will be 81 years old in August, stood for the entire session and answered each question with fervor and humor. By the end, we had been allowed an opportunity to see the world through his lens, and our minds were snapping, crackling and popping... and ready for the refreshing Cokes provided by Mr. Buffett (he owns approximately 9% of the company).

Board of Trade & Federal Reserve - Kansas

Imagine a profession that allows you to wear colorful, patterned jackets, shout at your colleagues, and wave seemingly obscene hand gestures across a room...welcome to the commodities trading floor. The UM group kicked off the day with a visit to the Kansas Board of Trade, where the order of the day is simple: buy low/sell high. Upon entering into the wheat pit, we were exposed to the inner workings of grain trade or the stuff that wraps your burger or your PB&J. And what a day to be in the pit; with oil prices dropping, the USDA releasing critical stats, and weather patterns dictating near-term crops, there was plenty of action to be heard and seen. The adrenaline was palpable. As a profession, it must be rewarding, to an extent, knowing where you stand at the end of the day: did your trades work in your favor...or not?

Next stop: Federal Reserve Bank (FRB) of Kansas City. There are 12 branches of the FRB, whose primary task is to increase GDP while decreasing unemployment, or so we were told. An initial tour of the FRB provided us a peek into the highly automated process of money transfer (or what makes money "fluid"): three robots moved "mucho diniero" in and out of the FRB's vaults, making sure that those who needed, got it, and those who had it, distributed it. We also learned that Kansas City is geographically optimal for an FRB: between the confluence of train/road systems, the prominence of cattle/grain companies, and its central location for inbound/outbound transportation, it truly offers a central "node" for trade.

The highlight was undoubtedly our meeting with FRB-KC President Tom Hoenig, who made time for the group to provide insights into the organization's regional and national role. Mr. Hoenig delivered a short overview of the FRB's function, and then answered multiple questions from UM students concerning the 2008 economic turmoil, the future market outlook, and the FRB's ongoing participation in the recovery. There's nothing like hearing it first-hand from people in the know...

In three seperate vans, once again, the group trekked back to Omaha (on a sunny, clear-skied day). Some of us swung by Mr. Buffett's humble abode, just to sneek a peek, since we are all very excited about tomorrow's rendez-vouz with the Oracle himself.

Day 1 - The Trip

The day started early for the 18 UM students (MBA and MAcct) and 2 faculty members. We met at 6 AM at the Missoula airport and boarded a plane shortly after for Denver and then Omaha. After a quick bite at the Omaha airport, the crew piled into three vans and motored the 180 miles to Kansas City through ag belt country. Indeed, if you've ever wondered where your Cheetos or (Sara Lee) hot dog buns come from, well, this is the place...heartland of America, folks. Aside for its Chiefs, KC is known for a mean BBQ, so I was told. So, for dinner, we headed for a famous grub joint called Arthur Bryant's: beef sandwiches, ribs, pulled pork...all with ample hot and sweet sauces. The ambiance is bare bones, straight forward, and gruff, but the food...ambrosial. Time to rest as the next two days are bound to provide for interesting and rewarding experiences. Tomorrow, it's up and early, since we have an 8:30 AM appointment with the Federal Reserve Bank of Kansas City. Stay tuned on what we learn there!

Questions for Warren Buffett

These are questions we are considering asking Warren Buffett when we meet with him on Friday, March 11.


Healthcare• What is your “opinion” on healthcare reform and the direction of insurance industry?
• Given the volatility in health care regulation, how do you see it affecting the valuation of publicly-traded insurance companies, especially Geico?


Personal Questions• What is your most personally rewarding transaction you’ve ever done?
• What are your guiding principles?
• What are you striving for? What is your motivation?
• Personal sacrifices: what are your regrets in your personal life? Does he regret the impact on his family?
• What would you do if you didn’t invest/work in business?


Succession Planning• What have you done to ensure succession planning?
• How will BH evolve with regards to technological evolutions and societal changes?
• As your ownership decreases in BH, do you foresee a change in agency versus stewardship-related issues to managing the company?
• Investment Advice
• If we had to put your entire net worth into 1 stock, which one?

US Competitiveness• What is America’s future competitive position?

Montana-related• How do we maintain land ownership in Montana, given the rising estate tax pressures on owners/family businesses? How do you reconcile the problem of people being land rich, cash poor?
• What’s your view on railroad prices for farm goods/ coal transportation? Does railroad transportation favor the “big guy” versus the smaller, independent farmer?
• What advice to you have for Native Americans with regards to Montana business relations?
• "How should rural states currently relying heavily on oil and gas production invest to insure a prosperous future?"



BSNF-related• What is the long-term opportunity with BNSF?
• For Montana, how will the BNSF investment benefit the regional economy and investments in infrastructure?

Global Trade• Given the 2003 comments on trade imbalance, what are your views today?

Management-related• How do you deal with all the various management personalities and styles in your subsidiaries?

Social Issues• What are your social/philanthropic interests? What would you try to fix first?
• Why are you letting someone else manage your philanthropic endeavors? Are wealthy individuals equipped to manage/disperse philanthropic funds?
• Are you pro- or anti-anything in terms of your passions?
• What would the world look like without Warren Buffett?
• Why the strong interest/concern for the tax burden for the poor?

Economic Disruption• Is there an inconsistency in your actions when helping out banks in the 2008 crisis, given that you don’t invest in turnarounds?

Reputation-related• Do you believe your reputation was affected by your involvement with Goldman Sachs?

Ethical Questions• Where do you draw the line with regards to investing in businesses that cross ethical lines?
• Business ethics: in your analysis, how much do you weigh ethical issues, including human rights, environmental, etc.?

Student Profiles

In preparation of our trip to Kansas City and Omaha, all students should post a short profile that will serve as an introduction to other participants in the program. Please add your name and a short professional introduction (professional, academic and/or personal background) through the 'comments' tab below. All profiles are available for review by clicking the below 'comments' tab. Thank you, and see you Wednesday! Mike.

SoBA visits Warren Buffett

Welcome! This is the blog for Montana's School of Business Administration visit with Warren Buffett of Berkshire Hathaway, to take place on Friday, March 11th. 20 SoBA MBA students, along with MBAs from 6 other schools, were invited to meet with Mr. Buffett at his Berkshire Hathaway HQ in Omaha Nebraska. In addition, SoBA's MBAs are also visiting with the Federal Reserve of Kansas, in Kansas City. No doubt this is a wonderful, once-in-a-lifetime opportunity...and we'll make sure to share the experience as it unfolds. So, stay tuned!