So how did number 14 go Kokkie? Kooyman’s thoughts on Berkshire AGM
After five hours of distilled wisdom from Warren Buffett and Charlie Munger at today's Berkshire Hathaway AGM in Omaha, Kokkie Kooyman shared his thoughts during the South African contingent's traditional post meeting dinner. It was the 14th time he has attended the gathering which drew record crowds this year – north of 35 000 people. – AH
ALEC HOGG: All right, Kokkie. Now, you've already insulted my beautiful studio here. You say you've done interviews in better places. I'd like to know where.
KOKKIE KOOYMAN: I don't know if the listeners know where we are.
ALEC HOGG: Well, it's pretty fancy, I think. We have a couple of tables here.
KOKKIE KOOYMAN: They call this a scullery hey, where all the restaurant's crockery is, and to get away from the noise, but the noise levels are low.
ALEC HOGG: The restaurant is good. You brought the entire South African crew. How many people are here?
KOKKIE KOOYMAN: We have 54 people here. It must be a record. I think we have to apply for the Guinness Book of Records. It's the most South Africans ever in Omaha.
ALEC HOGG: At one time.
KOKKIE KOOYMAN: At one time – incredible.
ALEC HOGG: Kokkie, we were talking earlier. It's your 14th visit to the Berkshire Hathaway. For me, it just gets better and better.
KOKKIE KOOYMAN: It does. I think its knowledge that just fills you up. The first, second, and third times you miss so much. Guys who've been here all rave about how fantastic it was. I don't want to insult them, but they mostly only got 20 percent of what was said because there's so much knowledge, which they don't have, and often, the longer you come the deeper you get the meaning of what these guys are really saying and what they've done. To me, one of the most outstanding points was – and again, this is characteristic of both Charlie as well as Warren – admitting to their mistakes.
ALEC HOGG: It was a big theme almost.
KOKKIE KOOYMAN: It was a big theme today. What did he say? Over the years, we de-layered (well, he had a better word), but we de-layered our ignorance, so we started off with a huge amount of ignorance and every time we made a mistake we reduced our amount of ignorance. I think it's a fascinating way of looking at yourself. Most of us/most CEO's go into business being overconfident. If you realise how ignorant you often are and that when you make mistakes, you can actually say 'guys, I've learned' and I think that's the point they brought across fantastically.
ALEC HOGG: 'I don't know what I don't know' and 'the circle of competence'.
KOKKIE KOOYMAN: The circle of competence.
ALEC HOGG: That's an area, which they focused on in quite a lot of detail today.
KOKKIE KOOYMAN: He always goes on about that and the question always comes back from shareholders: 'how do I know what my circle of competence is'. Charlie's answer was 'if you're five feet, your circle of competence…don't go into basketball.
ALEC HOGG: If you're 350 pounds, don't become a sprinter etcetera. It's very clever, the way they take everyday examples to illustrate what they're trying to get across.
KOKKIE KOOYMAN: This is one the powers they have to illustrate the example, but the circle of competence is as he said you need to have a good deal of self-knowledge and honesty about yourself, and most of us don't want to see our own circles of confidence. I ask my wife and she always – very quickly – tells me where I'm competent and where I'm not. He said that as well. Just go and ask your friends. They'll tell you what you're good at, but most of us don't do that.
ALEC HOGG: What about the point he was making that together they've been a fantastic team? Warren says that Berkshire Hathaway wouldn't be the company it is if Charlie wasn't there and similarly, if he wasn't there.
KOKKIE KOOYMAN: If you think, in South Africa, very few businesses who have that benefit of a team, and the best example is the First Rand Group. We had GD Lawrie and then later Paul Harris.
ALEC HOGG: Maybe Discovery with Adrian Gore and Barry Swartzberg.
KOKKIE KOOYMAN: Yes, Discovery too, but the benefit of having two or three people who are hugely passionate and trust each other…I mean, that's the most important thing that came through the whole day – how they trust each other, respect each other, can bounce ideas, and know that they won't agree. They said that was one of the main reasons for the success of Berkshire Hathaway.
ALEC HOGG: You've been talking to many of the people we've had here for the first time. What would these younger asset managers be taking from it?
KOKKIE KOOYMAN: I think the first thing is integrity. The second thing is rationality…it's just to be rational and unemotional. I think the third thing (that he kept saying) is that you're looking for management with shareholder orientation, and that was so important to me. That came through yesterday at the Value Managers' Conference as well. You want managers who think… As he said, every time we make a decision about whether we do an acquisition, but back shares, or pay a dividend (when we do), our first thought is always 'what is best for shareholders'. Every decision they make is 'what is best for shareholders', not 'what is best for management, what is best for staff…'
ALEC HOGG: What is best for Warren?
KOKKIE KOOYMAN: It's what is best for shareholders, and I think as an investor that's the type of business you actually want to look for. Those are rare. Very few management teams really think of shareholders first.
ALEC HOGG: Kokkie, it was also very interesting. When you look at the two of them who have been together for – what's it now…
KOKKIE KOOYMAN: Forty-nine years.
ALEC HOGG: Forty-nine years. They're not young. The one's 83 and the other one is 90. There was perhaps a concern that they'll start losing energy.
KOKKIE KOOYMAN: I heard this week that Charlie still plays a round of golf once a week at the age of 90. His eyesight isn't that good, so as you said he must have a hell of a good caddy. At the age of 90, I think they realise themselves that they're slowing down, but it's fascinating. This is a long day. It starts at 8:30 – the questions and answers.
ALEC HOGG: Well, it starts at 7:00. Warren goes around throwing newspapers and pitching baseballs…
KOKKIE KOOYMAN: I didn't attend the last part – the AGM – but at 3:30, Charlie at the age of 90 was still razor-sharp and answering questions. If I'm blessed enough to be that sharp at that age, just think of how good we'll be.
ALEC HOGG: So you didn't find the energy levels were down.
KOKKIE KOOYMAN: Over the years, you can see them slowing down. I don't know if you noticed. They don't walk up to the stage anymore. You don't see that. Do you remember? In the past, he used to walk through the door and walk up the steps. Now, they come from behind the curtains etcetera. Charlie's legs and his eyesight aren't as good, but in terms of the mental sharpness, I found it's as strong as ever.
ALEC HOGG: But the influence on the AGM of Susie Buffett seems to be growing. There were pom-pom girls today and YMCA playing in the background. Well, it was with the Berkshire Hathaway lyrics, but it was quite showbiz-y.
KOKKIE KOOYMAN: What he's really done well I think, is turned Berkshire Hathaway into a marketing organisation as well. The entire shareholders' meeting is effectively… He does it jokingly, but don't worry, he means it as well. He's exhorting people to go and shop…go and buy our products, so the entire thing is a marketing and fun experience, too. I don't know if you noticed as well, but I got the impression during the last hour, that they were almost deliberately having a bit of fun and bringing more jokes etcetera. They realise it's an experience and if you're more relaxed, you're going to shop more, and people are going to enjoy it more. I think that's where Susie's influence most probably comes in as well. The entire thing is just an experience. It's a 'feel good', a bit similar to Coke.
ALEC HOGG: I can't agree with you because in the beginning, many of the questions from the analysts in particular were very narrow.
KOKKIE KOOYMAN: They were boring. They were too technical.
ALEC HOGG: Very narrow… Next year would be your 15th year. Are you coming back?
KOKKIE KOOYMAN: Definitely.
ALEC HOGG: Warren said this year was the biggest crowd ever. He couldn't give exact figures, but that means its north of thirty-five thousand.
KOKKIE KOOYMAN: Well, you could see. Alec, you're one of the lucky guys who doesn't have to queue up in the morning because you get a special pass. One of our guys went at 4:30. Now remember, these are all people who own shares, so they're fairly wealthy and there are already 12 of them queuing
ALEC HOGG: And they're not young.
KOKKIE KOOYMAN: They're of average age – mostly 55 or 58. Our Namibian guys went early as well. They're used to getting up early in the morning. They got there, I think, at 5:30 and then the queue was already… When we got there at 6:00 – now, remember the gates open at 7:00 – at 6:00, there were at least four queues formed with each about 100/200 people ahead of us. Half an hour later, you couldn't see the end of the queues. When you get wealthy people like that, they call it the dash for good seats when the gates open, the 'billionaires' dash'.
ALEC HOGG: Well, I was walking around there just after 7:00 and I took a video, which is on YouTube and the place was packed, and that was maybe 7:05/7:10. If you didn't have your seat by then, the chances were you weren't going to get it.
KOKKIE KOOYMAN: It's like a test match. An hour-and-a-half before the time you want to be there and have your seat. It's fantastic.
ALEC HOGG: Kokkie, compared to other years, is there anything in particular you'll take home this time?
KOKKIE KOOYMAN: It's interesting. This was one of the poorer quality years in terms of me taking things away, but I don't blame them. Remember, the macro events are less, the corporate news flow is less, and the world is more settled than it was before so there weren't those massive questions. I think the most important thing that struck me is shareholder orientation – that came through strongly – and integrity. Everybody that came in the group this year when we asked them what struck them, is that it was that these guys…the reason they're so successful is they clearly identified the business principles and the life principles in which they want to work, and they didn't deviate from that. Many decisions then become easy. Do we do this deal? It's unethical. No. If it's outside our circle of competence – no – you don't even have a board meeting about it. A theme came through strongly again in today's meeting…why they've been so successful is they've been able to just cut out a lot of time wasting because they know how they want to run their business.
ALEC HOGG: Kokkie Kooyman, it's a privilege and a pleasure being with you this year.