People thought Robert Johnson was a little silly back in the early 1980s when he bought $1,000 worth of stock in the company owned by his high school buddy’s dad.
That company was Berkshire Hathaway.
And that dad was Warren Buffett.
“I wish I could tell you that it was because I was so smart, but really it was an accident of birth,” Johnson admitted. “I went to high school at Omaha Central with Peter Buffett. When I decided to start investing, I knew about Berkshire Hathaway and trusted his dad.”
Buffett spent 60 years as CEO of Berkshire Hathaway earning trust from investors around the world. And at this year’s annual shareholder meeting, the 95-year-old announced his retirement.
Johnson, who went on to make a career of finance and economic indexes and is now a professor at Creighton University as well as a CEO himself, said he wasn’t expecting it.
Johnson now lives in Charlottesville, Virginia. He makes his pilgrimage to Omaha for the annual Berkshire shareholder meetings. He said at Eppley Airfield, it’s interesting to see signs in different languages welcoming people from around the globe.
He said both Buffett and Berkshire put Omaha on the world’s finance map.
“His nickname, ‘The Oracle of Omaha,’ reinforces that. One thing about Warren is: He’s a proud Omahan,” Johnson said.
That gathering of shareholders has grown significantly from when Johnson first attended, and it was held in a cafeteria. In Buffett’s last year as CEO, the meeting known as the “Woodstock for Capitalists” grew to attract 40,000 visitors to Omaha.
The annual meeting is a time when Heath Mello, the president and CEO of the Greater Omaha Chamber of Commerce, prepares business owners in the area for an influx of spenders. He estimates the meeting brings in at least $20 million in direct spending.
Mello said it’s too early to determine if that number will change in coming years without Buffett at the helm, but he feels the Omaha-Berkshire tradition remains strong.
“The draw for what the future is at Berkshire is new opportunities, but particularly when it comes to that shareholder meeting, it’s also about the ecosystem that it builds,” he said. “It brings investor meetups, it helps connect more retail operations, business networking, a whole host of community engagement that we know that Warren Buffett has started and that Greg Abel will continue to lead moving forward.”
The number of attendees could begin to dwindle, according to Creighton economist and professor Ernie Goss. But he doesn’t expect it will cause the Omaha economy to immediately decline.
“He has solid ties to this city, to this day, and we all benefit from it,” Goss explained. “We will continue to benefit from it, if nothing else, through the foundations that he’s established with his children.”
Buffett has said his three children will have 10 years to give away the family fortune through a charitable trust upon his death. It’s estimated Buffett’s total net worth is approximately $150 billion. He has repeatedly promised to donate most of it.
Nebraska consistently ranks as one of the top states in the country for charitable dollars received per capita. That’s from both individuals and from grantmakers. A study released by nonprofit data groups labels it ‘the Buffett effect.’
“It was a term that we coined when trying to understand why Nebraskan nonprofits were exceeding expectations and the amount of support they were getting,” said Grace Sato, director of research for Candid, one of those groups who conducted the study.
The Buffett effect has helped the Omaha Community Foundation climb the ranks to become about the 12th largest community foundation in the country, according to President and CEO Donna Kush.
“What the future holds for Warren’s children is a tremendous responsibility, but it is also a tremendous opportunity to make transformational change in our community,” she said. “In terms of the focus areas that the family has demonstrated interest, or their willingness to be innovative or take risk, I wouldn’t expect those elements to be different, but I would expect them to be amplified.”
Sato said with Buffett stepping down, they’ll definitely be watching what happens to the state’s philanthropic efforts.
“There is this anticipated big transfer of wealth, not just from the Buffett family, but from others as well. And so I think we will be watching to see how the next generation chooses to distribute and give,” she added.
Kush said this “culture of giving” is what will leave a direct and indirect economic impact on the state.
“Philanthropy plays a major role in the economy,” she explained. “It inspires some people to earn so that they can give it away. It’s not just for materialistic purposes, but they actually are inspired and motivated to earn more money, because that is something that they find very rewarding, is then being able to give it away.”
Buffett’s business philosophy, according to economists, introduced the idea of successfully using both intellectual intelligence and emotional intelligence.
“That’s what we’re talking about, a capitalism with a high level of ethics,” Goss said. “So I think that’s good. In other words, it speaks well of capitalism and market economies.”
Mello said on a local level, Buffett has been able to showcase how to practice growing a business with the intention to also give back.
“Buffett’s connection to growth, to capitalism, to also ensuring that connection comes back to philanthropy and the impact that a business may have and can have in terms of the community in which it resides, I think, is well known and well documented across Nebraska,” he explained.
Although many of his fans and stockholders said they’ll miss Buffett’s leadership, people like Raven Connelly of London, England, are confident his legacy will continue for the business world and the nonprofit one. Connelly flew all the way to Omaha for Buffett’s last Berkshire stockholder meeting as CEO.
“He changed my life in so many, many, many ways,” Connelly said at the meeting on May 3. “I think Warren is a good teacher, and he’s a good selector. He chose the right people in his life.”
When he wraps up as CEO at the end of this year, he is passing the reins to longtime Berkshire executive Greg Abel. Abel will begin his new role as CEO Jan. 1 with Buffett staying on as an advisor.