Sunday, May 4, 2008

Back from Omaha

Well I am back from a whirlwind and great weekend. The Berkshire weekend is always a blast.

In general I think the meeting is getting to big. My first one was 4 years ago I think the attendance was in the low 20,000s. This weekend it was supposedly a little over 31,000. You are looking at 30% growth in just a few years. It has gotten so big that I think it has become somewhat less enjoyable as you shouldn't even think about going to the Borsheim's event anymore on Friday night. You also have to worry about getting a seat in the main auditorium. There are many private parties which are always fun where you can talk to old friends and professional investors can swap viewpoints.

The other problem is that it seems to becoming more politicized. There were questions involving advertisements Berkshire companies are involved with supporting supposed violent tv shows, pollution of rivers that Berkshire's energy company is supposedly involved with, issues surrounding the Olympics, and religion. I came to hear Buffett talk about investing and the economy not other peoples agendas.

Don't get me wrong I had an awesome trip and I will probably be back next year but I am just bemoaning what people are turning it into and how big it has gotten.

On a side note I was amazed how bearish the professional investors I talked to were. I was hoping I would get more bullish vibes as a signal that the last bears had given up and we were ready to move down again. Of course my sample set could just be among the top investors who would make the trip to Omaha and who are not going to change their opinion even if the market rallies another 10% to 20% who see what I see. Either way I was just overly surprised at the overall bearishness money managers voiced in concerns going forward.

On the way back from Omaha on the connection flight between DFW and San Antonio I saw next to a homebuilder in San Antonio (he has his own small company). I suggested that San Antonio was holding up okay and he shook his head no that things have changed and that inventory is surging and things are not moving. He was really worried going forward. He said homes in the 250k area are still moving somewhat but anything over 300k are not. He said that previously alot of his buyers were from California who would sell there house in California for extraordinary prices and then move the entire family to Texas buying an equally nice but much cheaper house. Those buyers are completely gone.

I found this very interesting as I was suspecting that Texas would never really enter into a downturn. Other anecdotal evidence I am hearing about Dallas is also showing signs of strain. If this is all true I think Texas could start feeling the recessionary strains in 6 to 9 months.

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