Matthews, a hedge fund manager, realized his dream first in the spring of 2007 and again in May. He chronicles the experiences in his just published book, "Pilgrimage to Warren Buffett's Omaha: A Hedge Fund Manager's Dispatches from Inside the Berkshire Hathaway Annual Meeting."
"I went to the meeting because I always wanted to hear Warren Buffett speak. Anyone in finance wants to see Buffett and hear him talk," said Matthews during a recent interview in his Penfield Road home. In the book, the author also takes a look at Buffett, the individual, and the future of Berkshire Hathaway without its CEO at its helm.
This financier's style and substance of writing are drawn from a deep passion for the writing craft and his experience as an energy analyst, hedge fund founder and blogger ("Jeff Matthews Is Not Making This Up"). In his book, he brings the reader right into the cavernous Qwest Center where Buffett and his close friend, partner and vice chairman, Charlie Munger sit at a table on a small stage in an arena, the size of Madison Square Garden.
"There was no light show, no master of ceremonies, only two guys on a stage answering a lot of questions," said Matthews, who wrote the book in the present tense to bring the reader right into the arena to hear the "Oracle of Omaha" speak. The experience is one that Matthews had coveted for years. Not a Berkshire Hathaway shareholder himself, he was able to attend as a guest of his friend who does own stock.
"It was a little like hearing a preacher in the flesh. You heard the sermons for years. You know what he will say, but when you hear it repeated right there he's so rational; everything about him is rational," Matthews said.
As a former energy analyst for Merrill Lynch, Matthews drew upon his acute skills of observation and listening to bring into focus the extraordinary experience attending a Berkshire Hathaway annual meeting, where people have an opportunity to ask questions, without limits or restrictions. During the course of one day, they ask more than 50 questions, on almost any topic, "from how to be a great investor to what a good first job for an ambitious 10-yeaar old girl would be," Matthews writes in the book's preface.
In addition to attending the meeting, people get an opportunity to shop at the many retail establishments set up at the Qwest Center representing some of the companies within the Berkshire Hathaway family. Products range from furniture, underwear and candy to auto insurance. However, the experience that Matthews chronicles in his book is not only the meeting itself, but also his impressions of the city where Buffett lives and makes his financial decisions.
Matthews was surprised how small Omaha was and "how slow time seemed to move." However, seeing Omaha, witnessing the slow pace of the city and listening to Buffett field questions in person, he began to understand why Buffett, who gets his news the old-fashioned way he reads newspapers lives in Omaha and still in the house that he bought 50 years ago for $31,500. The house's current appraisal value is $710,000. Omaha is a quiet environment, which allows Buffett to read and think. It is a place where he can ignore the short-term distractions of Wall Street and focus on long-term opportunities for shareholders.
Witnessing Buffett's environment did have an impact on Matthews. "You can't help but try to get away from the Wall Street noise after you've been out there. There's good reason why the best investor is sitting in Omaha. It does make you try to get less caught up in the day-to-day."
Commenting on his experience at the annual meetings within the context of this country's recent economic crisis, Matthews said he himself has "kept a more open eye on things to buy in the long run rather than reacting to the daily ups and downs."
Matthews came away from the experience with a view of Berkshire Hathaway's future without Buffett, who has set down plans for the company after his death.
"Berkshire Hattaway's future is more uncertain than I would have expected because Buffett doesn't like to spend money and that has an impact on the companies." For example, Matthews said Nebraska Furniture Mart "is not on the cutting edge of retail."
In studying Buffett upfront, Matthews observed how rational the man is as an investor. Also, he said, his businesses "are much more of a hodgepodge and not in as good shape as people may think."
During his two visits to Omaha, Matthews took time to speak with Berkshire Hathaway managers and looked in depth at Buffett companies as part of his research for his book. Buffett may be known for never buying tech stocks, but he is one of the most versatile investors in the world, from auto insurance and chocolate candy to tufted carpet, Western boots and vacuum cleaners, Matthews noted.
"Under Berkshire Hathaway management, several of its companies have withered on the vine," said Matthews, citing Fruit of the Loom, which is facing challenges from strong Asian competitors and the World Book Encyclopedia, who "with the Internet has gotten left behind."
In his book, Matthews offers an engaging discussion of See's Candy Shops, a California-based premium confectionary business Berkshire Hathaway bought in 1972 for $25 million. "It was one of the greatest acquisitions any company would ever make. In 25 years, See's has contributed $1.3 billion in pre-tax income to Berkshire. In the year 2007 alone, See's generated $82 million in profits on $383 million in sales. Today, See's has 200 shops, only two east of the Mississippi. During the 2008 annual meeting a gentleman from Bonn, Germany questioned why he couldn't buy See's Candy in his hometown and he couldn't understand why See's remained a small chocolate company while "Lindt went global."
"Do you want to have a company with high profitability but okay growth like See's?" he asked Buffett, "or a global company with okay profitability like Lindt?" Lindt & Spr ngli is a Swiss chocolate candy company.
"It was easily the most insightful question of the day," Matthews writes. When Buffett replied, "We want a business with a durable competitive advantage, management we trust, at a price that we understand," Matthews felt Buffett "dodged the heart of the question."
Throughout the book, Matthews offers a treasure trove of Buffett opinion:
"The best protection against inflation is your own earnings power."
"Gambling is 'a tax on ignorance' with government [preying] on the weaknesses of its citizens rather than acting to serve them."
"You use the [stock] market to serve you and not to instruct you We see thousands and thousands and thousands of companies priced very day we ignore 99.9 percent of what we see We look at the business, not the stock."
"I put a heavy weight on certainty."
Buffett also puts heavy weight on self-education when it comes to investing. When a 17-year-old asked what he should do to become a great investor. Buffett replied, "Read everything you can." Buffett has done just that since the age of 10 when he would go into the Omaha Public Library and read every book with the word "finance" in the title." He reads thousands of financial statements and annual reports.
Matthews said Buffett has "never owned a calculator in his life but what he cares most about when he buys a company is character."
The author notes how Buffett indeed may have lived up to his "oracle" signature. In May 2007, Buffett said, "Corporate America is living the best of all worlds And history has shown this is not sustainable."
Looking ahead to a post-Warren Buffett Berkshire Hathaway, the company according to Buffett, will have two individuals unnamed right now to assume Buffett's responsibilities. One successor will handle the investing and the other will manage the Berkshire Hathaway companies.
Matthews believes this new structure may present problems. "No one can replace Warren Buffett. He has bought all the companies himself and they report to him." When Berkshire Hathaway is split between the investing sector and management, Matthews says this will create "two competing interests."
Matthews has found his own formula in his work life. He majored in finance at Leigh University and minored in English. While working as a energy analyst for Merrill Lynch and then as founder of Ram Partners, LP, a hedge fund in 1994, he has enjoyed writing in his free time. "I just like to write."
Finance is a way to support his family, which includes two 20-something daughters, Sarah and Claire, and his wife, Nancy, the chancellor for the Diocese of Bridgeport.
Since 2005, he has written his blog, which has an international following, including investors and money managers. In discussing his blog, he recalls writing about the lack of blacks at the Berkshire Hathaway annual meetings and their lack of representation in the finance industry, a topic he addresses in his book. He received an e-mail from a black person who said, "Thank you for noticing."
For those looking to emulate Warren Buffett' success, keep in mind what Jason Zweig said in last weekend's Wall Street Journal, "you might as well try to catch a bolt of lightning in a paper cup."
Matthews will conduct a book signing at Barnes and Noble in Westport on Dec. 7 at 2 p.m.