Buffett’s brilliance now available online

Cartoon: Rod Clement

The annual pilgrimage by Australians to sit at the feet of Warren Buffett and his sidekick Charlie Munger at the Berkshire Hathaway annual meeting has been replaced by an online event this weekend.

Normally 40,000 investors travel from all over the world to midwestern Nebraska to hear the wisdom of the unassuming billionaires.

How wonderful that Buffett, the 89-year-old chairman, and his deputy Munger, now 96, are able to preside over the $US456bn ($705bn) conglomerate.

With just a hint of vaudeville, Buffett and the equally astute Munger have for decades taken to the stage often for more than five hours every May at the annual meeting in downtown Omaha.

The two men divulge their investment philosophies, Buffet sips on his Coca-Cola and Munger nibbles on See’s peanut brittle, products of course from Berkshire investments.

Sadly this year there’s no chance there’ll be a Tic Toc performance from the duo, with Munger keeping his COVID-19 distance.

Buffet will instead front with Greg Abel, who’s seen as the successor. They will explain why they’ve decided to go through the pandemic with their liquidity intact, against the backdrop of the Berkshire class A stock dropping from $US342,000 to $US281,000 this year.

Australian disciples who have been regular attendees have included Chris Mackay, the co-founder of Magellan Funds Management, and Hamish Douglass. Ditto former Hyperion Asset Management chief Manny Pohl and Wayne Peters, founder of the Peters MacGregor investment fund.

Repeat attendee, the late journalist Barrie Dunstan, Margin Call’s first business editor in the early 1980s at the Melbourne Herald, once recalled Munger’s preferred annual meeting style was a “solitaire soliloquy”: “I ask questions and then I’m going to answer them.”

A $US1000 investment in 1965, when Buffett took control of the company, would be worth more than $US27m, having posted an average 20 per cent annual gain, which means the duo can stick around for as long as they want. 

Off course not everyone loves the Sage of Omaha.

Indeed, in 2002 James Chessell, the then Sydney Morning Herald CBD columnist, countenanced Buffett was set to be kicked out.

Margin Call’s own inaugural Omaha-bound airline flight credit currently sits in the Qantas bank account earning interest (for Alan Joyce) until next year.

Meanwhile Yahoo Finance will live-stream the event at 6.45am Sunday morning.

Generous Google

Google has come to the aid of Antony Catalano’s Australian Community Media. It has secured innovation funding for an expanded buy/sell/swap presence on their regional websites from the technology giant.

ACM want to create the modern means for buyers and sellers across Australia to exchange goods and services online and in print. Something about seeking to resurrect the foundation of its many regional legacy newspapers through 21st century classifieds and trading posts. 

Google will help them craft a prototype of how classifieds ought to look in the digital age in the boondocks.

The fund will help them “look deeply” at customer habits and needs, which Margin Call reckons could centre on fishing rods, tinnies, second-hand utes and tyres. Maybe some advice from the boys at The Betoota Advocate, Clancy Overell and Errol Parker, would help ACM too.

Catalano, with billionaire fund manager Alex Waislitz’s Thorney Investment, bought the former Fairfax mastheads from Nine Entertainment for $125m last June.

Amid the COVID-19 pandemic they’ve suspended printing of non-daily titles, with the caveat that when ads come back, the papers come back. 

“I don’t want to close a single title if I can avoid it,” the Cat recently advised, while confirming papers not commercially viable would not return.

“I’d love to bring back the steam train, too, but there’s no real demand.”

ACM and The Conversation were the only two Australian entities that secured funds in the second round of the Google News Initiative Innovation Challenge.

The latest round saw 18 recipients sharing $US2.3m across the Asia-Pacific, so just crumbs for broken business models from the grasping Google empire.

The initial round had five local recipients, including Eric Beecher’s Crikey, which hoped to create a new group subscription model on top of its 90 per cent reliance on individuals. There was also funding of the pioneering Women’s Agenda, Mia Freedman’s Mamamia and the Guardian Australia.

Chief bean-counter

The Chartered Accountants Australia and New Zealand (CA ANZ) board has announced the appointment of lawyer-banker Ainslie van Onselen as its chief executive.

She recently spent six years at Westpac including time as chief of staff to ex-CEO Brian Hartzer, along with being their director of inclusion and diversity.

CA ANZ, a rival to CPA Australian, has close to 130,000 members.

John Palermo said the board viewed van Onselen as “a nimble thinker”.

Based in Sydney’s Vaucluse with husband, political commentator Peter van Onselen, she succeeds Simon Hann who was briefly interim CEO after the departure of Rick Ellis.

Insolvency woes

There was no uprising against Deloitte, so KordaMentha missed out on the Virgin Australia administration mid-week. But the first meeting of creditors doesn’t always go the way of the incumbent.

It was 2001 when the youthful Mark Korda and Mark Mentha shot to accountancy stardom, if there is such a thing.

Ansett collapsed the day after the September 11 attacks. Peter Hedge was one of three partners of PwC appointed administrators but their tenure lasted just five days after hitting hostility from Greg Combet’s ACTU.

Arthur Andersen, fronted by Korda and Mentha, took over.

The go-it-alone two Marks then set up their own firm, with the Ansett work, after Arthur Andersen collapsed, having been caught up in the Enron scandal.

Their Ansett administration still nominally continues, with the January 2020 update suggesting a December 2021 end date of all loose ends. The fees for the three key accountancy firms, and others, exceed $60m.

Margin Call recalls the collapse came just after a $20m marketing campaign starring Philip Brady, Nathan Buckley, Bert Newton, Peter Morrissey and Diana “Bubbles’’ Fisher, in what was billed by the airline’s vice-president in charge of marketing, George Frazis, as “the biggest celebrity endorsement in corporate Australian history”.

It also included Bryce Courtenay, Rod McGeoch, Dawn Fraser, Fiona Coote, John Bertrand, Jackie O, Justin Hemmes, Akira Isogawa and a dozing Bernard King seated in economy.

However, the Absolutely Ansett campaign, featuring pop star Vanessa Amorosi’s song Shine, flopped.

Research soon after showed limited consumer recall of the likes of Michael Klim, Rex Hunt, Brett Lee and Ita Buttrose, but very low recall for the likes of former Harper’s Bazaar editor Karin Upton-Baker, fashion designers Linda Jackson and Wayne Cooper, and even Telstra chairman Bob Mansfield.

Within four months some 16,500 Ansett staff had lost their jobs, but eventually most got their rightful entitlement, while the unsecured creditors owed $3bn got nothing.

The Ansett administration was part of the backdrop to John Williams, the now retired Nationals senator, instigating a parliamentary inquiry into the insolvency industry, noting the need for greater transparency.

Improvements came, yet Peter Gosnell at the Insolvency News Online website regularly spots extraordinary behaviour.

None of the big names starring in the Ansett promotion were paid, just contra involving flights that never took off.

And Frazis is now the Bank of Queensland boss; his LinkedIn makes no mention of ever working at Ansett, despite such a glamorous title.

Virgin owes $2.28bn to secured lenders and leaseholders, $1.98bn to unsecured bondholders, $1.88bn to aircraft lessors and $451m in entitlements to 9000 workers.

Absolutely tragic.