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Opinion: Warren Buffett’s latest charity auction will bring in a record amount – but who’s going to chase it?

There may not be a free lunch, but $1.5 million? That’s the average paid to dine with Warren Buffett at his annual auction to raise money for charity. This year’s lunch auction, which the 91-year-old Buffett says will be his last, ends June 17. With hours to go, the main auction on eBay topped $13 million. The previous record was $4.57 million, set in 2019.

Since the lunch tradition began in 2000, the Berkshire Hathaway BRK.A,
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BRK.B,
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The CEO has raised nearly $35 million, with proceeds going to the Glide Foundation, a center promoting social justice and pathways out of poverty. Winners can bring up to seven guests to lunch with Buffett, usually at a New York steakhouse.

The long line of winners underscores that paying offers great value, with lasting lessons about investing and living. Examples are investors Mohnish Pabrai and Guy Spier, who together won Buffett’s lunch in 2007 for $650,100.

Of his time with Buffett, Pabrai told me, “Warren’s goal at these luncheons is to make sure the winners think they got a good deal. He tries to set no time limits and answers questions in a way that could impact the lives of the winners. It’s the best $650,000 we’ve ever spent. Huge value for money.

Spier offered this thoughtful reflection: “Lunch with Warren was transformational: it taught me that I needed to stop trying to be Warren Buffett and instead become the best possible version of myself.”

Although Buffett promises to end the lunch auction after this year, it’s a tradition worth keeping. Warren was inspired by such charitable creativity from his late wife, Susie, and you can be sure she would want it to continue. The logical successors are Buffett’s three children, specifically Berkshire board members Howard and Susan.

People may not be offering millions of dollars to break bread with the famed investor’s offspring, at least not at first, but that was the case with early Buffett lunches. The first three went to five figures ($20,000 to $25,000), the next six to six figures ($250,000 to $650,000), and it wasn’t until the eighth year that the winning bid broke $1 million.

The Buffett children certainly have their father’s values, as well as their mother’s virtue of charitable generosity. In fact, most of their inheritance is affected in this way. Proceeds from their lunches could go to charities they support.

If the Buffetts pass up the opportunity or want to take turns, Berkshire Insiders are a great option to carry the torch. The obvious choices are co-vice presidents Greg Abel and Ajit Jain as well as portfolio managers Todd Combs and Ted Weschler. All have Berkshire in their blood, as Buffett once said.

Weschler would be a particularly good successor, as he is a two-time winner of the Buffett lunch – in 2010 and 2011, with bids $100 apart: $2,626,311 and the following year $2,626,411. Soon after, Buffett offered Westchler a job at Berkshire.

CEOs of other companies could also carry on the tradition. The best candidates would be business leaders who would attract bidders from the same loyal customer base as Buffett and offer a similar, high and distinctive return on investment.

These ideal candidates would lead companies to which high-quality, value-oriented investors are attracted because of particularly attractive cultural characteristics and performance results. The bids could even start low, as they did with Buffett, and increase over time. Along with investment prowess and business acumen, sought-after traits include humility, integrity, intelligence, patience, and generosity.

There will never be another Buffett, but there are similarities to him among some great business leaders. Tell your nominees to continue the tradition of charity lunches in the comments section below; here are mine: Tom Gayner (Markel MKL,
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); Melody Hobson (Ariel Investments); Mark Leonard (CSU of Constellation Software,
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CNSWF,
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); Carol Tomé (United Parcel Service UPS,
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) and Prem Watsa (Fairfax Holdings). None of these leaders is Buffett, but as Spier has learned, no one is and no one should want to be.

Lawrence A. Cunningham is a professor at George Washington University, founder of the Quality Shareholders Group and editor, since 1997, of “The Essays of Warren Buffett: Lessons for Corporate America”. Cunningham owns shares of Berkshire Hathaway and is a shareholder and director of Constellation Software. For updates on Cunningham’s research on quality shareholders, sign up here.

Read also : Guy Spier: What lunch with Warren Buffett taught me about investing and life

After: Major Berkshire shareholders could undermine Buffett’s legacy and everything that makes the company unique

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Post expires at 5:40am on Tuesday June 28th, 2022