Buffett lunch costs $2.1m, but wisdom is what the fund wants

By David Usborne
Sunday 23 October 2011 08:15

Zhao Danyang, an investment fund manager from Hong Kong, hopes he will get more than heartburn when he finishes having lunch with Warren Buffett at the famous Smith & Wollensky steakhouse in Manhattan shortly. As well as a very large bill he will need to leave with some newly gained wisdom.

Expensive it will have been. Mr Zhao made himself somewhat famous (and somewhat poorer also) at the end of last week by placing the winning bid in a charity auction on eBay for the privilege of taking lunch with Mr Buffett on a day of his choosing at the Midtown eatery.

True, Mr Zhao, whose fund is called the Pureheart China Growth Investment Fund, will also be allowed to bring along seven friends to enjoy the occasion. Even so, the amount he ended up paying – just over $2.1m (£1.05m) – seems a lot for great cuts of meat and decent conversation.

Indeed, it ended up, according to the folks from eBay, being the richest charity auction ever held on the site. Thus, whether or not it enriches Mr Zhao, it is very good news for Glide, the charity it will benefit, which is run by a United Methodist Church in San Francisco to help the city's many homeless people.

Mr Buffett, who took over Berkshire Hathaway, then a sleepy textile company in Omaha, Nebraska, in 1965, and turned into the powerhouse it is today, has been putting himself under the hammer this way for the past six years. He was prodded into it by his late wife, Susan Buffett, who had become involved in Glide, and the man who runs it, the Rev Cecil Williams. "I got a chance to really get exposed to what an extraordinary job he's done in helping people who the rest of the world has given up on," Mr Buffett, still listed by Forbes magazine as the world's richest man, remarked recently. "If I can tip my hat by having a lunch, I'm delighted to do it."

With the dollar and the stock market in a swoon, this might have been the year the bids came in a little droopy. Not so. It is only a good thing that time with Mr Buffett is not a commodity factored into the inflation index. Last year, the winning bidders paid a mere $650,100 for the annual lunch.

Mr Zhao should perhaps ask them – they were money managers Mohnish Pabrai and Guy Spier – if he has spent his money wisely and what to expect at the table. If he does, he may be reassured. Mr Pabrai bought his two daughters along and they received goodie bags from Mr Buffett filled by Mars, a Berkshire Hathaway subsidiary. Mr Spier came with his wife. Everyone had a fine time, apparently.

"It was well worth every penny, probably worth a lot more than every penny," said Mr Pabrai, who put up two-thirds of the $650,100. They had their lunch just last week. With Mr Buffett they talked about everything from the state of the economy to the demise of former New York governor, Eliot Spitzer. Mr Zhao may have slightly different, more global, interests to explore with the "Sage of Omaha". But his best approach to avoiding indigestion when the bill comes may be to remember the main purpose of the rendezvous in the first place – charity.

Giving has become a new focus for Mr Buffett. His plans include giving most of his stock in Berkshire Hathaway to five large charities, the biggest portion to the William and Melinda Gates Foundation. Meanwhile, the generosity of Mr Zhao's bid has already earned him love in San Francisco. "It almost feels like a miracle," the Rev Williams declared when the bidding was finally closed. "We are amazed and ready to continue our work of breaking the cycle of poverty."

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