Zhao Danyang paid more than US$2.1 million (Dh7.7m) to have lunch with Warren Buffett after picking up a few tasty morsels from the Oracle of Omaha that made him a fortune. The Chinese hedge fund manager had been mesmerised by the thoughts of chairman Buffett, turning his advice into a thriving business. Taking to heart the lessons he learnt from the world's second-richest businessman, Mr Zhao said his firm reported a 600 per cent profit on returns during a six-year period.
After reading Warren Buffett: From $100 to $1.6 Billion a decade ago during the Asian financial crisis, the general manager of Pureheart Asset Management in Hong Kong changed his investment philosophy and made it big. As a "massive thank you", Mr Zhao came up with his record-breaking bid last year to have lunch with his "teacher". "In my heart, I am really thankful to him," he said. "Buffett is my teacher."
Yesterday his dream of meeting Mr Buffett came a step closer when he was due to join the chairman of Berkshire Hathaway and the world's most celebrated investor at Smith and Wollensky's steakhouse in Manhattan. Last year, Mr Zhao's bid was three times the previous record for the charity lunch, and the largest on record for an eBay-sponsored charity auction. This year's version of the auction is in its fourth day on the internet site. Bidding stood at $100,100 on Tuesday night and is set to close tomorrow. In past years, bidders waited until the final minutes before driving up the price. The latest auction has attracted 44 bids so far.
Mr Zhao will take annual reports to the lunch and will ask Mr Buffett's advice about Wumart Stores, which is Beijing's leading supermarket chain. "I want Warren Buffett to have a look at this company," he said. "It's a very good business model and the management is very successful." Ranked just behind his friend Bill Gates in the Forbes magazine rich list, Mr Buffett transformed Berkshire Hathaway from a failing textile maker into an enterprise with businesses ranging from ice cream and underwear to corporate jet leasing. His investing acumen has earned him the "Oracle of Omaha" nickname worldwide.
Now young entrepreneurs and businessmen are queuing up to ask him the secret of his success. Moonish Pabrai, an investment manager, said he and his friend, Guy Spier, covered 54 topics in three hours with Mr Buffett after winning the 2007 auction with a $650,100 bid. "I got more than my money's worth," he said. Yet despite his fame, the 78-year-old investor has also felt the aftershocks from the global economic crisis. The value of Berkshire Hathaway's investments fell by nearly 10 per cent in the past year and Mr Buffett's personal wealth shrank by $25bn to $62bn.
At the company's annual meeting in Omaha, which attracted 35,000 shareholders, Mr Buffett admitted that he expected the company to make further losses this year. "There is no question that returns for Berkshire will be lower than in the past," he said. "We operate in a universe of stocks of companies worth at least $10bn and more often $50bn." In his opening address, Mr Buffett said it had been "a very extraordinary" year. "The [US] economy had experienced a financial hurricane," he said. "When the American public pulls back the way they have, the government does need to step in. It is the right thing to do, but it won't be a free ride," he added, referring to the stimulus packages that had been put together around the globe.
* with Bloomberg