[ggandibazz]

2012-06-14 03:07 | China Daily

Buffett guests realize there is no free lunch

Having hosted his annual charity "power lunch" for high-flying, well-heeled investors for
the past 13 years, Warren Buffett may be forgiven for not remembering the name of
each and every guest, despite their huge outlay to gain a seat at the table — this year's
top bidder shelled out a cool $3,456,789 for the pleasure of spending three hours in the
company of the chairman of the investment house Berkshire Hathaway.

However, one name the 81-year-old US investment guru is unlikely to forget is that of
Zhao Danyang, who not only introduced the notoriously abstemious Buffett to the
pleasures of China's famous, and famously expensive, rice spirit Moutai and the health
tonic Dong'e Ejiao, but also changed the nature of the event forever.



Before 2008, when Zhao won his place at the table with a bid of $2.1 million, the lucky
winner was allowed to quiz the "Oracle of Omaha", as Buffett is known, on topics ranging
from shares and investment combinations to food, music, philanthropy and even girlfriends.

All that changed after Zhao, the manager of a Hong Kong-based hedge fund, took the
chance to recommend two individual shares — the supermarket chain Wumart Commercial
and the auto and battery maker BYD, both listed on the Hong Kong Stock exchange — to
Buffett, who agreed to take a look at them.

That simple expression of interest moved the market, causing strong share-price volatility.
Zhao's hedge fund, Pure Heart Asset Management, benefited to the tune of $16 million in
the four days that followed the lunch as it offloaded shares of Wumart Commercial. Zhao
wasn't the only winner, though, as shares in both Guizhou Maotai and Dong'e Ejiao also
surged on the back of the association with Buffett.

As far as Zhao was concerned, the lunch came cheap. The man known as the "Godfather of
Chinese Private Equity" reasoned that $2.1 million was a small price to pay, compared with
the money he was able to earn from the lessons he learned during the three-hour meal.



Buffett's power lunch, traditionally held in a high-end New York steakhouse called Smith &
Wollensky — which itself donates $10,000 to the cause for the pleasure of hosting the event
annually — is legendary in the world of finance. When it started in 2000, interested parties
simply had to fork out a paltry $25,000 for the food and the table talk. Today the price has
risen more than 138-fold.

Buffett once told investors, "The 19th century belonged to England, the 20th century belonged
to the US and the 21st century belongs to China. Invest accordingly." However his own
business activity in China has been limited, so far, and many investors are waiting for him to
take his own advice.

Despite this, the famously unostentatious Buffett is a familiar figure to many Chinese, partly
through his visits to the country that have raised his profile with the general public and
investors alike, and partly because of his, some would say bizarre, prerecorded appearance on
China Central Television's New Year Gala, where he played the ukulele and sang a song about
railroads.

[foonlesse]

There is a price tag for everything.