Streetwise for Sunday, June 10, 2018

For the past 19 years Warren Buffett has been auctioning off a lunch with himself to benefit charity and the winning bids have skyrocketed. Pete Budlong was the first to win an opportunity to dine with Buffett in the year 2000.

Back then he paid only $25,000. In 2017, the winner paid approximately $2.7 million. The chance to dine with Buffett this year has a price tag of $3.3 million. And once gain the auction’s winner asked to remain anonymous.

The proceeds of the auction benefit Glide, an anti-poverty organization in San Francisco that Buffett became involved with through his late wife, Susie. The Smith & Wollensky steakhouse in New York City has been hosting the meal since 2004 and donates at least $10,000 to Glide each year.

For one former hedge-fund manager, winning the auction proved much more valuable than just scoring a chance to break bread with Buffett. After winning two years in a row, Ted Weschler landed a job offer from the Oracle of Omaha. Weschler is now a portfolio manager at Berkshire Hathaway.

Buffett was curious about Weschler’s hedge-fund success. Investors who backed Peninsula in early 2000 saw a 1236 percent gain by 2011. At the second dinner, Buffett extended a job offer.

“I very much wanted him to do it, but I didn’t expect to get very far with the idea,” Buffett told Fortune in 2011. “Ted was already making a lot of money with his fund – you can get an idea of that from the size of his Glide bids – so money was not the issue.”

Anyone who contributes seven figures to charity is to be commended. Nonetheless, I have always had this uneasy feeling that some winners hoped to gain more than just the good feeling that comes from donating a substantial chunk of disposable income to a worthwhile cause.

Surely anyone would realize that Buffett is not about to let slip information that would put him in violation of the full disclosure rule. Furthermore, any expectation of uncovering some previously undisclosed key to Buffett’s prodigious investment skill would be naïve to the point of ridiculous.

Buffett does not harbor some holy grail. He simply uses a modicum of common sense, backed by solid fundamental analysis, in combination with a very large piggy bank.

Meanwhile, I have been taken to task for being narrow minded and employing “humorous wit” to cast disparaging annotations upon some good-hearted philanthropists. Meaning, I was too dense to see unadulterated idolatry at its finest.

A low blow came when a reader wrote in saying that nobody would pay a dollar to have lunch with me. I agree; I also would not pay a dollar to have lunch with me. However, in self-defense over the years I have raised thousands of dollars for various charities.

Am I being overly cynical? After nearly 50 years on Wall Street, I find it difficult to believe in altruism. Egos and puffery run rampant, along with an insatiable desire for personal gain. Barron’s once wrote that success or failure on Wall Street is measured only in monetary terms.

In an attempt at redemption and salvation, I will again step up the plate, no pun intended. Last year, I offered to treat the first person who donated $2,000 to Southeastern Guide Dogs (SEGD) to dinner at a local restaurant of their choice, accompanied by a companion and four friends.

The caveat was that you had to specify that your donation was to be for votes for Happy Returns, the SEGD’s Puppies on Parade sculpture sponsored by Rudd International. (Note: Rudd won.)

I will do so again only I will triple the offer. The first three people who donate $2K each, and their companions, will receive a dinner invite. Unfortunately, this year’s competition is unlikely to begin before September. Also invited will be the artists responsible for Rudd’s yet unnamed dog. I will announce when voting will commence.

Are there any conditions? Yes, but only two. You must have a receipt showing the donation was made during the contest and only one donation per person or family unit.

The only publicity you are likely to receive is a tip of the hat in my column. However, you might come out ahead financially…and I know Southeastern Guide Dogs will.

Lauren Rudd is a financial writer and columnist. You can write to him at LVERudd@aol.com. Phone calls accepted between 9 AM and 3 PM at (941) 706-3449. For back columns please go to www.RuddReport.com.