Zhu Ye, president of Dalian Zeus Entertainment, explains his paying USD 2.34 million for a lunch with Warren Buffett, as being “absolutely worth it.”
After winning the bid to dine with the legendary investor in June, Zhu Ye took his wife and a team of eight people from his gaming company to the Smith & Wollensky steakhouse in Manhattan, New York, on September 8 and had his dream come true.
Zhu told The Paper that Buffett shared his investment experiences over the three-hour lunch and expressed his optimism and confidence in China’s economic prospects. Zhu also talked with Buffett about his own company, where he and his teammates work for 14 hours a day, six days a week, as an example of today’s youth and their ambitions to create their own wealth.
“The philosophy at the highest level is the simplest: perseverance is key,” he wrote on his WeChat Moments feed shortly afterwards.
Every year since 1999, Warren Buffett has auctioned off on eBay a chance to break bread with him at the Manhattan restaurant and donates all proceeds to the Glide Foundation, a San Francisco-based charity group that helps the poor and the needy.
Zhu Ye founded Zeus Entertainment in 2010 and develops online and mobile games at the company. In January 2014, the Dalian Kemian Wood Industry, a faltering publicly-traded company that manufactured flooring and wood products, sold its cash and assets to Zeus for a 100% stake. Since then, Zeus’ stock price has skyrocketed from RMB 17 to RMB 108 in April, a fivefold increase within 14 months, Beijing News reported.
In an interview with Shanghai-based publication The Paper, Zhu detailed how he felt and what he gained from the million-dollar dining experience. AllChinaTech.com has translated selected excerpts.
The Paper: The general public is debating whether the lunch was worth it. How do you feel?
I got my money’s worth even before I went to the actual lunch. Some don’t believe I was there for the learning experience. They think it was all a publicity stunt. Honestly, if we, as a company get all this media attention, it makes it worth it. But I don’t care so much about the publicity.
I admire two people the most. Person number one is Warren Buffett. The other person is Steve Jobs. Likewise, if Steve Jobs was still alive and were he willing to auction his lunchtime for charity, I’d bid on that too. A chance to meet my idol, why not?
After this experience, I’ve come to understand that “the philosophy at the highest level is the simplest: perseverance is key.” Many people, after achieving success, forget how or why they succeeded. Buffett is quite simple.
When I said to Buffett, “I am quite good at running a business. But I am bad at speculating on the stock market.” He said, “I don’t do speculation either.”
Buffett said that what he does is learn about a business, its proprietors, its financials, products, services and market share. In other words, he isn’t only investing in stocks, he’s investing in the business. He only does things he understands well.
The Paper: What expectations did you have before the meeting? Did the entire process meet your expectations?
Actually it wasn’t a meeting. It was a simple lunch. We chatted, exchanged ideas, joked, and had great fun.
My expectations were to first, have fun, no matter what we decided to talk about. Secondly, I wanted Buffett to understand China’s new generation of entrepreneurs, because we represent the future of China.
Of course, we asked him a bunch of questions and expressed our doubts. For example, people have been talking about an economic downturn, the likelihood of a global economic crisis. Will this mean society will revert once more to the “cash is king” mentality? What will he do? He told us that under no circumstances does he believe in the “cash is king” mentality. He has always been a proponent of value investing which means bear markets and bull markets are of no long term consequence to him. What matters is the real value of a company. This does not involve buying low or selling high.
For example, his friends ask him, ‘Why do you continue to invest in IBM? Why do you invest in Coca Cola?’ There are people who believe it is a bad time to invest in IBM right now. But Buffett believes, with so many companies still using IBM’s services, it is still a very profitable proposition. As for Coca Cola, today people advocate for healthy beverages, but when you are thirsty, you still want a sip of coke.
Buffet in fact drank the famous beverage with his steak when we dined together.
I brought two bottles of award-winning, local red wine over from China for him to try. He said, they were not bad.
The Paper: What is it about Buffett that makes you admire and respect him so much?
I respect him not for the reason that he is one of the richest, but for the reason that he is the richest, and yet he intends to donate all his assets and leave only 1% to his children. This is a really hard thing to do in traditional Chinese culture, because traditional Chinese culture places a lot of emphasis on succession, on inheritance.
At lunch, our people asked, ‘the American governing method creates problems with wealth inequality, what’s your take on that?’ Buffett said that Americans also have an immense sense of community, more and more individuals and enterprises engage in philanthropy and take up social responsibilities because they feel that they have benefited from society and so now it is time for them to give back to society and make it healthier and more sustainable.
It is something that Chinese entrepreneurs do not necessarily follow through on, because we have walked a distance in 30 years that took others 200 years to complete. Therefore, we need to slow down and do it step by step. It is pretty hard to make a huge turn all at once.
(Feature image of Zhu Ye from Security Daily)