3 Tough Questions to Ask Warren Buffett

Tim Melvin

If you're lonely, in dire need of a lunch date, or just happen to have a few million dollars lying around, you could try your luck at scoring the most successful investor in history.

The "Have Lunch with Warren Buffett" auction happens once per year, and the most recent winning bid reached as high as $3.3 million when all was said and done. Instead of being a meaningless opportunity for rich people to throw money around, the auction raises money for GLIDE, the favorite charity of Buffet's late wife, which is geared toward serving San Francisco's homeless population.

Some pretty cool things have happened to those who bid up for the meal. Ted Weschler, for example, paid about $5.3 million total to win the auction two years in a row. He now picks stocks and manages over $10 billion at Berkshire Hathaway Inc. (NYSE: BRK.A).

I have to admit it would be cool to have lunch with Warren Buffett. I would even pick up the tab for his signature steak and hash browns at Smith & Wollensky, or any other steakhouse of his choosing.

But while GLIDE may be a great cause, it could never inspire me enough to pony up the kind of money these rich Buffettologists are paying just to say they had lunch with their idol.

Yes, Warren Buffett is still the most successful investor and businessman in American history. He and right-hand man Charlie Munger have transformed Berkshire from an investment firm into an enormous collection of businesses. Very few people on the planet could make that transition with the same level of success.

Although I won't shell out $3 million to share a steak lunch, I've long been brewing over many questions to ask Warren Buffett if I got the chance.

They concern issues that the Oracle of Omaha needs to get straight, for the sake of individual investors like us.

And honestly, three of them in particular may come off as a bit crass…

3 Questions That Might Make Warren Buffett Sweat at the Lunch Table

Question No. 1, Part A, would have to do with the stock market's overall valuation.

I would ask him…

How likely is it that interest rates stay low long enough for stocks at current prices to yield meaningful returns?

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In the past, Buffett has identified the stock market cap-to-GDP ratio as a strong valuation indicator.

And right now, the ratio is approaching levels not seen since before the dot-com bust, clearly showing an overheated market…

He also said recently that if interest rates remain low, then stocks are deeply undervalued and we will regret not buying equities at current levels. Sure, interest rates are on the rise, but they're still near historical lows compared to the last 30 years.

Put the two together and it seems like Warren is saying the market is overvalued, yet stocks are undervalued. That's certainly something I'd want to clarify with him over a medium-rare steak.

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Piggybacking off of that, Question No. 1, Part B, would be…

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Tim Melvin

About the Author

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Tim Melvin is an unlikely investment expert by any measure. Raised in the "projects" of Baltimore by a single mother, he never attended college and started out as a door-to-door vacuum salesman. But he knew the real money was in the stock market, so he set sights on investing - and by sheer force of determination, he eventually became a financial advisor to millionaires. Today, after 30 years of managing money for some of the wealthiest people in the world, he draws on his experience to help investors find "unreasonably good" bargain stocks, multiply profits, and build their nest eggs. Tim tirelessly works to find overlooked "hidden gems" in the stock market, drawing on the research of legendary investors like Benjamin Graham, Walter Schloss, and Marty Whitman. He has written and lectured extensively on the markets, with work appearing on Benzinga, Real Money, Daily Speculations, and more. He has published several books in the "Little Book of" Investment Series and a "Junior Chamber Course" geared towards young adults that teaches Graham's principles and techniques to a new generation of investors. Today, he serves as the Special Situations Strategist at Money Morning and the editor of "Max Wealth" and Heatseekers.

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