The Best Advice Warren Buffett Gave American Express CEO

Being a CEO is considered a lonely job, but it helps to have investment oracle Warren Buffett as a trusted advisor.

That was the conclusion of Stephen Squeri, CEO of American Express (ticker: AXP), who recently sat down with him Barrons Andy server. Buffett’s Berkshire Hathaway is the largest shareholder of American Express, owning about 20% of the stock, according to FactSet data.

Having such a large and influential investor might seem overwhelming, but Squeri says he enjoys having access to Buffett’s extensive experience and speaking to him several times a year.

“I probably talk to Warren once every two months,” Squeri said. “It’s quite a thrill. You speak of tremendous experience, tremendous insight, and to have that at your fingertips you pick up the phone. That’s pretty special.”

This realization was particularly important to Squeri at the start of the pandemic in early 2020. Overnight, the company, whose slogan was once “Don’t Leave Home Without It,” was thrust into a world where people rarely left their homes. With consumers unable to spend on travel and entertainment, Amex’s 2020 revenue fell 17% year over year. Managing this momentum for a company synonymous with business and luxury travel has been challenging, but Squeri says Buffett provided solid guidance.

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“His advice to me is protect two things, protect your customers and protect your brand, which is why we have invested in the pandemic. It would have been pretty easy to pull back even further, but we’ve invested more in value propositions to our customers, we’ve invested in our colleagues, and we’ve invested in our brand,” said Squeri.

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That paid off. Over the past three years, shares of American Express are up 87% through the close on Thursday, outperforming the S&P 500

which increased by 66% during this period. Buffett seems pleased, noting in his annual letter to Berkshire shareholders that the company paid $1.3 billion for its stake in American Express and now receives $302 million in annual dividends from the company; Berkshire’s stake in the credit card company was valued at $22 billion at the end of 2022.

Few of us could imagine matching Buffett’s success in any investment, but there are reasons to invest in American Express, Squeri said, citing the company’s history of strong revenue growth and mid-teens earnings per share.

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“Maybe you should think about it,” Squeri said.

Write to Carleton English at [email protected]

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