In Buffett territory, holders show allegiance to Warren

OMAHA, Nebraska (Reuters) - Warren Buffett may be under fire from New York investment managers over a scandal involving one of his former lieutenants, but on his home turf his most loyal shareholders think he is doing just fine.

One of the focal points of Berkshire Hathaway's (BRKa.N) annual meeting weekend is the Friday night cocktail party at Borsheims, the country's largest independent jewelry store and one of the many businesses in Buffett's ice-cream-to-insurance conglomerate.

The young and the old mingled freely among display cases laden with diamonds at 20 percent off, and many took advantage of the discounts. One thing that was not discounted, though, was the loyalty of Nebraskan shareholders to Buffett, beloved as the hometown kid with the folksy manner.

"I think he's been handling it very well ... I think he's done a nice job of addressing the issue but also recognizing that it's a difficult one," said Amy Peck of Omaha, a shareholder who was visiting with her dog Bosley in tow.

Peck was hardly alone; most smaller shareholders in Omaha simply feel differently about the controversy surrounding David Sokol's behavior than some institutional holders do.

Even if they expect answers from Buffett about Sokol this weekend, they still fundamentally believe in the man some call the "Oracle of Omaha." One investor choked up when asked about Berkshire after Buffett is no longer in charge.

"In my opinion Warren Buffett is Superman," said Ernie Fierro of Omaha, who has been attending the annual meeting for the last five years.

This aura of invincibility is what keeps investors coming back year after year. In fact, Buffett has said he'll never retire, and suggested he'll work until he dies.

Others made no effort to hide their adulation for the 80-year-old and their eagerness to buy Berkshire's stock -- even four-legged investors.

"You know what, that's not a bad idea, maybe we'll have him buy some shares too," Peck said of her dog.

Not everyone shopping at Borsheims on Friday was a small investor, though. Baba Blumkin of Los Angeles, a descendant of the family that founded Buffett's retailer Nebraska Furniture Mart, was browsing some of the store's higher-end offerings.

Blumkin, who grew up attending Berkshire's annual meetings, agreed Buffett had handled the situation well. Yet, asked what he would ask Buffett if given the opportunity, Blumkin had a slight less pragmatic question than most.

"Is it fun hanging out with LeBron James?" he said.

(Reporting by Ben Berkowitz, editing by Bernard Orr)