We’re at the Berkshire Hathaway meeting!
I’ll summarize the AGM live via this thread:
I’ll summarize the AGM live via this thread:
1. Capital allocation is the key task of Charlie and Warren.
Berkshire Hathaway will still be a good investment for the next 50 years.
Berkshire Hathaway will still be a good investment for the next 50 years.
2. Operating earnings will be significantly higher 10 years from now.
3. Float remains a key pillar for Berkshire’s success.
3. Float remains a key pillar for Berkshire’s success.
4. Even Warren and Charlie make bad investment decisions plenty of times. The key is to try to stay as rational as possible.
5. The main challenge for Geico in the near term is to improve the technology they use.
5. The main challenge for Geico in the near term is to improve the technology they use.
6. The railroad industry is a beautiful industry to invest in. The future looks bright for BNSF.
7. Munger is sceptic about AI. Human intelligence is way more important and will remain crucial in the investment world. Buffett adds that AI can change everything in the world…
7. Munger is sceptic about AI. Human intelligence is way more important and will remain crucial in the investment world. Buffett adds that AI can change everything in the world…
8. Value investing will become harder because the market is getting more competitive.
“I would advise value investors to be happy with lower returns in the future.” - Munger
9. The best opportunities arise when other people are doing dumb things.
“I would advise value investors to be happy with lower returns in the future.” - Munger
9. The best opportunities arise when other people are doing dumb things.
10. The main disadvantage of Berkshire is its size. There are plenty of opportunities in small and mid caps.
11. The world is heavily focused on the short term. This gives plenty of opportunities for people who think on the long term.
11. The world is heavily focused on the short term. This gives plenty of opportunities for people who think on the long term.
12. “At Berkshire we have a very simple estate planning: just hold the goddamn stock.” - Munger
13. If you want to find the solution for a complex problem, just reverse engineer.
13. If you want to find the solution for a complex problem, just reverse engineer.
14. The energy transition will be a long journey. The capital and people are there. All states should work together to achieve Net Zero.
15. All we do is allocating capital. We want companies with good management in place to run daily operations. Skin in the game is very…
15. All we do is allocating capital. We want companies with good management in place to run daily operations. Skin in the game is very…
16. Never bet against America is still valid today. The future looks bright.
17. Berkshire will always hold a boatload of cash. It gives flexibility at inconvenient times.
17. Berkshire will always hold a boatload of cash. It gives flexibility at inconvenient times.
18. Stock market corrections will happen all the time. It can offer big investment opportunities.
19. We feel no pressure from Wall Street, don’t do investor calls, … and this allows Berkshire to be very successful.
19. We feel no pressure from Wall Street, don’t do investor calls, … and this allows Berkshire to be very successful.
20. We learned a lot from buying See’s Candies. You want to buy wonderful businesses at a fair price.
21. The best thing an investor can do is to learn all the time. Knowledge compounds too.
21. The best thing an investor can do is to learn all the time. Knowledge compounds too.
22. We can tell in 10 seconds whether a business might be attractive. You should try to find a reason to say ‘no’ as soon as possible.
23. Berkshire is trying to build long term relationships with Japanese companies as it might offer long term investment opportunities.
23. Berkshire is trying to build long term relationships with Japanese companies as it might offer long term investment opportunities.
24. Apple is a beautiful company. It’s one of the best businesses Berkshire owns according to Buffett.
25. Diversification is only useful for those who don’t know what they’re doing.
25. Diversification is only useful for those who don’t know what they’re doing.
26. The key to investing is staying within your circle of competence and stay humble. Don’t overestimate yourself.
27. Munger stated that the US should go along with China. Protectionism doesn’t help the economy.
27. Munger stated that the US should go along with China. Protectionism doesn’t help the economy.
28. Buffett about selling TSMC: The fact that TSMC is located in Taiwan is too risky for us. We would like to have the same kind of company based in the US.
29. When you combine a sustainable competitive advantage with great managers, you get something magical.
29. When you combine a sustainable competitive advantage with great managers, you get something magical.
30. Buffett about Graham: Graham helped me plenty of times without expecting anything in returns. It shows you the power of giving.
31. The book Security Analysis from Graham is still highly relevant today. Everyone should read it.
31. The book Security Analysis from Graham is still highly relevant today. Everyone should read it.
32. The most important thing in investing is avoiding stupid mistakes.
33. Index funds are great investment tools because the costs are so low.
33. Index funds are great investment tools because the costs are so low.
34. Buffett states that Greg Abel understands capital allocation as well as he does. Capital allocation is by far THE most important task of management.
35. Skin in the game is very important. Buffett has 99% of his net worth in Berkshire Hathaway.
35. Skin in the game is very important. Buffett has 99% of his net worth in Berkshire Hathaway.
36. The secret of business is to buy good businesses. Quality matters.
We’ll now have a 1 hour lunch break in Omaha.
We’ll now have a 1 hour lunch break in Omaha.
37. Munger on bankers: “I don’t think it helps that they all try to get rich for themselves. The less bankers and wealth managers there are, the better.”
38. About leverage: those who are smart don’t need it and those who aren’t smart shouldn’t use it.
38. About leverage: those who are smart don’t need it and those who aren’t smart shouldn’t use it.
39. Envy is your worst enemy. It’s truly toxic.
40. You never should try to predict the market or make economic forecasts.
40. You never should try to predict the market or make economic forecasts.
41. “Printing more money will become counterproductive for our economy at some point.” - Munger
42. “Cryptocurrencies are a joke. It’s madness.” - Buffett
42. “Cryptocurrencies are a joke. It’s madness.” - Buffett
43. You want to own assets that earn money for you while you sleep. Gold and crypto don’t earn money for you.
44. The best investment is always one in yourself.
44. The best investment is always one in yourself.
45. We prefer to buy entire businesses, write a check, and keep management in place.
46. It’s good to learn from your own mistakes, but it’s even better to learn from the mistakes of other people.
46. It’s good to learn from your own mistakes, but it’s even better to learn from the mistakes of other people.
47. Never use credit card debt. Invest a certain % of your income every month and you’ll become very wealthy.
48. Be as kind as you can. The best thing a human being can do is to help another human being.
48. Be as kind as you can. The best thing a human being can do is to help another human being.
49. Try to keep learning all your life and do a lot of delayed gratification. If you do this, you’re almost certain to succeed.
50. “Get toxic people the hell out of your life. And do it fast.” - Munger
50. “Get toxic people the hell out of your life. And do it fast.” - Munger
51. Buy stocks that you want to own forever.
52. Management should not be in for the money. They should love the business more than their salary.
52. Management should not be in for the money. They should love the business more than their salary.
53. It’s better to hire someone with an IQ of 130 who thinks he has an IQ of 100 than to hire someone with an IQ of 150 who thinks it’s 170.
54. Elon Musk is a brilliant business man. He wouldn’t have achieved what he has today if he didn’t dream so big.
54. Elon Musk is a brilliant business man. He wouldn’t have achieved what he has today if he didn’t dream so big.
55. If we think Berkshire is worth more than the stock price, we’ll buy back more shares. However, in general we’re just trying to buy great businesses.
56. Interest rates are as gravity on earth. Higher interest rates hurt stock price valuations and vice versa.
56. Interest rates are as gravity on earth. Higher interest rates hurt stock price valuations and vice versa.
57. “Show me the incentive and I’ll show you the outcome.” - Munger
58. Selling your time for money is not the best use of your time.
58. Selling your time for money is not the best use of your time.
59. Do something you love, and you’ll never have to work one day in your life.
60. If you’ve found a great business, the best time to sell is almost never.
60. If you’ve found a great business, the best time to sell is almost never.
61. About the acquisition of $ATVI: if it doesn’t go through, it isn’t because of any shortcoming of Microsoft or Activision.
62. There is nothing like working for yourself. It’s the ultimate source of freedom.
62. There is nothing like working for yourself. It’s the ultimate source of freedom.
63. Luck plays a very important role in life.
64. See’s Candies is more than 100 years old right now and it has magic. It was our first wonderful business at a fair price.
64. See’s Candies is more than 100 years old right now and it has magic. It was our first wonderful business at a fair price.
65. “The 1932 annual reports of General Motors is one of the best reports I’ve ever read.” - Buffett
66. Berkshire prefers to invest in companies with low capital costs
66. Berkshire prefers to invest in companies with low capital costs
67. Jerome Powell is doing an excellent job at the FED according to Buffett
68. Buffett doesn’t worry too much about the balance sheet of the US government.
68. Buffett doesn’t worry too much about the balance sheet of the US government.
69. Cash, though, is to a business as oxygen is to an individual: never thought about when it is present, the only thing in mind when it is absent.
70. You want to invest in companies that report their results in an integer and honest way.
70. You want to invest in companies that report their results in an integer and honest way.
That was it for the Berkshire AGM!
We’ll now head to an YPO Event with @CunninghamProf, @vitaliyk, Thomas Russo and Tom Gayner.
I’ll keep you guys posted about this event too via this thread.
We’ll now head to an YPO Event with @CunninghamProf, @vitaliyk, Thomas Russo and Tom Gayner.
I’ll keep you guys posted about this event too via this thread.
We’ll now start the YPO Event:
1. Never ever compromise on quality when making investment decisions.
2. Strong brands and pricing power are essential for companies to protect themselves against inflation.
2. Strong brands and pricing power are essential for companies to protect themselves against inflation.
3. You can never predict things, but you can prepare for it.
4. Never look at earnings. Look at cash flow.
4. Never look at earnings. Look at cash flow.
5. Expose yourself to people you trust which have a different point of view.
6. Companies need quality shareholders: investors with a long term mindset.
6. Companies need quality shareholders: investors with a long term mindset.
7. Capital allocation is the most important and way hardest task for management as well as investors.
That’s it for this wonderful day.
We’ll send a document with everything we’ve learned from the Omaha weekend soon.
Sign up here to receive it:
eepurl.com
We’ll send a document with everything we’ve learned from the Omaha weekend soon.
Sign up here to receive it:
eepurl.com
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