As one looks at folksy quotes from Warren Buffet it was interesting to see what has been the reaction to the 2019 Berkshire Hathaway Annual General meeting at the CHI center at Omaha Nebraska where as tradition goes Warren Buffet(88) and Charles Munger (94) answered shareholder questions for 6 hours (link to entire proceedings courtesy Yahoo Finance, below). I am not a stock market buff and I went looking for native wisdom that might have been shared by the two legends. Here is what I found as I read around.
Value investing is still key : Elaborating while answering to a 8 year old as to why he is investing in capital intensive industries like Rail roads and utilities Munger said the utilities and railroad businesses produced “very satisfactory” returns, adding that he wished Berkshire “had two more just like them.” Buffett agreed. On the Amazon investment at this all time high price, Buffet had this to say “Value investing is about estimating and valuing future cash flows, not about how low a Price to Book or a Price to Earnings ratio is for a stock.” Gary Mishuris in Forbes and Jordan Wathen in The Motley Fool.
’Size Is A Drag On Performance’ – the Fact that Berkshire has lagged S&P 500 index for most of last 10 years Buffet noted that “size is a drag on performance” but asserted “Berkshire is better situated than ever”. – Mark Kolakwoski in Investopedia
Buffet was clear about his position Buyout Funds – and holds that sometimes “those returns aren’t calculated in an honest way. He’s normally faulted hedge funds for high fees and it’s interesting to get his thoughts on private equity.” –Katherine Chiglinsky, Bloomberg
Ajit Jain and Gerg Abel, both newly named Vice Chairmen fielded a question each and that was a first indicative pointer to an unanswered question about succession.
No lack of native wisdom – here are some samplers :
On Business Quality:
Charlie Munger: If you take the hundred biggest corporations in the United States in, say, 1900, there is exactly one left alive [among the list of today’s 100 biggest]. But that [turnover on the list] didn’t happen because everything got weak. It happened because the competition and the change got so strong.
On Rationality Vs Behavioral Biases
Charlie Munger:It’s hard to be reasonable. There are a million tricks the human mind plays on its owner. That’s what causes stupidity. Think of how many times you’ve said to yourself, ‘Why in the hell did I do that?’
On learning and evolving:
Warren Buffett: If you want to grow your investment circle of competence you want to read a lot and study a lot of businesses. It is more competitive now than it was when we started investing, but if you build your circle and have the discipline to be patient and do nothing a lot of the time you can still do well.
On Creative Destruction :
There is no need to worry about technology destroying jobs though. The capitalist system is ingenious at achieving ways to get rid of some jobs (e.g. 80% of people were working in farms in the 1800s and were largely replaced by tractors) so as to free people to do other things and ultimately produce more goods per person
Buffett on what he values most in life: “It’s the two things you can’t buy: time and love.”
There is a lot more and I have listed all the links I visited along with the whole recording of the event.
Highlights from the Berkshire Hathaway Annual Shareholders Meeting: Morning Brief – Yahoo Finance https://yhoo.it/2VgM0lX
5 Insights From The 2019 Berkshire Hathaway Annual Meeting / Forbe https://www.forbes.com/sites/garymishuris/2019/05/05/5-insights-from-the-2019-berkshire-hathaway-annual-meeting/#2f0d6b255593
7 Takeaways From The Berkshire Hathaway Annual Meeting – Investopedia https://www.investopedia.com/5-takeaways-from-the-berkshire-hathaway-annual-meeting-4686363
Buffett Faces Kraft Heinz, Amazon Questions at Berkshire Meeting – Bloomberg https://www.bloomberg.com/news/articles/2019-05-04/buffett-faces-kraft-heinz-amazon-questions-at-berkshire-meeting
What were the most important takeaways from Berkshire Hathaway’s 2019 shareholder meeting? – Patrick Benhandan in Quora (He was there) https://www.quora.com/What-were-the-most-important-takeaways-from-Berkshire-Hathaway-s-2019-shareholder-meeting