Some highlights/notes from the 2017 Annual Shareholder’s Meeting in Omaha (Berkshire Hathaway Annual Shareholder Meeting Notes). Warren Buffett and Charlie Munger discuss the worth of a pound of cure.
Lessons Learned – Warren Buffett And Charlie Munger: A Pound Of Cure (2017 Meeting)
Q4 hedge fund letters, conference, scoops etc
Transcript
The 2017 Berkshire meeting starts with a question on problems which have to be handled promptly says Buffett. If an ounce of prevention is worth a pound of cure then a pound of cure is worth a ton of cure applied late. Competitors don't just go away. It's as if your business is a castle and you try to build a moat which is the competitive advantage and a night inside the castle which is the management Oren's says. They do deals if they think it's a smart idea with all the factors such as opportunity cost and risk factors and deal size and what other people say are not as important. Charlie says the best deal in terms of learning experience was Candy because it showed them what could be achieved and they ended up buying Coca-Cola later because of the candy experience experience and learning over a long period of time leads to wisdom. Charlie Munger says there are still plenty of fish in the sea but also too many boats which means much of the low hanging fruit is gone and they just have to reach a little bit higher. One measuring stick Warren Buffett likes to use is what competitor would you want. Gone for many retailers in 2017 it would have been Amazon Buffett says. Perhaps the most important factor in business is interest rate. If you could know because it would show you the future next newer markets are usually more speculative and when there are visible examples of people making quick money it invites greed. However if other people are doing crazy things you should try to stay away and you can still make lots of money in crazy environments as long as you keep your head about you Buffett goes on say the stock market is there to be taken advantage of. Not to instruct you what to do. Buffett says it's amazing that in certain situation you don't even have to build out infrastructure to start a business. This is a more recent phenomenon. The first rule of phishing is to go where the fish are says Charlie in becoming a great investor it helps to have run a terrible business for a while.
Personally painful experiences assist greatly in learning. Warren Buffett prefers not to invest in businesses that require layoffs and Charlie Munger says just because you're right doesn't mean you should always do it. Furthermore incentive cost bias is huge. You want to get rid of the delusion. People come up with all kinds of justifications for doing what they do when they get something out of it. Warren Buffett says you want to have people who want what's good for you rather than what's just good for them and you could spot this in people over time. Buffett says it's very hard to find a young ambitious and very smart person who doesn't put themselves first. He goes on say that he can surely spot things out and people if it is extreme in either direction. Next Charlie praises the woman saying that she is very wise who takes a proactive and intelligent approach to finding a life partner. Orn and Charlie are not afraid to do big deals if they arise. They would feel comfortable with the billions of dollars invested as long as the opportunity is right on the scuttlebutt method which comes from Common Stocks and Uncommon Profits. You ask intelligent questions to get an idea of the industry.
This method of asking penetrating questions does not necessarily solve everything but simply asking questions can give you a lot of answers. I quote There are ways to get about doing these things. Charlie Munger it's much preferable to live a worthy life. You don't want to be the guy that people say at your funeral. Well his brother was worse. Charlie and or both do not like it. You want to use accurate measuring standards on free Lulume which was all domestic in the past but now is partly overseas. Nonetheless trade is good for prosperity lots of volume doesn't necessarily mean more results. Efficiency is also very important. And finally Charlie Munger when asked about his dream. He says when I'm especially wishful I say to myself oh to be 90 again. But his advice to young people is this if there is something you want to do don't wait until you're 93 to do it. And Warren Buffett instantly agrees with this. Furthermore he says you won't always find it on your first or second try but go find what you would want to do if you had no needs like you had all the money in the world. What would you want to do for the rest of your life. Life must be evaluated backwards but live forwards.
