Value Investing

Great Notes: Warren Buffett’s Meeting with UMD MBA Students

Warren Buffett’s meeting with University of Maryland MBA Students (Notes taken by Professor David Kass, Department of Finance, Robert H. Smith School of Business, University of Maryland and Rahul Shah, MBA student)

Warren Buffett (WB) met with 20 MBA students from each of eight universities, including the University of Maryland, on November 15, 2013.  The MBA students asked 16 questions in the following order:

(1) Has Berkshire Hathaway (BRK) lowered its hurdle rate as it grew larger?

WB: BRK does not have a hurdle rate.  The added capital makes it harder to achieve superior returns.  If I manage $1 million I will get better returns than managing $210 billion (BRK’s net worth).  Size is the enemy of performance.  I would still rather manage $210 billion than $1 million.

By David Kass