Grateful to have spent the entire day with CEO Founder Warren Buffet, the third wealthiest person in the world. Attending his annual shareholder meeting provided life long lessons. Most significant was Warren’s long dialogue on TIME. Warren said, “When you have more money than you can ever spend, the only thing you wish for is more time.” He loves what he does and would not do anything else, but wishes he had more TIME to do it. This same sentiment was echoed in the recent box-office smash, Avengers Endgame, as one character said to another, “No amount of money ever bought a second of time.” So true.
Mr. Buffet is now 88 years old with a net-worth of $89B, which ranks him the third wealthiest out of 7.7 billion people. The chairman and CEO of Berkshire Hathaway, Warren has sat on over twenty publicly traded board seats. Charlie Munger, vice chairman, is 95 and lives by these words of wisdom, “Figure out what works in life and do it.”
Bill Gates, Buffett’s dear life long friend, also attended the meeting. Mr. Gates is the wealthiest person in the world, fourth largest shareholder of Berkshire Hathaway and appointed a board seat at the meeting. Berkshire’s largest holding is currently Apple computer, owning 5% of the company. Warren would like to own more shares but feels the company is fairly valued at this point. A wonderful and humorous video was presented showcasing Warren Buffet and Apple’s CEO Tim Cook.
Buffett also started buying shares of technology behemoth Amazon and feels the company is a value play based on all the due diligence and metrics Berkshire Hathaway employs.
Berkshire Hathaway’s focus is long term, believing delayed gratification is essential for successful investing. They don’t create monthly P&L statements, considering them not worth the time and energy. Their investment philosophy is to invest in dominant companies and industries they know well, to get a high batting average. Warren and Charlie both feel you don’t need to own fifty companies, only a handful that you know very well.
Plentiful spirited dialogue occurred around the $116B sitting idle in cash, the top detractor of performance over the last decade. Berkshire Hathaway has underperformed the S&P 500 over the last one, three, five, ten and fifteen year periods. Warren likes having cash for timely opportunistic investments. The problem with keeping that large of a cash position is opportunity cost, which had led to the partnership’s under performance. He mentioned that his successor may place the cash into an S&P 500 index fund.
Discussion ensued on Berkshire Partnership and willingness to buy more of the partnership shares. Bottom line is they won’t buy more shares unless they can buy at a discount, otherwise, it would not be rewarding to shareholders.
Buffett touched on insurance companies, describing how he likes them for the float – receive premiums up front, make payments later, and keep and invest the premiums to make money. The big differentiator between insurance companies is the operator, a good one being a “must”.
Warren also focused on capitalism, our incredibly innovative country and the creation of new jobs. The US currently has 160M jobs, more than ever in history. Just as we replaced 90% of farm jobs 150 years ago, our system will continue to innovate. That is capitalism.
For those of you that have yet to attend a meeting with Warren Buffet and Charlie Munger, I would highly recommend it. The only requirement is to own one share of Berkshire Hathaway.
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