The Annual Meeting

Patience was the order of the day. When I wanted to get up and walk around I reminded myself that that man and the people in that room were willing to sit, listen, and wrestle with the questions, large and small, for whatever wisdom and understanding could be gleaned. What better company could I get this Saturday morning?

I try to think about what I learned, in no particular order.

  1. Warren in slow motion, circling more slowly, though just as widely, as he did before b he honed in on his ultimate point. At first, I took that it as a deficit but I actually gained from glimpses into his inner logic. In slow motion. I’ll have to rewatch parts of it.
  2. He revealed a lot in the old-time stories he told and wanted Charlie to recount some of his own stories. It appears Charlie’s personality and way of confronting bs was a great attraction to Buffett, considering Warren’s more peaceable personality. I’m sure he learned a lot about how to deal with difficult people and situations under Charlie’s tutelage.
  3. He handled Calpers masterfully. Long meandering Colombo-ing until he gently skewered them with their hidden agenda – even to them – and their arrogance. But face them down, directly, he did. How many people do you know that could do that, in public, so directly, so well?
  4. The firehorse/arbitrage thing. Funny how he wanted credit for it. Competitive. Something to think about.
  5. He wanted shareholders to know that he had constructed Berkshire Hathaway to withstand anything short of nuclear war.
  6. As for the state of the world—why discuss it? There are crazy people in the world and there is nothing you can do about it except go about your business as best you can. Focus what you can do something about.
  7. Disraeli may be right, but some anecdotes are valuable.
  8. He is using his position with grace, relating as much about his thinking as he can for the people it will matter to.
  9. Ajit’s biggest concerns are that insurance will be held liable for losses due to acts of sabotage and war.
  10. Greg is able.
  11. I appreciated his using images of the big aha!, the gestalts of perception. Seeing something a particular way and not being able to see that it may be something different than it appears. That he had pictures of this tells me that these experiences are central to his creativity/success. His realization that he had been looking at stocks completely wrong until he read Chapter 8 was an aha! moment. I postulate that it’s still possible to look at stocks that way even after reading chapter 8, if you haven’t the requisite experience to receive that information. Or in my case, forget and start reading Saul’s board.

I’m struck by how lucky I was to have met Buffett in the mid-90’s and to have been exposed to Charlie then, too. Knowing nothing about stocks, et al, it was a great time to learn from those masters. They were active in the media and there was a lot of video. The AOL board was just beginning and there were amazing people to be found there. Charlie’s reading lists were making the rounds and it was possible to pick up some pieces of Charlie’s lattice-work of concepts that makes investing part of worldly wisdom. And to learn how important worldly wisdom is beyond investing.

It was a great learning experience to watch the internet bubble build and burst as I read, MacKay’s, Extraordinary Popular Delusions, for the first time.

The pandemic interrupted and made small my world. I didn’t see Charlie and Warren so often on TV, or not at all. I got fomo reading the Saul board.

Happy to be reminded of what Warren and Charlie stand for as far as investing is concerned and am reminded to re-read The Intelligent Investor and some of the books that I wasn’t ready for, at the time.

If nothing else, seeing Warren and Charlie, together, with Becky, and the crowd milling around in the buying area, hearing about See’s Candy and visiting Clayton Homes, learning about Benjamin Moore paint—even via the internet, reminds me, again, of the importance of what I learned from Warren and Charlie and all the people that make this thing possible. Love and gratitude. Old and slow, but well-loved.

Patience. Things change, but principles endure.

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Jain made some good points in response to acts of war and nuclear events that seemed like Buffett cut off and glossed over with a ‘Oh well, we’ll all be dead anyway’. I thought it sounded quite dismissive. There are lots of war scenarios, including nuclear acts, that leave insurers with massive losses, but the US relatively intact. It’s clear Ajit Jain has thought about these scenarios more than Buffett, and that Buffett should have deferred.

I appreciated the response to the buyback procedures. Buffett clarified that Berkshire’s stock repurchases aren’t following a “buy more if the price is lower” procedure, but rather follow the same “buy x% of shares traded on the open market” that he introduced in the interview with Charlie Rose. I’m still processing what his comment on there being no repurchases in April means. Whether it was a break because of the upcoming 1st quarter earnings report, or if it was value-based.

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He is saying we have smart shareholders who don’t want to sell so if he buys a little it will move the prices — unlike if he buys OXY. So he can only buy if there’s a big seller out there and he’s definitely not going to get to buy shares if he tells everyone in the AGM what formulas he’s using. So he will just going to buy when there’s big selloffs and only if he can’t buy another company’s share for cheaper price.

But impo, my take away is he is going to do more buy backs and that’s why he’s “rambling” all these reasons.

Same on the question about inflation. I think he’s saying this inflation is not necessarily bad for the stock market. He stops at saying he want to buy more stocks.

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Beginner, I mostly agree with all your 11) thanks. And, like so many here I’d expect, I too have had a similar two-decade-plus experience… “reminds me, again, of the importance of what I learned from Warren and Charlie and all the people that make this thing possible. Love and gratitude. Old and slow, but well-loved.”

Your thoughts almost made me tear-up.

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Thank you, miLucky.

It’s hard for me not to tear up whenever I see them or listen to them talk–every time.

I know others are more interested and competent with numbers but the Berkshire character and logic are the things I understand and value. And Warren talked a lot about that in those days. I didn’t go to college or come from much, so my first $32,000 A share was an investment in my financial education and character. I’m in B’s now, because it wasn’t a linear thing. But I’ve learned a lot.

I tend to be a misanthrope, like Charlie, though. “Can’t help it.”

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His realization that he had been looking at stocks completely wrong until he read Chapter 8 was an aha! moment. I postulate that it’s still possible to look at stocks that way even after reading chapter 8, if you haven’t the requisite experience to receive that information.
If you don’t mind me asking… Chapter 8 of what? I’m guessing The Intelligent Investor or Graeme & Dodd but it’d be great to know (to add to my read / re-read list when they show up again).

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WEB on “The Intelligent Investor” From 1996 meeting…

“ You know, I obviously recommend, first and foremost, [Benjamin Graham’s] “The Intelligent Investor,” with chapters eight and 20 are the ones that you really should read.

Two of the — well, all of the important ideas in investing, really, are in that book, because there’s only about three ideas. And those — two of them are emphasized in those two chapters.

Actually, I think John Train’s “Money Masters” is an interesting book.

I don’t know. Can you think of any others, Charlie, that we want to tout? (Laughs)

CHARLIE MUNGER: I don’t know. We have such a fingers-and-toes style around Berkshire Hathaway. (Laughter) So you sort of count.

WARREN BUFFETT: The three —

CHARLIE MUNGER: I’ve never seen — you know, Warren talks about these discounted cash flows. I’ve never seen him do one. (Laughter and applause)

WARREN BUFFETT: Yeah.

CHARLIE MUNGER: If it ever —

WARREN BUFFETT: There are some things you only do in private, Charlie. (Laughter)

CHARLIE MUNGER: If it isn’t pluperfect obvious that it’s going to work out well, if you do the calculation, he tends to go on to the next idea.

WARREN BUFFETT: Yeah, it’s sort of — it is true. You don’t — if you have to actually do it on — with pencil and paper, it’s too close to think about. I mean, it ought to just kind of scream at you that you’ve got this huge margin of safety.

I mentioned the three ideas. The three ideas, I should elaborate on. One is that — to think of yourself — to think of investing as owning a business and not buying something that wiggles around in price.

And the second one is your attitude, which ties in with that, the attitude toward the market, that’s covered in chapter eight. And if you have the proper attitude toward market movements, it’s an enormous help in securities.

And the final chapter is on the margin of safety, which means, don’t try and drive a 9,800-pound truck over a bridge that says it’s, you know, “Capacity: 10,000 pounds.” But go down the road a little bit and find one that says, “Capacity: 15,000 pounds.”

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Yes, Intelligent Investor.

I’m actually not sure he was talking about BRK buybacks when he made that comment. It’s worth re-watching.