Top 5 Quotes from Berkshire's Annual Meeting 26 comments
The Manual of Ideas
About this author:
-
Font Size:
-
Print
- TweetThis
More than 30,000 shareholders attended the Berkshire Hathaway (BRK.A) annual meeting on Saturday, with chairman Warren Buffett and vice chairman Charlie Munger once again answering a wide array of shareholder questions.
Here are our Top 5 quotes in three categories:
Top 5 Quotes by Warren Buffett
- On market timing: "We don’t try to pick bottoms. To sit around and not do something sensible because you think there might be something better…. doesn’t make sense. Picking bottoms is not our game. Pricing is our game. And that’s not so difficult. Picking bottoms is, I think, impossible."
- On keeping Berkshire as one entity: "We’ve got this ability in terms of moving money around into various opportunities without tax consequences. So if See’s Candies is a wonderful business, which it is and generates capital that can’t be used in that business - we can use it toward another business…"
- On Berkshire's credit rating: "We’re still a AAA in my mind and in Standard & Poor’s mind."
- On contracts: "We don’t want relationships that are based on contracts. I can’t really think of a formal contract that we have. We have understandings about bonus arrangements with various managers. We have different arrangements because all the businesses are different. We don’t try to hold people by contracts and it wouldn’t work. We basically don’t like engaging in them."
- On government action to save economy: "Overall I commend the actions that were taken. To expect perfection from people working 20 hour days and getting hit by new and sometimes bad information - when you’re getting punched from all sides - you’re not gonna do everything perfectly. I think overall they did a very good job…"
Top 5 Quotes by Charlie Munger
- On the future: "Now that I’m so close to the age of death - I am getting more cheerful about the economic future. What I find cheerful is that we will be able to harness the energy of the sun and have electric power. That will enable countries to turn sea water into fresh."
- On China: "Their rate of advance is so great and meaningful that if they lost a bit of their purchasing power on their dollar holdings - it’s a trifle for them. They’re going to be very hard to compete with - all over the world. I think the U.S. and China should be very friendly nations. We’re going to be joined at the hip."
- On executive compensation: "I would argue that a liberally paid board of directors is counterproductive. You keep raising me and I keep raising you. It gets very club-like."
- On Berkshire's relationship with its operating unit leaders: "Our model is a seamless web of trust that’s deserved on both sides. That’s what we’re aiming for. The Hollywood model where everyone has a contract and no trust is deserved on either side is not what we want at all."
- On the credit ratings agencies: "I think the ratings agencies eagerly sought stupid assumptions that enabled them to do clever mathematics. It’s an example of being too smart for your own good."
Top 5 Quotes on Public Companies
- Buffett on General Electric (NYSE: GE): "GE is a very,very important American institution."
- Munger on Bank of America's (NYSE: BAC) purchase of Merrill Lynch: "You can criticize the decision of BAC to buy Merrill and the contract they signed. But once they had signed that contract - I think Treasury behaved honorably and so did Bank of America."
- Buffett on selling Johnson & Johnson (NYSE: JNJ) to buy into Goldman Sachs (NYSE: GS): "We got a call on Goldman on a Wednesday [in September 2008] - that couldn’t have been done the previous Wednesday or the next Wednesday. We were faced with opportunity-cost - and we sold something that under normal circumstances we wouldn’t - J&J."
- Buffett on dealing with investee companies, and on the business of Moody's (NYSE: MCO): "I don’t think I’ve ever made a call to Moody’s. We don’t tell Burlington Northern (NYSE: BNI) what safety procedures to put in or AmEx who they should lend to. When we own stock - we are not there to try and change people. If you buy stock in a company - better not count on fact that you’ll change their course of action.In terms of selling the stock [Moody's] - the ratings agency business is still good -but subject to attack. It’s a biz with very few people in it - it affects large segment of the economy. I think there will be ratings agencies in the future and doesn’t require capital. ..It has fundamentals of a pretty good business."
- Buffett on use of balance sheet analysis when valuing Coca-Cola (NYSE: KO): "If you look at Coca-Cola today, for example, and just looked at a balance sheet, it wouldn’t tell you anything at all about Coca-Cola,” the billionaire investor said. “It’s what the product is."
Note: The above quotes are sourced from notes and published sources believed to be reliable. However, some of the quotes may be paraphrased.
Disclosure: Affiliates of The Manual of Ideas have a long position in BRK.B. No positions in any other companies mentioned in this article.
Related Articles
|
-
The Seeking Alpha 100
See allThe top 100 stock
market authors
selected for publication
Seeking Alpha 100 » -
Fastest Climbers
Authors with the largestSee all
increase in followers
in the last 7 days
Fastest Climbers » -
Top Commenters
Top commenters,See all
as ranked by their peers
Top Commenters » -
Top Instabloggers
The 100 most active
Instabloggers.-
1
David Fry
-
2
TraderMark
-
3
Don Dion
-
4
Cliff Wachtel
-
5
Mike Havrilla
Top Instabloggers » -
1
-
Top StockTalkers
TopSee all
StockTalkers.
Top StockTalkers »
This article has 26 comments:
www.wealthalchemist.co.../
Does he think that is still going to happen?
The author of the piece in your link mentioned that the 70's was a time of stagflation. The term "stagflation" is not mentioned in the transcript.
WB remains positive on economic prospects, as this helpful summary indicates.
On May 03 07:01 AM chleoku wrote:
> Any further words on Buffett's view on the Stagflation that we are
> heading to?
>
> www.wealthalchemist.co.../
>
>
> Does he think that is still going to happen?
>
I have noticed that Buffett is increasingly avoiding common equity and lending out Berkshire money for high interest preferreds and warrants. Berkshire also put a lot into COP, a commodity based stock.
IMHO: I think Buffett knows governments have screwed up the monetary gears, ....but being publicly negative about government has no positive consequences, ...and is not doing yourself a favor.
On May 03 12:41 PM Jeff Miller wrote:
> WB did not say that we are headed into stagflation. The CNBC transcript
> cites him as follows: "Inflation has the "potential" to be worse
> than the 1970s." www.cnbc.com/id/29592831
>
> The author of the piece in your link mentioned that the 70's was
> a time of stagflation. The term "stagflation" is not mentioned in
> the transcript.
>
> WB remains positive on economic prospects, as this helpful summary
> indicates.
He cannot comprehend what is going on right now, any better that any of the rest of us, or else he is just as worried as the rest of us but doesn't want to admit it as a fully invested, perennial long. All good things really must come to a end it seems.
Buffett, Gates, Jobs, the Google guys, Soros, Woz, and the other great capitalists are all afflicted by "white guilt" because normally they would have voted for the party that bankrupted the country and launched a worthless war all in the interest of maintaining a 35% income tax rate which doesn't affect them anyway.
Thanks for your blazing insight.
Sure, buy and hold works great when money is cheap and credit is expanding. But, had you bought one share of Berkshire ten years ago you would be about even today. That is only because the dollar has fallen so much that inflation has "kept you even".
Had you invested the same $90,000 in 1999 in gold, today you would have over $300,000.
I understand Munger's point here but it's still pretty dodgy. BAC had every right to back out of that agreement, legally, morally, and honorably - even if Lewis was a schmuck for signing it.
And altaman, seriously... Buffett is a Democrat.
Let's try January 1980. Berkshire is up from 300s to 93,000 even after a big dip, up about 290x. Does that beat inflation?
Gold has gone from $850 at its all-time high back then, to, hey, $904. Does that beat inflation?
So, if you had invested $85,000 in gold back in 1980, you'd have $90,400 today (forgive my math skills). You'd have been better off in treasuries (not that I'd be buying treasuries these days per se-well, maybe for a brief pull back in the stock market return of some fear trade). If you had invested $85,000 in berkshire back then you'd have $24,722,515.00. Give or take.
Past isn't necessarily prologue, do your own dd, future results may vary, this is not an offer to sell, nor a solicitaion of an offer to buy, the offer is only made by prospectus...
Love the avatar by the way. So does Joe Kernen.
And best of luck, ole yeller horde.
On May 03 08:29 PM yellowhoard wrote:
> Buffet, like most people his age, don't want to admit that they prospered
> from this massive ponzi scheme that is collapsing around us.
>
> Sure, buy and hold works great when money is cheap and credit is
> expanding. But, had you bought one share of Berkshire ten years ago
> you would be about even today. That is only because the dollar has
> fallen so much that inflation has "kept you even".
>
> Had you invested the same $90,000 in 1999 in gold, today you would
> have over $300,000.
>
Pepsi and Union Pacific are two stocks that I own that come to immediate mind.
Mr Dividend, can you please inform us on what dividend paying stocks you have purchased that haven't tumbled. I'm so very curious.
On May 04 11:24 AM dividendgrowthinvestor wrote:
> Buffett has made over 100 billion investing for him and his partners
> >who else is even close. I built a dividend machine to help me achieve
> financial independence by studying his words and tempermant
Perhaps gold will do better than BRK over the next 5-10-15 or 20 years. I am sure yellow hoard thinks so.
Disclosure: No position in either. Ever. Although I don't think having some gold or other precious metal as an inflation hedge is necessarily a bad idea.
On May 04 10:41 AM wobatus wrote:
> Hey, it's fun with cherry picking dates time.
>
> Let's try January 1980. Berkshire is up from 300s to 93,000 even
> after a big dip, up about 290x. Does that beat inflation?
>
> Gold has gone from $850 at its all-time high back then, to, hey,
> $904. Does that beat inflation?
>
> So, if you had invested $85,000 in gold back in 1980, you'd have
> $90,400 today (forgive my math skills). You'd have been better off
> in treasuries (not that I'd be buying treasuries these days per se-well,
> maybe for a brief pull back in the stock market return of some fear
> trade). If you had invested $85,000 in berkshire back then you'd
> have $24,722,515.00. Give or take.
>
> Past isn't necessarily prologue, do your own dd, future results may
> vary, this is not an offer to sell, nor a solicitaion of an offer
> to buy, the offer is only made by prospectus...
>
> Love the avatar by the way. So does Joe Kernen.
>
> And best of luck, ole yeller horde.
Best of luck, Salvador.
On May 04 12:32 PM Salvador wrote:
> A lot of my dividend paying stocks have taken a monumental tumble,
> and the dividend pay outs don't even begin to make up for the total
> loss.
>
> Pepsi and Union Pacific are two stocks that I own that come to immediate
> mind.
>
> Mr Dividend, can you please inform us on what dividend paying stocks
> you have purchased that haven't tumbled. I'm so very curious.
I'm thinking Brady Bunch orange jump suit with a lime green cowboy hat.
We right wing knuckle draggers need to raise the bar, style wise, for the maoist zombies running about these days.
IMHO
On May 04 10:41 AM wobatus wrote:
> Hey, it's fun with cherry picking dates time.
>
> Let's try January 1980. Berkshire is up from 300s to 93,000 even
> after a big dip, up about 290x. Does that beat inflation?
>
> Gold has gone from $850 at its all-time high back then, to, hey,
> $904. Does that beat inflation?
>
> So, if you had invested $85,000 in gold back in 1980, you'd have
> $90,400 today (forgive my math skills). You'd have been better off
> in treasuries (not that I'd be buying treasuries these days per se-well,
> maybe for a brief pull back in the stock market return of some fear
> trade). If you had invested $85,000 in berkshire back then you'd
> have $24,722,515.00. Give or take.
>
> Past isn't necessarily prologue, do your own dd, future results may
> vary, this is not an offer to sell, nor a solicitaion of an offer
> to buy, the offer is only made by prospectus...
>
> Love the avatar by the way. So does Joe Kernen.
>
> And best of luck, ole yeller horde.
On May 04 03:23 PM yellowhoard wrote:
> We right wing knuckle draggers need to raise the bar, style wise,
> for the maoist zombies running about these days.
>
> IMHO
All the best.
On May 04 03:23 PM yellowhoard wrote:
> Tell Kernen that he needs to dress more flamboyantly. That small
> town Ohio look is so last year.
>
> I'm thinking Brady Bunch orange jump suit with a lime green cowboy
> hat.
>
> We right wing knuckle draggers need to raise the bar, style wise,
> for the maoist zombies running about these days.
>
> IMHO
Like punch drunk boxers, they don't know when to hang up the gloves. While it's true that Buffet is leaving everything to the Bill & Melinda Gates Foundation, I believe there is an ulterior motive...like keeping Uncle Sam's hands off the pot!
Also, there is nothing philanthropic about transfer of wealth from one billionaire to another billionare monopolist.
Warren is a good business man, and practical, but he is a hypocrite when it comes to politics.
Munger is wise, and integrated.
Of course, as I stated above, since 1979, berkshire has returned 290x. Boy, if you went back to ITS ipo...nevermind.
No one is claiming Berkshire is a philanthropy. Mr. Buffett is philanthropic with his money that he gains thereby. You can quibble with his choices for bestowing his largesse, or his politics.
The point raised was whether he "makes" anything. Well, the maker of bobble-head dolls makes something, and i imagine the net utiles of pleasure in the world may increase thereby. Buffett et al allocate capital and in general has done it well, and he has done it well apart from inflation or some grand supercycle. You may not like paying for his geico car insurance, drinking his brown sugar water or reading a sanborn map to get from here to there, but there ya go...he would be poor if the products he invested in were not bought by people who have made their own decisions about whether they are worth their dollars, inflated or otherwise.
There are likely benefits to his capital allocation aside from just shunting money from one billionaire to another, although Andy Kessler might agree with you.
On May 05 04:31 AM Yoon Kim wrote:
> If you had invested in MSFT in the 1980s you'd be up more than twice
> that of Berkshire.
>
> Also, there is nothing philanthropic about transfer of wealth from
> one billionaire to another billionare monopolist.
This may be wrong, but he ws buying berkshire shares before he took control, and I saw somewhere that when he took over it was trading at about $15. This is 1965 I think, but I am not going for absolute accuracy here.
The return to today from $15 would be 6276. MSFT would have to go up about 25x over the next 20 some odd years to match. And of course, it is now paying a dividend. BRK doesn't.
Thankfully, no one is putting a gun to your head and saying you can't own both, or you can't ignore both.
Has msft added more to the world? well, some techies would say emphatically no.
On May 05 10:26 AM wobatus wrote:
> Well, I hate to be picayune, but msft actually returned 251x since
> the close of its first trading day, 3/13/1986, berkshire "only" 29x.
> You did say more than twice, so technically correct. Quite a bit
> more.
>
> Of course, as I stated above, since 1979, berkshire has returned
> 290x. Boy, if you went back to ITS ipo...nevermind.
>
> No one is claiming Berkshire is a philanthropy. Mr. Buffett is philanthropic
> with his money that he gains thereby. You can quibble with his choices
> for bestowing his largesse, or his politics.
>
> The point raised was whether he "makes" anything. Well, the maker
> of bobble-head dolls makes something, and i imagine the net utiles
> of pleasure in the world may increase thereby. Buffett et al allocate
> capital and in general has done it well, and he has done it well
> apart from inflation or some grand supercycle. You may not like paying
> for his geico car insurance, drinking his brown sugar water or reading
> a sanborn map to get from here to there, but there ya go...he would
> be poor if the products he invested in were not bought by people
> who have made their own decisions about whether they are worth their
> dollars, inflated or otherwise.
>
> There are likely benefits to his capital allocation aside from just
> shunting money from one billionaire to another, although Andy Kessler
> might agree with you.
>
>