Warren Buffett Talks Business, the Markets, the Dollar and Brands

Includes: BRK.A, BRK.B
by: FP Trading Desk

Saturday’s Annual General Meeting [AGM] may have been a bit thin on information, but private meetings with Warren Buffett produced an abundance of interesting insights and information.

In 1973, the first Berkshire Hathaway annual meeting held in Omaha took place in the lunchroom at the National Indemnity Company. Attendance was less than 20 people. Saturday’s meeting was attended by more than 31,000 shareholders.

From meetings with the Oracle of Omaha himself:

“Contemplating any business act, an employee should ask himself whether he would be willing to see it immediately described by an informed and critical reporter on the front page of his local paper – there to read by his spouse, children, and friends.”

“Of the billionaires I have known, money just brings out the basic traits in them. If they were jerks before they had money, they are simply jerks with a billion dollars.”

“The business schools reward difficult complex behaviour more than simple behaviour, but simple behaviour is more effective.”

“Can you really explain to a fish what it’s like to walk on land? One day on land is worth a thousand years of talking about it, and one day running a business has exactly the same kind of value.”

“The stock market is a semi-psychotic creature given to extremes of elation and despair.”

“Lethargy bordering on sloth should remain the cornerstone of an investment style.”

From the AGM:

“If I was to land on earth in a UFO and I went to the bank for $1 billion in currency, would I put all $1 billion in the U.S. dollar? No.”

“I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.”

“If past history was all there was to the game, the richest people would be the librarians.”

“The ability to say ‘no’ is a tremendous advantage for an investor.”

“We like to buy the business. We don’t like to sell, and we expect the relationship to last a lifetime.”

Regarding Coke (NYSE:KO): “A ‘brand’ is a promise. Ten years ago Richard Branson opened Virgin Cola... That’s an unusual promise. There have been hundreds of colas over the years... Who buys some substitute cola for a couple of cents less? Same goes for brand chocolate bars. We feel reasonably good about our products.”

Regarding the deal to finance Mars’ purchase of Wrigley’s (WWY): “Mars only wanted to do [it] with Berkshire. No lawyers or directors involved. We got a call that made sense. We said ‘yes.’”

[Jeff Hull, a financial and investment advisor with Berkshire Securities Inc. (a subsidiary of Manulife Financial) is the Financial Post’s insider to Warren Buffett and his company’s AGM.]