University of Berkshire Hathaway: 30 Years of Lessons Learned from Warren Buffett & Charlie Munger at the Annual Shareholders Meeting
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“Pragmatism! Do what suits your temperament. Do what works better with experience. Do what works and keep doing it. That’s the fundamental algorithm of life – REPEAT WHAT WORKS.”
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Look not what at the numbers are but what the numbers mean.
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growing intrinsic value is much greater than what the accounting reports.
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investors should focus on gains in operating earnings, gains in book value and gains in intrinsic value.
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“You can always tell a man to go to hell tomorrow if it’s such a good idea.”
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the best inflation hedge is a company with a wonderful product that requires little capital to grow.
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Buffett added that being an investor has made him a better businessman and that being a businessman has made him a better investor.
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they didn’t always know this inflation-business element, which shows how continuous learning is so important.
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The FDIC has been a well-designed mutual insurance company.
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any currency investment is a bet on how government will behave.
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Investments in assets that produce something.
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Buffett concluded that he will bet on good businesses to outperform gold.
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Adam Smith, “A great civilization has a good deal of ruin in it.”
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Buffett shared his usual advice that the average investor would do fine to simply buy shares of an index fund over time.
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reduced expectations are the best defense for the investor.
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it was a huge mistake not to learn more from the subprime mortgage debacle.
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past panics and the depression started on Wall Street with great waves of speculation and bad behavior.
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If society needs to save you, you should have very painful penalties.
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Costco has a store in Korea that will do $400 million in revenue – something that one would think cannot exist in retail, yet there it is.
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Costco has the right ethics, diligence and management to continue its winning ways – quite rare.
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he emphasized that he doesn’t mess around with short-term money.
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how critical it was when panic hit in 2008 that Berkshire has the money to do deals. It was not in a money market fund or commercial paper.
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Munger noted that we’re here to go to sleep each day smarter than when we woke up.
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Buffett’s big point was to develop yourself. Find your passion, and improve your skills.
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Munger observed that it is dangerous to go low on fiscal virtue, paraphrasing St. Augustine, “Everyone wants fiscal virtue but not quite yet.”
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follow the Roman example where two-thirds of the Punic Wars were paid off before the war was over.
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The U.S. Fed and Treasury had the power to do whatever it took. In contrast, 17 countries in Europe surrendered their sovereignty with respect to currency.
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The two basic risks he analyzes are excessive leverage and insurance risk.
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Buffett assured shareholders that no one at Berkshire makes him nervous.
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Buffett’s tactic is to assume the worst and price from there.
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Buffett’s key to motivating Berkshire’s managers is giving them room to paint their own paintings.
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Buffett asserted that The Intelligent Investor chapters 8 (Mr. Market) and 20 (Margin of Safety) give you all you need to know. Build into your system that stocks get mispriced.
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“Energy independence is stupid. We want to conserve it and use the other fellow’s resources.” Buffett joked, “This is Charlie’s version of saving up sex for old age.”
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“If you think about business and buy businesses for less than they’re worth, you’re going to make money.”
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Buffett claimed that in 53 years, he and Charlie had never had a discussion about buying a business that included a talk about macro affairs. “If it’s a good business at a good price, we buy it. There is always going to be bad news out there.”
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“We look to buy value. We don’t look to headlines.”
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Buffett suggested that investors stay away from businesses they don’t understand well.
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You want to be able to have a decent idea of what the business will look like in 5-10 years – then wait for a crazy price.
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Munger said to avoid issues with a large commission attached. Instead, look at things other smart people are buying.
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Don’t dwell too much on mistakes. Learn from other people’s mistakes.
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Read the stories of financial follies.
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Risk on Wall Street may be measured with Gaussian curves,
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you can’t afford to go along with the crowd in investment or insurance or a lot of things.”
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Buffett stressed that he and Charlie don’t pay any attention to macro forecasts.
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“To ignore what you know to listen to someone else who doesn’t know, doesn’t make sense.”
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Buffett declared that he thinks the dollar will be the world’s reserve currency for some decades to come.
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While China and the U.S. will be the world’s economic super powers, he thinks it extremely unlikely that any currency will supplant the U.S. dollar.
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it’s a lot easier to buy things sometimes than to sell them.
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“Interest rates are to asset prices sort of like gravity is to the apple.”
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“Interest rates power everything in the economic universe.”