On May 6, 2023, the annual shareholder meeting of Berkshire Hathaway took place in Omaha, Nebraska, lasting for over five hours. The meeting featured Chairman Warren Buffett and Vice Chairman Charlie Munger, who shared their life and investment wisdom accrued through many decades. During the meeting, the nonagenarians cracked jokes and answered dozens of questions on topics such as investment strategy, artificial intelligence, and politics. In this article, we will take a closer look at some of the best moments of this year’s meeting.
Buffett and Munger started the meeting by joking about the coronation of King Charles III in England, which was taking place on the same day. Buffett introduced Munger by referencing the coronation, saying, “When I woke up this morning, I realized that we had a competitive broadcast going out somewhere in the U.K.… They were celebrating a ‘King Charles,’ and we’ve got our own ‘King Charles’ here today.”
What did they discuss about the financial markets?
In his opening statement, Charlie Munger stated that value investors should be prepared for smaller returns as competition intensifies. However, when expressing his views Warren Buffett said there are still opportunities given that many people have a short-term view and often do stupid things in a panic. According to Buffett – “What gives you opportunities is when others do dumb things. In the 58 years we’ve been running Berkshire, I would say there’s been a great increase in the number of people doing dumb things, and they do big, dumb things.”
Munger also criticized the idea of diversification, saying that it’s “insane” to teach that one has to diversify when investing in common stocks. He argued that it’s not easy to have a vast plethora of good opportunities that are easily identified, and if an investor has only three good opportunities, they should stick to their best ideas instead of their worst. Munger also thinks that investors should know themselves and their strengths. He said – “We’re not so smart, but we kind of know where the edge of our smartness is. That is a very important part of practical intelligence. If you know the edge of your ability pretty well, you should ignore most of the notions of the experts about what I call ‘deworsification’ of portfolios.”
Advice from the big investors
When it comes to Berkshire Hathaway in an estate, Munger had a simple piece of advice: “Just hold the godd— stock.” Buffett offered advice on how to live life, spend and invest in a way that isn’t detrimental. According to Buffett: “You should write your obituary and then try to figure out how to live up to it. That’s something you get wiser on as you go along. You just want to make sure you don’t make any mistakes that take you out of the game or come close to taking you out of your game. You should never have a night when you’re worried about investing, assuming you have any money to invest at all. Spend a little bit less than you earn, and you can spend a little bit more than you earn. Then you’ve got debt, and chances are you’ll never get out of debt. I’ll make an exception in terms of a mortgage on your house.”
Warren Buffett also stated that investors don’t need to be experts in the technical aspects of businesses if they can understand fundamentals and commit to always learning. According to Buffett – “We’re interested in owning a wonderful business forever. We do learn a lot as we go along. We’re learning all the time how consumers behave. I’m not going to be able to learn the technical aspects of business. It’d be nice if I knew it, but it isn’t essential. We’ve got a business at Apple. I don’t understand the phone at all, but I do understand consumer behavior. We’re learning all the time, from all of our businesses.
Actually, as always the Berkshire Hathaway annual shareholder meeting provided a wealth of wisdom and humor from the famous duo – Warren Buffett and Charlie Munger. From the importance of knowing your strengths and weaknesses to the value of holding onto good investments and writing your own obituary, the insights shared by these legendary investors are invaluable, especially for anyone interested in finance and investing. While both nearing a centenarian frontier, Buffett and Munger continue inspiring and educating thousands of investors around the globe with their fundamental experience and true wisdom.
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