Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 305

10 quick lessons from Buffett’s 2019 Meeting

Every year, the city of Omaha in the US welcomes thousands of shareholders to Berkshire Hathaway’s Annual Meeting. Before the formal proceedings, Warren Buffett and Charlie Munger take questions from the audience for six or seven hours. These meetings have provided valuable advice for investors and this year was no exception. Here are 10 lessons from this year’s edition:

1. Price paid determines the investment outcome (Warren Buffett)

“You can turn any investment into a bad deal by paying too much. What you can’t do is turn any investment into a good deal by paying little, which is sort of how I started out in this world.”

2. No magic formulas in investing (Warren Buffett)

“We have no formulas around Berkshire. We don’t sit down and have … people work till midnight calculating things and putting spreadsheets together.”

3. If it’s a great company, you should be happy to see lower prices (Warren Buffett)

“What hurts is that [Apple] stock has gone up … we’d much rather have the stock at a lower price so we could buy more.”

4. On investing in Amazon and Google (Charlie Munger) 

"I give myself a pass (for not investing in Amazon). But I feel like a horse's ass for not identifying Google earlier ... We saw it used in our own operations and we just sat there sucking our thumbs."

5. Bitcoin is like roulette (Warren Buffett)

“Imagine people going to stick money on some roulette number … they just do it. Bitcoin has rejuvenated that feeling in me.”

6. Invest in technology only if you understand it (Warren Buffett)

“It is true that in the tech world, if you can build a moat, it can be incredibly valuable. I’ve not felt the confidence that I was the best one to judge that in many cases.”

7. The meaning of value investing (Warren Buffett)

“You’re putting out some money now to get more later on. And you’re making a calculation as to the probabilities of getting that money and when you’ll get it and what interest rates will be in between.”

8. It is possible to be overdiversified (Charlie Munger)

“I have always been willing to own [a concentrated portfolio of] stocks. And I have not minded that everybody who teaches finance in law school and business school teaches that what I’m doing is wrong.”

9. Government bonds may not be the best investment right now (Warren Buffett)

“The low interest rates, for people who invest in fixed-dollar investments, mean that you really aren’t going to eat steak later on if you eat hamburgers now.”

10. Beware of following the herd (Warren Buffett)

“We won’t go into something because somebody else tells us it’s a good thing to do. We are not going to subcontract your money to somebody else’s judgment.”

 

Wilbur Li holds a Bachelor of Commerce (Honours in Finance) from the University of Melbourne. He has worked at Unisuper (global equities) and Yarra Capital Management (equities and fixed income). This article is general information and does not consider the circumstances of any investor.

RELATED ARTICLES

Buffett on markets, cash and seizing opportunities

Three key takeaways from Buffett's annual letter

Buffett's meeting takeaway: extreme caution

banner

Most viewed in recent weeks

Lessons when a fund manager of the year is down 25%

Every successful fund manager suffers periods of underperformance, and investors who jump from fund to fund chasing results are likely to do badly. Selecting a manager is a long-term decision but what else?

2022 election survey results: disillusion and disappointment

In almost 1,000 responses, our readers differ in voting intentions versus polling of the general population, but they have little doubt who will win and there is widespread disappointment with our politics.

Now you can earn 5% on bonds but stay with quality

Conservative investors who want the greater capital security of bonds can now lock in 5% but they should stay at the higher end of credit quality. Rises in rates and defaults mean it's not as easy as it looks.

30 ETFs in one ecosystem but is there a favourite?

In the last decade, ETFs have become a mainstay of many portfolios, with broad market access to most asset types, as well as a wide array of sectors and themes. Is there a favourite of a CEO who oversees 30 funds?

Betting markets as election predictors

Believe it or not, betting agencies are in the business of making money, not predicting outcomes. Is there anything we can learn from the current odds on the election results?

Meg on SMSFs – More on future-proofing your fund

Single-member SMSFs face challenges where the eventual beneficiaries (or support team in the event of incapacity) will be the member’s adult children. Even worse, what happens if one or more of the children live overseas?

Latest Updates

Superannuation

'It’s your money' schemes transfer super from young to old

Policy proposals allow young people to access their super for a home bought from older people who put the money back into super. It helps some first buyers into a home earlier but it may push up prices.

Investment strategies

Rising recession risk and what it means for your portfolio

In this environment, safe-haven assets like Government bonds act as a diversifier given the uncorrelated nature to equities during periods of risk-off, while offering a yield above term deposit rates.

Investment strategies

‘Multidiscipline’: the secret of Bezos' and Buffett’s wild success

A key attribute of great investors is the ability to abstract away the specifics of a particular domain, leaving only the important underlying principles upon which great investments can be made.

Superannuation

Keep mandatory super pension drawdowns halved

The Transfer Balance Cap limits the tax concessions available in super pension funds, removing the need for large, compulsory drawdowns. Plus there are no requirements to draw money out of an accumulation fund.

Shares

Confession season is upon us: What’s next for equity markets

Companies tend to pre-position weak results ahead of 30 June, leading to earnings downgrades. The next two months will be critical for investors as a shift from ‘great expectations’ to ‘clear explanations’ gets underway.

Economy

Australia, the Lucky Country again?

We may have been extremely unlucky with the unforgiving weather plaguing the East Coast of Australia this year. However, on the economic front we are by many measures in a strong position relative to the rest of the world.

Exchange traded products

LIC discounts widening with the market sell-off

Discounts on LICs and LITs vary with market conditions, and many prominent managers have seen the value of their assets fall as well as discount widen. There may be opportunities for gains if discounts narrow.

Sponsors

Alliances

© 2022 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. Any general advice or ‘regulated financial advice’ under New Zealand law has been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892) and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. For more information refer to our Financial Services Guide (AU) and Financial Advice Provider Disclosure Statement (NZ). You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.

Website Development by Master Publisher.