I think it’s fair to say that Warren Buffett has earned the ears of investors. His track record speaks for itself, and thus thousands of his disciples flock to Omaha every year for the Berkshire Hathaway annual meeting. Knowing that none of you participated in this annual pilgrimage, yet knowing that Buffett (and his sidekick Charlie Munger) usually says something we can all learn from, today we’ll share a few tidbits coming out of the mouth of the ‘The Oracle of Omaha’ this past weekend.
If you’ve never been to a shareholders’ annual meeting, they are as riveting as you might expect. Berkshire’s is, I’m sure, much better than most. Starbucks used to give you a gift card (not anymore).
Before we get to Buffett, here’s a great clip of Danny DeVito speaking at the shareholders’ meeting in “Other People’s Money.” If you haven’t seen the movie, you should. Ok, ok, it is a Romcom if that’s not too big of a hurdle. Now, on to Buffet and Munger, the dynamic (and ageless) duo behind Berkshire Hathaway.
Being a product of the 1980’s I have to admit I see a slight resemblance to a couple of my favorite 80’s characters, Statler and Waldorf.
Or a close second, the Duke brothers from “Trading Places”.
Ok, enough wasting time already (By the way, another good movie from the 80’s).
Here are some takeaways from the annual meeting.
Just to clarify, cars will be electric and self-driving and Apple will be selling the iPhone 52. Will Apple be selling its own car? Buffett doesn’t seem to think so, but we’ll see!
Let’s now look at some other tidbits before we focus in on his comments about the recent turmoil in the banking sector:
There was plenty of “dumb” happening at SVB and other troubled lenders, sending regional bank stocks plummeting (the proverbial “baby with the bath water”). Thankfully the Federal Government was able to come in and “save” wealthy investors and savers from their own bad decisions of putting too much money in one bank (SVB). As we saw above, Buffett agreed with this move, realizing the contagion that could have ensued had they not. One has to wonder what opportunities he found as a “value investor” as “others made bad decisions.” Buffett has never been one to shy away from banks, insurers, and other financial institutions.
Continuing in the banking realm, here’s something I think we can all agree with (if we thought too much about it) –
As for other risks in the economy, they spent some time addressing the commercial real estate (CRE) market.
Here’s a current example in case you has a spare $60 million.
And finally, a further comment on “free” trade, which was quickly highlighted earlier:
As with most things in life, it should be a two-way street. That goes for every trade agreement that is made. The tricky part about trade is each country is looking out for their (perceived) best interests, which makes it difficult to find a perfectly equal benefit.
At 92 and 99, I would say congratulations on a life well-lived. Their track record has been tremendous, aided by one of the greatest bull markets in history. When I said bull market, I would bet you were thinking about the stock market from 1982 – 2000. Don’t get me wrong, that was great, but that was only 18 years. How about a bull market that lasted almost 50 uninterrupted years? I’m talking here about the bull market in bonds, which came about via the persistent downturn in yields that abruptly ended last year.
For now, have a good week. If something doesn’t make sense or you want clarification, let’s talk.