Key Takeaways from Berkshire Annual Meeting 2022
Buffett & Munger are sharp as ever!
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Hey 👋 - Thomas here.
Good day to my fellow compounders!
As promised, here are my key takeaways from Berkshire’s annual meeting 2022.
Great to see Warren & Charlie being sharp as ever.
If this has been helpful to you, I will appreciate it if you could share it online or with your friends!
Let’s dive in.
1. The stock market has become noisier than ever
Institutions make money from you buying & selling.
They want to teach you how to trade these call & put options.
There has been an explosion of options used for gambling activities.
But this crazy activities gave opportunities.
2. Progressive has done a better job than GEICO in recent years.
Both in terms of margins and growth rate.
The biggest reason is Progressive's telematics for segmentation in matching rate and risks.
It will take a while for GEICO to catch up.
3. A lot of financial advisory business are charging for investing skills yet delivering closet index results.
Everybody does the same things because they are worried they will lose their fees if they are too different.
4. Being a better person in the second half of your life
You have had a chance to see how stupid you were.
Figure out what makes you happy.
Be more sensitive to what make others unhappy.
Be a better version of yourself.
5. Nuclear attack is the great risk to Berkshire Hathaway Insurance
It's a very tiny risk, but with huge repercussions.
There's no way of protecting against a nuclear attack.
Charlie Munger: "I'm gonna crawl under the table and kiss my ass goodbye."
6. How to deal with inflation
The best thing to do is to be exceptionally good at something.
If you are the best at whatever it may be, people are going to pay you well and that value can't be destroyed by inflation.
Nobody can take away your talent.
7. Learning, unlearning and relearning
Buffett started out very interested in technical analysis.
Spent hours charting, buying stocks and tried shorting.
The light bulb went off after reading chapter 8 of The Intelligent Investor.
This a-ha moment repeated many times in his life.
8. How does Charlie use multi-disciplinary framework in making decisions.
Know more than one discipline.
To a man who carries only a hammer, everything looks like a nail.
You'll make a lot of mistakes if you don't have a combination of disciplines.
10. Predicting inflation
Some will speculate to make money or for prestige to make themselves sound smart.
The truth is nobody knows.
Not all companies will be impacted the same.
The company that requires less capital will fare better than those who requires plenty.
11. Getting the shareholders you deserve.
It's easier to keep a good shareholder base than to attract new ones.
To Warren, companies that continually upsell their stocks to attract new shareholders are crazy.
Especially when it comes to overpromising for short-term results.
12. Activision Blizzard purchase
Since Microsoft announced acquisition at $95 per share, it becomes a different kind of security.
The strategy is affectionately known as a workout, or arbitrage.
Now Berkshire owns 9.5% of Activision Blizzard as he think that there's a good chance the deal will succeed.
13. Is Charlie worried about China?
The Chinese government has worried US investors more in recent months than in periods.
But investing in China you could get much better companies at much lower prices.
He's willing to take a little risk for this.
14. Lack of bureaucracy at Berkshire has made the company a lot of money.
For example, once a year Jack Ringwalt of National Indemnity would get pissed at the regulators and offered to sell his business.
There was only a small window of opportunity to snap this opportunity.
15. Comparing today's inflation with the high inflationary period of the past: nothing in economics is the same the second time.
The first time their attitudes are affected by the incident.
The second time their attitudes will influence the activity itself.
16. Buffett's views on Bitcoin
"If you told me you owned all the Bitcoin in the world, and you offered it to me for $25, I wouldn't take it because what would I do with it?”
17. Munger's views on Bitcoin
"I'll show you something that in my life, I try and avoid things that are stupid and evil, and made me look bad in comparison with somebody else. And bitcoin does all three."
18. People are becoming increasingly tribal It can get very dangerous.
People lose rationality and it's not good for society when people get tribal.
19. How to figure out your calling
- Work for whomever you admire the most
- Figure out what you are bad at and avoid all of it
- Choose work that interest you
That’s all for today.
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See you again soon.