Berkshire AGM: Buffett back with new wisdom on investing with Munger by his side

MUMBAI: Billionaire investor Warren Buffett along with his long-time partner Charlie Munger on Saturday hosted the annual general meeting of Berkshire Hathway, often dubbed by some as the ‘Woodstock for Capitalists’.

The famous investor’s address to the shareholders and his millions of admirers, hosted virtually, comes in the backdrop of a rebounding US and global economy as Covid-19 vaccination accelerates in most western nations.

Buffett’s Berkshire Hathaway, however, used most of the March quarter to book profits and the company’s net stock sales were the highest in five years in the quarter, as per Berkshire Hathaway’s earnings reported earlier in the day.

The billionaire investor’s every word from this annual event is diced and sliced by admiring investors and shareholders as they look for guidance, bigger meanings and plain wisdom in the nonagenarian’s three-and-a-half-hour long question and answer session.

Here are some of the major highlights and quotes from this year’s Berkshire Hathaway AGM:

Buffet on ESG disclosures:

• I don’t think I’ve had 3 letters in the last year from shareholders asking for that sort of disclosure
• The people who bought Berkshire with their own money voted against it (ESG reporting)
• The people who did probably didn’t put a dime of their money

Munger on ESG:

• We don’t know the answers to global warming whereas people who talk about it a lot think they know all the answers
• We are just modest

Buffett:

• Fed acted with the speed and decisiveness in March that changed the market situation
• There was a run on the money market funds
• US economic recovery has gone far better than anybody could predict with reasonable assurance one year ago
• I think the Fed and government did a better job than they imagined

Buffet on buying Chevron stock:

• I would hate for all the hydrocarbons to be banned in three years
• We have no problem in owning Costco or Walmart just because they sell cigarettes
• I do think the world is moving away from hydrocarbons
• I don’t like making moral judgement on businesses
• I will not be uncomfortable about being in the oil business
• We’re going to need a lot of hydrocarbons for a long time, and we’ll be very glad we’ve got them
• Chevron is not an evil country in the least

Buffett:

• I have never recommended Berkshire shares to anybody; I have advised people to buy S&P500 index funds
• I do not think an average person can pick stocks
• Ordinary investors better off in index funds than in individual stocks
• My will is going to be public record; 99% of my estate will go to philanthropy

Munger:

• I personally prefer holding the market, but I am quite comfortable holding Berkshire shares

Buffett on not deploying cash in March 2020 selloff:

• We could have deployed $50-75 billion of cash right before the Fed acted
• We had to be sure that under any circumstance we did not want to depend on anybody

Buffett on selling airline stocks in March 2020:

• Imagine if Berkshire was the shareholder of these airlines (during the crisis), the government could have said ‘take it out of Berkshire’
• Looking back, we would have been better off buying
• I don’t consider it the finest moment in Berkshire’s history; I think airlines business did better because we sold them

Buffett’s advice for first-time investors:

• There is a lot more to picking stocks than working out which is going to be the most wonderful industry in the future
• World can change in very, very dramatic ways; Best ideas in 1989 did not necessarily do well, although equities overall were the place to be
• Capitalism has worked incredibly well, especially, for the capitalists
• None of the top 20 highest valued companies from 1989 are in the same list 30 years later; It is a reminder of what extraordinary things can happen
• When people say America is not working very well, you have to see that in the whole world, five out of six most valuable companies are in the US; It’s not an accident, but because the system has worked unbelievably well
• I will like the new investors to keep some things in mind before they do 30 trades every day in what looks like a very easy game
• This has been a very unusual recession… Right now business is really very good in great many segments of the economy. There are still problems in few businesses

Buffett on holding the AGM for the first time out of Omaha:

• All of us wanted to do it (AGM) with Charlie (Munger), not because he asked for it.