I was tidying up a little recently and I came across an old notebook that happened to have my notes from the both the 2009 and the 2010 Berkshire Hathaway annual meetings in Omaha.
I’ve been to 10 BRK meetings, so my Berkshire notes are going to differ from a Buffett neophyte. I would have jotted down what I thought was interesting, as opposed to writing a primer on Warren Buffett.
For context, the Great Recession ended in March of 2009. This meeting is in early May 2009, and at the time it would not be clear that the bad times were behind us. Here are some selections from my notes:
From May 2009 –
Buffett says “In September (2008) we were looking into the abyss. The authorities were getting hit from all sides. They made a decision. People will be critical of any action the government took, but they did a very good job.”
(With the benefit of hindsight, we now know that the “bailouts” are, in fact, a terrible misnomer. Instead they were a very profitable investment for taxpayers.)
On share prices: “Buying Berkshire shares at their absolute peak doesn’t matter so much in the long term. What matters is that Berkshire owns the best precision cutting tool company in the world, the lowest cost insurance businesses, etc. World class companies drive the earnings of Berkshire, and earnings determine share prices.”
“If you own a farm, you don’t get a price quote on it every day. You look at the asset itself. You look at how much crop you can grow. With the stock market people look at prices, not at the business. Go back and read chapter 8 of ‘The Intelligent Investor’ (by Ben Graham)”
“Buy things when they are on sale. If you buy a hamburger on sale, and it goes even more on sale tomorrow, you don’t need to regret the first, good, purchase. To sit around and not do something sensible just because you think the prices will get cheaper yet is not the way we do things.”
From May 2010 –
“We aren’t smarter nor do we work harder than people 200 years ago, but we sure live differently and we aren’t at the end of potential yet.”
“It is more important – there is a bigger potential impact on your life – to have financial education at primary school rather than university.”
(To that end, Buffett stars in an animated series for kids called the “Secret Millionaires Club.” Check it out here… http://www.smckids.com/ )
“The efficient market hypothesis = the deficient market hypothesis.”
By Brad Brain, CFP, R.F.P., CLU, CH.F.C., FCSI