Charlie

2016 letter is out: http://www.givernycapital.com/en/doc/214/Giverny_Capital_-_Annual_Letter_2016_web_.pdf Cheers!

Thanks for the transcript. :) The stickiness of Apple products is very obvious to me, because I buy only Apple computers anymore. The products are simply better. I like this investment. Perhaps we got the shares from Carl Icahn, who sold his shares some time ago, because of worries about China. ;D

Some interviews with Munger after the Meeting :): Cheers!

Yeah, what in the end counts are the incentives of the decision maker. So be aware of (high) agency costs. We will hear more about it in 1-2 weeks in the Berkshire Hathaway annual letter. ;)

I like this part: :) "Am I comfortable with a non-diversified portfolio? Of course… if you take the Munger’s, I care about the Munger’s. The Munger’s have three stocks. We have a block of Berkshire, we have a block of Costco, we have a block of Li Lu’s fund, and the rest is dribs and drabs. So am I comfortable? Am I securely rich? You’re damn right I am. Could other people be just as comfortable as I who didn’t have a vast portfolio with a lot of names in it? Many of whom neither they or their advisors understand? Of course they’d be better off if they did what I did. And is three stocks enough? What are the chances that Costco’s going to fail? What are the chances that Berkshire Hathaway’s going to fail? What are the chances that Li Lu’s portfolio in China’s going to fail? The chances that any one of those things happening is almost zero. And the chances that all three of them are going to fail? That’s one of the good ideas I had when I was young. When I started investing my little piddly savings as a lawyer, I tried to figure out how much diversification I would need if I had a 10% advantage every year over stocks generally. I just worked it out. I didn’t have any formula, I just worked it out with my high school algebra. And I realized that if I was going to be there for thirty or forty years, I’d be about 99% sure to do just fine if I never owned more than three stocks and my average holding period is 3 or 4 years. Once I’d done that with my little pencil, I just… I never for a moment believed this boulderdash they keep… why diversification… diversification is a rule for those who don’t know anything. Warren calls them ‘know-nothing investors’. If you’re a ‘know-nothing investor’ of course you’re going to own the average. But if you’re not a know-nothing investor, if you’re actually capable of figuring out something that will work better, you’re just hurting yourselves looking for fifty when three will suffice. Hell one will suffice if you do it right. One. If you have one cinch, what else do you need in life. And so the whole idea that the ‘know-something’ investor needs a lot of diversification. To think that we’re paying these investors to teach this crap to our young. And people think they should be paid for telling us to diversify. Where it’s right, it’s an idiot decision. And where it’s wrong, you shouldn’t be teaching what’s wrong. What’s gone on in corporate finance teaching is that people are getting paid for dispensing boulderdash. And since I never believed that it was a great help to me, it helps if you’re out in the market and the other people are believing boulderdash and you know what the hell’s going on. It’s a big help. So of course you don’t want a lot… if you’re Uncle Horace who has no children has an immense business which is immensely secured and powerful. And he’s going to leave it all to you if you come to work in the business. You don’t need any diversification. You don’t need any corporate finance professors, you should go to work for Uncle Horace. It’s a cinch. You only need one cinch! And sometimes the market gives you the equivalent of an Uncle Horace. And when it does, step up to the pie-cart with a big pan. Pie carts like that don’t come very often. When they do you have to have the gumption and the determination to seize the opportunity shrewdly."

These notes look also good: http://latticeworkinvesting.com/2017/02/17/charlie-munger-full-transcript-of-daily-journal-annual-meeting-2017/ Cheers!

Next Wednesday, at February 15th, will be the Daily Journal Annual Meeting. :) So it´s probably a good idea now to think about great questions asking Mr. Munger and posting them since a lot of people here at the board will be going to the meeting and perhaps someone can ask the best questions. I will post my question and perhaps anybody who likes it can ask it at the meeting: You are famous of quoting the "Man with only 1 Hammer Syndrome". What do you think percentage wise of the working force how widespread is the "Man with only 1 Hammer Syndrome"?

I bought more Berkshire B shares today. Business results should be very good. Too much of a good thing can be wonderful. :)

Interesting reflections on the Trump Presidency: https://finance.yahoo.com/news/dalio-trump-could-ignite-animal-spirits-and-it-could-be-huge-for-markets-104253070.html Cheers!

Thanks for posting. :) I like the part about Precision Castparts: "Greg Steinmetz: For those of you who might not know, Precision Castparts manufactures turbine blades and other hard-to-make parts for airplanes and jet engines. We did our first work on this company and wrote our first memos on it in 2003. We realized that it occupied a unique position in the aerospace supply chain and that it would be very hard to get a Boeing jet off the ground without parts made by Precision Castparts. The trouble was that Precision was and is a highly capital intensive business and it operates in a cyclical industry. When you invest in something like that, we knew that we had to be careful. So what did we do? As is so often the case, we did nothing. But we did not forget about it. Fast forward to December of 2008. Remember those good old days: Lehman Brothers, Bear Stearns. The world was melting down; a lot of investors were scared to death. I was one of them. I was hiding under my desk when Chase came to me and said, ‘‘Precision Castparts? You know about that company. It has shown up on my screen as being not only affordable because stocks are down, but it is still growing. And it is a very profitable business. Maybe you should take another look.’’ I think it was that same week Arman, who had done a bunch of work on Rolls-Royce, the engine maker, came up to me and said, ‘‘A lot of my contacts for Rolls-Royce are telling me that the 800-pound gorilla in the components business is Precision Castparts. Maybe you should take a look.’’ So we cranked up the research process again. We crunched the numbers, but it still took us about four months even though we had known the company before. But at the end of that process we discovered that not only was Precision as strong as it was in 2003, but it had gotten even stronger. So we started buying the stock. The stock really got hurt last year when aerospace started to go through one of its slow periods and oil and gas, which is another of Precision’s end markets, got pounded when crude prices plunged. But we stayed with Precision because we knew from our research that planes still could not go up in the air without parts made by Precision Castparts; we held on and we even bought a little bit more. As you may know, the story has a happy ending. Berkshire Hathaway ended up buying the company earlier this year for about $32 billion dollars and we more than tripled our investment."

Good Buffett interview: http://www.politico.com/story/2016/08/the-playbook-interview-warren-buffett-226892 Cheers! :)

"All I want to know is where I´m going to die so I´ll never go there" by Peter Bevelin I read about 50 pages now and like it very much. Very good. :) You can order it here: https://www.poorcharliesalmanack.com/all_i_want_to_know.php Anyone else reading it?

"Anyone see a good transcript floating around?" This looks pretty good: https://www.biznews.com/global-investing/2016/04/30/berkshire-agm-warren-buffett-charlie-munger-part-one/ Cheers!

Fantastic webcasting. Sitting on the sofa and I thought I were at the meeting. Thank you Warren. :)

you can drink enough at Borsheims and sleep in your car or you can go to Wal Mart and double your money when you find some fresh foods that are expired. ;) I did this some years ago, but it is not very comfortable. These tips are only for true value investors. ;)

http://www.gurufocus.com/news/407278/david-rolfes-lengthy-analysis-of-berkshire-hathaway Cheers! :)

Very good analysis of Berkshire. Thanks for posting. :)

The Transcript of the 3 hours: http://www.cnbc.com/2016/02/29/cnbc-transcript-of-warren-buffett-on-squawk-box.html Cheers! :)

"Here's What Buffett Wouldn't Do, and Maybe You Shouldn't Either http://www.bloomberg.com/news/articles/2016-02-24/here-s-what-buffett-wouldn-t-do-and-maybe-you-shouldn-t-either" Thanks for posting. I like this quote: Don’t be distracted by macroeconomic forecasts: “The cemetery for seers has a huge section set aside for macro forecasters. We have in fact made few macro forecasts at Berkshire, and we have seldom seen others make them with sustained success.” (2004)

CNBC has been advertising that they will have Buffett on for three hours on Monday February 29th following the weekend earnings release. He will be on 6 to 9 am eastern time. Cheers! :)

I think Buffett wants more international phone calls from great companies. ;) He wants to be in the mind of great business owners if they want to sell and seek a safe home for their business. In America he is, international there is room for improvement. The webcast could help. I read somewhere that the webcast will be translated into chinese language.

Yahoo to live-stream Warren Buffett's Berkshire meeting http://www.cnbc.com/2016/02/16/yahoo-to-live-stream-warren-buffetts-berkshire-meeting.html?__source=yahoo%7Cfinance%7Cheadline%7Cheadline%7Cstory&par=yahoo&doc=103390147 Cheers!

http://thecharlieton.com/category/hedgefundnotes/ Cheers! :)

Since next wednesday is the Daily Journal Annual Meeting I thought it would be smart to think about some interesting questions, you want to ask Munger (Munger is 92, it´s now or never ;)). Perhaps somebody who goes to the meeting could ask the best questions we can collect. :) Here are my questions: What do you think, where are the biggest dangers to die in this investment environment? Do you think your mental model approach will survive long-term, since not many people are teaching them? Do you still learn new mental models?

Thanks for posting. :)