Berkshire Hathaway 2016 Meeting - Live Stream / Saturday

[Jurgis]

What is either side trying to get/learn by winning this debate?

 

Make a positive impact on the lives of people on this planet.  8)

[Guest Schwab711]

What is either side trying to get/learn by winning this debate? There were probably 50 other questions and the best thing you can debate on is the coke question.

 

I really enjoyed hearing Buffett's reasoning behind minimal due diligence. Essentially you will not go wrong in getting the minor details wrong, it is your view of the industry economics that will determine whether or not you do well. WB also mentioned pattern recognition multiple times, which seems to point to the value of watching these industries for 50+ years.

 

New regulations could potentially have substantial effects on many industries (sugar being one, which would affect KO). Personally, I like these debates because it helps me learn the opinions of both sides. Sometimes they can also help gauge the nation's opinion and/or point of view. Once in awhile, I feel I have arrived at a point where I am able to handicap the odds of the threat (not the same as saying I'm 100% confident in the odds I have arrived at) and those odds materially differ from what market valuations are implying. MCO is an example. This debate of sugar/KO may seem pointless or off-topic but I think it could potentially have a lot of value. When reading or participating in the board's debates like this one, I'm hoping that it will become a decent proxy for the debates folks in congress would have amongst themselves.

 

I also think it's possible to have a high batting average when it comes to making predictions, as long as you are extremely picky. These types of debates play an important role in my investing strategy. I could see how others find little-to-no value. Some examples of high probability predictions (I'm not sure if I actually think these are true):

"B2C eCommerce sales will be higher in 10 years", or

"There will be some kind of pharmaceutical drug price regulations in place in the next 10 years"

 

The point is not to be bold. I'm looking for divergences in opinion to help find buying opportunities for wonderful companies (like MCO in 2013).

 

Presently, media companies with a lot of desirable content (like DIS, TWX, FOX, and CMCSA) could be one of those opportunities.

[rb]

I agree that this is a debate that we need to have. It's a debate that society needs to have. Maybe even on this board. But is it a debate that needs to be had at the BRK annual meeting? Can you imagine this conversation taking place at annual meetings of other investment shops? Ichan, Pershing, Third Point, even Sequoia?

 

The way I see it it went like this. WB runs one of the most respectable and responsible corporations. WB provides a wide open forum to ask questions about the company. Someone asks a leading question about a company and product the well know that WB enjoys. WB deflects and doesn't put down one of his largest and oldest holdings, an iconic company that has some products that can cause damage if over-indulged. Let's all jump on WB then!

 

I'd say that based on everything that WB and BRK did/does maybe they should get a pass on Coke. But that's just me.

[netnet]

What is either side trying to get/learn by winning this debate? There were probably 50 other questions and the best thing you can debate on is the coke question.

 

I really enjoyed hearing Buffett's reasoning behind minimal due diligence. Essentially you will not go wrong in getting the minor details wrong, it is your view of the industry economics that will determine whether or not you do well. WB also mentioned pattern recognition multiple times, which seems to point to the value of watching these industries for 50+ years.

+1

 

The sugar thing is getting tedious.  Ok, let's agree, in excess or maybe at all Coke is bad, there, done!

 

I still wonder about the limited DD, my response to Munger about how limited DD is before marriage, well doesn't living together count?

[Guest longinvestor]

I agree that this is a debate that we need to have. It's a debate that society needs to have. Maybe even on this board. But is it a debate that needs to be had at the BRK annual meeting? Can you imagine this conversation taking place at annual meetings of other investment shops? Ichan, Pershing, Third Point, even Sequoia?

 

The way I see it it went like this. WB runs one of the most respectable and responsible corporations. WB provides a wide open forum to ask questions about the company. Someone asks a leading question about a company and product the well know that WB enjoys. WB deflects and doesn't put down one of his largest and oldest holdings, an iconic company that has some products that can cause damage if over-indulged. Let's all jump on WB then!

 

I'd say that based on everything that WB and BRK did/does maybe they should get a pass on Coke. But that's just me.

 

+1

What investorss should really be learning is the fact that Buffett picked up on the franchise nature of the KO business at age 11 and that franchise value remains intact even today, when he's 85. Why he can'ts top talking about it. Go try to find your version of something similar versus trying to knock it down.  We'll become better investors!

[Guest notorious546]

What are other meetings/conferences within Canada other than FFH that would be beneficial to attend?

[rb]

I still wonder about the limited DD, my response to Munger about how limited DD is before marriage, well doesn't living together count?

Well the dude lived in a different time not much pre marital habitation in those days. But I'd say that it will take quite a long time of living together to claim that you've done thorough DD.

 

Plus it's easier with companies. You can't fix problems in your wife like you would in a company (such fire her reasoning and bring in a new one). And when WB makes a mistake on an acquisition it doesn't leave with 1/2 of BRK's assets  :P

[alwaysinvert]

What is either side trying to get/learn by winning this debate? There were probably 50 other questions and the best thing you can debate on is the coke question.

 

I really enjoyed hearing Buffett's reasoning behind minimal due diligence. Essentially you will not go wrong in getting the minor details wrong, it is your view of the industry economics that will determine whether or not you do well. WB also mentioned pattern recognition multiple times, which seems to point to the value of watching these industries for 50+ years.

+1

 

The sugar thing is getting tedious.  Ok, let's agree, in excess or maybe at all Coke is bad, there, done!

 

I still wonder about the limited DD, my response to Munger about how limited DD is before marriage, well doesn't living together count?

 

I think his point was that there's no need for a formal due diligence, i.e check birth certificates, because it doesn't tell you anything worthwhile. So a "checking boxes" kind of procedure is a waste of time. It's all in the intangible values, which they think they can get to know better via other methods.

 

Due diligence in its current incarnation is something that has come about because of the principal-agent problem inherent in the usual setup with professional managements. "You won't get fired for doing due diligence". Even if it's a complete waste of time, it's an insurance policy which someone else bears the costs of.

[Guest]

Everything in life that we choose to do has a benefit, otherwise we wouldn't choose to do it. Nearly all these things also have associated risks or harms. The question is then is the risk worth the benefit? The answer is different for different people and also depends on the quantity of the product consumed.

 

Smoking tobacco happens to be one of the few products where the risks and harm outweigh the benefits for every single person. Therein lies the difference as to why Buffett and Munger avoid it but not soda, alcohol, fast food, or chocolates.

 

 

 

 

I somehow doubt the "joys" of soda are higher for people who drink it than the "joys" of tobacco for those that participate. There is plenty of research that shows soda increases the risk of obesity and diabetes. Diet soda has also been linked to cognitive impairment.  For what it's worth, I avoid both.

 

 

 

No, but the "harms" are higher for tobacco. One can be enjoyed in moderation, the other can't.

 

There are plenty of people who smoke casually.

[LC]

just fyi in the US:

 

~480k smoking-related deaths/year

~300k obesity-related deaths/year

[Mephistopheles]

Everything in life that we choose to do has a benefit, otherwise we wouldn't choose to do it. Nearly all these things also have associated risks or harms. The question is then is the risk worth the benefit? The answer is different for different people and also depends on the quantity of the product consumed.

 

Smoking tobacco happens to be one of the few products where the risks and harm outweigh the benefits for every single person. Therein lies the difference as to why Buffett and Munger avoid it but not soda, alcohol, fast food, or chocolates.

 

 

 

 

I somehow doubt the "joys" of soda are higher for people who drink it than the "joys" of tobacco for those that participate. There is plenty of research that shows soda increases the risk of obesity and diabetes. Diet soda has also been linked to cognitive impairment.  For what it's worth, I avoid both.

 

 

 

No, but the "harms" are higher for tobacco. One can be enjoyed in moderation, the other can't.

 

There are plenty of people who smoke casually.

 

The risk of addiction and the damage caused by even moderate amounts of smoking are much more severe than are for Coca-Cola. Are you saying the two are equivalent?

[rb]

Guys, cmon.... I know these are issues that people are passionate about. And that are pertinent to our current societal debate but please let's keep this thread about the annual meeting.

[RickMayhew]

Re: WEB's Coke Response    /  This is my take.  Warren may be biased on several levels.  Not the least of which is the fact he's 85, doing great and drinking as much Coke as he wants to.  Some things work well for some people and some things don't.  / We could always vote for a prohibition type amendment making sugar water products illegal.  I'm sure that would go over well...  /  At some point, personal responsibility kicks in.  People should have the freedom to decide for themselves.  I'm sure grilled hamburgers are not that great for you, but I think the entire country would riot if the government said we couldn't eat hamburgers.  /  My grandmother lived to be 102.  She ate whatever she wanted, but she ate in moderation.  Maybe that's something smart to try?  (She liked Pepsi, not Coke...)

[scorpioncapital]

The argument he gives is pure physics, it's like at the atomic level, you can't argue with input-output of calories. He seems like a pretty slim guy for 85. But there may be other issues besides weight such as quantity and quality of micronutrients.

[CassiusKing1]

It's simple.  They get'em coming and going with KO and Davita!

[Guest notorious546]

Here's a transcript from Factset.

BRK.B-US-20160430-1812177-X.pdf

BRK.B-US-20160430-1812177-X.pdf

[doughishere]

Base Hit nailed it the other day

 

"After Omaha last week, I heard someone say that Buffett and Munger “never say anything new”. This comment was probably out of frustration that Buffett and Munger didn’t unveil some secret formula for success in investing."

 

 

 

That's not even the best part of the quote

[merkhet]

Base Hit nailed it the other day

 

"After Omaha last week, I heard someone say that Buffett and Munger “never say anything new”. This comment was probably out of frustration that Buffett and Munger didn’t unveil some secret formula for success in investing."

 

 

 

That's not even the best part of the quote

 

As they themselves mentioned at the meeting, you don't go to church to hear something new; you go to church to hear the old things harped on again and again.

[Guest notorious546]

Base Hit nailed it the other day

 

"After Omaha last week, I heard someone say that Buffett and Munger “never say anything new”. This comment was probably out of frustration that Buffett and Munger didn’t unveil some secret formula for success in investing."

 

That's not even the best part of the quote

 

As they themselves mentioned at the meeting, you don't go to church to hear something new; you go to church to hear the old things harped on again and again.

 

Thomas Gayner re-iterated the same concept as well at the Brunch on Sunday.

[Guest longinvestor]

Base Hit nailed it the other day

 

"After Omaha last week, I heard someone say that Buffett and Munger “never say anything new”. This comment was probably out of frustration that Buffett and Munger didn’t unveil some secret formula for success in investing."

 

 

 

That's not even the best part of the quote

 

As they themselves mentioned at the meeting, you don't go to church to hear something new; you go to church to hear the old things harped on again and again.

+1

What matters is what church goers do when they leave. Church exists coz sin& folly does.

[doughishere]

Base Hit nailed it the other day

 

"After Omaha last week, I heard someone say that Buffett and Munger “never say anything new”. This comment was probably out of frustration that Buffett and Munger didn’t unveil some secret formula for success in investing."

 

 

 

That's not even the best part of the quote

 

As they themselves mentioned at the meeting, you don't go to church to hear something new; you go to church to hear the old things harped on again and again.

 

 

If Greenspan overdosed on Ayn Rand...imagine what would happen if someone overdosed on Buffett and Munger! lol.

 

 

But in all seriousness...how many of you mothers and fathers out there had to repeat the same thing over and over to your child before they caught on.....things need to be repeated and you cant deny that there could be worse messages.

 

 

As long said, "Here's a collection of my best ideas.They seem to work pretty good for me....good luck."

[Guest longinvestor]

There was a question from the audience last year on Macro and how Buffett / Munger use what they know, since they read a lot (hence know a lot). The questioner clearly asked about Macro.

 

As Buffett started to answer that, Munger chimed in with "there's some confusion here....he's asking about Micro economic factors" and then they talked at length about that. I haven't stopped wondering if that question was intentionally batted away! Perhaps because the number of times that question has been asked of Buffett / Munger. It may also be that Munger didn't hear properly. In which case, this could repeat and they answer whatever question they thought they heard.  ;)

 

It's at the 3 hour 06 minute mark.

 

https://www.youtube.com/watch?v=G4X9iUb_cC4&t=11300s

 

Bringing this up as a vast majority of the posts on CobF are either directly or indirectly Macro type discussions.