Berkshire Hathaway 2016 Meeting - Live Stream / Saturday

[Jurgis]

FYI Yahoo newscaster said that the replay will begin shortly for anyone who missed any parts of the webcast. Not sure if this means that recording will be available at any time or if this is just one-of replay.

[CorpRaider]

I enjoyed that a lot.  Good job by Yahoo.

[Charlie]

Fantastic webcasting.

 

Sitting on the sofa and I thought I were at the meeting.

 

Thank you Warren.  :)

[valuebull]

Yahoo!'s press release said a video on demand will be available on Yahoo Finance for 30 days following the meeting.

[Graham Osborn]

Interesting meeting.  The following struck me:

 

- The whole renewables focus seems a bit quixotic to me.  We are at the end of a commodity cycle and these are declining margin businesses.  The age of carbon has come - even with a carbon tax.  And he seems a bit in denial about the implications of this for BRK's railroad holdings.  I would expect to see those earnings in decline for the next 5 years at least.

 

- Would anyone in their right mind buy a megabank (including BOA) without looking very hard at their derivatives book?  The AAA CDOs were listed in the same account as treasuries by many banks before the last collapse.  I hope really meant he just didn't want to talk BOA's book, which I'd understand :)

 

- Can anyone explain to me what the German fixed income manager was asking?  I couldn't properly hear the question and Buffett was giving one of his tap-dancing answers.  Gotta go back to the recording..

 

- Munger seems badly in need of retirement, lol.  Watching him sit there eating peanut brittle or whatever just cracked me up.  Buffett kept apologizing for him as though he were perpetually passing flatus.

 

- Buffett seemed a bit darker than I've seen him in recent years.  His whole "CNBC" digression.  Then he mentioned how he did not think the next financial dislocation would be in housing, but somewhere else.  That he took the time to watch the VRX hearings was interesting.  I get the sense that he smells something.  He's trailing Soros but definitely getting there from where he stood last December.  He was a macro wizard back in his 30s-40s although he might not admit it - just as sharp as PTJ.  I think he realizes that as a reinsurer it takes all of 2 seconds to go from acting incredibly smart to acting incredibly stupid a la AIG, something that could happen if an idiot someday runs his company.

 

- Succession plan?  The problem everyone forgets is WEB has 99% of his net worth in the company.  He spends every minute of his waking life monitoring his baby.  For his successor it will be just a job with good incentive pay that comes after spouse/ kids/ next job opportunity.  Look at Walmart which had exceptionally strong family ownership - even they are losing it 20 years after founder's death (amazing run by the way).  Buffett doesn't have a strong family governance in place, so I don't see Berkshire's core advantage of intelligent long-term capital allocation and intelligent reinsurance outlasting his life.  His collection of wonderful managers bear him a strong personal loyalty, but that goodwill is unlikely to be transferable to a successor.

 

- GEICO ad with the dog during the company movie?  I nearly inhaled my tie laughing.  High point of the meeting for me :)

 

- VRX and Theranos comments?  Talk about a smack down.  Monday could be dicey for healthcare shares now that God has spoken, but what do I know :)

[gfp]

"Can anyone explain to me what the German fixed income manager was asking?  I couldn't properly hear the question and Buffett was giving one of his tap-dancing answers.  Gotta go back to the recording.."

 

If I remember correctly I believe he was (after classlessly plugging his fund - why do people keep doing this at the mic?  It is unbelievably tacky) asking if Buffett would consider closing his remaining CDS derivatives positions early by effecting an offsetting trade.  Buffett didn't seem to hear the question 100% and talked mostly about CDS on BRK.

[Graham Osborn]

"Can anyone explain to me what the German fixed income manager was asking?  I couldn't properly hear the question and Buffett was giving one of his tap-dancing answers.  Gotta go back to the recording.."

 

If I remember correctly I believe he was (after classlessly plugging his fund - why do people keep doing this at the mic?  It is unbelievably tacky) asking if Buffett would consider closing his remaining CDS derivatives positions early by effecting an offsetting trade.  Buffett didn't seem to hear the question 100% and talked mostly about CDS on BRK.

 

Thanks, it seemed like some sorta weird disconnect.  I'll go back and listen b/c I was in fact curious about the positions referenced.  And yes, the amount of marketing going on among the questioners this year was epic

[Mephistopheles]

I'm trying to watch some parts I missed. But it won't let you fast forward or rewind?? Useless

[dabuff]

It would be nice if there were a rule that prohibited questions requiring one to recite from a piece of paper or a cell phone.  Warren and Charlie were understandably having difficulty getting some of these long-winded questions.

[Picasso]

If you have  to plug your fund, you're probably managing peanuts.  And it showed by the really crappy questions they asked.  Like that Hogwarts one...

[CorpRaider]

I thought it was a stupid question 100% designed to try and highlight his mad trading skillz.

[jay21]

Anyone see a good transcript floating around?

[tooskinneejs]

I enjoyed the webcast.  My biggest takeaway was that Warren seems to be slowing down, unfortunately.

[jgyetzer]

Anything in particular that makes you think so?

[Guest longinvestor]

I enjoyed the webcast.  My biggest takeaway was that Warren seems to be slowing down, unfortunately.

 

I did not think so at all. He was sharp as a tack. Munger even sharper.

 

The meeting goes as well as the questions. 

 

The proportion of stupid questions is increasing. If not stupid, rather ordinary. The panelists were supposed to make it better, but in my opinion, it has gone worse. They represent the interests of the long term shareholder less and less. I rather liked the old format with audience only asking questions. Sorkin took the cake for the stupidest ones. I guess he represents the peanut gallery. He seemed to grab Munger's attention..."Let me take that question" it was hilarious.The only question he asked that had some gravity was the one about incentives for subs chiefs. It was a question I sent to all three journalists for the 2015 meeting. Not that it matters or am I willing to take credit for it (surely someone else asked it as well), he did not acknowledge who sent that question. (Loomis did with each question). Among the analysts, G Warren's were rather ordinary. He represents the run of the mill side of investing, the mediocrity-guaranteed-crowd, why would we expect anything more. Many in the audience asked better questions. Of course there were stupid ones there, as well as 3- 4- part and page long questions. WEB struggled with these. Anyone would. Truth be told, all those non-english native accents made it harder as well. It is amazing that Munger caught even those!

 

I hope WEB does a poll of shareholders to see if they like this format. I will vote to go back. Maybe a shareholder proposition to vote on?

[tooskinneejs]

Anything in particular that makes you think so?

 

I'm not saying he is mentally slowing down.  But literally the pace of his answers was very slow, which kind of gave me the impression of fatigue.  And he did certainly have trouble catching the gist of some of the questions, although I agree that some of those questions went on and on and on at ridiculous lengths.

[Guest longinvestor]

Anything in particular that makes you think so?

 

I'm not saying he is mentally slowing down.  But literally the pace of his answers was very slow, which kind of gave me the impression of fatigue.  And he did certainly have trouble catching the gist of some of the questions, although I agree that some of those questions went on and on and on at ridiculous lengths.

 

He did seem to measure his answers as he gave them out. Wonder how much of it was because of the new format where the whole world could be listening, not just the shareholders. He's in his element with this being a shareholder only event, the intimacy goes out with the webcast.

[VersaillesinNY]

An extra 16 min separate interview with Charlie Munger

 

http://finance.yahoo.com/news/munger--donald-trump-s-behavior-reflects-a--form-of-sickness-205710579.html

[Mephistopheles]

 

Air travel provides benefits that would be impossible without it. Business benefits as well as efficiency benefits. This is very different from "pleasure derived" benefits. You are pretty much saying that Coke is like cigarettes and drugs. OK, I'm fine with that, but Buffett explicitly said he won't invest in cigarettes and the questioner even mentioned it directly.

 

Second, air travel was not engineered to add to fatalities just to increase "pleasure derived". Coke pretty much did the same thing as the cigarette companies by pumping extra crap into drinks to make them more attractive and addictive.

 

Third, I could argue that Coke could try to find the way to maintain or increase the "pleasure derived" while increasing health benefits. And perhaps they do it somewhat now that the pressure is on. That might have been a good direction to take this question to.

 

So, yes air travel comparison is stupid since it's completely different. Its defense here is completely Munger-hero-worship bias. If someone else rather than Munger did it, people would say "apples to oranges" and other non-complimentary things.

 

I made it clear I didn't like Buffett's answer, and I've pointed his hypocritical views on this forum in the past - so no hero worship here.

 

The difference between cigarettes and soda is that it's nearly impossible to enjoy smoking in moderation without getting addicted. Also, even moderate consumption of tobacco is bad for you whereas the same isn't necessarily true of coke. Note that I have nothing against investing in tobacco but just saying the risk:benefit ratio is different and this is why Buffett may be against it.

 

Almost ANY food and drink is bad for you in excess, including fruits and vegetables. Some more so than others and some should be consumed more moderately than others. If you think it's wrong to invest in "pleasure" than why stop with KO? To continue with the air travel argument - you say business and efficiency benefits. Ok, but not all forms of air travel are for business or productivity. How about flying for pleasure (vacation)?

 

Nearly all food investments should be off the radar for Berkshire if you want to apply his tobacco logic to everything. And why stop there? How about the bottlers, shippers, and aluminum producers who all facilitate in consumption?

 

All soda consumption cannot be painted with the same brush. A healthy athlete having a can every now and then is different than a 250 lb. obese man with type 2 diabetes having 3 cans a day. Or to use the airline example - someone with a history of deep vein thrombosis should be more careful flying than the average person.

[dabuff]

The analyst questions unfortunately did little to "add color" to the discussion; they were fishing for numbers to plug in to spreadsheets ("beware of geeks bearing formulas")

Ditto for some of the journalist questions. Are these really the most important questions we should be discussing? Really?

Half the questions were so long-winded the questioners themselves were stumbling over their words.

 

A much better way to do this would be for shareholders themselves to vote for the top questions themselves in some social media polling format.

 

 

[fareastwarriors]

The analyst questions unfortunately did little to "add color" to the discussion; they were fishing for numbers to plug in to spreadsheets ("beware of geeks bearing formulas")

Ditto for some of the journalist questions. Are these really the most important questions we should be discussing? Really?

Half the questions were so long-winded the questioners themselves were stumbling over their words.

 

A much better way to do this would be for shareholders themselves to vote for the top questions themselves in some social media polling format.

 

I think if you did the poll, the questions would probably be pretty much the same... You have to realize most shareholders are not  value investors like the folks here.  Majority of people are just regular folks and they want to ask about the headline stuff. 

[LC]

 

Air travel provides benefits that would be impossible without it. Business benefits as well as efficiency benefits. This is very different from "pleasure derived" benefits. You are pretty much saying that Coke is like cigarettes and drugs. OK, I'm fine with that, but Buffett explicitly said he won't invest in cigarettes and the questioner even mentioned it directly.

 

Second, air travel was not engineered to add to fatalities just to increase "pleasure derived". Coke pretty much did the same thing as the cigarette companies by pumping extra crap into drinks to make them more attractive and addictive.

 

Third, I could argue that Coke could try to find the way to maintain or increase the "pleasure derived" while increasing health benefits. And perhaps they do it somewhat now that the pressure is on. That might have been a good direction to take this question to.

 

So, yes air travel comparison is stupid since it's completely different. Its defense here is completely Munger-hero-worship bias. If someone else rather than Munger did it, people would say "apples to oranges" and other non-complimentary things.

 

I made it clear I didn't like Buffett's answer, and I've pointed his hypocritical views on this forum in the past - so no hero worship here.

 

The difference between cigarettes and soda is that it's nearly impossible to enjoy smoking in moderation without getting addicted. Also, even moderate consumption of tobacco is bad for you whereas the same isn't necessarily true of coke. Note that I have nothing against investing in tobacco but just saying the risk:benefit ratio is different and this is why Buffett may be against it.

 

Almost ANY food and drink is bad for you in excess, including fruits and vegetables. Some more so than others and some should be consumed more moderately than others. If you think it's wrong to invest in "pleasure" than why stop with KO? To continue with the air travel argument - you say business and efficiency benefits. Ok, but not all forms of air travel are for business or productivity. How about flying for pleasure (vacation)?

 

Nearly all food investments should be off the radar for Berkshire if you want to apply his tobacco logic to everything. And why stop there? How about the bottlers, shippers, and aluminum producers who all facilitate in consumption?

 

All soda consumption cannot be painted with the same brush. A healthy athlete having a can every now and then is different than a 250 lb. obese man with type 2 diabetes having 3 cans a day. Or to use the airline example - someone with a history of deep vein thrombosis should be more careful flying than the average person.

I mean, let's be real. Smoking 5 cigs daily, cancer is coming your way. Drinking 5 cans of coke daily, leaves u obese with diabetes.

 

Eating 5 tomatoes daily is gonna make most people healthier.

 

So I get what ur sayin that cigs are worse than soda, but soda is waaaay worse than fruits and veggies. Buffett ain't shilling kale and quinoa here.

[Guest longinvestor]

I enjoyed the webcast.  My biggest takeaway was that Warren seems to be slowing down, unfortunately.

 

I did not think so at all. He was sharp as a tack. Munger even sharper.

 

The meeting goes as well as the questions. 

 

The proportion of stupid questions is increasing. If not stupid, rather ordinary. The panelists were supposed to make it better, but in my opinion, it has gone worse. They represent the interests of the long term shareholder less and less. I rather liked the old format with audience only asking questions. Sorkin took the cake for the stupidest ones. I guess he represents the peanut gallery. He seemed to grab Munger's attention..."Let me take that question" it was hilarious.The only question he asked that had some gravity was the one about incentives for subs chiefs. It was a question I sent to all three journalists for the 2015 meeting. Not that it matters or am I willing to take credit for it (surely someone else asked it as well), he did not acknowledge who sent that question. (Loomis did with each question). Among the analysts, G Warren's were rather ordinary. He represents the run of the mill side of investing, the mediocrity-guaranteed-crowd, why would we expect anything more. Many in the audience asked better questions. Of course there were stupid ones there, as well as 3- 4- part and page long questions. WEB struggled with these. Anyone would. Truth be told, all those non-english native accents made it harder as well. It is amazing that Munger caught even those!

 

I hope WEB does a poll of shareholders to see if they like this format. I will vote to go back. Maybe a shareholder proposition to vote on?

I'd pick Loomis and Russo as the only two on stage in the current format. They'll vet the questions better and keep it long term oriented. Otherwise, the questions will be repeatedly stupid and the answers will appear canned.

[Libs]

An extra 16 min separate interview with Charlie Munger

 

http://finance.yahoo.com/news/munger--donald-trump-s-behavior-reflects-a--form-of-sickness-205710579.html

 

CM hit it out of the park here. Great interview.

[CorpRaider]

I know this is nothing new but what do you guys make of this endorsement of index funds?  His rationale seems centered on the costs argument, which is what Bogle's arguments now focus on (as opposed to an acceptance of the EMH).  I wish someone would ask him about low cost value index funds or fundamentally weighted funds.  I could see him preferring the SPY given his quality bent (it is already kind of an alternative/fundamental index given the screening and selection (and ejection) of stocks by S&P), then again I think he still holds to value as a general proposition and those index funds would satisfy the low management and tax cost concerns.  He would probably be concerned about tracking error and the potential for investor performance gaps if he mentioned those to his wide audience though.