Graham Osborn Posted May 6, 2017 Author Share Posted May 6, 2017 Warren's projection on prospective returns for Berkshire to prospective interest rates is interesting. I think he is talking about the ability to buy businesses at attractive prices to boost Berkshire's productivity in a meaningful way. Link to comment Share on other sites More sharing options...
Graham Osborn Posted May 6, 2017 Author Share Posted May 6, 2017 10% compounding incoming. 8) (might be understated as in the past) Haha. Link to comment Share on other sites More sharing options...
gfp Posted May 6, 2017 Share Posted May 6, 2017 Nice that he disclosed the prospective deal structure on the Unilever bid. In what certainly would have been at least a $150 Billion cash offer ultimately, BRK and 3G were going to put in $30 Billion cash and borrow the rest. Gotta love the economics of that. ($15 B from each). There was no talk of issuing KHC shares. Link to comment Share on other sites More sharing options...
Graham Osborn Posted May 6, 2017 Author Share Posted May 6, 2017 This discussion of high margin/ ROC (monopolies) vs low margin/ ROC businesses (commodities) and the observation that the largest US companies are extremely asset-light is so fundamental. If Berkshire had gone that route it would already be the world's largest company. Instead Buffett drew a dotted line around anything that smelled "techy" and bought railroads and utilities then found creative ways to rationalize the purchases. Chris Sacca has a very similar thesis for early stage cloud companies - he says that traditional VC is broken because managers think you need to plow more money into the business to produce more growth - but that requirement is actually the mark of precisely the sort of business one does NOT want to be invested in. The right sort of business requires only a catalytic amount of capital at the early stages to get the ball rolling, but after that it should be self-generating. I liked Charlie's comments on Dow and the chemical co's as well. Fisher discusses these extensively. At that time in US industrial development the chemical companies where still high-margin (like pharmaceutical companies or unregulated cloud software companies) whereas now their profits have been regulated and commoditized away. Younger industries are less prone to both (sometimes). Link to comment Share on other sites More sharing options...
Graham Osborn Posted May 6, 2017 Author Share Posted May 6, 2017 I guess at 2B Ajit is rich enough he checks that box! The retained earnings option program seems like a good one, but I wish WEB would flesh out what the book value gain threshold would be that triggers the option. Link to comment Share on other sites More sharing options...
Graham Osborn Posted May 6, 2017 Author Share Posted May 6, 2017 The usual bashing of "helpers" to a roomful of helpers who all seem to enjoy it. Never fails to amuse me. Link to comment Share on other sites More sharing options...
Graham Osborn Posted May 6, 2017 Author Share Posted May 6, 2017 Quiet board this year.. Link to comment Share on other sites More sharing options...
Parsad Posted May 6, 2017 Share Posted May 6, 2017 Quiet board this year.. I think most people are watching, so that's probably why it's a bit quiet. They will all chime in later after the meeting. Also, alot of people are actually in Omaha, so that might also be it. Cheers! Link to comment Share on other sites More sharing options...
rb Posted May 6, 2017 Share Posted May 6, 2017 I don't want to interfere too much with your live posting of the meeting from down on the ground Graham. I think you're doing a fantastic job. Link to comment Share on other sites More sharing options...
Graham Osborn Posted May 6, 2017 Author Share Posted May 6, 2017 I don't want to interfere too much with your live posting of the meeting from down on the ground Graham. I think you're doing a fantastic job. Thanks. I do like talking with people though! Link to comment Share on other sites More sharing options...
John Hjorth Posted May 6, 2017 Share Posted May 6, 2017 I've been following the whole thing via Yahoo on this side of the Atlantic Ocean since it started. It's great experience! - like last year. Both Mr. Buffett and Mr. Munger are in top notch shape - If you listen and view it, you can feel, that they love pulling this thing off! When they talk about PE, they are almost like from Muppet's. - - - o 0 o - - - If your Chrome is not working, you most likely just need to update it manually [i had that problem earlier today before the session]. I'm using Chrome for following this thing. Link to comment Share on other sites More sharing options...
rb Posted May 6, 2017 Share Posted May 6, 2017 The Munger classic: "I don't think we mind killing chickens and we're against nuclear war." Link to comment Share on other sites More sharing options...
Jurgis Posted May 6, 2017 Share Posted May 6, 2017 Just got back... and Warren's quarreling with Charlie... what happened. 8) Edit: you guys don't have to answer ... it was rhetoric question. Maybe first time I saw them talking cross each other. 8) Tough topic. 8) Link to comment Share on other sites More sharing options...
John Hjorth Posted May 6, 2017 Share Posted May 6, 2017 Jurgis, It was a discussion about AI and it's consequenses for society and business - Yes, they were discussing it intensely - but: Who doesn't? : - ) Link to comment Share on other sites More sharing options...
Graham Osborn Posted May 6, 2017 Author Share Posted May 6, 2017 The Munger classic: "I don't think we mind killing chickens and we're against nuclear war." I will pay $25 to anyone who shows up at the next Berkshire meeting wearing a T shirt with that creed. Link to comment Share on other sites More sharing options...
Graham Osborn Posted May 6, 2017 Author Share Posted May 6, 2017 Jurgis, It was a discussion about AI and it's consequenses for society and business - Yes, they were discussing it intensely - but: Who doesn't? : - ) Buffett has a good point though which ties into inflation as well - if a single person could do the work of 150M people, the cost of living would be rock bottom. In a nation where robots take all the jobs, people can enjoy a high standard of living practically for free - meaning it doesn't matter so much that they contribute a low percentage of overall production. And of course that has already happened to an extraordinary degree since the Industrial Revolution. I do think such a society generates some real social issues such as massive disparities of power, wealth, and freedom between individuals. A good example of this is a home and real estate ownership, which were once part of the standard of living for a great many Americans. Link to comment Share on other sites More sharing options...
scorpioncapital Posted May 6, 2017 Share Posted May 6, 2017 You can also live practically for free if you move to Mexico and made all your money in the USA. Lots of retirees do it. I think this issue of automation also has to look at the global economy and how systems integrate - or don't integrate all around. Link to comment Share on other sites More sharing options...
Graham Osborn Posted May 6, 2017 Author Share Posted May 6, 2017 You can also live practically for free if you move to Mexico and made all your money in the USA. Lots of retirees do it. I think this issue of automation also has to look at the global economy and how systems integrate - or don't integrate all around. True - globalization and automation have some common effects. Link to comment Share on other sites More sharing options...
AzCactus Posted May 6, 2017 Share Posted May 6, 2017 Charlie Sleeping ? Not sure if this is common but thought it was funny. Link to comment Share on other sites More sharing options...
John Hjorth Posted May 6, 2017 Share Posted May 6, 2017 I'm a spring rabbit compared to Mr. Munger - I almost also fel asleep under the formal part of the AGM - it's just soo boring. Or perhaps Mr. Munger was taking an overview of his spillings of crums? Those two men really enjoy each others company - there is so much ping-pong interaction between them. Furthermore, I think the line of questions was actually very good this year. There was shed light on quite some topics related to Berkshire, that are not in general discussed. Link to comment Share on other sites More sharing options...
ScottHall Posted May 7, 2017 Share Posted May 7, 2017 Gee, it sounds like Warren has been reading my topics on here. You're welcome for the great meeting, everyone. Link to comment Share on other sites More sharing options...
John Hjorth Posted May 7, 2017 Share Posted May 7, 2017 Gee, it sounds like Warren has been reading my topics on here. ... Yes, there was actually a lot of talk about Amazon. It appear that both Mr. Buffett and Mr. Munger admires Mr. Bezos for his accomplishments with building Amazon to what it is today, from scratch. Link to comment Share on other sites More sharing options...
John Hjorth Posted May 7, 2017 Share Posted May 7, 2017 The stream is now achieved at yahoo.com here, in the right side of the page. Link to comment Share on other sites More sharing options...
Dynamic Posted May 8, 2017 Share Posted May 8, 2017 It's now way after the livestream is over (and I first started watching on my Android phone's Chrome mobile browser), but Chrome on Windows 10 reported that Flash Video was disabled (it is a helper app with frequent security flaws that can be exploited to steal your data on nefarious sites, so I understand why). I then added the yahoo URL to the Allow list under Manage exceptions using this method:https://support.google.com/chrome/answer/142064 and stopped watching on my phone. I only needed to use Chrome for a few seconds before it allowed me to Cast it to my TV's Chromecast, bypassing Flash entirely! For some reason, the cast option wasn't shown on my phone. My wife really got a kick out of some of Charlie's cutting remarks. I'll now owe her a few chick-flicks by way of compensation or perhaps some Grace & Frankie on Netflix (which I'll enjoy as much as she will). I really should've insisted we turned off before the shareholder propositions, though! In our time zone that was after 10pm and we didn't need any help getting to sleep. Link to comment Share on other sites More sharing options...
John Hjorth Posted May 9, 2017 Share Posted May 9, 2017 The Berkshire Annual Meeting 2017 - Full Q&A Video - is now available on Youtube here. Link to comment Share on other sites More sharing options...
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