Berkshire 2018 Annual Meeting

[John Hjorth]

... and a lot of people on these forums think I'm one of the biggest idiots on here. ...

 

To be totally honest, straight, bordering to being brutal here, Scott: For my part: Not. But please stop ruining your smart brain with pot, and come back. Furthermore, there seem to me to be at least some kind of correlation between you trolling here on CoBF and being under influence of pot, or whatever. If you hereby don't grasp how much damage your're causing, then, yes, you're one of the biggest idiots here on CoBF.

[rb]

What's more interesting to me is that he chose to invest in Apple now vs others, in particular google, which I think has a high probability of growth than Apple.

Well for one Apple is a lot cheaper than Google. That has to count for a lot. Also I'm not that sure that google has a higher probably of growth than apple. I can make a case the other way around.

[ScottHall]

... and a lot of people on these forums think I'm one of the biggest idiots on here. ...

 

To be totally honest, straight, bordering to being brutal here, Scott: For my part: Not. But please stop ruining your smart brain with pot, and come back. Furthermore, there seem to me to be at least some kind of correlation between you trolling here on CoBF and being under influence of pot, or whatever. If you hereby don't grasp how much damage your're causing, then, yes, you're one of the biggest idiots here on CoBF.

 

Unprovoked you bring up my marijuana usage, which I haven't mentioned once in this thread. It's an activity you intensely dislike, supposedly. Yet here you are promoting it to thousands of users and giving me a bigger microphone than I would have otherwise had due to that attention.

 

You're promoting personal behavior you don't approve of so that you can call me out on a message board topic you apparently felt offended by.

 

By a brief look through my post history, at least by a quick glance, it looks like I haven't mentioned weed on this forum since around this time last year. I gave you what you wanted, out of respect kept it to my Twitter account and off the forums, and yet you still don't want to let it go.

 

I'm sorry, but which of us is supposed to be trolling in this particular thread? Maybe changing behavior starts by looking in the mirror, John.

[rb]

Scott, you have talked extensively and proudly about your pot use on this forum. You have exalted (in your case) the benefits of using pot. Once you do that you don't get to put that back in the box. You don't get to dictate when people can or cannot bring it up or direct on which platform they can bring it up on.

 

Here's the thing. This is an anonymous forum. Nobody investigated you to figure out if you smoke pot. If you don't want people to know that you smoke pot then don't tell them. But if you think that you can wave it in everyone's face and them they should refrain from mentioning it. Then man, you've smoked too much pot!

[ScottHall]

Scott, you have talked extensively and proudly about your pot use on this forum. You have exalted (in your case) the benefits of using pot. Once you do that you don't get to put that back in the box. You don't get to dictate when people can or cannot bring it up or direct on which platform they can bring it up on.

 

Here's the thing. This is an anonymous forum. Nobody investigated you to figure out if you smoke pot. If you don't want people to know that you smoke pot then don't tell them. But if you think that you can wave it in everyone's face and them they should refrain from mentioning it. Then man, you've smoked too much pot!

 

I don't care if anyone knows I smoke pot. John Hjorth asked me not to post about it here, so I stopped, and then he decided to bring it up anyway. It's not about my use of pot; I'm very proud of that, and have written about it extensively. But when you ask me to stop bringing it up, and I do, and then you start bringing it up yourself, that means you're now the instigator and have no room to speak.

 

I hope John doesn't mind if I start posting about weed every week again, since he likes to talk about marijuana now.

[rb]

Scott, you have talked extensively and proudly about your pot use on this forum. You have exalted (in your case) the benefits of using pot. Once you do that you don't get to put that back in the box. You don't get to dictate when people can or cannot bring it up or direct on which platform they can bring it up on.

 

Here's the thing. This is an anonymous forum. Nobody investigated you to figure out if you smoke pot. If you don't want people to know that you smoke pot then don't tell them. But if you think that you can wave it in everyone's face and them they should refrain from mentioning it. Then man, you've smoked too much pot!

 

I don't care if anyone knows I smoke pot. John Hjorth asked me not to post about it here, so I stopped, and then he decided to bring it up anyway. It's not about my use of pot; I'm very proud of that, and have written about it extensively. But when you ask me to stop bringing it up, and I do, and then you start bringing it up yourself, that means you're now the instigator and have no room to speak.

 

I hope John doesn't mind if I start posting about weed every week again, since he likes to talk about marijuana now.

The way I see it nobody can stop you from posting income anything - well except Sanjeev but he's pretty liberal in that way. What I would say is that you should try to post your best. Post if you have something to add. If you try to do that i don't think that John's opinion should have anything to do with it. Maybe whether you or him bring pot up should be something you guys hash out privately.

 

But honestly, you can post your insights about pot and I just don't give a shit. So I just overlook anything you say. I simply don't care for that information. So you have a choice. You can be a troll, and I don't think anyone will stop you from that and lots of people will just ignore you. Or you could try to post your best and be considered a valued contributor.

 

Now, maybe you've turned a page - some of your recent post don't feel that trolly. But it takes time to rebuild a reputation. Sins of of the past are called that for a reason. You can't just say that you've turned a page and everyone should move along and shut up.

[DanielGMask]

Maybe I didn't make clear enough what I meant exactly. There is a difference between figuring some of these stocks out and predicting that they would be 5-10 baggers from 2013 levels. I'm not stating that 99% didn't figure these out, I'm saying that most people would have laughed in your face when you would have claimed, for instance, that Netflix would have a $140B market cap in early 2018. 99% seems about right to me, but the number was meant more to make a point. Could be 95%+ just the same. My point is that sentiment was véry different back then and that it was not easy to predict this outcome. If you and others did, you guys are eithers very bright or very lucky. I remember you buying FB a few years back, so congratz! (As an aside: I wouldn't assume the average money manager is on par with the brighest on this forum tbh. Or they might be but have various reasons (career risk etc) not to act on it.)

 

Would love to see if we could find more than a handful of fund managers who have, in the last 9 years, either: 1) trailed the S&P500 with an equal cash balance on average; 2) outperformed the S&P500 with >10b in assets. I'm also very interested to see how these managers will fare from now until after the next stock market slump versus Buffett, Todd and Ted. Somehow I feel I already know the answer.

 

Anyway, I think we both agree that Buffett is still very good but that he made some mistakes. So not really a big difference in opinion. Given the circumstances I just believe these mistakes are understandable and minor. Buffett isn't omniscient.

 

Everybody is fallible, including Buffett. But I don’t think that passing on AMZN, GOOG or FB is equivalent to making a mistake. Those companies weren’t sure things when they were smaller/cheaper, and putting money into something where the price to owner’s earnings is ridiculously high because the market assumes it will grow and grow is more of a guessing game than investing.

 

Moats used to be way more stable and difficult to overcome. Technology disruption changed that and the likes of Buffett (myself included though much younger) are adapting to this new paradigm of assets-light companies with ever-changing moats.

 

Anyway, I don’t think we will ever see another investor with the capacity to achieve such great results for more than 60 years while maintaining an honest and humble attitude. It really doesn’t matter if he missed the likes of Intel, Wal-mart or Facebook, on the contrary, what’s incredible is that he achieved the impossible even after missing those great companies!

 

I'm not saying those were his mistakes? Are you all purposefully trying to misread my posts? ;) Or are you replying to ScottHall? I'm basically saying the same as you, DanielGMask. Not buying MSFT since the nineties is an example of an error of omission in my opinion. So I have a different view of what his mistakes are than ScottHall. Would be ridiculous to assume there is an investor out there that doesn't make mistakes anyway.

 

I’m not trying to misread you and I was indeed answering the previous comment. Still I don’t totally agree with the statement that not investing in MSFT since the nineties was a mistake. From my observations on Buffett I conclude that he invests when he thinks he can asses the future cash flow of a business and that number makes sense when compared to the actual share price.

 

I think that’s the reason he is now investing in AAPL but didn’t invest in MSFT during the nineties. It wasn’t a mistake but a lack of understanding MSFT’s potential or a consequence of his personal relation with Gates.

 

According to my point of view, the IBM investment is an example of one of Buffett’s mistakes.

[rb]

IBM... Yea... That was a mistake. This is what I love about berkshire mistakes. They break even or turn a small profit. Somehow it's always a little heads I win tails you loose.

[ScottHall]

Scott, you have talked extensively and proudly about your pot use on this forum. You have exalted (in your case) the benefits of using pot. Once you do that you don't get to put that back in the box. You don't get to dictate when people can or cannot bring it up or direct on which platform they can bring it up on.

 

Here's the thing. This is an anonymous forum. Nobody investigated you to figure out if you smoke pot. If you don't want people to know that you smoke pot then don't tell them. But if you think that you can wave it in everyone's face and them they should refrain from mentioning it. Then man, you've smoked too much pot!

 

I don't care if anyone knows I smoke pot. John Hjorth asked me not to post about it here, so I stopped, and then he decided to bring it up anyway. It's not about my use of pot; I'm very proud of that, and have written about it extensively. But when you ask me to stop bringing it up, and I do, and then you start bringing it up yourself, that means you're now the instigator and have no room to speak.

 

I hope John doesn't mind if I start posting about weed every week again, since he likes to talk about marijuana now.

The way I see it nobody can stop you from posting income anything - well except Sanjeev but he's pretty liberal in that way. What I would say is that you should try to post your best. Post if you have something to add. If you try to do that i don't think that John's opinion should have anything to do with it. Maybe whether you or him bring pot up should be something you guys hash out privately.

 

But honestly, you can post your insights about pot and I just don't give a shit. So I just overlook anything you say. I simply don't care for that information. So you have a choice. You can be a troll, and I don't think anyone will stop you from that and lots of people will just ignore you. Or you could try to post your best and be considered a valued contributor.

 

Now, maybe you've turned a page - some of your recent post don't feel that trolly. But it takes time to rebuild a reputation. Sins of of the past are called that for a reason. You can't just say that you've turned a page and everyone should move along and shut up.

 

I never said anything about not "trolling." That is one of my biggest value adds here, whether you believe it or not. My use of copywriting helped inspire one person to leave their job and start their own business, because they believed they could make use of the same techniques I was showing off in order to improve their life.

 

Many seem to assume I post these things malevolently rather than out of a sense of comedy and humor, and to help people learn about techniques that are being used on them literally every day without even realizing it.

 

A lot of conservative political operatives started in my little subdomain, so anyone in the U.S. is exposed to a more sinister version of this on a daily basis. Many just don't realize it. In some ways the modern conservative movement was built on such techniques. You have to read a lot of my posts with second order thinking in mind to truly grasp them.

 

Book rec about the topic above: https://www.amazon.com/Americas-Right-Turn-Conservatives-Alternative/dp/1566252520

 

I've laid out the roadmap on here several times, and I get PMs and e-mails all the time from people who have read them and are taking the teachings to heart. It's okay if you're not one of them or if you don't get it. Not everyone has to like it, but my posts have helped create real, tangible value for forum members who bother to look beyond the veil.

 

If you can't get past those biases, that's up to you. But it probably will make you more likely to miss my obvious winners like CAOX at $1k, because of underestimation. So far that has proved to be the reader's loss, not the author's. Maybe John is right and that won't be the case going forward, who is to say. But so far so good.

 

I will hazard a guess and say that I have a different view of what best is than most of you, probably because of my background. It's very unusual. My grandma was a witch and she raised me while my mom went to school, so I lived in a mountain town of 500 people. I dropped out of the fourth grade there and later talked myself into a job that I ended up leaving after 4 or 5 years because of severe depression with regard to my gender dysphoria.

 

I now work in marketing and replace that income by working fewer days per year, because of my copywriting ability. The point of writing copy is to write in a way that incites response, rather than writing as a way to convey pure, unadulterated information. It's in the name DRM - Direct Response Marketing. This usually means using lots of colloquialisms and writing in a very visual way.

 

It's a different style of writing compared to what most people are used to, and it does have a lot in common with the more harmless varieties of internet "trolling." Basically because to a large extent, in my copywriting career, I've often ended up playing devil's advocate for ideas that were someone else's. It didn't matter what I thought of them, but I needed to be able to write about them in a sense as if they were my own.

 

And you have to write them compellingly, because if you don't, your client is not bringing in any sales and you're not getting paid.

 

What I have done here in the past is essentially the same thing, except I have more control over the subject matter. Sometimes they're chicken scratch ideas I'm just beginning to work on in my head for my own investing philosophy, and writing them in this way helps me think them through a bit more, and gets other people to contribute as well because the format of writing helps to excite them.

 

Other times it's because I want to test the reaction to a certain viewpoint that I may have to incorporate in a future campaign. It's important to have practice to make sure you're hitting the mark with people who pretty closely represent your target demographic but who are miles away from who you are yourself.

 

I don't see anything harmful or nefarious about this; use strong language to hook people in, and then serve the main course. Sometimes people will view that in a negative or villainous way because the targets might be some of their heroes, but that is helpful sometimes because that perception can serve as a lightning rod for response. In the social media age, that can be quite a valuable thing.

 

When people open up to the idea that I'm trying to help them, they tend to learn and learn quickly. But I get that it's not for everyone.

 

It's for some people, though, and so long as I keep hearing stories about how my posts have helped improve the lives of people who have read them, I do not intend to stop writing the way I do. I view it as my responsibility to share my knowledge with the world.

 

If you aren't cool with that, it's fine. I'm just trying to expose this forum to a new set of what can be powerful mental models. Some have opened themselves to these ideas, others "don't get it" and just see a troll or an idiot and will just ignore me. I'm totally cool with that, too.

[benchmark]

What's more interesting to me is that he chose to invest in Apple now vs others, in particular google, which I think has a high probability of growth than Apple.

Well for one Apple is a lot cheaper than Google. That has to count for a lot. Also I'm not that sure that google has a higher probably of growth than apple. I can make a case the other way around.

 

If he were to reflect on the 'mistake' of not investing in google, I wonder what are the lessons, and seems to me that those lessons still won't get him to invest in google. Btw, I don't think google is expensive (not cheap, but not expensive).

[Graham Osborn]

From NYT:

 

"As for Alphabet, Mr. Buffett said that he had “made a mistake.” He said he was unable to conclude that at Alphabet’s present prices, its “prospects were far better than the prices indicated.”"

 

Comparing this with his investment in Apple (and IBM), I wish someone would ask him his reasonings.

 

If you look at Buffett's historical purchases, he rarely pays more than 20X earnings even for a franchise.  And the only time Google made it there was in 2008-2009, when I think Buffett was distracted by opportunities in the financials sector.  He doesn't do so well with these higher-growth businesses where you might have to put up to 20X earnings (or maybe a bit more).  That's why he missed Microsoft too.

[cubsfan]

But he didn't "miss" Microsoft - it's always been "off limits" since 1991.

[Jurgis]

A lot of conservative political operatives started in my little subdomain

 

ScottHall for President!  8)

 

 

 

You heard it here first

[Kapitalust]

A lot of conservative political operatives started in my little subdomain

 

ScottHall for President!  8)

 

 

 

You heard it here first

 

Seconded.

 

People take things way too seriously and have difficulties reading between the lines...

[Nomad]

So many of the shareholder questions were from Chinese nationals and children.  A few questions from the Chinese folks were ok - trade relations, why not look to buy chinese businesses, etc.  The worst was probably from the Chinese woman who works at a 'family office' for high net worth Chinese.  "You two would be my dream clients"  ???  why?  "Do you have family offices and what do they do for you?"  give me a break...

 

I have to agree with the complaint often voiced here that the quality of the questions is just not good.  Very few substantive issues about the business are being addressed.  Unfortunately the journalists and analysts aren’t helping that much - they tend to delve into the weeds rather than asking big-picture, difficult questions.

 

Having attended in person this year, I have to third this sentiment - many of the questions were downright cringeworthy. From the "family office" question to the "they call me the Warren Buffett of fertility" doctor to the Chinese man who asked about a World War redux between the US and China, idiocy abounded. And of course there had to be New York parents who flew in their eight-year old daughter to read a "question" from a script they had obviously pre-written. Do people actually fall for this stuff?

 

Also, having stood in line outside the CenturyLink Center, I have to say that I observed all kinds of attempts to jockey for position and cut in line. I suppose it's a function of the growth in the meeting size and the large foreign presence, but it seems like the basic norms of civility shown to fellow shareholders hit a nadir this year.

 

Although I always love to go to Omaha, I'm considering live-streaming the meeting in 2019.

[gfp]

I’m enjoying the video of the meetings from the 90’s. Audience questions are from people like Bill Ackman, Christopher Davis and a bunch of Omaha locals (at least in 94). Steve Burke did us all a huge service lobbying Warren to get those videos online!

[voyager]

I’m enjoying the video of the meetings from the 90’s. Audience questions are from people like Bill Ackman, Christopher Davis and a bunch of Omaha locals (at least in 94). Steve Burke did us all a huge service lobbying Warren to get those videos online!

 

Would you be able to share where you found those videos?  I'd love to have the chance to watch them too.

[CharlesMunger]

https://www.cnbc.com/video/2018/05/07/cnbcs-buffett-archive-over-130-hours-of-searchable-video-content-from-warren-buffett.html

 

:)

[gfp]

https://buffett.cnbc.com

 

Click on annual meetings to get the videos, starting in 94

[Seanzy]

THANKS!

[Jurgis]

I mostly agree with this https://www.bloomberg.com/view/articles/2018-05-07/warren-buffett-needs-to-share-the-stage

Although I'd add that Warren should have Todd and Ted there too.

 

But then the Omaha circus zoo show is about Warren, so probably won't happen. Maybe when Charlie dies, but even then who knows.

At least Abel talked a bit during the official business meeting, which was IMO positive.

[Spekulatius]

And of course there had to be New York parents who flew in their eight-year old daughter to read a "question" from a script they had obviously pre-written.

 

Yeah, I recall that one too. I loved Mungers answer when he was asked what he thought about thr question

 

“I am glad she is not nine years old”.

[kiwing100]

FYI,

 

link to video - https://www.youtube.com/watch?v=SF-PW7C3J88

 

[gfp]

So, to my ears it sounded like Warren alluded to the likely possibility of another warrant / preferred deal being announced in the not so distant future.  Maybe not a 10% one, but something above market for Berkshire.  He mentioned, I believe, not a huge one.

 

The likely source seems to be QSR, but it could be anyone I guess.  He's offered similar stuff to JAB in the past, although they didn't end up getting their deal (Avon I think it was).

 

Any guesses?  I'll throw Domino's pizza out there since there have been rumors.  My track record of predicting Berkshire deals is very poor...

[Graham Osborn]

I have to agree with the complaint often voiced here that the quality of the questions is just not good.  Very few substantive issues about the business are being addressed.  Unfortunately the journalists and analysts aren’t helping that much - they tend to delve into the weeds rather than asking big-picture, difficult questions.

 

What would those big-picture, difficult questions be?

 

Obviously I have a personal ax to grind.  I emailed Sorkin my question about new/ seasoned insurance business depressing the cost-of-float calc.  That got booted in favor of AI and healthcare.  If you're out there, Sorkin, know this: next year I'm emailing someone else.