Jonathan and I just returned from Omaha after attending the 2010 Annual Berkshire Hathaway Shareholder Meeting. Omaha is full of incredible food and nice people, and we definitely had a great time there. I mentioned to our cab driver on the way to the hotel that we were from Baton Rouge, and he could not stop talking about how awesome LSU fans were last year. He took us by the site of the new stadium and said “win or lose you guys love to party”. I said we didn’t do much losing last year here, but after losing 7 straight (swept by Ole Miss, Florida and a midweek loss to UNO) it was nice to be in the town where less than a year ago LSU was dogpiling and celebrating another CWS Championship.
We love attending the meeting and listening to Warren and Charlie. Charlie was not himself this year. Comparatively, he contributed a lot. We thought we would send out some of our favorite comments from the meeting.
Warren Buffett and Charlie Munger
-“Take the high road; it’s far less crowded.” -Warren
– “I asked my wife if she would love me if I lost all my money and she said yes but I’ll miss you terribly.” -Charlie
– Warren was asked how he kept shareholders for so long. He discussed that when they invest with him they know what to expect. “We want people who think the way we do. It is our fault if we give out the wrong advertisement.” Buffett referenced an example Philip Fisher used related to shareholder expectations:
“A good restaurant man might build up a splendid business with a high priced venture. He might also build up a splendid business with an attractive place selling the best possible meals at the lowest possible prices. Or he could make a success of Hungarian, Chinese, or Italian cuisine. Each would attract a following. People would come there expecting a certain kind of meal. However, with all his skill, he could not possibly build up a clientele if one day he served the costliest meals, the next day low-priced ones, and then without warning served nothing but exotic dishes.
Charlie added, “We regard our shareholders as family.”
Later Charlie said, “We get offered things (businesses) from people who will not sell to anyone else.”
We believe it is important to notice how they view the people that invest with them and the people they invest in. When people sell them their life’s work Berkshire does not want to change it because that is why they bought it. People realize Warren and Charlie will let their business continue in the manner they built it in and that is why they come to Berkshire. There is also something to be said for the family of shareholders they have. Attending the Shareholder meeting in person and seeing how everyone feels like they are part of something great. They are part of the great Warren Buffet and they know he will treat them like family.
-“You don’t have to be an expert on all businesses just the ones you put your money into.” -Warren
– “Does not matter how big your circle of competence is, but incredibly important to know where the perimeter is.” -Warren
– “If you want to get good at something you have to think about it a lot and practice it and keep learning. Try to go to bed every night a little wiser than when you woke up. People who do this never fail utterly….they may have bad days but ultimately they succeed.” -Charlie
– Success: “Sometimes it is just…..avoid doing something dumb.” [as opposed to doing something extraordinary.] -Warren
-Charlie described their philosophy in one word. Not only on investing but everything: “It is Pragmatism. We do things partly because it suits our nature…..temperament and partly because it works. We demonstrate the most fundamental algorithm of life….repeat what works.”
-Warren said many times throughout the meeting that “our kids and kids’ kids will live much better than we do.” He also said, “The qualities that led to 220 years of incredible progress are still there because our system lets people do extraordinary things. That game is not over. We don’t know our own potential.”
-“We won’t trade reputation for money.” -Warren
-“I got more courage when I discovered I could handle hardship. I got my feet wet with failure early.” -Charlie
-“We are in the business of making our own decisions.” -Warren
-“I can be optimistic and I am nearly dead surely you all can handle a little inflation.” -Charlie