Buffet and Munger's May Meeting

from Lake Martin Living June 2023

MEDICAL NEWS

May is one of my favorite months of the year, with it meaning cold weather is officially over and warmer weather has arrived. Also, May happens to be the month when Berkshire Hathaway holds its annual meeting. As an avid follower of Warren Buffett and Charlie Munger, who run Berkshire Hathaway, I always look forward to hearing them speak on a wide range of topics. This year, the meeting was held on Saturday, May 6. This month’s article is about some of my takeaways from that meeting.

Berkshire Hathaway, under Warren Buffett, has been going strong since April 1965. Over this period, the S&P 500, including dividends, has grown 24,708 percent versus Berkshire’s share price growth of 3,787,464 percent on an aggregate basis. Yes, this does require a double take, and yes, it’s true.

n Our government has always looked like a mess throughout history. Today is no different.

Money Matters

n Buffett said if he could pick any time in history to be born, it would be today and in the U.S.

n Munger, in true Munger fashion, said he is slightly less optimistic than Buffett and to expect less going forward.

Buffett always talks about investing in yourself. This year was no different. An audience member asked a question that led Buffett to giving his thoughts.

n Your best earning power is yourself. You want to be the best teacher, lawyer, etc., in town.

n The best investment you can make is always in yourself.

Most people would look at this record of outperformance and think Buffett/Munger must have made many great investments over the years to have such an impressive record. At this year’s meeting, Buffett said their record has really been the beneficiary of 12 great investment decisions. The person who most believe to be the best investor in the world is saying that over 60 years, their record was driven by just a handful of great decisions.

The point is to amass a great fortune; you don’t have to get it right all the time. You just have to get it right some of the time, and when you do, let the winners run. Over this time period, they have made many investment decisions that didn’t work out or were just average at best; however, they happened to make a few key decisions and had the fortitude to let them run and compound. The compounding of these great decisions is what has led to the outperformance of Berkshire.

These two older men have something most investors don’t have: patience.

One question asked had to do with the U.S. and what it needs to do to remain strong. Below are key points Buffett and Munger made in answer to this question: n In the grand scheme of things, our country is young at only a little over 200 years old. n The U.S. is a miracle. On net, the U.S. is a better place to live than many years ago. It has worked. or prospective clients where Blalock Williams and its representatives are properly licensed or exempt from licensure.

My favorite discussion point of this year’s meeting was Munger’s obituary way of life. He said if you want to figure out how to live your life, reverse engineer it. Write your obituary backwards. This is such a great point. If you know what you want to be read about you and said about you after death, write it down; and then, live it out.

This is in line with something else Munger frequently says about making decisions. He believes the best way to decide is to invert it. By inverting, you are thinking about the worst thing that can happen, and if you know the worst thing that can happen, getting to what you should do becomes much easier.

These two men have been a gift to the investing world for many years. Given their ages, 92 (Buffett) and 99 (Munger), seeing them on stage together at Berkshire’s annual meeting for several more years is unlikely. Munger says to let him know where he will die, so he will never go there. Hopefully, he doesn’t find this place for several more years.

These two have given us their thoughts on how to invest since the mid-1960s through their Letters to Shareholders, found on the Berkshire Hathaway website. If you want to learn something about investing, read the annual letters. Many great investors who have been through the top business schools in the country say these letters will educate you more than an MBA. Even more, they are free.

The information provided is for educational and informational purposes only and does not constitute investment advice, and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. Consult your attorney or tax advisor.

The views expressed in this commentary are subject to change based on market and other conditions. These documents may contain certain statements that may be deemed forward looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur.

All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information, and it should not be relied on as such.