Notes: Berkshire 2017 Meeting

Yahoo Halftime Show (36:45):

“Going back to my point about the advantages of not running a fund and having to do reporting, I never liked talking to my LPs about ideas that I had and I think you guys are both the same because you become somewhat wed to it. It’s harder to change your mind over time. You become precommitted to your positions and so forth. That’s always been my stance.” -Todd Combs

“Why wouldn’t you want to talk about stocks that you specifically picked?” -Andy Sewer

“The point that Todd hit is really important. If you speak up and put it on record, you end up getting too wedded to your thesis, and that’s dangerous. Because everything that you’re invested in is a function of the circumstances on a given day. It changes.” -Ted Weschler

EP#7 (4:15):

On increasing productivity by cutting wasteful spending: “I don’t see anything wrong with increasing productivity. On the other hand, there’s a lot of counterproductive publicity to doing it. Just because you’re right doesn’t mean you should always do it.” -Charlie Munger

Yahoo Interview with Charlie Munger (15:25):

“You have to have the habit of reexamining your old ideas all the time because if you don’t, they’ll just get so firm that you can’t see it when they become wrong. It’s like housecleaning—you can’t just let the dust pile up. You’ve got to clean out your idea cabinet all of the time; throw out the bad ideas and put in better ones. You just can’t get through life successfully without it. The world changes.” -Charlie Munger

Warren checks credit card activity reported by visa, MasterCard, and Chase as an indicator of consumer sentiment and behavior.

CNBC Interview with Warren Buffett, Charlie Munger, and Bill Gates:

Warren observed that the top 5 US companies by market cap don’t require any equity capital. This is a huge change compared to previous centuries where capital was required to grow.

Warren says the most important factor in determining future asset prices is interest rates. If interest rates stay about this low, Warren will have passed up good opportunities (which implies he believes interest rates will be higher at some point).


Jeff Bezos has said that Amazon was only possible because the internet had already been created, package delivery had already been developed, and payment systems had already been developed. (What exists today that enables new businesses today that couldn’t have been created earlier?)

Charlie said the US would be way better off if Kaiser Permanente took care of everyone. Kaiser pays doctors a salary instead of based on the services they provide patients. This avoids doctors providing treatment that isn’t necessary. Kaiser doctors also don’t have to work such long hours.


“I think there’s a lot of idiotic deal making in venture capital now. If we had some big recession, I think a lot of this levered finance would present a lot of agony.” -Charlie Munger on CNBC


“Every smart guy is tempted by leverage and some of them are broken by it. And it’s somewhat capricious in terms of which ones get broken. And Charlie came close.” -Warren Buffett on CNBC


“I made a tech company investment and we damn near went broke. We hovered on the edge of a precipice for about three or four years. It was agony and it was a lot of money to me at the time. We scrambled out of it with a pretty good profit, but it wasn’t the world’s smartest investment and it took a lot of intelligent scrambling to rectify the situation. I’m not looking to repeat the dumb decisions that got me there.” -Charlie Munger on CNBC


Becky Quick: “What’s the worst trade you think you’ve ever made, or one of?”

Bill Gates: “My expertise, or purported expertise, is more in software and so things like my role in not having Microsoft lead in search or not lead in the phone operating system…”

Charlie Munger: “…or in the cloud.”

Bill Gates: “Right. But we’re number two there.”

Charlie Munger: “But you started five years late.”


Note: Bill Gates has money invested in Mexico currently.


“It’s amazing, having worked so hard to learn, how much we don’t know.” -Charlie Munger on CNBC


“My fellow Republicans that want to take away all this regulation of the major finance—I think that’s bonkers. I think that if you’re using the government’s credit to maintain your deposits, you should behave in a pretty careful, standardized way. Let the people who want to swing for the fences get it in a different form. But I don’t think you want the too big to fail places swinging for the fences. I think they have a duty to behave conservatively.” -Charlie Munger on CNBC


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