Nomad

I don't get why the Robinhood apologists pretend that zero commissions are some revolutionary new thing. They're not. Back in 2006 there were already discount brokerages offering zero commissions on stock trades. Zecco offered a limited number of free trades pre-GFC, and so did several other brokers. Furthermore, Robinhood's PR team acting like fractional share trading is some brilliant new innovation is also highly disingenuous. I've been able to trade fractional shares at other brokerages for a long time now. Using the fractional trading point to attack Buffett as a rent-seeking elite is even more absurd, given that Buffett specifically created Berkshire B shares in the mid-1990s to prevent individual investors from getting duped by fee-collecting promoters who were setting up trusts to make BRK fractional interests available to the masses. The difference between other discount brokerages and Robinhood is qualitative. Other discount brokers offer zero commission trades and fractional trades but don't make use of the gamification elements (flashing lights, Tinder-like swiping when you make a trade, etc.) to the extent that Robinhood does. I've never seen confetti pop up on someone's screen when they make a trade at Fidelity. Saying that people will learn by losing money on Robinhood and "graduating" to more sophisticated investing is a bad argument. It's the equivalent of claiming that a certain amount of people who enter the Vegas casinos will learn from their mistakes and one day study linear algebra and advanced probability theory. It may be true for a vanishingly small part of the population, but it's not the reality for the average person, especially one who is 1-2 years out of high school and who doesn't know any better. Add in the payment for order flow and the history of questionable moves, like making its users' aggregate trade data publicly available in an API, and it's clear that Robinhood's interests are diametrically opposed to those of the retail investor. That's why Munger and Buffett attack it. Not because it's "innovative" (it's nothing of the sort), but because it's a shady company run by shady people.

Wow, Munger really did let the cat out of the bag on that one! Greg seems like a great leader, very candid, humble, and capable. Nevertheless, I'm hoping for many more years of WEB and CM at the helm.

Buffett and Munger have done more to help the individual investor than anyone except for Jack Bogle. I can't believe that someone in the Robinhood PR department thought it was a good idea to release this statement. What an embarrassment of a response.

WEB: Berkshire subsidiaries are seeing "substantial inflation" in input costs

WEB on the failure of Berkshire/AMZN/JPM joint venture to reduce healthcare costs: "We were fighting a tapeworm, and the tapeworm won."

Greg Abel on Kraft Heinz: Strong manager and team is now in place and we are pleased with them and how they are reducing debt levels WEB: CEOs often go out and repeat things to the public that then become a catechism, and no one at the company can then go out and contradict them. This creates company path dependence and leads to "enormous errors." Hard to tell the story without giving examples but WEB doesn't want to criticize people by name. Munger: "What you prattle out all the time, you're pounding back in, even if it's wrong."

Ajit Jain on writing insurance for Elon Musk and SpaceX's mission to Mars: "No thank you, I'll pass." WEB: "I would say it depends on the premium, and I'd have a different rate if Elon was onboard vs. if he was not onboard [the rocket]"

WEB on cryptocurrencies: "I'm going to dodge that question...I'm all right on that one." Munger: "Those who know me well are just waving the red flag at the bull. Of course I hate the Bitcoin success. I don't welcome a currency that's so useful to kidnappers and extortionists...the whole damn development is disgusting and contrary to the interests of civilization. And I'll leave the criticism to others."

WEB on Precision Castparts: I paid too much in relation to average earnings; for example, GE doesn't need as many engines as we thought. WEB: "I'll continue making mistakes." Munger: "The rest of us will help."

Ajit put up $1.6b in reserves for pandemic losses; number is likely to grow significantly Sees another $70b in industry losses from Covid-19

Ajit Jain: "In the insurance business, we often think of pandemic risk as one of the risk factors...pandemic risk was totally underpriced by all of us in the industry...We haven't done a good enough job of correlating the risk and aggregating the risk." Mentioned event cancellation risk stemming from pandemics (such as Olympics cancellation) not being appropriately priced.

Munger on possible corporate tax increases: "We've adapted to the tax rate whatever it is." WEB: Taxes mean that the government holds "class AA" shares in Berkshire; they used to take 52% of corporate profits when I first started. Question is what would you pay to own a class AA interest in Berkshire? This class AA share is worth more if the tax rate is higher. Taxes are not passed on to the customer in many Berkshire businesses, and higher rates therefore do hurt BRK shareholders.

Munger: "Bernie Sanders has won...the Millennial generation is going to have a hell of a harder time getting rich than our generation...Bernie has won. He did it by accident, but he won."

Paraphrasing WEB: He's unhappy about not being able to put cash to work but sees no real good targets in current environment

Munger on SPACs and gambling mindset prevailing in the markets: "It's not just stupid, it's shameful."