Berkshire Hathaway 2016 Meeting - Live Stream / Saturday

[Guest ajc]

 

It turns out to be surprisingly hard to pull the video from the yahoo site.

 

That's their new turnaround strategy. All of it.

 

 

[RadMan24]

Sorry but Coke answers from Warren and Charlie are again totally biased. You'd think they'd be rational. Warren is skirting the issue again by going anecdotal and joking. And Charlie... come on "benefit"? Loading fizzy water with tons of carbs is not benefit. Comparing that to deaths in air travel is stupid (sic. I'm free to use the word he used).

 

Please. Why would Coke sell and make so many billions if people didn't enjoy the taste, flavor, feeling that goes into eating and drinking every day including being happy.

[LC]

Please. Why would Coke sell and make so many billions if people didn't enjoy the taste, flavor, feeling that goes into eating and drinking every day including being happy.

 

My issue is that they love taking ownership of the benefits you mention, but do not take ownership of the associated problems.

[sleepydragon]

the whole argument is ridiculous. Shall investors stop owning auto stocks because they are polluting the environment? Shall we all walk to everywhere? Tobacco company is totally different from coke. One is addictive, harmful with a singal usage, another one is not addictive and people have a choice.

[ERICOPOLY]

the whole argument is ridiculous. Shall investors stop owning auto stocks because they are polluting the environment? Shall we all walk to everywhere? Tobacco company is totally different from coke. One is addictive, harmful with a singal usage, another one is not addictive and people have a choice.

 

Isn't it true that only the smoking of tobacco is harmful?  I think if you are vaporizing the unflavored product, you don't have health risks (nicotine itself is not a carcinogen).

 

Today, it's personal choice if you choose to also suck in all of the carcinogens via smoking when you try to get your addictive nicotine.

[stahleyp]

Isn't soda addictive too? Caffeine has some addictive qualities. Virtually everything we do is a personal choice.

[Mephistopheles]

Everything in life that we choose to do has a benefit, otherwise we wouldn't choose to do it. Nearly all these things also have associated risks or harms. The question is then is the risk worth the benefit? The answer is different for different people and also depends on the quantity of the product consumed.

 

Smoking tobacco happens to be one of the few products where the risks and harm outweigh the benefits for every single person. Therein lies the difference as to why Buffett and Munger avoid it but not soda, alcohol, fast food, or chocolates.

 

Personally my moral values are different. I wouldn't mind owning shares of a tobacco company because I have a higher threshold for what I think personal responsibility should be.

 

But let's say heroin and crack were legal, then I wouldn't invest in them. Does that make me a hypocrite? No, it's just that's where I draw the line. Often times victims of drug addiction grow up in such environments and the odds are stacked against them in terms of risks of addiction. Not to mention such drugs also ruin your life in almost every other way aside from the direct health effects.

 

As an aside: I also have my own set of morals. I'm vegetarian and refuse to invest in companies that directly deal with animal cruelty. But I recognize this is impossible to completely avoid. For example, Berkshire owns all sorts of companies that I wouldn't touch if they were standalone. It's not their core business so I make an exception.

[Jurgis]

As an aside: I also have my own set of morals. I'm vegetarian and refuse to invest in companies that directly deal with animal cruelty. But I recognize this is impossible to completely avoid. For example, Berkshire owns all sorts of companies that I wouldn't touch if they were standalone. It's not their core business so I make an exception.

 

I don't directly invest in meat-product related companies either, but as you say, this is difficult to avoid in indexes or BRK, FFH.

 

I would not directly invest in tobacco companies.

 

I have some investments in alcohol companies. I would possibly invest directly in KO/PEP, especially since I think that they are moving to more healthy mix due to public pressure (although I don't know if that's true outside US/Europe where the pressure is less).

[John Hjorth]

Does anyone know if the meeting has been recorded somewhere so it can be downloaded? I kinda want to put in my records. It turns out to be surprisingly hard to pull the video from the yahoo site.

 

rb,

 

It's hardly a direct reply to your post, but I found the full version on Youtube today [and I don't know if it will stay there - [Yahoo IP[?]]].

[CorpRaider]

I know this is nothing new but what do you guys make of this endorsement of index funds?  His rationale seems centered on the costs argument, which is what Bogle's arguments now focus on (as opposed to an acceptance of the EMH).  I wish someone would ask him about low cost value index funds or fundamentally weighted funds.  I could see him preferring the SPY given his quality bent (it is already kind of an alternative/fundamental index given the screening and selection (and ejection) of stocks by S&P), then again I think he still holds to value as a general proposition and those index funds would satisfy the low management and tax cost concerns.  He would probably be concerned about tracking error and the potential for investor performance gaps if he mentioned those to his wide audience though.

 

Not as interesting a question as whether Coke gives you diabeetus?

[fareastwarriors]

Oh, and if buying 1 B-share to attend the meeting sounds pathetic, here's an extract from an actual conversation I had at the Borsheim's reception:

 

Me: Hi there

Guy in suit: Hi!

Me: [brave stab at conversation] So what brings you to the meeting?

GIS: Oh, well I'm a student at Creighton College.

Me: Oh really, so why do you own Berkshire?

GIS: I don't, they sell the tickets on campus for $5 so we just come for the free drinks.

Me: Oh really, so is that - er - popular?

GIS: Oh yeah, most of the people here are in college.

Me: [politely] Don't you have anything better to do than gate-crash the annual meeting for a top-10 insurer?

GIS: Not really.  There's not much to do in Omaha.

 

He was NOT lying.  Most of the people I talked with were Omaha natives and seemed about as happy to talk about Berkshire as the local temperance society.  Rather than the world's largest congregation of value investors, it felt like Omaha's largest frat party.

 

$5 ticket for drinkS? Sounds like a great investment to me.

[Ballinvarosig Investors]

Oh, and if buying 1 B-share to attend the meeting sounds pathetic, here's an extract from an actual conversation I had at the Borsheim's reception:

 

Me: Hi there

Guy in suit: Hi!

Me: [brave stab at conversation] So what brings you to the meeting?

GIS: Oh, well I'm a student at Creighton College.

Me: Oh really, so why do you own Berkshire?

GIS: I don't, they sell the tickets on campus for $5 so we just come for the free drinks.

Me: Oh really, so is that - er - popular?

GIS: Oh yeah, most of the people here are in college.

Me: [politely] Don't you have anything better to do than gate-crash the annual meeting for a top-10 insurer?

GIS: Not really.  There's not much to do in Omaha.

 

He was NOT lying.  Most of the people I talked with were Omaha natives and seemed about as happy to talk about Berkshire as the local temperance society.  Rather than the world's largest congregation of value investors, it felt like Omaha's largest frat party.

Value investing at its finest! I love it.

[BRK7]

Does anyone know if the meeting has been recorded somewhere so it can be downloaded? I kinda want to put in my records. It turns out to be surprisingly hard to pull the video from the yahoo site.

 

rb,

 

It's hardly a direct reply to your post, but I found the full version on Youtube today [and I don't know if it will stay there - [Yahoo IP[?]]].

 

don't see it on youtube.  has it been taken down already?

[peluche]

Does anyone know if the meeting has been recorded somewhere so it can be downloaded? I kinda want to put in my records. It turns out to be surprisingly hard to pull the video from the yahoo site.

 

rb,

 

It's hardly a direct reply to your post, but I found the full version on Youtube today [and I don't know if it will stay there - [Yahoo IP[?]]].

 

don't see it on youtube.  has it been taken down already?

Here's the youtube link: https://www.youtube.com/watch?v=hrulcIBe3Z0

[rb]

Thanks

[stahleyp]

awesome. thanks!

[Mephistopheles]

I know quite a few people haven't been satisfied with the quality of the questions. I'm thinking, Buffett should ask an all star group of investors to be seated in the analyst panel instead of equity research folks. Imagine a panel of Gabelli, Ackman, and Pabrai or something like that? They are regulars at the meeting and I'm sure would have no problem doing so. Would be a win win for everyone.

[stahleyp]

Everything in life that we choose to do has a benefit, otherwise we wouldn't choose to do it. Nearly all these things also have associated risks or harms. The question is then is the risk worth the benefit? The answer is different for different people and also depends on the quantity of the product consumed.

 

Smoking tobacco happens to be one of the few products where the risks and harm outweigh the benefits for every single person. Therein lies the difference as to why Buffett and Munger avoid it but not soda, alcohol, fast food, or chocolates.

 

 

 

 

I somehow doubt the "joys" of soda are higher for people who drink it than the "joys" of tobacco for those that participate. There is plenty of research that shows soda increases the risk of obesity and diabetes. Diet soda has also been linked to cognitive impairment.  For what it's worth, I avoid both.

 

 

[Mephistopheles]

Everything in life that we choose to do has a benefit, otherwise we wouldn't choose to do it. Nearly all these things also have associated risks or harms. The question is then is the risk worth the benefit? The answer is different for different people and also depends on the quantity of the product consumed.

 

Smoking tobacco happens to be one of the few products where the risks and harm outweigh the benefits for every single person. Therein lies the difference as to why Buffett and Munger avoid it but not soda, alcohol, fast food, or chocolates.

 

 

 

 

I somehow doubt the "joys" of soda are higher for people who drink it than the "joys" of tobacco for those that participate. There is plenty of research that shows soda increases the risk of obesity and diabetes. Diet soda has also been linked to cognitive impairment.  For what it's worth, I avoid both.

 

 

 

No, but the "harms" are higher for tobacco. One can be enjoyed in moderation, the other can't.

[Guest Schwab711]

We should make a speeding ticket have the same penalty as attempted assault with a deadly weapon and only penalize and heavily regulate General Motors' passenger vehicles.

[BRK7]

thx, peluche

[Guest longinvestor]

I know quite a few people haven't been satisfied with the quality of the questions. I'm thinking, Buffett should ask an all star group of investors to be seated in the analyst panel instead of equity research folks. Imagine a panel of Gabelli, Ackman, and Pabrai or something like that? They are regulars at the meeting and I'm sure would have no problem doing so. Would be a win win for everyone.

 

Agree, only would like managers who've owned BRK and for a long time to be there. They'd ask the right questions being vested in it. And of course some one who's short the stock. Not Kass, please!

[RadMan24]

This whole thing about Coke is insane. Munger elaborated on this issue on the yahoo finance interview as well for those interested, look there.

[rmitz]

This whole thing about Coke is insane. Munger elaborated on this issue on the yahoo finance interview as well for those interested, look there.

 

It's not quite as insane as it looks.  The difference is in that Coke had continued to push more, more more via advertising of all sorts, even when Americans drink vastly more than they really should anyway.  There's no problem in Europe as far as I saw where you don't really have fountain beverages (or at least no free refills) and you often get a traditional 8oz serving.  Here in the US, often 20oz is now a "small", 32 very common and even 64 available.

 

Should it be illegal?  No, of course not, that's a straw man.  There's really no issue with making it available in general. 

 

I think a lot of this was incentivized by the emphasis on the # of 8 oz servings metric.  Even Buffett used to tout this metric in the annual letters.  This created vastly larger drinks in the US.  It is entirely possible that with a different focus, economically Coke could make just as much if not more money with a higher price paid for fewer servings--I'm speculating on this point though.

[spartansaver]

What is either side trying to get/learn by winning this debate? There were probably 50 other questions and the best thing you can debate on is the coke question.

 

I really enjoyed hearing Buffett's reasoning behind minimal due diligence. Essentially you will not go wrong in getting the minor details wrong, it is your view of the industry economics that will determine whether or not you do well. WB also mentioned pattern recognition multiple times, which seems to point to the value of watching these industries for 50+ years.