Berkshire 2018 Annual Meeting

[John Hjorth]

I'm really pleased by on Yahoo Finance to experience both those gents in good shape today!

[Graham Osborn]

I have to agree with the complaint often voiced here that the quality of the questions is just not good.  Very few substantive issues about the business are being addressed.  Unfortunately the journalists and analysts aren’t helping that much - they tend to delve into the weeds rather than asking big-picture, difficult questions.

[benchmark]

From NYT:

 

"As for Alphabet, Mr. Buffett said that he had “made a mistake.” He said he was unable to conclude that at Alphabet’s present prices, its “prospects were far better than the prices indicated.”"

 

Comparing this with his investment in Apple (and IBM), I wish someone would ask him his reasonings.

[Jurgis]

I have to agree with the complaint often voiced here that the quality of the questions is just not good.  Very few substantive issues about the business are being addressed.  Unfortunately the journalists and analysts aren’t helping that much - they tend to delve into the weeds rather than asking big-picture, difficult questions.

 

What would those big-picture, difficult questions be?

[ScottHall]

From NYT:

 

"As for Alphabet, Mr. Buffett said that he had “made a mistake.” He said he was unable to conclude that at Alphabet’s present prices, its “prospects were far better than the prices indicated.”"

 

Comparing this with his investment in Apple (and IBM), I wish someone would ask him his reasonings.

 

Good of him to own up to this. He has cost shareholders a lot in terms of opportunity cost the past decade, hate to say it but it's true. Outside the GFC Berkshire has done nothing impressive and TBH even considering that opportunity returns have not been that impressive compared to what they should have been with the "world's greatest investor" at the helm.

 

Munger says Buffett keeps getting better with age. I don't see it, honestly. He's still very good but I don't get the impression he or Berkshire have morphed with the times in the way that is sold. It's cool he's trying new things with Apple, maybe he'll get his old groove back sooner or later.

 

I sold my Berkshire stock a while back, held it for a quick +20% on tax reform and redeployed to better opportunities. It'll probably do fine but not much more than fine, in the long run.

[scorpioncapital]

Be happy opportunity cost lost has resulted in at least matching the sp500. It's quite a tribute that a one third pile of cash vehicle can do that...often when companies don't swing enough or make mistakes they tend to severely underperform the index which is the true disaster you need to avoid . Matching averages is not the worst fate.

 

[tombgrt]

From NYT:

 

"As for Alphabet, Mr. Buffett said that he had “made a mistake.” He said he was unable to conclude that at Alphabet’s present prices, its “prospects were far better than the prices indicated.”"

 

Comparing this with his investment in Apple (and IBM), I wish someone would ask him his reasonings.

 

Good of him to own up to this. He has cost shareholders a lot in terms of opportunity cost the past decade, hate to say it but it's true. Outside the GFC Berkshire has done nothing impressive and TBH even considering that opportunity returns have not been that impressive compared to what they should have been with the "world's greatest investor" at the helm.

 

Munger says Buffett keeps getting better with age. I don't see it, honestly. He's still very good but I don't get the impression he or Berkshire have morphed with the times in the way that is sold. It's cool he's trying new things with Apple, maybe he'll get his old groove back sooner or later.

 

 

I'd say that is a little too negative considering size, market conditions and cash position. Ask Prem Watsa about true opportunity costs... Hell, ask most decent fund managers with a strong value bent. They'll come back in vogue at some point too. Buffett was buying in 08/09 while many were trembling with fear. And he still did some decent deals like you said. That's more than most can say. Nothing mindblowing but he has still kept up with the market and its soaring tech stocks with enormous cash levels. Maybe he got better with age but certain conditions make it very hard to see this. I'd love to see what happens if the S&P500 drops two or three years in a row! Also, selecting Todd and Ted, who both seem to be beating the market, is impressive in itself imo. They are not managing a few hunderd million...

 

So easy to say in hindsight that BRK did poor vs broader market. Maybe one of his biggest mistakes is not buying MSFT a few years back and going after IBM. (With IBM he fell prey to a backwards looking fallacy as someone else put it here. "They have always reinvented themselves thus they will do it again.") But who would have guessed Amazon, Google, Apple, Netflix, Facebook, ... would be where they are today. Five years ago, 99%+ of analysts, investors etc would have called you insane if you dared to predict this outcome. Do you know about many fund managers who got extraordinary outperformance vs the market? In any case, I would have slept better owning 100% BRK than 100% S&P500 in the last 9 years.

 

For the last 20 years, BRK has been a great stock to own in size at certain points in time. Good investors were best to trade around that. Early 2000 and 2011/2012 were two such occasions where the investment case was a no-brainer. Many didn't see it in 2000 and 2011 and I'm sure Mr Market will be blinded once again in the future.

[gfp]

Cnbc has footage and other stuff from past annual meetings, not available previously.  They call it their new 'warren buffett archive' ->

 

https://buffett.cnbc.com/annual-meetings/

[gfp]

One thing I always enjoy is when someone asks about their access to the 'dry powder' they currently show.  This year it was about insurance regulators only allowing a certain amount of dividends out of the ins. companies per year without special request/approval.  Of course, cash does have to be outside the Ins. company to buy and cancel BRK shares, but it probably isn't necessary in order to buy them.  They can be distributed to the parent and cancelled later.

 

But my point is that they don't want to spit out a number (Charlie has accidentally spit out, 'we could do a 150 billion dollar deal tomorrow if one came along' last year) - but they were clearly indicating that they will have no problem at all getting creative and closing an enormous acquisition if one were to be possible.  This year he mentioned partners would line up - like FFH uses OMERS and others - even though it would be unlikely that BRK would require partners.  If debt markets stay like this, obviously that can and will be used as a major lever.  And, of course, one of the reasons BRK cash seldom goes down by much - even during years with large acquisitions like PCP - is that the amount of time between a deal being announced and it ultimately closing can end up bringing in another $25+ billion in cash to Berkshire.  Float growth, maturing securities, free cash flow from subsidiaries.

 

Through relatively short term (2-10 years) debt issues, Buffett would have no problem "pre-spending" some of Berkshire's future earnings power on the right deal.  Compared to the current situation it would be a luxury.

 

And capital doesn't have to be dividend-ed out of the Insurance companies to make acquisitions.  There is no problem if NICO ends up owning another large operating business.

[John Hjorth]

Total policyholders statutory surplus of this "tiny taxi insurance company" doing business out of Omaha is actually USD 128,562,565,980 at year end 2017. [ : - ) ]

[gfp]

So many of the shareholder questions were from Chinese nationals and children.  A few questions from the Chinese folks were ok - trade relations, why not look to buy chinese businesses, etc.  The worst was probably from the Chinese woman who works at a 'family office' for high net worth Chinese.  "You two would be my dream clients"  ???  why?  "Do you have family offices and what do they do for you?"  give me a break...

 

I have to agree with the complaint often voiced here that the quality of the questions is just not good.  Very few substantive issues about the business are being addressed.  Unfortunately the journalists and analysts aren’t helping that much - they tend to delve into the weeds rather than asking big-picture, difficult questions.

[ScottHall]

From NYT:

 

"As for Alphabet, Mr. Buffett said that he had “made a mistake.” He said he was unable to conclude that at Alphabet’s present prices, its “prospects were far better than the prices indicated.”"

 

Comparing this with his investment in Apple (and IBM), I wish someone would ask him his reasonings.

 

Good of him to own up to this. He has cost shareholders a lot in terms of opportunity cost the past decade, hate to say it but it's true. Outside the GFC Berkshire has done nothing impressive and TBH even considering that opportunity returns have not been that impressive compared to what they should have been with the "world's greatest investor" at the helm.

 

Munger says Buffett keeps getting better with age. I don't see it, honestly. He's still very good but I don't get the impression he or Berkshire have morphed with the times in the way that is sold. It's cool he's trying new things with Apple, maybe he'll get his old groove back sooner or later.

 

 

I'd say that is a little too negative considering size, market conditions and cash position. Ask Prem Watsa about true opportunity costs... Hell, ask most decent fund managers with a strong value bent. They'll come back in vogue at some point too. Buffett was buying in 08/09 while many were trembling with fear. And he still did some decent deals like you said. That's more than most can say. Nothing mindblowing but he has still kept up with the market and its soaring tech stocks with enormous cash levels. Maybe he got better with age but certain conditions make it very hard to see this. I'd love to see what happens if the S&P500 drops two or three years in a row! Also, selecting Todd and Ted, who both seem to be beating the market, is impressive in itself imo. They are not managing a few hunderd million...

 

So easy to say in hindsight that BRK did poor vs broader market. Maybe one of his biggest mistakes is not buying MSFT a few years back and going after IBM. (With IBM he fell prey to a backwards looking fallacy as someone else put it here. "They have always reinvented themselves thus they will do it again.") But who would have guessed Amazon, Google, Apple, Netflix, Facebook, ... would be where they are today. Five years ago, 99%+ of analysts, investors etc would have called you insane if you dared to predict this outcome. Do you know about many fund managers who got extraordinary outperformance vs the market? In any case, I would have slept better owning 100% BRK than 100% S&P500 in the last 9 years.

 

For the last 20 years, BRK has been a great stock to own in size at certain points in time. Good investors were best to trade around that. Early 2000 and 2011/2012 were two such occasions where the investment case was a no-brainer. Many didn't see it in 2000 and 2011 and I'm sure Mr Market will be blinded once again in the future.

 

I really don't think that's true. I and many others have made very good returns on Facebook, Amazon and Google over the past five years. I sold out of Facebook recently - I will buy back in - held it since 2014 and had 137% gain on the position. Still have AMZN and GOOG.

 

I didn't miss these stocks and a lot of people on these forums think I'm one of the biggest idiots on here. I beat Buffett at growth investing, so did a lot of others on this forum TBH. He owns up to his mistake and there's no shame in making mistakes, but to say that 99% of people couldn't figure those stocks out seems a little silly to me.

[Cigarbutt]

Humble contribution.

 

Investment is like a race and you have to choose the vehicle and the driver.

 

It is impossible to maintain a permanent edge. ScottHall's comments may be right that the time has come but (politely submitted) the comments remind me of an article I read in 1999 titled: "What's wrong, Warren?" when I was trying to define the rules of the race.

 

At a time when the value of moats is questioned, if there is a message that will stay, even after Mr. Buffett is gone, it is that Markets can sometimes be wrong and, in spades, spectacularly so.

 

Borrowed from "Get your groove back":

 

"Looking at the past in the rear view mirror,

Moving so fast I've never seen clearer,

Now I get a new way to feel ten times better,"

 

Here to learn but to win a race, you have to try to finish the race, even if there is no finish line.

 

[tombgrt]

From NYT:

 

"As for Alphabet, Mr. Buffett said that he had “made a mistake.” He said he was unable to conclude that at Alphabet’s present prices, its “prospects were far better than the prices indicated.”"

 

Comparing this with his investment in Apple (and IBM), I wish someone would ask him his reasonings.

 

Good of him to own up to this. He has cost shareholders a lot in terms of opportunity cost the past decade, hate to say it but it's true. Outside the GFC Berkshire has done nothing impressive and TBH even considering that opportunity returns have not been that impressive compared to what they should have been with the "world's greatest investor" at the helm.

 

Munger says Buffett keeps getting better with age. I don't see it, honestly. He's still very good but I don't get the impression he or Berkshire have morphed with the times in the way that is sold. It's cool he's trying new things with Apple, maybe he'll get his old groove back sooner or later.

 

 

I'd say that is a little too negative considering size, market conditions and cash position. Ask Prem Watsa about true opportunity costs... Hell, ask most decent fund managers with a strong value bent. They'll come back in vogue at some point too. Buffett was buying in 08/09 while many were trembling with fear. And he still did some decent deals like you said. That's more than most can say. Nothing mindblowing but he has still kept up with the market and its soaring tech stocks with enormous cash levels. Maybe he got better with age but certain conditions make it very hard to see this. I'd love to see what happens if the S&P500 drops two or three years in a row! Also, selecting Todd and Ted, who both seem to be beating the market, is impressive in itself imo. They are not managing a few hunderd million...

 

So easy to say in hindsight that BRK did poor vs broader market. Maybe one of his biggest mistakes is not buying MSFT a few years back and going after IBM. (With IBM he fell prey to a backwards looking fallacy as someone else put it here. "They have always reinvented themselves thus they will do it again.") But who would have guessed Amazon, Google, Apple, Netflix, Facebook, ... would be where they are today. Five years ago, 99%+ of analysts, investors etc would have called you insane if you dared to predict this outcome. Do you know about many fund managers who got extraordinary outperformance vs the market? In any case, I would have slept better owning 100% BRK than 100% S&P500 in the last 9 years.

 

For the last 20 years, BRK has been a great stock to own in size at certain points in time. Good investors were best to trade around that. Early 2000 and 2011/2012 were two such occasions where the investment case was a no-brainer. Many didn't see it in 2000 and 2011 and I'm sure Mr Market will be blinded once again in the future.

 

I really don't think that's true. I and many others have made very good returns on Facebook, Amazon and Google over the past five years. I sold out of Facebook recently - I will buy back in - held it since 2014 and had 137% gain on the position. Still have AMZN and GOOG.

 

I didn't miss these stocks and a lot of people on these forums think I'm one of the biggest idiots on here. I beat Buffett at growth investing, so did a lot of others on this forum TBH. He owns up to his mistake and there's no shame in making mistakes, but to say that 99% of people couldn't figure those stocks out seems a little silly to me.

 

Maybe I didn't make clear enough what I meant exactly. There is a difference between figuring some of these stocks out and predicting that they would be 5-10 baggers from 2013 levels. I'm not stating that 99% didn't figure these out, I'm saying that most people would have laughed in your face when you would have claimed, for instance, that Netflix would have a $140B market cap in early 2018. 99% seems about right to me, but the number was meant more to make a point. Could be 95%+ just the same. My point is that sentiment was véry different back then and that it was not easy to predict this outcome. If you and others did, you guys are eithers very bright or very lucky. I remember you buying FB a few years back, so congratz! (As an aside: I wouldn't assume the average money manager is on par with the brighest on this forum tbh. Or they might be but have various reasons (career risk etc) not to act on it.)

 

Would love to see if we could find more than a handful of fund managers who have, in the last 9 years, either: 1) trailed the S&P500 with an equal cash balance on average; 2) outperformed the S&P500 with >10b in assets. I'm also very interested to see how these managers will fare from now until after the next stock market slump versus Buffett, Todd and Ted. Somehow I feel I already know the answer.

 

Anyway, I think we both agree that Buffett is still very good but that he made some mistakes. So not really a big difference in opinion. Given the circumstances I just believe these mistakes are understandable and minor. Buffett isn't omniscient.

 

 

 

[ScottHall]

Humble contribution.

 

Investment is like a race and you have to choose the vehicle and the driver.

 

It is impossible to maintain a permanent edge. ScottHall's comments may be right that the time has come but (politely submitted) the comments remind me of an article I read in 1999 titled: "What's wrong, Warren?" when I was trying to define the rules of the race.

 

At a time when the value of moats is questioned, if there is a message that will stay, even after Mr. Buffett is gone, it is that Markets can sometimes be wrong and, in spades, spectacularly so.

 

Borrowed from "Get your groove back":

 

"Looking at the past in the rear view mirror,

Moving so fast I've never seen clearer,

Now I get a new way to feel ten times better,"

 

Here to learn but to win a race, you have to try to finish the race, even if there is no finish line.

 

More about investing being like racing, for those interested: http://www.cornerofberkshireandfairfax.ca/forum/berkshire-hathaway/sorry-warren!-another-year-of-dragging-ass/

[scorpioncapital]

One possible scenario , rates double, berkshire stock stays flat , fangs crash 50 percent... Warren said in a recent interview investing is not as easy as just buying anything at any price . I predict in due time the value of moats won't change, high valuation for growth will come down as the noose of rates ratchet up. And the basic principles he describes will be made clear again because like mathematics or gravity its just basic math.

[ScottHall]

One possible scenario , rates double, berkshire stock stays flat , fangs crash 50 percent... Warren said in a recent interview investing is not as easy as just buying anything at any price . I predict in due time the value of moats won't change, high valuation for growth will come down as the noose of rates ratchet up. And the basic principles he describes will be made clear again because like mathematics or gravity its just basic math.

 

Yeah, then Warren gets to buy all the FANG stocks at the prices he originally should have. And I get to buy more. Not a bad idea!

[rb]

I think that all these comparisons to indexes miss the point that you have to be comfortable with what you hold.

 

Let's say that I didn't buy Amazon, or Netflix, or whatever. Yes I've missed on returns from those names. But it's not like I didn't know they existed. I didn't buy them because I didn't feel comfortable holding those. So then why would I put together a portfolio that has heavy weights in those names? After all the S&P 500 is just a portfolio of stocks.

[ScottHall]

I think that all these comparisons to indexes miss the point that you have to be comfortable with what you hold.

 

Let's say that I didn't buy Amazon, or Netflix, or whatever. Yes I've missed on returns from those names. But it's not like I didn't know they existed. I didn't buy them because I didn't feel comfortable holding those. So then why would I put together a portfolio that has heavy weights in those names? After all the S&P 500 is just a portfolio of stocks.

 

Scorpion has the right idea, IMO. Perhaps Buffett is just waiting for a market pullback to buy the tech stocks. If the market crashed 50% all of them would probably be screaming buys.

[DanielGMask]

From NYT:

 

"As for Alphabet, Mr. Buffett said that he had “made a mistake.” He said he was unable to conclude that at Alphabet’s present prices, its “prospects were far better than the prices indicated.”"

 

Comparing this with his investment in Apple (and IBM), I wish someone would ask him his reasonings.

 

Good of him to own up to this. He has cost shareholders a lot in terms of opportunity cost the past decade, hate to say it but it's true. Outside the GFC Berkshire has done nothing impressive and TBH even considering that opportunity returns have not been that impressive compared to what they should have been with the "world's greatest investor" at the helm.

 

Munger says Buffett keeps getting better with age. I don't see it, honestly. He's still very good but I don't get the impression he or Berkshire have morphed with the times in the way that is sold. It's cool he's trying new things with Apple, maybe he'll get his old groove back sooner or later.

 

 

I'd say that is a little too negative considering size, market conditions and cash position. Ask Prem Watsa about true opportunity costs... Hell, ask most decent fund managers with a strong value bent. They'll come back in vogue at some point too. Buffett was buying in 08/09 while many were trembling with fear. And he still did some decent deals like you said. That's more than most can say. Nothing mindblowing but he has still kept up with the market and its soaring tech stocks with enormous cash levels. Maybe he got better with age but certain conditions make it very hard to see this. I'd love to see what happens if the S&P500 drops two or three years in a row! Also, selecting Todd and Ted, who both seem to be beating the market, is impressive in itself imo. They are not managing a few hunderd million...

 

So easy to say in hindsight that BRK did poor vs broader market. Maybe one of his biggest mistakes is not buying MSFT a few years back and going after IBM. (With IBM he fell prey to a backwards looking fallacy as someone else put it here. "They have always reinvented themselves thus they will do it again.") But who would have guessed Amazon, Google, Apple, Netflix, Facebook, ... would be where they are today. Five years ago, 99%+ of analysts, investors etc would have called you insane if you dared to predict this outcome. Do you know about many fund managers who got extraordinary outperformance vs the market? In any case, I would have slept better owning 100% BRK than 100% S&P500 in the last 9 years.

 

For the last 20 years, BRK has been a great stock to own in size at certain points in time. Good investors were best to trade around that. Early 2000 and 2011/2012 were two such occasions where the investment case was a no-brainer. Many didn't see it in 2000 and 2011 and I'm sure Mr Market will be blinded once again in the future.

 

I really don't think that's true. I and many others have made very good returns on Facebook, Amazon and Google over the past five years. I sold out of Facebook recently - I will buy back in - held it since 2014 and had 137% gain on the position. Still have AMZN and GOOG.

 

I didn't miss these stocks and a lot of people on these forums think I'm one of the biggest idiots on here. I beat Buffett at growth investing, so did a lot of others on this forum TBH. He owns up to his mistake and there's no shame in making mistakes, but to say that 99% of people couldn't figure those stocks out seems a little silly to me.

 

Maybe I didn't make clear enough what I meant exactly. There is a difference between figuring some of these stocks out and predicting that they would be 5-10 baggers from 2013 levels. I'm not stating that 99% didn't figure these out, I'm saying that most people would have laughed in your face when you would have claimed, for instance, that Netflix would have a $140B market cap in early 2018. 99% seems about right to me, but the number was meant more to make a point. Could be 95%+ just the same. My point is that sentiment was véry different back then and that it was not easy to predict this outcome. If you and others did, you guys are eithers very bright or very lucky. I remember you buying FB a few years back, so congratz! (As an aside: I wouldn't assume the average money manager is on par with the brighest on this forum tbh. Or they might be but have various reasons (career risk etc) not to act on it.)

 

Would love to see if we could find more than a handful of fund managers who have, in the last 9 years, either: 1) trailed the S&P500 with an equal cash balance on average; 2) outperformed the S&P500 with >10b in assets. I'm also very interested to see how these managers will fare from now until after the next stock market slump versus Buffett, Todd and Ted. Somehow I feel I already know the answer.

 

Anyway, I think we both agree that Buffett is still very good but that he made some mistakes. So not really a big difference in opinion. Given the circumstances I just believe these mistakes are understandable and minor. Buffett isn't omniscient.

 

Everybody is fallible, including Buffett. But I don’t think that passing on AMZN, GOOG or FB is equivalent to making a mistake. Those companies weren’t sure things when they were smaller/cheaper, and putting money into something where the price to owner’s earnings is ridiculously high because the market assumes it will grow and grow is more of a guessing game than investing.

 

Moats used to be way more stable and difficult to overcome. Technology disruption changed that and the likes of Buffett (myself included though much younger) are adapting to this new paradigm of assets-light companies with ever-changing moats.

 

Anyway, I don’t think we will ever see another investor with the capacity to achieve such great results for more than 60 years while maintaining an honest and humble attitude. It really doesn’t matter if he missed the likes of Intel, Wal-mart or Facebook, on the contrary, what’s incredible is that he achieved the impossible even after missing those great companies!

[tombgrt]

Maybe I didn't make clear enough what I meant exactly. There is a difference between figuring some of these stocks out and predicting that they would be 5-10 baggers from 2013 levels. I'm not stating that 99% didn't figure these out, I'm saying that most people would have laughed in your face when you would have claimed, for instance, that Netflix would have a $140B market cap in early 2018. 99% seems about right to me, but the number was meant more to make a point. Could be 95%+ just the same. My point is that sentiment was véry different back then and that it was not easy to predict this outcome. If you and others did, you guys are eithers very bright or very lucky. I remember you buying FB a few years back, so congratz! (As an aside: I wouldn't assume the average money manager is on par with the brighest on this forum tbh. Or they might be but have various reasons (career risk etc) not to act on it.)

 

Would love to see if we could find more than a handful of fund managers who have, in the last 9 years, either: 1) trailed the S&P500 with an equal cash balance on average; 2) outperformed the S&P500 with >10b in assets. I'm also very interested to see how these managers will fare from now until after the next stock market slump versus Buffett, Todd and Ted. Somehow I feel I already know the answer.

 

Anyway, I think we both agree that Buffett is still very good but that he made some mistakes. So not really a big difference in opinion. Given the circumstances I just believe these mistakes are understandable and minor. Buffett isn't omniscient.

 

Everybody is fallible, including Buffett. But I don’t think that passing on AMZN, GOOG or FB is equivalent to making a mistake. Those companies weren’t sure things when they were smaller/cheaper, and putting money into something where the price to owner’s earnings is ridiculously high because the market assumes it will grow and grow is more of a guessing game than investing.

 

Moats used to be way more stable and difficult to overcome. Technology disruption changed that and the likes of Buffett (myself included though much younger) are adapting to this new paradigm of assets-light companies with ever-changing moats.

 

Anyway, I don’t think we will ever see another investor with the capacity to achieve such great results for more than 60 years while maintaining an honest and humble attitude. It really doesn’t matter if he missed the likes of Intel, Wal-mart or Facebook, on the contrary, what’s incredible is that he achieved the impossible even after missing those great companies!

 

I'm not saying those were his mistakes? Are you all purposefully trying to misread my posts? ;) Or are you replying to ScottHall? I'm basically saying the same as you, DanielGMask. Not buying MSFT since the nineties is an example of an error of omission in my opinion. So I have a different view of what his mistakes are than ScottHall. Would be ridiculous to assume there is an investor out there that doesn't make mistakes anyway.

[benchmark]

What's more interesting to me is that he chose to invest in Apple now vs others, in particular google, which I think has a high probability of growth than Apple.

[tombgrt]

What's more interesting to me is that he chose to invest in Apple now vs others, in particular google, which I think has a high probability of growth than Apple.

 

Especially considering Munger has said that GOOG has the widdest moat he has ever seen. Maybe they considered regulation risk too?

[Guest longinvestor]

Maybe I didn't make clear enough what I meant exactly. There is a difference between figuring some of these stocks out and predicting that they would be 5-10 baggers from 2013 levels. I'm not stating that 99% didn't figure these out, I'm saying that most people would have laughed in your face when you would have claimed, for instance, that Netflix would have a $140B market cap in early 2018. 99% seems about right to me, but the number was meant more to make a point. Could be 95%+ just the same. My point is that sentiment was véry different back then and that it was not easy to predict this outcome. If you and others did, you guys are eithers very bright or very lucky. I remember you buying FB a few years back, so congratz! (As an aside: I wouldn't assume the average money manager is on par with the brighest on this forum tbh. Or they might be but have various reasons (career risk etc) not to act on it.)

 

Would love to see if we could find more than a handful of fund managers who have, in the last 9 years, either: 1) trailed the S&P500 with an equal cash balance on average; 2) outperformed the S&P500 with >10b in assets. I'm also very interested to see how these managers will fare from now until after the next stock market slump versus Buffett, Todd and Ted. Somehow I feel I already know the answer.

 

Anyway, I think we both agree that Buffett is still very good but that he made some mistakes. So not really a big difference in opinion. Given the circumstances I just believe these mistakes are understandable and minor. Buffett isn't omniscient.

 

Everybody is fallible, including Buffett. But I don’t think that passing on AMZN, GOOG or FB is equivalent to making a mistake. Those companies weren’t sure things when they were smaller/cheaper, and putting money into something where the price to owner’s earnings is ridiculously high because the market assumes it will grow and grow is more of a guessing game than investing.

 

Moats used to be way more stable and difficult to overcome. Technology disruption changed that and the likes of Buffett (myself included though much younger) are adapting to this new paradigm of assets-light companies with ever-changing moats.

 

Anyway, I don’t think we will ever see another investor with the capacity to achieve such great results for more than 60 years while maintaining an honest and humble attitude. It really doesn’t matter if he missed the likes of Intel, Wal-mart or Facebook, on the contrary, what’s incredible is that he achieved the impossible even after missing those great companies!

 

I'm not saying those were his mistakes? Are you all purposefully trying to misread my posts? ;) Or are you replying to ScottHall? I'm basically saying the same as you, DanielGMask. Not buying MSFT since the nineties is an example of an error of omission in my opinion. So I have a different view of what his mistakes are than ScottHall. Would be ridiculous to assume there is an investor out there that doesn't make mistakes anyway.

MSFT is out of bounds for Berkshire. Including Todd and Ted because of the perception problem. This is as brought up even yesterday at the meeting.

[tombgrt]

Right, forgot about that reason. Read it a few years ago. Thanks.