2004 Berkshire Hathaway Annual Meeting (Full Version)

Berkshire Hathaway annual shareholder meeting (May 1, 2004)
Video combines Morning session & Afternoon session.

[JenPurple]

Habits in value investing 4:33:33
Basic principles
Widen the universe
How businesses operate overtime?
Investment framework + learn everything you can about the business

[SeenaAbedi]

2:56:27 Warren and Charlie answer a question regarding importation of foreign workers. The current state of US immigration law as it applies to the employment of highly skilled permanent workers.

[SeenaAbedi]

3:42:20 Warren explains how direct marketing in auto insurance at GEICO come from Leo Goodwin and his wife who had come from USAAA and how auto insurance use to be sold by a system where the agent would get large commissions and that there were cartel like rates. He goes on to explain the history of auto insurance.

[FighterX]

1:00:53 2:31:50 prices do crazy things sometimes
1:35:10 reluctance to keep buying after slight price increase is a costly mistake
1:40:18
2:36:59 people adapt morality of their leadership
2:48:23
3:22:24
3:55:00
4:38:22

[JenPurple]

“It’s a game of continuing to learn!” 4:34:58
“It’s a life-long game, if you don’t keep learning, other ppl will pass you by.”

[JenPurple]

4:53:18 Avoid evil or irrational people! Hang out with ppl better than you!

[SeenaAbedi]

4:37:53 Warren says he doesn't consider stupid things. Buffett says that people get irritated because people will call him and when they're in the middle of their first sentence, he'll tell that person to forget it because he can see what's coming.

[SeenaAbedi]

1:38:34 The question of finding other advisers. Warren says he felt an obligation to send his partners to an alternative person when he closed down his partnership.

Warren could only think of 2 people, David Sanford Gottesman and Bill.

Warren adds that the fact he could only come up with two names in a time where he was very active says something about how difficult it is in finding good managers.

[SeenaAbedi]

1:33:00 Warren talks about the mistakes he made of not investing into a company because the price was X and it might have went up to X + 1/8.

They mention Walmart as an example.

[SeenaAbedi]

50:10 Warren talks about compensations at Berkshire and how they work.

Warren offered over 50% to the CEO, David Sokol and less than 50% to Greg Abel.

David Sokol asked to split it 50/50 between himself and Greg.

[SeenaAbedi]

1:24:01 Warren speaks about a persons temperament.

Warren also mentions that what we learn from history is that people don’t learn from history.

[SeenaAbedi]

2:37:30 "People sink faster to a lower prevailing morality than they rise to a higher prevailing morality but they do move in the direction of what they perceive to be the prevailing morality of those around them in many cases."

[SeenaAbedi]

4:38:12 Warren mentions Bobby Fischer vs Boris Spassky and computers. Warren tells us not to spend 10 minutes when you know after the first sentence that it isn't a great wonderful idea to be polite.

[SeenaAbedi]

2:34:53 Warren mentions the signals that throw him and Charlie off, when it comes to companies. What the company does in public in relation to their investors, the promises they make. Buffett says he's suspicious of companies who place a lot of importance on the price of their stock, these type of things get him nervous.

[JenPurple]

2:07:25 Charlie: It’s a dead horse and I miss it too.

[JenPurple]

Compensation design 3:59:15
Selling tires how you can make money from that?

[SeenaAbedi]

1:38:00 Charlie says it’s difficult to find great management or great companies in a lifetime. Therefore once you do your due diligence and are confident about something, invest large amounts. Unlike the diversification that is thought in business schools which are wrong.

[SeenaAbedi]

1:01:29 Warren says that when someone advises to put 50% into bonds and 35% equities and 15 elsewhere, is nonsense.

[SeenaAbedi]

2:30:30 Warren says he has an aversion towards leverage. He says the only way smart people can get clobbered is through leverage. Warren always predicts that a very high percentage of people in Wall Street have been clobbered at least once because of the use of leverage.

[JenPurple]

The best way to Minimize risk is to Think 1:44:51

People who wanna sell your the solution is there to convince you have that problem.