Warren Buffett: WHY GOOGLE STOCK WILL OUTPERFORM 📈💰 Everything he ever said on Google (Alphabet) 🤓

Warren Buffett and Charlie Munger explain why Google's stock will always outperform. This is because Google (Alphabet) has an extremely high return on capital.

Companies with a high return on capital don't need to reinvest much of what they earn to achieve growth.

The best companies in the world are those with a high Return on Capital.

Often, companies in the software industry have very high return on capital, while heavier industrial companies have lower return on capital.

The challenge for investors, of course, is that the best companies are also the most expensive in terms of earnings. And, furthermore, there aren't many of them.

Other companies with very high return on capital include companies like Apple, Microsoft, Meta (Facebook), Amazon, Netflix, etc.

Here is everything Warren Buffett and Charlie Munger have ever said about the company Google.

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Those two guys who created that are two of the smartest young men in the whole country

They make lots of money. They earn fantastic returns on capital. They look very tough to dislodge, where they have their strengths.

You know, I would not be at all surprised to see them be worth a lot more money 10 years from now

Buying a high-return-on-assets, very light-capital-intensive business that’s going to grow beats the hell out of buying something that requires a lot of capital to grow.

And if you take those five companies, essentially, you could run them with no equity capital at all. None.

That is a very different world than when Andrew Carnegie was building a steel mill and then using the earnings to build another steel mill and getting very rich in the process, or Rockefeller was building refineries and buying tank cars and everything.

Generally speaking, over — for a very long time in our capitalism, growing and earning large amounts of money required considerable reinvestment of capital and large amounts of equity capital, the railroads being a good example.

You literally don’t need any money to run the five companies.

There’s no question that a business that doesn’t take any capital and grows and has, you know, almost infinite returns on required equity capital, is the ideal business.

that’s a far, far, far better way of laying out money than what we’re able to do when buying capital-intensive businesses.

When Google can sell you something that — where GEICO was paying 11 bucks or something every time somebody clicked something — that is a lot different than spending years finding the right site and developing, you know, iron mines to supply the steel plants and, you know, railroads to haul the iron to where the steel is produced and distribution points, and all that sort of thing.

Our capitalist system, basically, was built on tangible assets, and reinvestment, and all that sort of thing, and a lot of innovation and invention to go with it.
But this is so much better, if you happen to be good at it, to essentially be able to build hundreds of billions of market value without really needing any capital.
That is a different world than existed in the past.

CHARLIE MUNGER: What was our worst mistake in the tech field, I think we were smart enough to figure out Google. Those ads worked so much better in the early days than anything else.

So I would say that we failed you there. And we were smart enough to do it and didn’t do it. We do that all the time, too.

Well, we’ve always known that the dream business is the one that takes very little capital and grows a lot, and Apple and Google and Microsoft and Facebook are terrific examples of that.

They’re in better business. It’s a much better business than we have, and Microsoft’s business is a way better business than we have. Google’s business is a way better business. We’ve known that a long time. We found that out with See’s candy in 1972. I mean, See’s candy just doesn’t require that much capital.

They are incredible companies, in terms of what they earn on capital. They don’t require a lot of capital, and they gush out more money

We’ve looked at it, and you know, I made a mistake in not being able to come to a conclusion where I really felt that at the present prices that the prospects were far better than the prices indicated.

So, we’ll do our best to enlarge the circle of competence of the people at Berkshire so that we don’t miss so many. But we’ll miss a lot in the future. We missed a lot in the past.

The main thing to do is to find things where our batting average is going to be high. And if we miss the biggest ones, that really doesn’t bother us, as long as the things we do with money work out OK.

We were not ideally located to be high-tech wizards.

But it wasn’t like what they were doing was a mystery to me. The mystery was how much competition would come along.

Some of the age-related stupidity at headquarters has been ameliorated by Ted [Weschler] and Todd [Combs] joining us.

We just sat there sucking our thumbs.

[tonimontana]

One improvement idea for the videos: It may be helpful to show the year of the comment, which Buffett makes. That means showing the number of the annual meeting year in the corner would be very helpful….thanks.

[tonimontana]

I discovered this wonderful channel. Thanks for the excellent content!!!

[booneflm]

Man he dropping gems 💎, I like how you edit your videos, showing pictures so we can view in more detail