Monday, May 04, 2009

Warren Buffet's AGM

I am just back from Omaha. I was at the Berkshire Hathaway (Warren Buffet) annual meeting. Very inspirational event.

35,000 people attended in a stadium. It felt like a concert atmosphere. Warren Buffet and Charlie Munger candidly fielded questions for 6 hours.

There was a tradeshow of the companies he has investments in. This was brilliant cross marketing. Get your shareholders to buy your products. Obvious and simple and adds value to his investments.

The message mostly reinforced everything I knew but it was reassuring. The sky is not falling. Everything is long term. Do smart business. The basics win long term. Look for value.

I liked the simple analysis they do of companies. They even call it false precision to use computers to calculate to multiple digits since so much is dependant on assumptions.

Some Quotes:

"Just because everyone else is doing it does not make it a good idea" (my mom used that on me all the time)

"Derivatives are weapons of mass destruction"

"Whenever anyone buys a security, someone is selling it. They cannot both be right"

"don't obsess on one disadvantage when you have so many advantages"

"Capitalism is creative construction"

Generally I felt an optimism about life and the future.

Changing topics, I was nominated to the National Magazine Awards for an article I wrote for Profit Magazine. From an email from them:

I know it’s a cliche, but given the prestige of the NMAs within Canada’s magazine industry, it really is an honour just to be nominated, whether or not you also go on to win a gold or silver.

Thanks again for your contribution to our success with Your Next Big Thing.

This is a humbling honour for me. I will note that I was only one of seven contributors to the section so the award is not all mine.

5 Comments:

At 8:36 AM, Anonymous Michael Williams said...

Great post, I love the Quotes.

 
At 4:48 PM, Anonymous kevin said...

The sky is not falling. Some days it feels so close we could bump our head on it. :)

Like all problems, this will pass with time. I like the quotes.

Must have been a great event.

regards,

 
At 9:38 AM, OpenID scottlivingston said...

Hey Jim, I'm jealous. I'll get to Omaha one of these days. Bill Ghormley, one of Horst Engineering's advisors took issue with the "Capitalism is Creative Construction" quote. Bill is an ardent capitalist, but like me, questions whether all enterprises, and all that is built are not necessarily good for the long term. He reminded me of Joseph Schumpeter's position and his "Capitalism is Creative Destruction" theory. Surely, Buffet had him in mind. Schumpeter also couldn't predict business cycles exclusively with mathematics.

Ghormley specifically said to me via e-mail, "...the sooner one does not cling to past constructions, the sooner better decisions are made about next steps and better strategies for one's enterprise."

That is the essence of a business cycle planning process.

http://en.wikipedia.org/wiki/Schumpeter

http://transcriptions.english.ucsb.edu/archive/courses/liu/english25/materials/schumpeter.html

I'm biased in that I feel most privately held family businesses think long term as part of their DNA, but this isn't quite true for many large corporations. Berkshire is among the largest.

Switching gears, but also along the lines of lifecycles: as an engineer, you are aware of the concept of lifecycle design. Make it so it breaks, then sell lots of spare part. Why don't brakes last for the life of the car? Why don't shingles last for the life of the house? Why can't you change the battery in an iPod? Even Fruit of the Loom underwear(a Berkshire product) wears out! And so on.

Oh well, glad to hear that Berkshire is thinking long term...at least a little. Did you buy anything for Elizabeth at Borsheim's?

 
At 9:25 PM, Anonymous Anonymous said...

I don't always get to read you as soon as you post, so sometimes I catch up on your posts by reading a month at a time.

Funny the things that leap out at me when I read a blocks of blogs, rather than taking them individually. You've taken to mentioning your mother a number of times this month. That tells me she is probably a pretty cool lady.

Good to know moms have that kind of sticking power. Gives me something to look forward to.

Congrats on the NMA gig. While you may have been one of 7, you certainly write well enough to have just been the one. Enjoy the glow.

 
At 8:28 AM, Blogger FRANCESCA said...

"Whenever anyone buys a security, someone is selling it. They cannot both be right"

Love it! :)

 

Post a Comment

Links to this post:

Create a Link

<< Home