10 pearls from Warren Buffett’s annual shareholder meeting

It’s the one event of the year that followers of investment guru Warren Buffett wait for; the annual general meeting of Buffett’s company Berkshire Hathaway.
The meeting, which has been called the “Woodstock for capitalists”, attracted 35,000 people to Buffett’s hometown of Omaha, Nebraska.

Buffett and his sidekick and chief investment officer Charlie Munger spoke for around six hours, taking questions from the floor and updating investors about the performance of the company’s businesses and investments.

Warren Buffett at Berkshire Hathaway's meeting

Given Berkshire Hathaway shares are down around 30% over the past 12 months, some observers said the mood of the meeting was a bit more subdued than in recent years, but that didn’t stop the flow of great quotes from Buffett.

Here are a selection of his best quotes from the weekend:

“The most important lesson is that the world needs a whole lot less leverage.”
Buffett on the global financial crisis.

“We’re perfectly willing to make a deal for cash that makes sense to us. There are so many things going on in the US right now that are interesting to us.”
Buffett on how recession bargains and how Berkshire might spend its $20 billion in cash.

“Basically five years ago, virtually everyone in the country had this model in their mind that house prices could not fall significantly. They were wrong.”
Buffett on why ratings agencies and financial analysts failed to see the crash in sub-prime debt.

The Government in mid-September last year were facing a situation akin to a meltdown of the whole financial system. We really were looking into the abyss at the time and a lot of action was taken very promptly. Overall I commend the actions.”
Buffett on the US Government’s response to the financial crisis.

“There will be new rules that affect us one way or another. The American public do not like bankers now and they are suffering. They had worries in the last 12 to 18 months that are of an order of magnitude they have never had in their lives, and they are mad.”
Buffett on why regulation of the financial sector is about to increase.

“If you are in the investment business and you have a high IQ, sell 30 points to the next person. You do not have to be a genius at all. But you do have to have emotional stability, and you have to have some peace about your decisions. I don’t know how much is innate and how much can be taught. If you have that quality you will do very well. As I have said many times, it is simple, but not easy.”
Buffett on what makes a good investor.

“The world depends on calculators instead of people sitting down with actual arithmetic. If you need to use a computer or calculator, you shouldn’t buy it.”
Buffett on assessing complex investments.

“For most newspapers in the United States, we would not buy them at any price. They have the possibility of going to just unending losses.”
Buffett on traditional media.

“If you think we’re in trouble because the stock price went down, you don’t understand what’s going on.”
Buffett reassures his followers.

“I don’t really see any advantages in having some crown prince around.”
Buffett on why he and Munger are trying to develop four internal successors, rather than anointing a particular heir.

(Author : James Thomson)


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