Berkshire Hathaway 2006 Shareholder Meeting (Part 2)
This post is part 2 of my series on the recent Berkshire Hathaway annual meeting. The topic: Warren Buffett's thoughts on investing. These are my notes and *interpretations* of Warren Buffett and and Charlie Munger's answers on various investing-related questions.
On Investing in Tech Companies
Tech companies are hard to predict. Five years from now, who know what's going to be hot, or who's going to be on top? We know the edge of our competency- if you don't know your edge, you don't have a competency.
Economics of investing in ethanol?
Agricultural processing has not earned high rates of return in the past. It's hard to have competitive advantages. It also takes too much fossil fuel to be worth it.
Is there a Commodity Bubble?
Not in agriculture, perhaps in copper and oil. At the start of a bubble, it is driven by fundamentals. What the wise man does in the beginning, the fool does at the end. We don't know how far up a bubble can go. Be careful that everyone will turn into pumpkins at midnight (and there's no clock on the wall).
Investing in South America and Emerging Markets
We invested in PetroChina (would have like to buy more). Brazil is not off limits. In general, due to emerging market uncertainties, we want cheaper prices.
Investing in Russia
Bad experiences in the past working with Solomon- oil drilling in Siberia. Hard to develop confidence in Russia.
Exposure in Silver?
Used to own silver, but sold it. Consumption of silver is down in photography, but there are few silver mines. It's non-interest bearing, there may be overconsumption.
Investing in Regions of High Per-Capital Natural Resources
This is too macro a trend. We don't play big macro trends.
Views on Chinese Currency and Debt
High probability of a weakening dollar. Expect higher inflation. Fiscal and current account deficits are bad.
Does the CPI track Inflation?
It's not great. The core CPI doesn't include food and oil. The rental factor is lagging and housing factor is not accurate. Overall it understates inflation.
Investing in Newspapers
Circulation is down, advertising in papers is down. Demographics change is going the wrong way (younger people tend not to read them).
Modern Portfolio Theory
Modern Portfolio Theory doesn't make sense. Modern Portfolio theory is assinine. Jeremy Siegel is demented.
Naked Short Selling
There's nothing evil about short selling. But it's dangerous.
On Investing in Tech Companies
Tech companies are hard to predict. Five years from now, who know what's going to be hot, or who's going to be on top? We know the edge of our competency- if you don't know your edge, you don't have a competency.
Economics of investing in ethanol?
Agricultural processing has not earned high rates of return in the past. It's hard to have competitive advantages. It also takes too much fossil fuel to be worth it.
Is there a Commodity Bubble?
Not in agriculture, perhaps in copper and oil. At the start of a bubble, it is driven by fundamentals. What the wise man does in the beginning, the fool does at the end. We don't know how far up a bubble can go. Be careful that everyone will turn into pumpkins at midnight (and there's no clock on the wall).
Investing in South America and Emerging Markets
We invested in PetroChina (would have like to buy more). Brazil is not off limits. In general, due to emerging market uncertainties, we want cheaper prices.
Investing in Russia
Bad experiences in the past working with Solomon- oil drilling in Siberia. Hard to develop confidence in Russia.
Exposure in Silver?
Used to own silver, but sold it. Consumption of silver is down in photography, but there are few silver mines. It's non-interest bearing, there may be overconsumption.
Investing in Regions of High Per-Capital Natural Resources
This is too macro a trend. We don't play big macro trends.
Views on Chinese Currency and Debt
High probability of a weakening dollar. Expect higher inflation. Fiscal and current account deficits are bad.
Does the CPI track Inflation?
It's not great. The core CPI doesn't include food and oil. The rental factor is lagging and housing factor is not accurate. Overall it understates inflation.
Investing in Newspapers
Circulation is down, advertising in papers is down. Demographics change is going the wrong way (younger people tend not to read them).
Modern Portfolio Theory
Modern Portfolio Theory doesn't make sense. Modern Portfolio theory is assinine. Jeremy Siegel is demented.
Naked Short Selling
There's nothing evil about short selling. But it's dangerous.
posted by jasonz at
12:50 PM
0 Comments:
Post a Comment
<< Home