Happy Mothers’ Day to all our members (particularly those in the US who celebrated theirs yesterday). Here’s also wishing all our Muslim members Eid Mubarak in arrears.
Today, we will be discussing some of the highlights from the April 30th annual shareholders meeting of Berkshire Hathaway whose Chairman is the legendary Warren Buffet.
- Put your money where your mouth is: One of Warren Buffet’s most famous quotes is the one that states that investors should “be fearful when others are greedy and be greedy when others are fearful.”
He exemplified that when he informed his audience, that Berkshire had spent $51 billion (more than Nigeria’s external reserves) buying stock of various companies in the 1st quarter of 2022.
According to him, Berkshire was able to take advantage of the fact that Wall Street is largely run like a gambling parlour with many people speculating wildly on stocks. He also stated that Berkshire occasionally gets a chance to do something and it’s not because “we are smart but because we are sane”.
Although he didn’t state all the companies invested in, he mentioned a few such as Chevron, HP, and Activision Blizzard (the gaming company acquired by Microsoft).
I particularly like that the fact that he still ‘walks the talk’. There will always be opportunities, we just need to take action in line with our investment philosophy.
It definitely also doesn’t hurt to have enough cash at hand. Even after this purchase, Berkshire still has a cash position of $106 billion!
- Baba is still fearful of crypto: Buffet and his good friend and investing partner, Charlie Munger still remain very critical of cryptocurrencies such as bitcoin.
According to them, cryptocurrencies do not produce anything and as such are not valuable. On his own part, Munger believes that they are “stupid and that their value would likely go to zero”. He also believes America should ban them.
Personally, I believe that their reluctance to embrace crypto may be more of a generational thing than anything else.
However, it is also a clear reminder that everyone’s wealth journey is different and it is always advisable to do you! What works for A may not necessarily work for B.
- You are your best investment/asset: Warren Buffet told the audience, that the best way to fight inflation; currently high in the US (and many other parts of the world) is to invest in themselves. That way, people will always be willing to pay them for their services irrespective of how much a dollar is worth. This advice in my opinion, holds true for both individuals and companies irrespective of where you reside on the globe.
For example, food prices are scary right now and don’t seem to be coming down any time soon and there is a need to shrink the percentage of our earnings spent feeding our families. I mentioned food in particular because it is common and essential to all.
If Buffet is still looking to improve his earnings, who are we not to do likewise?
Till we meet again next week, do have a profitable week!