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I spent a big chunk of my time yesterday watching this year's Berkshire Hathaway annual meeting live from Omaha on CNBC. As usual, good old Warren charmed everyone with his common sense, folksy advice and stories from his stellar 60+ year investment career. All in extemporaneous responses to shareholder/audience questions. 94 years old - and the guy is much more astute and far more worth listening to than most of the posters on eccie. Too bad he is stepping down as CEO at year-end.
Enjoy!
Since Warren touches on a wide range of subjects from the debasement of the US dollar to nuclear proliferation, please feel free to comment on ANY of them without fear of being off-topic.
The below link is the CliffsNotes version for anyone like me who does not want to spend six and a half hours of their life watching a Berkshire Hathaway shareholder meeting video on YouTube and would rather just spend a few minutes reading/skimming for main points.
I thought I would help this thread get moving a bit because I know damn well nobody is watching that whole video. LOL
I'll put in my 2 cents later if some have posts that make me interested enough to do so.
Here's a full transcript which you may find helpful in pinpointing Warren's thoughts and views. Lots of good insights into his thinking on a variety of industries... insurance, energy, healthcare, Apple/Tim Cook etc.
I had a lot of money invested Berkshire Hathaway before the pigs stole it all...
Nobody stole it, Rip. A big chunk of your money is sitting there along with everyone else's, parked in US Treasury bills. The company has a cash stash that is now approaching $350 billion! Just waiting for the right opportunities to emerge. Warren has always been a cautious investor. Nowadays he has to be even more careful. Berkshire has grown so big that he is the 800-pound gorilla in the room, and everyone is trying to "ape" him (pun intended).
Welcome back from banned land Lusty Lad. But I'm kind of glad you were gone as you probably would have given me a couple of good ass kickings. I've been mercilessly pounding Trump on the trade wars.
I recorded the meeting and have gotten through most of it. In addition to nuclear proliferation, highlights for me were,
Buffet's very concerned about our 7% budget deficits. He's even more concerned about the potential for an extreme currency devaluation.
Charlie Munger dabbled in real estate, and believed he could do well in currency markets. Buffet vastly prefers buying equities. Equities are much easier to buy. He did once effectively go short the dollar, by buying a large basket of foreign currencies. And right now Berkshire is borrowing in Yen. That's a special case though, because the debt offsets Berkshire's positions in Japanese trading companies. (Tiny: The dividends from the Japanese companies probably more than pays the interest on the debt.)
Buffett was going through a handbook of Japanese equities (like the old Value Line or S&P handbook) and came across the trading companies. That turned out to be one of his best ideas in recent times.
He looks at balance sheets more closely than income statements. Most investors do the opposite. He'll look at 8 or 10 years of balance sheet history before he looks at the income statement.
The large tech companies (Apple, Microsoft, etc.) are great because they produce out of sight returns with comparatively little capital.
We're all incredibly lucky to have been born when we were, instead of 200 years earlier.
He doesn't see a solution to out-of-control health care costs, which are approaching 20% of GDP. A consortium consisting of Berkshire, J P Morgan and Amazon tried to reduce costs but gave up. This is in the hands of the government, and the vested interests and preferences of Americans to choose their own doctors and the like will probably prevent us from ever finding a solution to the problem.
Munger was asked who he would have liked to eat lunch with if he'd had a chance. Munger said that's a stupid question, I've read all their books. Buffett noted he could spend $10,000 for ventriloquist lessons and it wouldn't do him a lick of good. But for $10 he could buy a book written by Benjamin Graham and get a lot out of it.
Quote:
Originally Posted by Lucas McCain
The below link is the CliffsNotes version for anyone like me who does not want to spend six and a half hours of their life watching a Berkshire Hathaway shareholder meeting video on YouTube and would rather just spend a few minutes reading/skimming for main points.
If you're a value investor it might just be worth it. Following on from above, I spent maybe 40 hours reading and absorbing Graham and Dodd's Security Analysis and it was well worth the time.
A fund manager I did consulting work for used to send his people to Berkshire's meeting every year, and he'd go himself. He's worth 10 figures, which is to say his time is a lot more valuable than ours.
Oh yeah, two more highlights. An environmentalist criticized Berkshire for not eliminating its coal fired power generation capacity. Providing Iowa as an example, Greg Abel replied that the company invested immense sums in wind power, and the coal fired plants that were left were needed to properly manage supply on the grid. Furthermore, state and local governments have the biggest say in the composition of the power supply. (Tiny's example: the state's not going to let you invest massive amounts in battery storage, and then jack up electric rates by 100%, unless that state's California.) Abel practically got a standing ovation.
The value of electric utility companies has gone down considerably, because the utilities are getting sued for wildfires, even when they had nothing to do with the fires. It's not a business where you have well defined costs and returns any more. Now there are big risks. Abel provided an example in Oregon where a lightning strike outside of Berkshire's service area caused a forest fire that spread into their area, so Berkshire gets blamed because it has the deepest pockets. Buffett said one of his biggest mistakes was acquiring a utility company and not breaking it up into seven parts, corresponding to the seven states where it provided service. Presumably, the lawyers, regulators and politicians then could have only gone after each of seven smaller companies, instead of the whole enterprise.
One thing I found discouraging was how his JV/consortium with JP Morgan and Amazon gave up on their search for ways to constrain US health care costs. The pushback was tremendous. He used words like "entrenched" and "ingrained" to describe the resistance from the vested interests to common sense cost-control suggestions.
I didn't know his father was a US Congressman. We should all be optimistic about the future, because it's in our DNA as Americans. But Warren hit the nail on the head when he laid out the biggest threat to our national well-being this way:
"I wouldn’t want the job of trying to correct what’s going on in revenue and expenditures of the United States with roughly a 7% gap when probably a 3% gap is sustainable. The further away you get from that, the more you get to where the uncontrollable begins. It’s a job I don’t want, but it’s a job I think should be done. And Congress does not seem good at doing it.
We’ve got a lot of problems always as a country, but this is one we bring on ourselves. We have a revenue stream, a capital-producing stream, a brains-producing machine like the world has never seen. And if you picked a way to screw it up, it would involve the currency. That’s happened a lot of places.
In theory, you would make it so there was substantial downside for anybody that screwed things up, but there isn’t downside. There’s upside. It’s the problem of the most successful company in the history of the country, in the history of the world."
But Warren hit the nail on the head when he laid out the biggest threat to our national well-being this way:
"I wouldn’t want the job of trying to correct what’s going on in revenue and expenditures of the United States with roughly a 7% gap when probably a 3% gap is sustainable. The further away you get from that, the more you get to where the uncontrollable begins. It’s a job I don’t want, but it’s a job I think should be done. And Congress does not seem good at doing it.
We’ve got a lot of problems always as a country, but this is one we bring on ourselves. We have a revenue stream, a capital-producing stream, a brains-producing machine like the world has never seen. And if you picked a way to screw it up, it would involve the currency. That’s happened a lot of places.
In theory, you would make it so there was substantial downside for anybody that screwed things up, but there isn’t downside. There’s upside. It’s the problem of the most successful company in the history of the country, in the history of the world."
Agreed LustyLad. In addition to large budget deficits and the national debt, now we've got to worry about Fed policy. Both the MMT crowd and Trump want low interest rates, all the time. That's a recipe for high inflation and a currency crisis, although hopefully we won't go there.
First; hypocrite. Him, not you. The first thing he should have said in answering Saskia from Germany's question was to advise Benny F that maybe that slavery thing shouldn't be a part of this country. Some fuckin' crony capitalist that fuck, wouldn't you agree?
In his answer he expanded on the ideas and inventions of Franky. Just like this site and other social media outlets, many inventions lead to unforseen disasters. The nuke proliferation is just about power. Another invention that got out of hand, and now in the hands of a psycho again.
In that same segment of his address, he tells the story of how his dad in Congress was in the dark about the funding they were voting for. The bomb.
Welcome back from banned land Lusty Lad. But I'm kind of glad you were gone as you probably would have given me a couple of good ass kickings. I've been mercilessly pounding Trump on the trade wars.
Pound away. I'm always open & receptive to intelligent criticism of Trump and his policies (emphasis on "intelligent"). Most of the posters here are not capable of it, but you certainly are.
Since this thread is about Warren Buffett, here's something you may find thought-provoking:
Even Warren Buffett warned that America’s trade deficit is ‘selling the nation out from under us’ — and proposed a ‘tariff called by another name.’
Here’s why his fix is better than Trump’s
Jing Pan
Updated Apr 24, 2025
President Donald Trump’s sweeping tariffs have sent shockwaves across the globe, as he attempts to rein in the massive trade deficits the U.S. has with other nations.
While many economists have criticized Trump’s blunt approach — and markets have reacted poorly — the issue he’s targeting is far from trivial. While the president has since gone back and forth on levying the tariffs, legendary investor Warren Buffett has been sounding the alarm on America’s growing trade deficit for decades.
Back in 2003, Buffett wrote a Fortune article with the striking title: “America's Growing Trade Deficit Is Selling The Nation Out From Under Us. Here's A Way To Fix The Problem — And We Need To Do It Now.” In it, he issued a stark warning about the long-term risks of persistent trade imbalances.
A trade deficit occurs when a country imports more than it exports. While that might sound harmless, Buffett warned that over time it leads to something far more serious: a steady transfer of national wealth to foreign hands.
To drive the point home, he introduced a parable involving two fictional islands: Thriftville, whose industrious citizens produce more than they consume and export the surplus, and Squanderville, whose inhabitants consume more than they produce, financing their excess consumption by issuing IOUs to Thriftville.
Over time, Thriftville accumulates substantial claims on Squanderville's future output, leading to a scenario where Squanderville's citizens must work harder just to repay the debt, effectively becoming economically subservient to Thriftville.
Buffett took the analogy further, warning that Thriftville’s citizens might lose faith in Squanderville’s IOUs.
“Just how good, they ask, are the IOUs of a shiftless island?” Buffett wrote.
“So the Thrifts change strategy: Though they continue to hold some bonds, they sell most of them to Squanderville residents for Squanderbucks and use the proceeds to buy Squanderville land. And eventually the Thrifts own all of Squanderville.”
Buffett’s central concern was that the U.S. was behaving just like Squanderville — consuming far more than it produced, and becoming increasingly indebted to the rest of the world.
He warned that, at the trade deficit level at the time, foreign ownership of U.S. assets would “grow at about $500 billion per year.” As that ownership increases, he cautioned, so too will the net investment income flowing out of the country.
“That will leave us paying ever-increasing dividends and interest to the world rather than being a net receiver of them, as in the past,” he wrote. “We have entered the world of negative compounding — goodbye pleasure, hello pain.”
That was more than two decades ago. But Buffett’s warning still resonates today. By the end of 2024, the U.S. net international investment position had plunged to -$26.2 trillion — meaning foreign investors now own over $26 trillion more in U.S. assets than Americans own abroad.
Buffett proposed a bold fix: a concept he calls the “Import Certificate” system — a market-based solution to reduce the U.S. trade deficit.
Here’s how it works:
Exporters earn certificates — For every dollar an American company earns by exporting goods or services, it receives an Import Certificate of equal value.
Importers must buy certificates — To bring goods into the U.S., importers must purchase these certificates from exporters.
This effectively limits total imports to the value of exports, achieving trade balance. It also creates a powerful financial incentive to export, since companies can sell their certificates on the open market to importers.
How does Buffett’s idea compare to the sweeping tariffs currently being implemented by Trump?
Buffett himself acknowledged that, “in truth,” his import certificate system is “a tariff called by another name.” But he was quick to note that it avoids the typical pitfalls of traditional tariffs — namely, industry favoritism, geopolitical tension, and the risk of escalating trade wars.
“This is a tariff that retains most free-market virtues, neither protecting specific industries nor punishing specific countries nor encouraging trade wars,” he wrote. “This plan would increase our exports and might well lead to increased overall world trade. And it would balance our books without there being a significant decline in the value of the dollar, which I believe is otherwise almost certain to occur.”
In other words, Buffett’s proposal is designed to nudge markets toward equilibrium — not to punish America’s trading partners.
Pound away. I'm always open & receptive to intelligent criticism of Trump and his policies (emphasis on "intelligent"). Most of the posters here are not capable of it, but you certainly are.
I take serious offense to that, sir.
Ecomomics: "Supply and demand. That's it!" I get that. That's logistics.
...How does Buffett’s idea compare to the sweeping tariffs currently being implemented by Trump?
Buffett himself acknowledged that, “in truth,” his import certificate system is “a tariff called by another name.” But he was quick to note that it avoids the typical pitfalls of traditional tariffs — namely, industry favoritism, geopolitical tension, and the risk of escalating trade wars.
“This is a tariff that retains most free-market virtues, neither protecting specific industries nor punishing specific countries nor encouraging trade wars,” he wrote. “This plan would increase our exports and might well lead to increased overall world trade. And it would balance our books without there being a significant decline in the value of the dollar, which I believe is otherwise almost certain to occur.”
In other words, Buffett’s proposal is designed to nudge markets toward equilibrium — not to punish America’s trading partners...
This was pretty much the point I was trying to make in another thread, where Tiny, whose judgements I mostly admire, obviously not counting the whole Covid debacle.
Quote:
Originally Posted by Tiny
Au contraire. Smoot, Hawley et al tried it. So did India and Latin America. It did not end well. On the other hand when countries like Chile lifted heavy tariffs and implemented other free market reforms, they prospered.
There’s another name for those many special interest groups, crony capitalists. Contrast with free market capitalists, who were favored by Republicans since Reagan, until Trump came along...
To which I say: I believe the Smoot-Hawleys of the world should be better know as the Double Down Boys.
From The Britannica:
Quote:
The Smoot-Hawley Tariff Act of 1930 and the tariffs imposed during Donald Trump's presidency share similarities as tools intended to protect domestic industries, but they differ significantly in scope, implementation, and global context.
Smoot-Hawley Tariff Act, U.S. legislation (June 17, 1930) that raised import duties to protect American businesses and farmers, adding considerable strain to the international economic climate of the Great Depression. The act takes its name from its chief sponsors, Senator Reed Smoot of Utah, chairman of the Senate Finance Committee, and Representative Willis Hawley of Oregon, chairman of the House Ways and Means Committee. It was the last legislation under which the U.S. Congress set actual tariff rates...
Am I the only who can appreciate Congress having the Courage to Quit, when it came to managing tariffs?!? To which I would add, they should have added to the end of the last sentence above, "and rightly so".
Yet I would ask: So what did they double down on? To which I would go back to The Britannica. Lo and behold, it was The Stupids, aka Fordney-McCumber.
Quote:
...The Smoot-Hawley Tariff Act raised the United States’s already high tariff rates. In 1922 Congress had enacted the Fordney-McCumber Act, which was among the most punitive protectionist tariffs passed in the country’s history, raising the average import tax to some 40 percent. The Fordney-McCumber tariff prompted retaliation from European governments but did little to dampen U.S. prosperity. Throughout the 1920s, however, as European farmers recovered from World War I and their American counterparts faced intense competition and declining prices because of overproduction, U.S. agricultural interests lobbied the federal government for protection against agricultural imports. In his 1928 campaign for the presidency, Republican candidate Herbert Hoover promised to increase tariffs on agricultural goods, but after he took office lobbyists from other economic sectors encouraged him to support a broader increase. Although an increase in tariffs was supported by most Republicans, an effort to raise import duties failed in 1929, largely because of opposition from centrist Republicans in the U.S. Senate. In response to the stock market crash of 1929, however, protectionism gained strength, and, though the tariff legislation subsequently passed only by a narrow margin (44–42) in the Senate, it passed easily in the House of Representatives. Despite a petition from more than 1,000 economists urging him to veto the legislation, Hoover signed the bill into law on June 17, 1930...
IMMHO, instead of using a formula of any meaning, they welcomed the Dawning of the Age of Depression, by beating the holy-heck out of the world economy. Then I thought, since Britannica did me so nice twice, I thought I would try out their AI chatbot with the statement: Compare and Contrast Smoot-Hawley versus Trump's tariffs. It did not disappoint with:
Quote:
The Smoot-Hawley Tariff Act of 1930 and the tariffs imposed during Donald Trump's presidency share similarities as tools intended to protect domestic industries, but they differ significantly in scope, implementation, and global context.
Point being; there seems to be much more give and take to Trump's methodology versus the blunt clubs, as used in years gone by.
He's Baaaaackk!!
