Even the best-s are still learning

Great summary 6-May Berkshire Hathaway meeting by Compounding Quality:

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1. Capital allocation is the key task of Charlie and Warren.

Berkshire Hathaway will still be a good investment for the next 50 years.

2. Operating earnings will be significantly higher 10 years from now.

3. Float remains a key pillar for Berkshire’s success.

4. Even Warren and Charlie make bad investment decisions plenty of times. The key is to try to stay as rational as possible.

5. The main challenge for Geico in the near term is to improve the technology they use.

6. The railroad industry is a beautiful industry to invest in. The future looks bright for BNSF.

7. Munger is sceptic about AI. Human intelligence is way more important and will remain crucial in the investment world. Buffett adds that AI can change everything in the world except how people think and behave.

8. Value investing will become harder because the market is getting more competitive. “I would advise value investors to be happy with lower returns in the future.” - Munger

9. The best opportunities arise when other people are doing dumb things.

10. The main disadvantage of Berkshire is its size. There are plenty of opportunities in small and mid caps.

11. The world is heavily focused on the short term. This gives plenty of opportunities for people who think on the long term.

12. “At Berkshire we have a very simple estate planning: just hold the goddamn stock.” - Munger

13. If you want to find the solution for a complex problem, just reverse engineer.

14. The energy transition will be a long journey. The capital and people are there. All states should work together to achieve Net Zero.

15. All we do is allocating capital. We want companies with good management in place to run daily operations. Skin in the game is very important.

16. Never bet against America is still valid today. The future looks bright.

17. Berkshire will always hold a boatload of cash. It gives flexibility at inconvenient times.

18. Stock market corrections will happen all the time. It can offer big investment opportunities.

19. We feel no pressure from Wall Street, don’t do investor calls, … and this allows Berkshire to be very successful.

20. We learned a lot from buying See’s Candies. You want to buy wonderful businesses at a fair price.

21. The best thing an investor can do is to learn all the time. Knowledge compounds too.

22. We can tell in 10 seconds whether a business might be attractive. You should try to find a reason to say ‘no’ as soon as possible.

23. Berkshire is trying to build long term relationships with Japanese companies as it might offer long term investment opportunities.

24. Apple is a beautiful company. It’s one of the best businesses Berkshire owns according to Buffett.

25. Diversification is only useful for those who don’t know what they’re doing.

26. The key to investing is staying within your circle of competence and stay humble. Don’t overestimate yourself.

27. Munger stated that the US should go along with China. Protectionism doesn’t help the economy.

28. Buffett about selling TSMC: The fact that TSMC is located in Taiwan is too risky for us. We would like to have the same kind of company based in the US.

29. When you combine a sustainable competitive advantage with great managers, you get something magical.

30. Buffett about Graham: Graham helped me plenty of times without expecting anything in returns. It shows you the power of giving. 31. The book Security Analysis from Graham is still highly relevant today. Everyone should read it.