Warren Buffett: If A $100 Billion Deal Came Along We'd Get It Done | May 7, 2018

Transcript

good morning guys it's great to see both of you and i am in omaha nebraska this morning that's the site of the berkshire hathaway annual meeting our special guest for the next three hours if you haven't figured it out already is berkshire's chairman and ceo warren buffett and warren thank you so much for being here this morning thanks for having me... Read More

Summary

In this video, Warren Buffett, the Chairman and CEO of Berkshire Hathaway, discusses various topics, including his thoughts on the Berkshire Hathaway annual meeting, the value of investing in index funds, the current state of the market, his views on Bitcoin, and his decision to stick with Wells Fargo despite its past controversies.

Questions & Answers

Q: How does Warren Buffett feel about the Berkshire Hathaway annual meeting?

Warren Buffett says that everyone at the annual meeting had a great time, as always. The crowd was record-breaking and shareholders and directors all enjoyed themselves.

Q: Has anything changed about the annual meeting over the years?

Warren Buffett states that the format of the annual meeting hasn't changed much because he and Charlie Munger, his business partner, prefer to stick with what works. However, he acknowledges that this year's meeting covered a lot of controversial subjects and gained a lot of media attention.

Q: Why does Charlie Munger often speak his mind using colorful language?

According to Warren Buffett, Charlie Munger has always expressed his thoughts openly and with colorful language. This has been his style since Warren Buffett met him in 1959.

Q: How did Warren Buffett use the annual meeting as a teaching experience?

Normally, Warren Buffett goes straight into the Q&A session during the annual meeting. However, this year, he decided to talk about his first stock purchase in 1942 and the lesson it taught him about long-term investing in index funds.

Q: What lesson did Warren Buffett learn from his first stock purchase in 1942?

Warren Buffett bought his first stock, City Service Preferred, in 1942 when the headlines were grim and the stock market was declining. Despite the uncertain times, he believed in the future of America and its businesses. His lesson is that if one invests in an index fund and holds it for a long time, they can benefit from the growth of the American economy.

Q: What other lessons did Warren Buffett share at the annual meeting?

Warren Buffett mentioned that regularly investing in a cross-section of stocks over a long period of time can lead to significant returns. He also explained that buying productive assets is more beneficial than investing in non-productive assets like gold or cryptocurrencies.

Q: What does Warren Buffett think about the current state of the market?

Warren Buffett mentions that Berkshire Hathaway hasn't bought any businesses in their entirety recently, but they have been increasing their stake in Apple. He believes stocks are a better choice for investors compared to government bonds. However, he notes that if interest rates rise significantly, stocks may be less attractive.

Q: Does Warren Buffett think the market is currently overpriced?

Warren Buffett doesn't think the market is overly priced at the moment, but he mentions that it's crucial to evaluate stock valuations in relation to alternative investments. He believes stock prices are justified considering the low interest rates.

Q: Why is Warren Buffett not investing in businesses entirely?

Warren Buffett explains that Berkshire Hathaway calculates returns based on an all-equity basis and does not rely heavily on borrowed money like many private equity firms. He also mentions that the current market conditions, where prices for businesses are relatively high, make it difficult to find attractive opportunities.

Q: What are Warren Buffett's thoughts on Bitcoin?

Warren Buffett considers Bitcoin a non-productive asset that relies on future buyers to create value. He believes that investing in something that produces value, like buying a farm or business, is more rational than speculating on cryptocurrencies. He also mentions the risks of getting caught up in speculative frenzies.

Q: How does Warren Buffett view Wells Fargo despite its controversies?

Warren Buffett acknowledges that Wells Fargo made significant mistakes in terms of encouraging improper incentives and suppressing whistleblowers. However, he believes in the fundamental business of Wells Fargo and has faith in the current CEO, Tim Sloan. He cites examples of other companies, including Geico, where opportunities arose due to similar situations.

Takeaways

One of the main takeaways from Warren Buffett's discussion is his belief in the power of long-term investing and the value of buying productive assets. He advocates for investing in index funds and a diversified portfolio as a way to benefit from the growth of the overall economy. While he acknowledges the flaws and mistakes made by companies like Wells Fargo, he also highlights the importance of taking action to rectify issues and learn from them. Additionally, Warren Buffett cautions against speculative investments like cryptocurrencies and emphasizes the need for rational decision-making based on understanding the underlying value of an asset.