How Warren Buffett decides if something is a good investment

TL;DR

Warren Buffett discusses the benefits and drawbacks of the President's tax cut and how it affects Berkshire Hathaway shareholders. He also talks about healthcare initiatives, cryptocurrencies, the Chinese economy, advancing women in the workplace, and his legacy as a teacher.

Transcript

you've praised the president's tax cut calling it a win dat merit the American economies back I guess no I have said I have said that it is a wind a tax bill it was targeted in a big way to help corporations so it helps Berkshires million shareholders isn't what I would have done if I was going to have a tax cut but so as an individual I do not agr... Read More

Key Insights

• 💇 Warren Buffett acknowledges the benefits of the President's tax cut for Berkshire Hathaway shareholders, despite personal disagreements with the philosophy behind it.
• 💇 He highlights the costs and downsides of tax cuts, such as increased government borrowing and potential inequalities.
• 🚕 Berkshire Hathaway is using the tax savings for investments rather than distributing them to employees or shareholders.
• 📁 Warren Buffett emphasizes the importance of direct communication for effective leadership, drawing parallels between CEOs and presidents.
• 💨 The healthcare initiative aims to find ways to improve healthcare quality and reduce costs, potentially serving as a model for other companies in the healthcare system.
• 😑 Buffett expresses skepticism towards cryptocurrencies, considering them speculative assets that lack intrinsic value.
• 👏 He praises the economic progress of the Chinese economy, stating that they have unleashed the potential of their citizenry and are destined for a bright economic future.

Questions & Answers

Q: What are Warren Buffett's thoughts on the President's tax cut?

Buffett acknowledges that the tax cut benefits Berkshire Hathaway shareholders but personally disagrees with the philosophy behind it. He believes it could have been better targeted to help different groups of people.

Q: Is there a cost or downside to the tax cut?

Buffett explains that there are always costs and downsides to tax cuts, as they can lead to increased government borrowing. Additionally, giving a large break to one group may create inequalities.

Q: Has Berkshire Hathaway increased salaries and benefits for employees due to the tax cut?

While some portfolio companies have increased salaries and benefits, Berkshire Hathaway is using the tax savings for investments rather than distributing them to employees or shareholders.

Q: What are Warren Buffett's thoughts on President Trump's tweets and communication style?

Buffett believes that communication is enormously important for a president and that direct communication can be effective. He understands why President Trump prefers to communicate directly rather than through traditional news media.

Q: How did the healthcare initiative between Berkshire Hathaway, JPMorgan, and Amazon come about?

Warren Buffett explains that the initiative originated from discussions between Todd Combs, an employee working for both Berkshire Hathaway and JPMorgan. It aims to find ways to achieve better healthcare at lower costs and potentially serve as a model for the rest of the healthcare system.

Q: What are Warren Buffett's views on cryptocurrencies?

Buffett has negative feelings towards cryptocurrencies, considering them speculative rather than true investments. He emphasizes the importance of investing in assets that have intrinsic value and generate returns, rather than solely relying on the willingness of others to pay more.

Key Insights:

• Warren Buffett acknowledges the benefits of the President's tax cut for Berkshire Hathaway shareholders, despite personal disagreements with the philosophy behind it.
• He highlights the costs and downsides of tax cuts, such as increased government borrowing and potential inequalities.
• Berkshire Hathaway is using the tax savings for investments rather than distributing them to employees or shareholders.
• Warren Buffett emphasizes the importance of direct communication for effective leadership, drawing parallels between CEOs and presidents.
• The healthcare initiative aims to find ways to improve healthcare quality and reduce costs, potentially serving as a model for other companies in the healthcare system.
• Buffett expresses skepticism towards cryptocurrencies, considering them speculative assets that lack intrinsic value.
• He praises the economic progress of the Chinese economy, stating that they have unleashed the potential of their citizenry and are destined for a bright economic future.
• Warren Buffett emphasizes the importance of women in the workplace, recognizing the untapped talent that has been sidelined for centuries and the benefits of utilizing all available talent in business and the economy.

Summary & Key Takeaways

• Warren Buffett acknowledges that the tax cut has been beneficial for Berkshire Hathaway shareholders, even though he personally disagrees with the philosophy behind it.

• He highlights that there are always costs and downsides to tax cuts, as they can lead to increased government borrowing and potential inequalities.

• Buffett discusses how Berkshire Hathaway is using the tax savings for investments rather than increasing salaries or paying dividends to shareholders.