Saturday April 30 was a day that I will certainly never forget as it began waiting outside of the CenturyLink Center in Omaha Nebraska with thousands of Berkshire Hathaway shareholders holding umbrellas over their heads in an effort to stay dry from a downpour of rain.
The doors opened at 6:20 am, and me and my friend Chris as well as thousands of Berkshire Hathaway shareholders entered the CenturyLink Center walking through security checks and metal detectors before arriving at our seats. As I sat down I saw that Guru Mario Gabelli (Trades, Portfolio) was in attendance as well as the founder of Microsoft, Bill Gates (Trades, Portfolio).
The meeting began with several comical videos involving the duo of Munger and Buffett. Another famous actor and the former governor of California, Arnold Schwarzenegger also appeared in various comical scenes that got most of the shareholders laughing.
After the videos were finished, Buffett and Munger began talking about various subjects while also answering questions from the audience and various reporters. The much more outspoken Buffett talked and answered the majority of the shareholders questions. He also did the majority of the speaking at the meeting. Munger did share some of his wisdom when he told an interesting story that involved working for Buffets grandfather during his youth.
Munger described how he used to work 10 hours in one day for Buffets grandfather at his grocery store and receive $2 as his payment. He then said that Buffets grandfather would take two pennies away from his $2 payment to remind young Charlie about how socialists take everything away. Charlie then began to laugh hysterically at his own story
I believe this is is when young Charlie Munger (Trades, Portfolio) learned to be industrious, as he would often work for the entire day taking 0 breaks. According to his book Poor Charlie's Almanac.
One of the most interesting questions that I listened to at the meeting was when a shareholder asked about Warren & Charlie's biggest mistakes they have made in their investing careers. Warren didn't answer the question with a specific mistake that he or Charlie had made, however, I know that one of his biggest mistakes was purchasing holdings of USAir stocks. In this YouTube video below starting at 46:30 Buffett talks about his biggest investing mistakes.
Although Buffett never answered the question directly, he did mention that he knew some intelligent investors that made the mistake of betting most of or their entire bankroll on securities where the risk far outweighed the reward. He went into say that a lot of intelligent investors lack emotional intelligence and discipline while they make investment decisions. He said that he has known many intelligent people that have made a lot of money and have unintelligently risked it all in an irrational manner when the risk far outweighed the reward. The investors that he talked about lost all or the majority of their bankroll due to lack of emotional intelligence, and self discipline. Buffet and Munger both agreed that you do not need to be a genius to be successful at investing, but you do need to have good emotional intelligence.
Neither Buffett or Munger described how to improve emotional intelligence as an investor. However, I would like to rationally explain what I have learned about dealing with the problem that Buffett describes. I have read many books on emotional intelligence and I know that one of the greatest investors of all time is John Marks Templeton. He used gratitude as a central motivator which helped him to achieve tremendous success. One of my favorite all time quotes is Templeton's “Gratitude melts away fear and anger” Templeton used gratitude as a way to control his emotions which enabled him to limit his mistakes at a much faster pace . Another very successful guru that had good control of his emotions is Ray Dalio (Trades, Portfolio). Dalio founded what is now the world's largest hedge fund. Bridgewater Associates during a time that he was raising his young family in Connecticut. Dalio attributes his success to meditation and claims that sharing his knowledge about it is his gift to the world.
In this youtube video below Ray Dalio (Trades, Portfolio) describes the importance of meditation starting at 3:44
Even though Warren Buffett (Trades, Portfolio) is getting older he can still retain knowledge as if he was still a young man. Buffett still has an extremely accurate and precise memory. I was very impressed when Buffett described a book that he had read in 1940 at age 10 called “Where Are the Customers' Yachts: or A Good Hard Look at Wall Street. At the age of 85 he could still remember a book that he had read 75 years ago. This showed me that Buffett at age 85, still retains a razor sharp memory.
Overall, my time in Omaha was well spent as I learned valuable wisdom and met new great people. I'll be looking forward to next years meeting as well as meeting more people at next year's GuruFocus conference.
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