A reader emailed me some notes from the meeting that were compiled by Ed Barr and edited slightly by Whitney Tilson:
Format: comment briefly on merger, academics and markets, greedy bastards that we are.
About half of Wesco shareholders took stock and the rest cash. Berkshire’s stock price went way lower than Warren or he expected so they had to issue more stock than they wished. But they try to behave well for those without power.
Lollapalooza effects come from multiple academic disciplines from the same direction. Academics can't figure out why Cokes and candy bars are too high priced at movie theaters.
Americans would not handle the Japanese situation nearly as well. Export driven but then new huge competition from Korea and China.
Just reread Matt Ridley’s book, "The Rational Optimist: How Prosperity Evolves." Power gets allocated to those that deserve it, with example of 20 restaurants in Pasadena driven down to the two best. Don't reach for the obvious/first answer.
Blue Chip Stamps/Berkshire (BRK.A)(BRK.B). Immense float from stamps but dying. In decades found few things to do. See's, Buffalo News and Wesco. Most acquirers hurt their shareholders. If we can’t buy companies then we buy securities. They had an alternative. Wesco was the worst of the three but went from $5 to $385.
Nothing more counterproductive than envy. Learning as they went. Did not initially understand the power of a brand. It changed Berkshire. You must be a continuous learner. Protect your own mind. Improve as much as you can.
We did some massively stupid things. What is needed is lifelong learning and it is fun.
Current investment scene. Like Japan, an idiotic bubble. Evil in banking, investment banking and mortgage banking. Can't foist gambling onto people. Cutting risk taking is like asking Vegas to keep slots but cut craps, blackjack, etc. Medical community prevents problems but not accounting. What accounting people have expressed any contrition?
For folly and evil to succeed, all that’s necessary is for wise and good men to remain silent.
Dick Fuld ruined Lehman with megalomania and evil — Munger would bet that he has no contrition. Don't behave like others just so you can make more money.
Thinks Bill Gross’ “new normal” (this) is probably correct. Europe having an adult experience.
Increasing hours to get higher pension is evil and dishonorable. Either saying always soak the rich or can't have any new taxes are both really dumb.
Combination of patience and opportunism is highly desirable as an investor. When a major opportunity comes along, don't be timid.
Three most important parts of his legacy. Self-improvement. Don't imitate a lot of his peculiarities. Irreverence can get you in a lot of trouble if you aren't Munger. Self-discipline is good.
Loves the Wall Street Journal. Likes the Economist, the best among magazines.
Authors to study. I have an inadequate response.
Index funds: I prefer to do considerably better. Said he’s un-humble by nature so willing to put up with a certain amount of misery. Utterly failed with Dexter since they issued stock. Owners of Berkshire will do quite alright from here just sitting.
Re: adversities: You simply must soldier through the best you can.
He thinks it’s perfectly obvious that there will be inflation over time.
Greece is contemptible. If he was running Europe he would not have taken Greece in. An ounce of prevention worth way more than a pound of cure.
It is hard for me to imagine Google (GOOG) not having a strong position. I don't know how you would displace Google.
Of course I have helped my children financially. The children that don't get anything hate their parents. Lose graciously. Will they be as driven? Not likely.
Exxon(XOM) stands by itself as long term, in the past, investment.
Admiration the best kind of love.
Lot of people want to be greedy jerks then nice at the end. Doesn't recommend that. Just consistent learning.
Won't do this meeting again next year. You people need a new cult hero. I am doing you a favor by saying no.
Do what you like to do. Follow your interests and your talents. Could not have been a quarterback or ballet dancer.
Is Coke (KO) as good as 20 years ago? No, but still one of my favorites. Very entrenched. Tough for the elephant to move fast. Likes branded companies selling cheap items that are entrenched. If he was running money, all accounts would own Coke.
Extremely reluctant/brutal to put something on his calendar. Once in, however, he does it. Keeps calendar open by design.
Don't preach one set of values and live another.
Some of you will live to see a Berkshire dividend but he hopes he does not. Sees parallels between the Roman Empire and US today. All empires pass the baton in due course. Every one.
We have had a huge positive influence on Asia. Chinese copied Singapore. Big admirer of Lee Kuan Yew. Admires the talent and culture of Asia but side consequence is competition.
Thinks employment will be a considerable problem for a considerable period.
Modern consultants with style boxes won't work worth a damn on average. How do pension consultants come up with 8%?
Company and CEO he admires the most: Costco (COST). Would argue Jim Sinegal one of top retail guys ever. Total meritocracy. Losing easy money in the short run.
If running a fund, how much cash would he hold today? I have less than $10 million in cash so there is your answer.
Loves admitting when he is a horse's ass/wrong. Take joy in admitting mistakes. You will have no shortage of opportunity.
Insurance business has always been a mediocre business conventionally applied. Will find more oil and gas than thought and there will be a lot of renewable energy from the sun. Solving energy problem will be done by our children. Certain class of people enjoy talking about climate problems rather than finding solutions. Not sure warmer isn't better. How many moving from California to North Dakota?
Ajit Jain could move up (and be Berkshire’s CEO) if he wants to but doesn't think he wants to. Iscar is easy, fanatical and highly talented. Off-the-wall wonderful. Most managements will disappoint you sooner or later. Look at them with Dexter.
US Bank (USB) and Wells Fargo (WFC) are better than most at avoiding common stupidities of banking. CEO of Wells told him regarding a certain decision that he had his head up his ass. That made Charlie feel better about Wells. Level Three in his too tough pile.
Ben Franklin: When the citizens of a republic can vote themselves money, the end of the republic is near.