It's very simple. He did what he had to do," Buffett said. Charlie Munger said he's willing to take on that risk for a good investment. Other people might reach the opposite conclusion, and everybody is more worried about China now than they were 50 years ago.
And it's different, it's a long way away and they've got in their own culture in their own loyalty. To me, Berkshire is a painting, and I get to paint. Buffett has said Berkshire "had no prior knowledge" of Microsoft's plan to buy the company when Berkshire made its initial investment. Buffett said he has been buying more shares of Activision since the deal was announced as the stock is trading way below Microsoft's offer.
Buying at these levels will yield a bigger return if the deal closes. Buffett said Berkshire now owns about 9. One thing we do know is that Microsoft has the money," Buffett added. It swindles the person who keeps their cash under their mattress.
It swindles almost everybody," he said. Buffett pointed out that inflation also raises the amount of capital that companies need to have and that it isn't as simple as raising prices to maintain inflation-adjusted profits. The Berkshire Hathaway CEO cautioned against listening to people who claim to be able to predict the path of inflation. Buffett reiterated that the best protection against the inflation is investing in your own skills.
Berkshire Hathaway is buying. Mike Segar Reuters A trip to the New York Stock Exchange when he was 9 years old was inspiring for Warren Buffett, who is known to have started investing when he was 11 years old. I just did everything.
He said his approach to investing later changed completely when he was 19 or 20 years old after reading one particular book passage in what he said must have been Benjamin Graham's "The Intelligent Investor. I just had the whole approach wrong," Buffett said. It receives some of the spread on trades the company forwards to larger trading houses.
God is getting just," Munger said. He responded to an audience member question asking what single stock they would invest in given how high inflation has been rising. The Berkshire executives didn't say where they would put their money, but Munger was clear about where he wouldn't invest: bitcoin. Munger's answer was a thinly veiled reference to big news from Fidelity this week , which will now allow employees to put bitcoin into their employee-sponsored retirement accounts.
Munger and Buffett have both long been critics of bitcoin, which has become increasingly attractive to certain investors for its potential as an inflation hedge. We don't know," he continued. The Oracle of Omaha said he often gets misplaced credit for the stock winners he's picked over the years, pointing out he's also missed out on some big opportunities as well. Buffett said he failed to make some big purchases in the early days of the pandemic. Instead, Buffett adheres to a value investing strategy, or picking stocks with attractive valuations, instead of focusing on the vagaries of the stock market.
And we had no idea when we bought anything, but we always hoped it would the down for a while so we could buy more. I mean, that stuff, you could you could learn in fourth grade. Telematics refers to putting a device on a car that tracks driving patterns, in exchange for a lower insurance rate. Geico, until recently, wasn't involved in telematics," Jain said. It will take a while, but my hope is that in the next year or two, Geico will be positioned to catch up with Progressive.
The proposal's aim stems from concerns about corporate governance with one person holding dual roles. CNBC Munger said today's stock market has become "almost a mania of speculation. After Munger likened the activity to a casino, where people play craps and roulette, Buffett expanded on the comparison.
Nobody's going around selling calls on farms. That's why markets do crazy things. Occasionally Berkshire gets a chance to do something. It's not because we're smarter. The move drew criticism from those who disapproved of the support of big banks. The billionaire investor made those remarks while also praising the Federal Reserve's role during the financial crisis and the pandemic.
He added the Fed will "do whatever is necessary. That's what happened in and , and that's what happened in , and you'll hope it happens again next time. David A. Weber said it was tough to raise prices for Brooks' products but that he thinks some of the cost pressures could cool soon. But our whole industry is so competitive. It's a big market place. Whatever we thought that was, think that the company would do somewhat better benefit from it being somewhat better and realized that other investors would see what we saw six months later, a year later, and would rewrite the shares too.
So you could buy something 11 times earnings and maybe they would earn 10 percent more. But you'd get another three points on the multiple and you'd make 50 percent over two or three years. That that isn't happening anymore because there's nobody to notice what actually happens at these companies. So we have to be the other side of that is nobody knows what anything is worth. So there's an enormous number of companies that are dramatically mis valued in ways that we haven't seen before.
So whereas before we might pay eight times or nine times or twelve times, which seem like low multiples, but now we can buy a lot of those same companies at three times earnings or four times earnings. And if they're buying back 10 or 15 or 20 or 40 percent of their stock, in some cases, eventually we're going to have to get paid by the company as opposed to having other investors figure out what we thought we figured out before them.
Well, so they are seeing some better valuations in the markets to buy specific stocks. I'm wondering if you still think that there are bubbles out there in the market. We have seen a draw down to a degree already. There's a lot of worries that that drawdown might be bigger. And so do you still see bubbles? Well, sure, of course, because the absence of people doing valuation means that nobody knows what anything is worth and the market doesn't know what anything is worth.
And so you had a period of time, like in , where if you just took the highest valued companies a priority, they went up the most 30 percent, 40 percent for the top decile, the bottom decile went down 20 percent. So all you had to know was, is it already highly valued? And it was highly valued. It went up more and it was a lowly valued. It went down. And so you had this bifurcation of the market and that vacation basically remains. So people look at those companies that ran away and they they were already overvalued and they became even more overvalued.
And they look at them now and go, oh, my goodness, they're down 50 percent. They're down 70 percent. Whatever it is, they must be cheap because devalue even one person I heard say talking about stuff that was down a lot from a recent high. But all you're saying is, is it's at a discount to some previous price, which was obviously wrong.
And so just because something I would say on the way up twice a silly price isn't twice as silly, but something that's half of a prior high is not devalue. In fact, the joke really is, is, you know, what you call a stock that's that's down 90 percent. It's a stock that was down 80 percent and then it got cut in half.
So let's add in then the cocktail of higher interest rates, because some of this is based on a price to earnings or even kind of relative value, if you will. But what happens as rates rise? How do you discount where stocks should be specific facts and in particular, as you know, the terminal value?
And decided yet on where the Fed. Yeah, I think that that is not the right way to look at things these days because nobody's actually doing those calculations in any case. It's not like people are looking at it and saying, well, you know, with interest rates at 2 percent, I can pay, you know, 9 times for this, but at 4 percent, I got to pay seven times for this. That's not really what people are doing. You know, what you basically have is, is you have that companies where the value fundamentally disconnected and you can figure out what we're in is a bear market.
And so in a bear market, those things get to you rated and you can say, well, the proximate cause of the bear market is inflation or interest rates or the Fed or all of those things. But in a bear market is when ultimately it turns out if you buy something and it's just at the wrong price, it's a long way down before somebody like me is going to want to come in and say, OK, this is actually really pretty cheap, pretty cheap.
You say we're in a bear market. You say, but are we in a recession? I'm wondering if you can kind of calculate the probability as you see it, what a hard landing would look like. Look, I heard to understand, look, the politicians are debating whether we're in a recession. They don't really know what the definition is. You know, they also don't know the definition of a woman is. So they're confused and there's a lot of confusion.
You know, that's out there on these type of things. I don't think it matters whether we're in a recession. I think what matters is these things are are in a slowing. And so it matters is, is that the general direction, things it doesn't really matter whether we're technically in a recession or whether it's technically a soft landing or a hard landing. Well, we are as we're in a period of economic slowdown or deterioration, and that's when when things that were overvalued tend to get degraded.
Talk to me about that slowdown. Do you think that as you talk to CEOs, as you talk to other investors, do you think that there's a mismatch here about expectations, about where earnings are headed from here, whether it's because the cost of financing for companies are going up or whether it's because you think earnings revisions might go down further than you've seen them?
Do you think that there's a mismatch out there? Well, some earnings will go up and some earnings will go down. I think it's a company by company, you know, type of type of circumstance. You know, companies that are in energy, for example, I expect the earnings are going to continue to be very strong and materials in some other areas that are for benefiting from the difficulties that we have.
You know, we've under invested in some areas which is allowed there to be a dearth of capital placed into, you know, not the software is eating the world companies, but the really boring ones. And, you know, when was last time we put a cement factory in this country? And when was last time we created an oil refinery? We've under invested in these areas. And that's going to allow companies that are in these areas to earn excess profits for us for a substantial period of time, because they don't face the normal competition that you'd have if you if if we were trying to grow these sectors.
I have to ask you more about the role of inflation here when it comes to why companies are earning on one hand. There's a concern that lower inflation would mean lower profits as well. At higher inflation, as we know, has also been an issue this morning. Ray Dalio had told my colleague that he thinks structural inflation can be 4 to 5 percent.
You will be quite surprised at the number of people already lined up outside. It can be quite chilly, so I recommend bringing a jacket. At am, there should still be plenty of parking directly in front of the center. The meeting is free to attend, but you will need to be a shareholder to get tickets.
You will either receive an application in the mail, request a ticket via poxyvote. You can also watch the meeting live the day of the event through the CNBC website. In-person attendees can enjoy visiting the vendors of companies that Berkshire Hathaway owns and participate in events surrounding the meeting, such as a 5k run, picnic, or shopping events at Nebraska Furniture Mart and Borsheims. While not associated with Berkshire Hathaway, it is focused on the same principles deployed by Warren Buffett and Charlie Munger.
The conference gives value investors an opportunity to meet other value investors worldwide. Talks are given by successful money managers, professionals, authors, business managers, and journalists. Content is focused on sharing advice on the value investing process, as well as the success of value investors. It gives people a chance to also bounce ideas off others in order to gain different perspectives. Value investors always buy good business in good industry with good management. Speaker also suggested to use a check list in such a way that investors will not miss any important step in evaluating a company.
Example of check list is shown below: Check list 1. Do I understand or familiar this company and its industry? Is it good business, good industry, good competitiveness etc? Is the management team trusted? Does the CEO care about shareholder?
Value investors bet that what market believes is wrong. Indeed, when the market undervalues a company by giving lower market price than its intrinsic value, it is a time for value investors to correct it. Next, speaker also give some suggestions to beat the market, some of them are: 1. Be a good market timer. But it is very hard to be a good market timer.
Then you think of possible courses of action. Then you calculate which course is in your best interest. Then you take the action. Economic models and entire social science disciplines are premised on the assumption that people are mostly engaged in rationally calculating and maximizing their self-interest. Perhaps this will be the moment when we shift our focus from step three, rational calculation, to step one, perception.
Looking at and perceiving the world is an active process of meaning-making that shapes and biases the rest of the decision-making chain. The meeting is free to attend, but you will need to be a shareholder to get tickets. You will either receive an application in the mail, request a ticket via poxyvote. You can also watch the meeting live the day of the event through the CNBC website.
In-person attendees can enjoy visiting the vendors of companies that Berkshire Hathaway owns and participate in events surrounding the meeting, such as a 5k run, picnic, or shopping events at Nebraska Furniture Mart and Borsheims. While not associated with Berkshire Hathaway, it is focused on the same principles deployed by Warren Buffett and Charlie Munger. The conference gives value investors an opportunity to meet other value investors worldwide.
Talks are given by successful money managers, professionals, authors, business managers, and journalists. Content is focused on sharing advice on the value investing process, as well as the success of value investors. It gives people a chance to also bounce ideas off others in order to gain different perspectives. The conference takes place at the University of Nebraska at Omaha and takes place on the Thursday before the Berkshire Hathaway meeting.
The conference aims to promote the value investing philosophy pioneered by Benjamin Graham and made famous by Warren Buffett. It aims to present the different investing methods with value investing and promote the study of the strategy.