8 Most Important Lessons from the 2022 Berkshire Hathaway Annual Meeting

every year 40 000 people travel to omaha nebraska to listen to investing legends warren buffett and charlie munger speak they share their thoughts on practically everything from what they see going on in the stock market in the economy all the way to inflation and even bitcoin these question and answer sessions have become legendary and are a great opportunity to learn about investing whether you're just starting out or manage a multi-billion dollar portfolio these q a sessions typically last for five hours but i've condensed it down to the 20 most important minutes that you need to see so make sure to hit the like button because i spent hours pouring through the footage to find the best parts for you enjoy well that's why well look what happened to robin hood for its peak to its trough wasn't that pretty obvious that something like that was going to happen robin hood when they came out and went public and alerted everybody in all the short-term gambling and big commissions and hidden kickbacks and so on and so on it was disgusting yeah and it says the last year and they got mad at you and they sold a bunch of their stock and they got the money and yeah but now they're it's unraveling god god is getting just but a lot of the insiders have great got not no but they've gotten a lot of money from it i mean they were big sellers as i remember that maybe but yeah there's there's been some justice there's all kinds of people watching this that are long bitcoin and there's nobody that's short and nobody nobody wants their win pipe stepped on i don't blame them i don't like people to step on my windpipe but i would say this that if all the people list if the people in this room owned all of the farmland in the united states and you offered me a one percent interest in it and you said from one percent interest in all the farmland in the united states hey it says bargain price 25 billion dollars i'll write you a check this afternoon 25 billion now i own one percent of the farmland if you tell me you own one percent of the apartment houses in the united states and you offer me a one percent interest so i'll have a one percent of all the apartment houses in the country and you want whatever it may be for another 25 billion or something i'll write you check you know it's very simple now if you told me you owned all of the bitcoin in the world and you offered it to me for 25 i wouldn't take it because what would i do with it i have to sell it back to you one way or another i mean maybe i have the same people but it isn't going to do anything the apartments are going to produce rental and and the farms are going to produce food and uh if i've got all the bitcoin you know i'm back where whatever his name was who may or may not have existed was you know 15 years ago if i've got it all he could create a mystery about it but everybody knows what i'm like i mean so if i'm trying to get rid of it you know people will say well you know why should i buy some bitcoin from you i mean why don't you call a buffered coin you know make your own or somewhat do something but uh i'm not going to give you anything for it and you'd be right incidentally but that explains the difference between productive assets and something that depends on the next guy paying you more than the last guy got now net if you look at it a lot of commissions have been paid and there's i mean there's all kinds of frictional costs that are very real that somebody has paid to a bunch of people who facilitate this game but whatever one group of the public has taken out or one group of owners has come in from other people i mean other people have entered the room and they move money around but but no money has there's no more money in the room it just changed hands with a lot of maybe fraud and costs involved and you know a whole bunch of things you lose you know you forget the numbers and get the equation you can do that with a lot of things i mean it's been done throughout history certain things have value that produce something tangible i mean you can you can say a great painting you know probably will have some value 500 years from now may not but the odds are pretty good that if it was a big enough name at some point there will be a few things i mean you know you can uh you can find something brave if somebody wants to sell you a pyramid or something and you can charge the viewers and you know it'll be around a long time and and won't produce anything but but but uh people will find it interesting to go there because i brought about the parents but basically assets to be that value they have to deliver something to somebody and uh and there's only one currency that's acceptable and i'd say i mean you can come up with all kinds of things uh we can put out berkshire coins or you know we put up berkshire money or anything like that but uh we get in trouble i guess if we call it money but uh in the end this is money and and there's no reason in the world why the united states government whose currency people prefer literally there's 2.3 just under 2.3 trillion just of these little pieces of paper floating around some places seven thousand for every man woman or child in the united states and of course most of them probably are in the united states who knows but this is the only thing that's money and anybody that thinks the united states is going to change to where they let berkshire money replace theirs you know it's out of their mind i mean so anyway uh with those few deficiencies whether it goes up or down in the next year or five years ten years i don't know but the one thing i'm pretty sure of is that it it doesn't it doesn't multiply it doesn't produce anything it's it's uh it's got a magic to it and people have attached magics to lots of things look at the gold on wall street great magic you know we are not an insurance company we're a tech company well they're an insurance company but a dozen people ourselves raise a lot of money they just say just don't pay attention to the fact that we sell insurance we are a tech company well in the end they wrote insurance and government of china has worried the investors from the united states who invest in china more in recent months and years than he did in earlier periods so there's been some tension and it's affected the prices of some of the chinese stocks particularly enter uh internet stocks just in the last day or two the chinese leader has sort of reversed coursed on that and said he went too far and he's going to pull way back and so on and so on so we're having some hopeful signs but yes there are more difficulties investing i mean of dealing with the regime in china than there are in the united states and it's different it's a long way away and they have their own culture and their own loyalties and so on and so on the reason that i invested in china is i could get so much more so much better companies at so much lower prices and i was willing to take a little political risk to get them to get into the better companies the lower prices other people might reach the opposite conclusion my question is on market timing you have always said that it is impossible to time the markets yet if we look at your track record you have had amazing timings with some of your key decisions you got out of the stock markets in 1969 70 you got back in 72 70 to 74 when the markets were really cheap you did the same thing in 87 99 2000 and today we are sitting on a significant amount of cash when the markets are going down my question is how do you time the big market moves so well uh we'd like to offer you a job first i will take it the uh the interesting thing is uh you know obviously we have the faintest idea what the stock market is going to do when it opens on monday we never have had we have never made charlie and i i don't think in all the time we work together and i'll tell you something later on maybe about how learning takes place but we have we have never i don't think we've ever made a decision that we're either one of us has either said or been thinking we should buy or sell based on what the market is going to do uh no or or for that matter on on what the economy is going to do we don't know and the interesting thing is some sometimes i get some credit someplace for the fact that you know how wonderful it was that we were optimistic in 2008 and when everybody was down on stocks and all that sort of thing you know we we we spent a big percentage of our net worth in a very dumb time and i i shouldn't say we it's i we spent about 15 or 16 billion dollars which was a lot bigger to us then than it is now we spent in the last few weeks a period of three or four weeks between wrigley and goldman sachs and generally at a terrible time as it turned out i mean i didn't think i didn't know it was going to be a good time or a bad time but it was a really dumb time and i wrote an article for the new york times and by american and all these things well if i'd had any sense of timing and waited six months until i think the law was in march and in fact um i think i was on cnbc maybe that day or something but but uh i totally missed that opportunity i totally missed you know in march of of 2000 2020 uh we we have not been good at timing we have we've been reasonably good at figuring out when we were getting enough for our money and we hadn't had no idea when we bought anything well we always hoped it would go down for a while so we could buy more and we hoped even after we were done buying and ran out of money that if it was cheap the company would keep buying in effect taking our interest up i mean that stuff you could you could learn it in fourth grade but it's not what's taught in school and i mean so never give us any credit well actually give us all the credit i mean go out and tell everybody how smart we are but we aren't we haven't ever timed anything we've never figured out insights into the economy when i was about 11 years old march march 12th i guess 1942 you know at march 11th you know but i bought stock when the dow was 90. it was 101 in the morning it was 99 at the end of the day i think and you know now it's 34 000 or in the last couple of years because our market is probably it's always been a combination of a casino and when i talk about wall street i'm talking about the whole capital formation market uh but the and trading market etc but the market has been extraordinary sometimes it's it's quite investment oriented kind of like it always you read about in the books and everything uh what capital markets are supposed to do and you study it in school and all that and other times it's it's it's almost totally uh a casino and uh it's a gambling parlor and that existed to an extraordinary degree uh in the last couple years encouraged by wall street because the money is in the money has turned is in turning over stocks i mean people say how wonderful you've done if you bought berkshire in 1965 or something and and held it but you broke her with a starve to death i mean it's wall street makes money on one way or another catching the crumbs to fall off a table of capitalism and an incredible economy that nobody could have ever dreamed of a couple hundred years ago they don't make money unless people do things and that they get a piece of them and they make a lot more money when people are gambling than when they're investing i mean it's much better to have somebody that's going to trade 20 times a day and get all excited about just like paying pulling the handle on the slot machine you may not say that you want that person you'd like the other kind of person too maybe but that's where you make the money bonds can swindle the equity investor to everything inflation i should say swindle's the bond investor too it swindles a person who keeps their cash under their mattress it swindles almost everybody the problem if you have a business that doesn't take any capital and let's just say the dollar depreciates 90 or something so things cost 10 times as much it doesn't take any capital you can charge 10 times as much and you've kept your relative position but most businesses take some capital if our utility business just say that the dollar worth one tenth uh some years hence from now we have to have ten times the capital investment basically and we get paid a return on that but we have forced capital investment uh to essentially keep them in the same place and uh i wrote an article related to that and i will tell you a very one famous story which you will all sympathize with and that i wrote that story for fortune and when i finished it it was about seven thousand words and fortune doesn't didn't like publishing seven thousand words and they had my friend carol willis explain that to me knowing that i would pay more attention to her than anybody else but being stubborn and male i said uh you know every word is precious then they can either run it or not so then they sent an editor a very nice guy out to omaha and this guy explained to me that just wasn't right to use that many words and i said well that's fine but if you don't do it i'll write it someplace else over here very disgusting behavior on my part and then i sent it it was it was beginning to bother me a little so i sent it to my friend meg greenfield and meg was a great great great editor at the washington post and we were very very good friends wonderful woman and meg who was tough as nails with most writers but she was kind of nice she was she didn't want to really hurt me too much so she said i said well mate what do you think and she said well warren she says you don't have to tell everything you know in this article and it uh it made it made the point and so i write that letter i'd write that article shorter and uh but i'd say more or less the the same thing no and you're better off if you really could have a totally stable unit of a monetary uh use for the next hundred years it would be better better for business and investors in general well it happened on a scale of stem we'd never seen before those checks that were just mailed out to everybody who claimed to have a business and claim to have employees they they probably drowned the country in money for a while and then if you say they probably had to do it but it it was something that had never been done on that scale before but we had a problem we hadn't had before yes no i'm not i'm i'm not saying it wasn't a good idea i mean in my book jay paul is a hero i mean it's very simple i mean he did what he had to do you know when when uh if he had done nothing it would be the i mean he would be be very easy to engage in what you would call thumb sucking then and plenty of i shouldn't say plenty but there are other fed chairman that would have been sucking their thumbs and the world would have fallen around them is we will always have a lot of cash on hand and when i say cash i don't mean commercial paper when 2008 and 2009 financial panic came along we didn't own anybody's commercial paper yeah we didn't have money market funds we didn't we have treasury bills we believe in having cash and uh have been a few times in history and will be more times in history where where if you don't have it you know you don't get to play the next day i mean it uh it's like oxygen you know it's there all the time but if it disappears for a few minutes it's all over so we our cash was down on march 31st because as you saw we spent that large sum uh there in that brief period during the quarter 40 billion uh we've committed to buy allegheny court for something over 11 billion and but we will always have a lot of cash we won't we don't some of our companies have buying bank lines i don't know why they have the bank lines we're better than the banks and we will give them the money if they need it but but you know the local bankers been calling on them and they need something to do everybody else has bank lines so uh it's harmless uh but there's no reason for any of our subsidiaries uh that bank lines when berkshire is stronger than the banks that they're i didn't hear exactly i don't know whether that was a banker screaming or i don't i don't really like to torture i don't like to torture anybody i mean but uh money's kind of an interesting thing people seem to like to talk to me about it i mean they don't they don't ask me how to dance or anything like that but they ask about money and so 20-1 it's a photo of a 20 bill and it says at the top federal reserve notes now federal reserve no we we've done all kinds of things with money in this country it's amazing country only a couple hundred years old the number of different experiences we've made with banks and everything but we finally just decided to let the federal reserve do the issuing of money down in the lower left-hand corner and said i think rosie rios uh who signed this note i think she signed more more uh lewis currency than than any other person in history uh so if you see rosie you know you cozy up to her i mean this is a woman who has issued a lot of currency uh but it says this note is legal tender for all debts public and private and that makes it money you you can go in and go into our candy store and if you offer us enough bushels of wheat we'll probably give you a box of candy but but money is the only thing that the irs is going to take from you that uh you can offer them pains you're going to offer them all whatever but this is what settles debts in the united states and i thought that you'll hear a lot about various kinds of money this is the only kind of money uh you're going to see uh in my opinion uh throughout your lifetime or even throughout charlie's lifetime

Channel: Investor Center

Views: 83,621

Keywords: 2022 Berkshire Hathaway annual meeting, Berkshire annual meeting 2022, 2022 Berkshire Hathaway meeting, Warren Buffett meeting 2022, Berkshire Hathaway annual meeting, Charlie munger Bitcoin, Warren Buffett Bitcoin, Charlie munger Robinhood, Berkshire Hathaway 2022 summary, Berkshire Hathaway 2022 highlights, Warren Buffett, Charlie munger, Warren Buffett Charlie munger Berkshire Hathaway 2022, 2022 Berkshire meeting

Id: 89A1kZt0E84

Length: 22min 3sec (1323 seconds)

Published: Tue May 03 2022