Загрузка видео...

Не удалось загрузить видео

На главную

Warren Buffett and Charlie Munger didn't avoid real estate because they thought it was a bad asset class They stayed away because they believed they had no durable advantage in it. When asked why real estate had never become a significant part of Berkshire Hathaway's portfolio, Buffett pointed to...

BlackEdgeFund's profile picture

Black Edge

209,160 subscribers

20,087 просмотров • 1 месяц назад •via X (Twitter)

LIVE

Anya Rossi• Live Now

Private livecam show

Комментарии: 0

Нет доступных комментариев

Здесь появятся комментарии из оригинального поста

Похожие видео

Warren Buffett and Charlie Munger purchased Wells Fargo stock in the early 1990s because of the quality of management. MUNGER: We were basically betting that their real estate lending was way better than average. And, indeed, it was. BUFFETT: If we hadn't gone a little further than just looking at numbers, we would not have been able to make that decision.
1:25

Warren Buffett and Charlie Munger purchased Wells Fargo stock in the early 1990s because of the quality of management. MUNGER: We were basically betting that their real estate lending was way better than average. And, indeed, it was. BUFFETT: If we hadn't gone a little further than just looking at numbers, we would not have been able to make that decision.

Kevin Carpenter

24,807 просмотров • 6 месяцев назад

Warren Buffett: "It is a different game that requires a different type of person to enjoy it." At 94 years old, Warren Buffett has a clear preference when it comes to investing, and it's not real estate. When asked about real estate versus stocks, Buffett argues the stock market wins on almost every practical dimension. "There is simply much more opportunity in the United States security market than in real estate." His reasoning comes down to three things: speed, simplicity, and certainty of completion. In stocks, you can execute billions of dollars worth of business anonymously in five minutes, and once the trade is done, it's done. The completion rate is essentially 100% once buyer and seller agree on price. Real estate is the opposite. You're dealing with a single owner or family that may have held a property for a long time, possibly borrowed too much against it, or is facing negative trends. Every transaction becomes an enormous, drawn-out decision. "In real estate, signing the deal is just the start of another phase where people negotiate more and more things." Buffett contrasts this with the stock market: "If someone needs to sell 20,000 shares of Berkshire and the price is right, it is done in five seconds and closes every time." His late partner Charlie Munger took a different view. Munger enjoyed real estate deals and continued doing them even in the last five years of his life. But Buffett says that if Munger had to choose exclusively between the two at age 21, even he would have chosen stocks. For Buffett, the conclusion is simple: "We find it much better when people are ready to pick up the phone and you can do hundreds of millions of dollars of business in a day. I have been spoiled by this efficiency, and I like being spoiled, so we will keep it that way." Real estate can produce great returns, but the friction involved in negotiations, multiple parties, and drawn-out timelines makes it a fundamentally different game. For most investors, the stock market offers far more opportunity with far less complexity.
5:35

Warren Buffett: "It is a different game that requires a different type of person to enjoy it." At 94 years old, Warren Buffett has a clear preference when it comes to investing, and it's not real estate. When asked about real estate versus stocks, Buffett argues the stock market wins on almost every practical dimension. "There is simply much more opportunity in the United States security market than in real estate." His reasoning comes down to three things: speed, simplicity, and certainty of completion. In stocks, you can execute billions of dollars worth of business anonymously in five minutes, and once the trade is done, it's done. The completion rate is essentially 100% once buyer and seller agree on price. Real estate is the opposite. You're dealing with a single owner or family that may have held a property for a long time, possibly borrowed too much against it, or is facing negative trends. Every transaction becomes an enormous, drawn-out decision. "In real estate, signing the deal is just the start of another phase where people negotiate more and more things." Buffett contrasts this with the stock market: "If someone needs to sell 20,000 shares of Berkshire and the price is right, it is done in five seconds and closes every time." His late partner Charlie Munger took a different view. Munger enjoyed real estate deals and continued doing them even in the last five years of his life. But Buffett says that if Munger had to choose exclusively between the two at age 21, even he would have chosen stocks. For Buffett, the conclusion is simple: "We find it much better when people are ready to pick up the phone and you can do hundreds of millions of dollars of business in a day. I have been spoiled by this efficiency, and I like being spoiled, so we will keep it that way." Real estate can produce great returns, but the friction involved in negotiations, multiple parties, and drawn-out timelines makes it a fundamentally different game. For most investors, the stock market offers far more opportunity with far less complexity.

Big Brain Investing

42,809 просмотров • 4 месяцев назад

Warren Buffett thoughtfully explains why investing in stocks/equities is better than real estate, during Berkshire's latest annual meeting: "In respect to real estate, it's so much harder than stocks in terms of negotiation of deals, time spent, the involvement of multiple parties in the ownership. Usually when real estate gets in trouble, you find out you're dealing with more than equity holder. But there have been times when large amounts of real estate... I've changed hands at bargain prices, but usually stocks were cheaper, but there were a lot easier to do. Charlie did more real estate. Charlie enjoyed real estate transactions, and he actually did a fair number of them in the last five years of his life. But he was playing a game that was an interesting game to him. But I think if you'd asked him to make a choice when he was 21, he'd either be in stocks exclusively the rest of his life or real estate the rest of his life. He would have chosen stocks in a second. There's just so much more opportunity, at least in the United States. There's so much more opportunity that presents itself in the security market than it does in real estate and in real estate. You're usually dealing with a single owner or a family that owns maybe a large property they've had a long time. Maybe they've borrowed too much money against them. Maybe the population trends are against them. But to them, it's an enormous... When you walk down to the New York Stock Exchange, you can do billions of dollars worth of business totally anonymous, and you can do it in five minutes. And the trades are complete when they're complete. In real estate, when you make a deal, a big deal with a distressed lender, when you sign the deal, then you go into another phase. Then people start negotiating more things and more things. It's a whole different game. And a different type of person, to some extent, enjoys the game. We did a few real estate deals that came our way in 2008 and 2009, but the amount of time that they would take us compared to doing something intelligent and probably better in securities, there was just no comparison. I mean, in a real estate deal, every sentence is important. In stocks, if somebody needs to sell 20,000 shares of Berkshire or something and they call us and the price is right, it's done in five seconds. And it closes all the time."
2:36

Warren Buffett thoughtfully explains why investing in stocks/equities is better than real estate, during Berkshire's latest annual meeting: "In respect to real estate, it's so much harder than stocks in terms of negotiation of deals, time spent, the involvement of multiple parties in the ownership. Usually when real estate gets in trouble, you find out you're dealing with more than equity holder. But there have been times when large amounts of real estate... I've changed hands at bargain prices, but usually stocks were cheaper, but there were a lot easier to do. Charlie did more real estate. Charlie enjoyed real estate transactions, and he actually did a fair number of them in the last five years of his life. But he was playing a game that was an interesting game to him. But I think if you'd asked him to make a choice when he was 21, he'd either be in stocks exclusively the rest of his life or real estate the rest of his life. He would have chosen stocks in a second. There's just so much more opportunity, at least in the United States. There's so much more opportunity that presents itself in the security market than it does in real estate and in real estate. You're usually dealing with a single owner or a family that owns maybe a large property they've had a long time. Maybe they've borrowed too much money against them. Maybe the population trends are against them. But to them, it's an enormous... When you walk down to the New York Stock Exchange, you can do billions of dollars worth of business totally anonymous, and you can do it in five minutes. And the trades are complete when they're complete. In real estate, when you make a deal, a big deal with a distressed lender, when you sign the deal, then you go into another phase. Then people start negotiating more things and more things. It's a whole different game. And a different type of person, to some extent, enjoys the game. We did a few real estate deals that came our way in 2008 and 2009, but the amount of time that they would take us compared to doing something intelligent and probably better in securities, there was just no comparison. I mean, in a real estate deal, every sentence is important. In stocks, if somebody needs to sell 20,000 shares of Berkshire or something and they call us and the price is right, it's done in five seconds. And it closes all the time."

Triple Net Investor

1,042,844 просмотров • 1 год назад

Warren Buffett bought a dying textile mill out of pure spite. It became a $1 TRILLION company. He still calls it the dumbest decision of his career. > In 1962 Buffett was running a small investment partnership called Buffett Partnership Ltd > He spotted Berkshire Hathaway a failing textile mill in Massachusetts. > Every time the mill closed a factory they bought back their own shares at a small premium. > Buffett kept buying shares and flipping them back for a tiny profit. > In 1964 CEO Seabury Stanton shook hands with Buffett and verbally agreed to buy his shares at $11.50 each. > When the written offer arrived it said $11.375 exactly 12.5 cents less than agreed. > Buffett wrote later that he felt "chiseled". > Instead of selling he went and bought every single share he could find. > By May 1965 Buffett Partnership had taken control of Berkshire Hathaway. > He fired Stanton on the spot. > He had just spent $14 MILLION buying a dying textile business out of pure spite. > For years it earned almost nothing. > His partner Charlie Munger told him from day one it was a catastrophic mistake. > Buffett ignored him, then he started using Berkshire as a shell to buy insurance companies and invest the premiums. > That single pivot triggered entirely by anger over 12.5 CENTS built one of the greatest investment empires in history. > Berkshire Hathaway is now worth over $1 TRILLION. > It holds $325 BILLION in cash alone more than the GDP of most countries. > Buffett retired as CEO on December 31 2025 at age 95 after 60 years. > In a 2010 CNBC interview he called Berkshire "the dumbest stock I ever bought". > He estimated his anger over 12.5 cents cost him $200 BILLION in lost compounding. > His net worth today is $150 BILLION almost entirely from the company he bought out of spite. The most expensive argument in business history started with 12.5 cents.
2:14

Warren Buffett bought a dying textile mill out of pure spite. It became a $1 TRILLION company. He still calls it the dumbest decision of his career. > In 1962 Buffett was running a small investment partnership called Buffett Partnership Ltd > He spotted Berkshire Hathaway a failing textile mill in Massachusetts. > Every time the mill closed a factory they bought back their own shares at a small premium. > Buffett kept buying shares and flipping them back for a tiny profit. > In 1964 CEO Seabury Stanton shook hands with Buffett and verbally agreed to buy his shares at $11.50 each. > When the written offer arrived it said $11.375 exactly 12.5 cents less than agreed. > Buffett wrote later that he felt "chiseled". > Instead of selling he went and bought every single share he could find. > By May 1965 Buffett Partnership had taken control of Berkshire Hathaway. > He fired Stanton on the spot. > He had just spent $14 MILLION buying a dying textile business out of pure spite. > For years it earned almost nothing. > His partner Charlie Munger told him from day one it was a catastrophic mistake. > Buffett ignored him, then he started using Berkshire as a shell to buy insurance companies and invest the premiums. > That single pivot triggered entirely by anger over 12.5 CENTS built one of the greatest investment empires in history. > Berkshire Hathaway is now worth over $1 TRILLION. > It holds $325 BILLION in cash alone more than the GDP of most countries. > Buffett retired as CEO on December 31 2025 at age 95 after 60 years. > In a 2010 CNBC interview he called Berkshire "the dumbest stock I ever bought". > He estimated his anger over 12.5 cents cost him $200 BILLION in lost compounding. > His net worth today is $150 BILLION almost entirely from the company he bought out of spite. The most expensive argument in business history started with 12.5 cents.

Jeremy

46,370 просмотров • 3 месяцев назад

Warren Buffett just warned that some of the biggest names in AI might collapse soon. And he said it while revealing he had personally put $31 billion into one of them... Google, Microsoft, and Amazon are now laying out hundreds of billions in capex to stay in the AI race. Buffett called that real money, the kind that was never required back when software was cheap to run. He said these companies have no choice but to keep spending at this scale, because none of them can afford to be the one that blinks. In his own words, they are "playing a game they don't want to play." But the one AI company Buffett actually bought is Google. Berkshire now holds a stake worth more than $31 billion, and for weeks Wall Street assumed the credit belonged to Greg Abel, who took over as CEO in January and ran the position up on his watch. But Buffett admitted he "initiated" the investment. He usually never reveals who makes a call. The Google position already sits behind only Apple and American Express in Berkshire's stock portfolio, and last month Berkshire bought $10 billion of it directly from the company in a private placement. Then he undercut his own trade. When asked why he chose Alphabet over the rest of the Mag 7, Buffett said he does not even like it as much as four or five other businesses Berkshire already owns. He bought it the way he buys anything, as a good company available at a fair price. For years he waved off the Apple question by calling it a consumer company. This time he let the AI label on Google stand, and bought it anyway. Buffett also said the vast majority of what Wall Street pushes, on the order of 90 to 95%, is merchandising, because Wall Street only cares whether it can sell you something. He said he cannot remember the last research report that dug into the actual returns a business earns. Everyone fixates on next quarter instead. He also brought up IBM, which owned its market for decades until a rival offered its customers a better deal and its best business cracked. He brought up A&P, the biggest retailer in America in the 1930s, a company he said held a commanding position that later vanished completely. Buffett was describing the AI leaders as much as anyone: The most dominant company on Earth today is not promised to be dominant in ten years. So the most famous technology skeptic in investing put $31 billion into the AI trade and at the same time warned that the companies leading it are stuck in a war with no exit. What does Buffett see coming that the rest of the market doesn't?
4:03

Warren Buffett just warned that some of the biggest names in AI might collapse soon. And he said it while revealing he had personally put $31 billion into one of them... Google, Microsoft, and Amazon are now laying out hundreds of billions in capex to stay in the AI race. Buffett called that real money, the kind that was never required back when software was cheap to run. He said these companies have no choice but to keep spending at this scale, because none of them can afford to be the one that blinks. In his own words, they are "playing a game they don't want to play." But the one AI company Buffett actually bought is Google. Berkshire now holds a stake worth more than $31 billion, and for weeks Wall Street assumed the credit belonged to Greg Abel, who took over as CEO in January and ran the position up on his watch. But Buffett admitted he "initiated" the investment. He usually never reveals who makes a call. The Google position already sits behind only Apple and American Express in Berkshire's stock portfolio, and last month Berkshire bought $10 billion of it directly from the company in a private placement. Then he undercut his own trade. When asked why he chose Alphabet over the rest of the Mag 7, Buffett said he does not even like it as much as four or five other businesses Berkshire already owns. He bought it the way he buys anything, as a good company available at a fair price. For years he waved off the Apple question by calling it a consumer company. This time he let the AI label on Google stand, and bought it anyway. Buffett also said the vast majority of what Wall Street pushes, on the order of 90 to 95%, is merchandising, because Wall Street only cares whether it can sell you something. He said he cannot remember the last research report that dug into the actual returns a business earns. Everyone fixates on next quarter instead. He also brought up IBM, which owned its market for decades until a rival offered its customers a better deal and its best business cracked. He brought up A&P, the biggest retailer in America in the 1930s, a company he said held a commanding position that later vanished completely. Buffett was describing the AI leaders as much as anyone: The most dominant company on Earth today is not promised to be dominant in ten years. So the most famous technology skeptic in investing put $31 billion into the AI trade and at the same time warned that the companies leading it are stuck in a war with no exit. What does Buffett see coming that the rest of the market doesn't?

Ricardo

230,573 просмотров • 1 месяц назад

Warren Buffett explains why great investing isn't about comparing every new opportunity to your greatest success. At a Berkshire Hathaway annual meeting, a shareholder asked why several major Berkshire investments were structured so differently. Goldman Sachs received $5 billion at 10% plus warrants. General Electric got similar terms. Dow Chemical's deal came with an 8.5% convertible structure. Mars/Wrigley paid 11.45%, while Swiss Re paid 12%. Why weren't the deals priced the same? Buffett's answer was simple. Each investment was made at a different point in time, under different market conditions, with different alternatives available. As he explained: "Our opportunity costs were different in every single one of those five transactions." The deciding factor wasn't the company itself. It was what Berkshire could have done with its capital at that specific moment. Buffett also acknowledged that capital allocation is never perfect. "We could have done a much better, I could have done a much better job of allocating our money." And with characteristic humility, he added: "We not only don't have perfect foresight, sometimes it's pretty, it's pretty bad." When Buffett evaluates an investment, he doesn't compare it to decisions he made years earlier. He compares it to the alternatives available today. Discussing Berkshire's investment in Swiss Re, he said: "I was thinking about what else I could do with $2.7 billion dollars. And that, that's the way all the decisions are made." Every investment passes through the same filter: What opportunities exist right now? What is the best use of capital today? Which option offers the most attractive balance of risk and reward? Past wins don't factor into the decision. As Buffett put it, previous deals "don't really make any difference." That leads to one of the biggest mistakes he believes investors make. "One of the errors people make in business, and sometimes it can be a huge error, is that they try and measure every deal against the best deal that they've ever made." The problem is psychological. Once people anchor themselves to their greatest investment, acquisition, or trade, every future opportunity can seem disappointing by comparison. Instead of making solid decisions, they wait endlessly for another perfect one. Eventually, they stop acting altogether. Buffett warns that by doing so, "they, in effect, sometimes they take themselves out of the game." His philosophy is far more practical. "The goal is not to make a better deal than you've ever made before; the goal is to make a satisfactory deal. It's the best deal that you can make at the time." Investing isn't about constantly setting new personal records. It's about allocating capital intelligently based on the information and opportunities available today. In Buffett's view, there's only one rational way to judge a decision: Did you make the best choice you could with what you knew at the time? As he concludes: "There's no other rational way to make deals." Source: Berkshire Hathaway Annual Shareholders Meeting (2009) – Warren Buffett & Charlie Munger Q&A
3:38

Warren Buffett explains why great investing isn't about comparing every new opportunity to your greatest success. At a Berkshire Hathaway annual meeting, a shareholder asked why several major Berkshire investments were structured so differently. Goldman Sachs received $5 billion at 10% plus warrants. General Electric got similar terms. Dow Chemical's deal came with an 8.5% convertible structure. Mars/Wrigley paid 11.45%, while Swiss Re paid 12%. Why weren't the deals priced the same? Buffett's answer was simple. Each investment was made at a different point in time, under different market conditions, with different alternatives available. As he explained: "Our opportunity costs were different in every single one of those five transactions." The deciding factor wasn't the company itself. It was what Berkshire could have done with its capital at that specific moment. Buffett also acknowledged that capital allocation is never perfect. "We could have done a much better, I could have done a much better job of allocating our money." And with characteristic humility, he added: "We not only don't have perfect foresight, sometimes it's pretty, it's pretty bad." When Buffett evaluates an investment, he doesn't compare it to decisions he made years earlier. He compares it to the alternatives available today. Discussing Berkshire's investment in Swiss Re, he said: "I was thinking about what else I could do with $2.7 billion dollars. And that, that's the way all the decisions are made." Every investment passes through the same filter: What opportunities exist right now? What is the best use of capital today? Which option offers the most attractive balance of risk and reward? Past wins don't factor into the decision. As Buffett put it, previous deals "don't really make any difference." That leads to one of the biggest mistakes he believes investors make. "One of the errors people make in business, and sometimes it can be a huge error, is that they try and measure every deal against the best deal that they've ever made." The problem is psychological. Once people anchor themselves to their greatest investment, acquisition, or trade, every future opportunity can seem disappointing by comparison. Instead of making solid decisions, they wait endlessly for another perfect one. Eventually, they stop acting altogether. Buffett warns that by doing so, "they, in effect, sometimes they take themselves out of the game." His philosophy is far more practical. "The goal is not to make a better deal than you've ever made before; the goal is to make a satisfactory deal. It's the best deal that you can make at the time." Investing isn't about constantly setting new personal records. It's about allocating capital intelligently based on the information and opportunities available today. In Buffett's view, there's only one rational way to judge a decision: Did you make the best choice you could with what you knew at the time? As he concludes: "There's no other rational way to make deals." Source: Berkshire Hathaway Annual Shareholders Meeting (2009) – Warren Buffett & Charlie Munger Q&A

Black Edge

12,029 просмотров • 1 месяц назад

Warren Buffett explains why the best inflation hedge isn't gold or real estate — it's a business that can grow without requiring much additional capital During a Berkshire Hathaway annual meeting, Buffett was asked whether a high-return, capital-light business like See's Candies remains the best protection against inflation, or whether capital-intensive assets like railroads have become more attractive. His answer was clear: the capital-light business still wins. The reasoning is simple. When inflation rises, businesses that can increase revenue without needing large amounts of new capital are in the strongest position. Buffett compares it to your own earning power. “The ultimate test is your own earning ability. If you’re an outstanding doctor, lawyer, teacher, as inflation goes along, your services will command more and more in dollar terms and you don’t have to make any additional investment in yourself.” By contrast, businesses tied up in inventory and receivables need more and more capital just to maintain the same level of business as prices rise. He then points to See's Candies, one of Berkshire's most successful investments. When Berkshire acquired the company, it generated about $30 million in sales with just $9 million in tangible assets. Years later, sales had grown to more than $300 million while requiring only around $40 million in tangible assets. Berkshire invested just $30 million of additional capital over that entire period, producing roughly $1.5 billion in pre-tax earnings. “If the price of candy doubles, we don’t have any receivables to speak of. Our inventory turns fast. The fixed assets aren’t big. That is a much better business to own than a utility business if you’re going to have a lot of inflation.” His ideal business is even simpler: “You want a royalty on somebody else’s sales. All you do is get a royalty check every month based on their sales volume. You have no receivables, no inventory, no fixed assets. That kind of business is real inflation protection.” Charlie Munger jokes that they didn't always understand this—and sometimes still forget it. Buffett agrees. “It shows how continuous learning is absolutely required to have any significant achievement at all in the world.” As for Berkshire's investments in railroads and other capital-intensive businesses, Buffett says it isn't because his philosophy changed. It's because there simply aren't enough businesses like See's Candies large enough to deploy Berkshire's enormous amounts of capital. “We’d love to find them. But we can’t find them in the quantity.” Source: Berkshire Hathaway Annual Shareholders Meeting (2004)
5:51

Warren Buffett explains why the best inflation hedge isn't gold or real estate — it's a business that can grow without requiring much additional capital During a Berkshire Hathaway annual meeting, Buffett was asked whether a high-return, capital-light business like See's Candies remains the best protection against inflation, or whether capital-intensive assets like railroads have become more attractive. His answer was clear: the capital-light business still wins. The reasoning is simple. When inflation rises, businesses that can increase revenue without needing large amounts of new capital are in the strongest position. Buffett compares it to your own earning power. “The ultimate test is your own earning ability. If you’re an outstanding doctor, lawyer, teacher, as inflation goes along, your services will command more and more in dollar terms and you don’t have to make any additional investment in yourself.” By contrast, businesses tied up in inventory and receivables need more and more capital just to maintain the same level of business as prices rise. He then points to See's Candies, one of Berkshire's most successful investments. When Berkshire acquired the company, it generated about $30 million in sales with just $9 million in tangible assets. Years later, sales had grown to more than $300 million while requiring only around $40 million in tangible assets. Berkshire invested just $30 million of additional capital over that entire period, producing roughly $1.5 billion in pre-tax earnings. “If the price of candy doubles, we don’t have any receivables to speak of. Our inventory turns fast. The fixed assets aren’t big. That is a much better business to own than a utility business if you’re going to have a lot of inflation.” His ideal business is even simpler: “You want a royalty on somebody else’s sales. All you do is get a royalty check every month based on their sales volume. You have no receivables, no inventory, no fixed assets. That kind of business is real inflation protection.” Charlie Munger jokes that they didn't always understand this—and sometimes still forget it. Buffett agrees. “It shows how continuous learning is absolutely required to have any significant achievement at all in the world.” As for Berkshire's investments in railroads and other capital-intensive businesses, Buffett says it isn't because his philosophy changed. It's because there simply aren't enough businesses like See's Candies large enough to deploy Berkshire's enormous amounts of capital. “We’d love to find them. But we can’t find them in the quantity.” Source: Berkshire Hathaway Annual Shareholders Meeting (2004)

Finance Nerd

15,692 просмотров • 1 месяц назад

Why does Warren Buffett avoid real estate even when it’s cheap? Because one asset class lets him move billions in minutes, the other can trap him in years of negotiations. Buffett’s take is brutally simple: Stocks = speed, scale, finality. Real estate = delays, complexity, endless humans + paperwork. He’s done both. He’s seen bargains in both. But only one lets him act instantly when opportunity appears without meetings, emotions, or multi-party chaos. That’s why he says the securities market will always offer more opportunities and far easier ones to capture. Efficiency is an edge. And Buffett knows exactly where to find it. Video credit: CNBC
6:19

Why does Warren Buffett avoid real estate even when it’s cheap? Because one asset class lets him move billions in minutes, the other can trap him in years of negotiations. Buffett’s take is brutally simple: Stocks = speed, scale, finality. Real estate = delays, complexity, endless humans + paperwork. He’s done both. He’s seen bargains in both. But only one lets him act instantly when opportunity appears without meetings, emotions, or multi-party chaos. That’s why he says the securities market will always offer more opportunities and far easier ones to capture. Efficiency is an edge. And Buffett knows exactly where to find it. Video credit: CNBC

Gary Stone

390,393 просмотров • 9 месяцев назад

Warren Buffett and Charlie Munger on why you should build culture from scratch rather than try to change it: An audience member explains that he's just joined a new organisation, and for him to succeed there, the culture needs to change. He asks Buffett and Munger how to change the culture of an existing organisation, and how to build a strong, unique culture if you're starting fresh. Buffett doesn't hesitate on which is easier: "Well I think it's a lot easier to build a new organization around the culture than it is to change the culture of an existing organization and it is really tough." He uses Berkshire itself as the example. The culture there is now so deeply embedded that it has become self-protecting: "It's so ingrained in all our managers, our owners, everything about the place is designed in effect to reinforce a culture and for anybody to come in and try and change it very much, I think the culture would basically reject it." But Buffett is candid that Berkshire's strong culture wasn't built quickly, or against resistance. He had something most people don't: a blank slate and decades to work with. "That was the luxury of time I've had with Berkshire; it goes back to 1965 and there really wasn't much of anything there except some textile mills, so I didn't have to fight anything." Rather than forcing change, he added companies that fit and let belief accumulate over time: "As we added companies they became complimentary and they bought into something that they felt good about, but it took decades." Then comes the admission that gives the whole answer its weight. Buffett has tried to change an existing culture, and graded himself honestly on the result: "At Salomon, I attempted to change culture in some respects and I would not grade myself A+ in terms of the result." Munger is even blunter, and funnier, about the difficulty. He's quietly flattered the questioner believes they can pull off what he never could: "Well I'm quite flattered that a man would say that he's in a new place where he can't succeed unless he changes the culture and he wants us to tell him how to change the culture. In your position, my failure rate has been 100%."
2:50

Warren Buffett and Charlie Munger on why you should build culture from scratch rather than try to change it: An audience member explains that he's just joined a new organisation, and for him to succeed there, the culture needs to change. He asks Buffett and Munger how to change the culture of an existing organisation, and how to build a strong, unique culture if you're starting fresh. Buffett doesn't hesitate on which is easier: "Well I think it's a lot easier to build a new organization around the culture than it is to change the culture of an existing organization and it is really tough." He uses Berkshire itself as the example. The culture there is now so deeply embedded that it has become self-protecting: "It's so ingrained in all our managers, our owners, everything about the place is designed in effect to reinforce a culture and for anybody to come in and try and change it very much, I think the culture would basically reject it." But Buffett is candid that Berkshire's strong culture wasn't built quickly, or against resistance. He had something most people don't: a blank slate and decades to work with. "That was the luxury of time I've had with Berkshire; it goes back to 1965 and there really wasn't much of anything there except some textile mills, so I didn't have to fight anything." Rather than forcing change, he added companies that fit and let belief accumulate over time: "As we added companies they became complimentary and they bought into something that they felt good about, but it took decades." Then comes the admission that gives the whole answer its weight. Buffett has tried to change an existing culture, and graded himself honestly on the result: "At Salomon, I attempted to change culture in some respects and I would not grade myself A+ in terms of the result." Munger is even blunter, and funnier, about the difficulty. He's quietly flattered the questioner believes they can pull off what he never could: "Well I'm quite flattered that a man would say that he's in a new place where he can't succeed unless he changes the culture and he wants us to tell him how to change the culture. In your position, my failure rate has been 100%."

Black Edge

31,560 просмотров • 2 месяцев назад

Warren Buffett and Charlie Munger on why reading fast is overrated: At a Berkshire Hathaway meeting, shareholder Keith McGawan asks Buffett for advice on reading faster, noting that Buffett gets through five newspapers a day plus a steady diet of 10Ks and 10Qs. Buffett's answer is disarmingly humble. Despite his legendary reading habit, he confesses: "Unfortunately, I'm not a fast reader." He even adds that Charlie can read faster than he can, and that "it's a huge advantage to be able to read fast." Then he tells a story on himself, by way of Woody Allen: "I read War and Peace last night in 20 minutes. It's about Russia." That punchline, Buffett admits, hits a little too close: "that's the problem I have when I try and read fast. I get all through reading the book and I say it's about business." But for Buffett, the point was never the speed. It's the act itself: "There's hardly anything more pleasurable... than reading and reading and reading and reading. And Charlie and I do a lot of it. We continue to do a lot of it." Then Munger reframes the entire question and quietly dismantles the premise: "I think speed is overestimated. I had a roommate at Caltech who had a very distinguished mind and I could do problems faster than he could, but he never made a mistake and I did. So I wouldn't be too discouraged if you have to go a little slower. What the hell difference does it make?"
3:55

Warren Buffett and Charlie Munger on why reading fast is overrated: At a Berkshire Hathaway meeting, shareholder Keith McGawan asks Buffett for advice on reading faster, noting that Buffett gets through five newspapers a day plus a steady diet of 10Ks and 10Qs. Buffett's answer is disarmingly humble. Despite his legendary reading habit, he confesses: "Unfortunately, I'm not a fast reader." He even adds that Charlie can read faster than he can, and that "it's a huge advantage to be able to read fast." Then he tells a story on himself, by way of Woody Allen: "I read War and Peace last night in 20 minutes. It's about Russia." That punchline, Buffett admits, hits a little too close: "that's the problem I have when I try and read fast. I get all through reading the book and I say it's about business." But for Buffett, the point was never the speed. It's the act itself: "There's hardly anything more pleasurable... than reading and reading and reading and reading. And Charlie and I do a lot of it. We continue to do a lot of it." Then Munger reframes the entire question and quietly dismantles the premise: "I think speed is overestimated. I had a roommate at Caltech who had a very distinguished mind and I could do problems faster than he could, but he never made a mistake and I did. So I wouldn't be too discouraged if you have to go a little slower. What the hell difference does it make?"

Black Edge

21,290 просмотров • 2 месяцев назад

Warren Buffett jokes about Charlie Munger's Costco obsession "Charlie and I were on a plane recently that was hijacked. The hijackers picked us out as the two dirty capitalists that they really had to execute" "They were a little abashed about it, they didn't really have anything against us, so they said each of us would be given one request before they shot us. They turned to Charlie and said, what would you like as your request?" "Charlie said, I would like to give once more my speech on the virtues of Costco, with illustrations. And the hijacker said, well, that sounds pretty reasonable to me" "He turned to me and said, and what would you like, Mr. Buffett? And I said, shoot me first"
1:00

Warren Buffett jokes about Charlie Munger's Costco obsession "Charlie and I were on a plane recently that was hijacked. The hijackers picked us out as the two dirty capitalists that they really had to execute" "They were a little abashed about it, they didn't really have anything against us, so they said each of us would be given one request before they shot us. They turned to Charlie and said, what would you like as your request?" "Charlie said, I would like to give once more my speech on the virtues of Costco, with illustrations. And the hijacker said, well, that sounds pretty reasonable to me" "He turned to me and said, and what would you like, Mr. Buffett? And I said, shoot me first"

Jaynit

309,851 просмотров • 18 дней назад

Bill Ackman is openly trying to build the next Berkshire Hathaway and explained the entire playbook on All-In. It starts with a 4 billion dollar company nobody on Wall Street cares about. The company is Howard Hughes. It trades at 60 cents on the dollar. Here is the playbook he is copying. Someone went back and read every filing Warren Buffett made over 60 years. Almost all of Berkshire's value came from one thing nobody talks about. Insurance. Buffett ran an insurance company. You collect premiums today in exchange for paying claims later. That means you get money up front. Float. Most insurers obsess over the liability side. How much they might have to pay out. Buffett did the opposite. He took that float and invested it. Manage both sides well and you build a compounding, tax-efficient machine that runs for decades. So why hasn't everyone copied it? Because the people great at investing go work for hedge funds. Insurance companies can't recruit them. Buffett owned half his company and happened to be the best investor alive. Ackman is now running the same play. Instead of plowing Howard Hughes cash into real estate, he is pouring it into insurance. The goal is a trillion dollar machine compounding over 50 years. Buffett started with a failing textile mill. Ackman is starting with land nobody wanted. The playbook was never hidden. Almost nobody is built to run it. WATCH THE FULL PODCAST ON The All-In Podcast
3:17

Bill Ackman is openly trying to build the next Berkshire Hathaway and explained the entire playbook on All-In. It starts with a 4 billion dollar company nobody on Wall Street cares about. The company is Howard Hughes. It trades at 60 cents on the dollar. Here is the playbook he is copying. Someone went back and read every filing Warren Buffett made over 60 years. Almost all of Berkshire's value came from one thing nobody talks about. Insurance. Buffett ran an insurance company. You collect premiums today in exchange for paying claims later. That means you get money up front. Float. Most insurers obsess over the liability side. How much they might have to pay out. Buffett did the opposite. He took that float and invested it. Manage both sides well and you build a compounding, tax-efficient machine that runs for decades. So why hasn't everyone copied it? Because the people great at investing go work for hedge funds. Insurance companies can't recruit them. Buffett owned half his company and happened to be the best investor alive. Ackman is now running the same play. Instead of plowing Howard Hughes cash into real estate, he is pouring it into insurance. The goal is a trillion dollar machine compounding over 50 years. Buffett started with a failing textile mill. Ackman is starting with land nobody wanted. The playbook was never hidden. Almost nobody is built to run it. WATCH THE FULL PODCAST ON The All-In Podcast

Ihtesham Ali

212,771 просмотров • 2 месяцев назад

Warren Buffett on why buying Berkshire Hathaway was the dumbest decision of his career: Buffett is asked about the worst trade he ever made. His answer surprises everyone. "The dumbest stock I ever bought was, drum roll here, Berkshire Hathaway. And that may require a bit of explanation." He takes us back to the beginning: "It was early in 1962 and I was running a small partnership about 7 million. They call it a hedge fund now. And here was this cheap stock, cheap by working capital standards or so, but it was a stock in a textile company that had been going downhill for years." Buffett spotted what looked like an easy pattern to profit from: "They kept closing one mill after another and every time they would close a mill, they would take the proceeds and they would buy in their stock. I'd buy the stock tender to them and make a small profit." By 1964, Warren Buffett had built up a sizable position and went to meet management. That's when the pivotal moment happened: "I went back and visited the management, Mr. Stanton. And he looked at me and he said, 'Mr. Buffett, we've just sold some mills. We're going to have a tender offer, and at what price will you tender your stock?' And I said, '$11.50.' And he said, 'Do you promise me that you'll tender at 11.50?' And I said, 'Mr. Stanton, you have my word that if you do it here in the near future that I will sell my stock at 11.50.'" Then came the moment that changed everything: "I went back to Omaha and a few weeks later, I opened the mail… And here it is. A tender offer from Berkshire Hathaway. That's from 1964. And if you look carefully, you'll see the price is 11 and 3/8. He chiseled me for an eighth." That tiny shortchange triggered a decision that would define his entire career: "If that letter had come through with 11 and a half, I would have tendered my stock. But this made me mad. So I went out and started buying the stock and I bought control of the company and fired Mr. Stanton and we went on from there." A move driven by emotion, not strategy. Buffett took control of a dying textile business simply because he'd been chiseled for an eighth of a dollar. "Now that sounds like a great little morality tale at this point…" The lesson? Even the world's greatest investor has made decisions based on emotion rather than logic. Sometimes the trades that feel most justified in the moment, the ones where you're "teaching someone a lesson", are the ones that cost you the most.
1:53

Warren Buffett on why buying Berkshire Hathaway was the dumbest decision of his career: Buffett is asked about the worst trade he ever made. His answer surprises everyone. "The dumbest stock I ever bought was, drum roll here, Berkshire Hathaway. And that may require a bit of explanation." He takes us back to the beginning: "It was early in 1962 and I was running a small partnership about 7 million. They call it a hedge fund now. And here was this cheap stock, cheap by working capital standards or so, but it was a stock in a textile company that had been going downhill for years." Buffett spotted what looked like an easy pattern to profit from: "They kept closing one mill after another and every time they would close a mill, they would take the proceeds and they would buy in their stock. I'd buy the stock tender to them and make a small profit." By 1964, Warren Buffett had built up a sizable position and went to meet management. That's when the pivotal moment happened: "I went back and visited the management, Mr. Stanton. And he looked at me and he said, 'Mr. Buffett, we've just sold some mills. We're going to have a tender offer, and at what price will you tender your stock?' And I said, '$11.50.' And he said, 'Do you promise me that you'll tender at 11.50?' And I said, 'Mr. Stanton, you have my word that if you do it here in the near future that I will sell my stock at 11.50.'" Then came the moment that changed everything: "I went back to Omaha and a few weeks later, I opened the mail… And here it is. A tender offer from Berkshire Hathaway. That's from 1964. And if you look carefully, you'll see the price is 11 and 3/8. He chiseled me for an eighth." That tiny shortchange triggered a decision that would define his entire career: "If that letter had come through with 11 and a half, I would have tendered my stock. But this made me mad. So I went out and started buying the stock and I bought control of the company and fired Mr. Stanton and we went on from there." A move driven by emotion, not strategy. Buffett took control of a dying textile business simply because he'd been chiseled for an eighth of a dollar. "Now that sounds like a great little morality tale at this point…" The lesson? Even the world's greatest investor has made decisions based on emotion rather than logic. Sometimes the trades that feel most justified in the moment, the ones where you're "teaching someone a lesson", are the ones that cost you the most.

Big Brain Business

46,116 просмотров • 4 месяцев назад

The Australian Government is selling a dramatic 33,000 HECTARES of Defence Real Estate which includes some of the most historic barracks in the world that it believes are no longer required and surplus to needs which they expect to generate $2 -$3 billion dollars. They say they’ll reinvest the funds back into the military for new equipments and upgrades to essential bases. Part of the reasons also listed is that ‘Defence does not need and CANNOT afford all the current estate’ - This was found in the audit report 2023 One anonymous source said “Taxpayers had been pissing money up against a wall and it needs to stop” It should be noted that Governments of the past have always sold real estate that they believe to be surplus to only regret doing so at a later period in time.
8:54

The Australian Government is selling a dramatic 33,000 HECTARES of Defence Real Estate which includes some of the most historic barracks in the world that it believes are no longer required and surplus to needs which they expect to generate $2 -$3 billion dollars. They say they’ll reinvest the funds back into the military for new equipments and upgrades to essential bases. Part of the reasons also listed is that ‘Defence does not need and CANNOT afford all the current estate’ - This was found in the audit report 2023 One anonymous source said “Taxpayers had been pissing money up against a wall and it needs to stop” It should be noted that Governments of the past have always sold real estate that they believe to be surplus to only regret doing so at a later period in time.

Mickamious

108,261 просмотров • 6 месяцев назад

One of the main reasons why you can't afford to buy a house: The wealthy (people like Dave Ramsey) use residential real estate as a savings account. You are their cash flow. As they buy more houses than they need, the market price of real estate rises. Dave owns THOUSANDS of rental properties. He does it to collect rental income EVEN THOUGH HE HAS HUNDREDS OF MILLIONS OF DOLLARS. #Bitcoin takes attention away from real estate as an investment/savings vehicle. People like Dave want you to stay away from it so you keep working hard to buy real estate. You are his exit liquidity. You start focusing on Bitcoin = decreased demand for RE = prices go down = Dave's portfolio suffers Do you get it yet? In 10+ years when houses are selling for 0.0001 Bitcoin or less, Dave's entire portfolio will barely buy him 1 Bitcoin. He will be FORCED to sell all the homes he accumulated over the last 40 years, because real estate will no longer be profitable. This is the wealth transfer I'm looking forward to.
4:18

One of the main reasons why you can't afford to buy a house: The wealthy (people like Dave Ramsey) use residential real estate as a savings account. You are their cash flow. As they buy more houses than they need, the market price of real estate rises. Dave owns THOUSANDS of rental properties. He does it to collect rental income EVEN THOUGH HE HAS HUNDREDS OF MILLIONS OF DOLLARS. #Bitcoin takes attention away from real estate as an investment/savings vehicle. People like Dave want you to stay away from it so you keep working hard to buy real estate. You are his exit liquidity. You start focusing on Bitcoin = decreased demand for RE = prices go down = Dave's portfolio suffers Do you get it yet? In 10+ years when houses are selling for 0.0001 Bitcoin or less, Dave's entire portfolio will barely buy him 1 Bitcoin. He will be FORCED to sell all the homes he accumulated over the last 40 years, because real estate will no longer be profitable. This is the wealth transfer I'm looking forward to.

Rajat Soni, CFA

161,807 просмотров • 2 лет назад

Warren Buffett and Charlie Munger were asked in 2008 why Berkshire Hathaway wasn't investing in India A 12-year-old named Sabrina Chug stood up at the Berkshire annual meeting and made the case: India represents 17% of the world's population. Its economy had been growing at 7-8% per year. At that pace, she argued, India's total GDP would surpass the United States by 2043. Buffett's answer was revealing. He didn't dismiss India. In fact, he shared that Berkshire's Iscar business was already performing well there, and that he had agreed to visit the country the following March to explore expanding it further. "We do not rule out India, believe me, in looking at either direct investments or marketable securities." But then he named the structural constraint that had kept Berkshire on the sidelines: India's insurance regulations severely limited what a foreign-owned company could own and operate. "I really hate to take some of our managerial talent and put them to work for something we only own 25% of. I'd rather have them working on something we own 100% of." This is a window into how Buffett thinks about market entry. Fast growth alone is not enough. You need the legal and structural conditions that allow you to deploy capital in the way you actually operate, at full ownership, with your best people running the business. Charlie Munger went further. He traced India's investment constraints not to economics, but to governance: "Its governments tend to have a fair amount of paralysis. Endless due process, endless objection, zoning is hard, planning permissions are hard." He noted that Lee Kuan Yew, the founder of modern Singapore, had argued China would outpace India for exactly this reason. Less bureaucratic friction meant faster compounding of capital and infrastructure. But Buffett pushed back on the idea that current conditions are permanent: "If you looked at China 40 years ago you wouldn't have dreamt of what would happen. Countries do learn from each other and they should. I don't think I would feel that any impediment to growth that existed now are necessarily ones that have to be permanent." That nuance matters to long-term investors. Buffett wasn't writing India off. He was saying the opportunity wasn't yet structured in a way that fit Berkshire's model. And he was leaving the door open for that to change. His final line said everything: "People in India are going to be living a lot better 20 years from now than they are now." Source: 2010 Berkshire Hathaway Annual Shareholders Meeting
5:26

Warren Buffett and Charlie Munger were asked in 2008 why Berkshire Hathaway wasn't investing in India A 12-year-old named Sabrina Chug stood up at the Berkshire annual meeting and made the case: India represents 17% of the world's population. Its economy had been growing at 7-8% per year. At that pace, she argued, India's total GDP would surpass the United States by 2043. Buffett's answer was revealing. He didn't dismiss India. In fact, he shared that Berkshire's Iscar business was already performing well there, and that he had agreed to visit the country the following March to explore expanding it further. "We do not rule out India, believe me, in looking at either direct investments or marketable securities." But then he named the structural constraint that had kept Berkshire on the sidelines: India's insurance regulations severely limited what a foreign-owned company could own and operate. "I really hate to take some of our managerial talent and put them to work for something we only own 25% of. I'd rather have them working on something we own 100% of." This is a window into how Buffett thinks about market entry. Fast growth alone is not enough. You need the legal and structural conditions that allow you to deploy capital in the way you actually operate, at full ownership, with your best people running the business. Charlie Munger went further. He traced India's investment constraints not to economics, but to governance: "Its governments tend to have a fair amount of paralysis. Endless due process, endless objection, zoning is hard, planning permissions are hard." He noted that Lee Kuan Yew, the founder of modern Singapore, had argued China would outpace India for exactly this reason. Less bureaucratic friction meant faster compounding of capital and infrastructure. But Buffett pushed back on the idea that current conditions are permanent: "If you looked at China 40 years ago you wouldn't have dreamt of what would happen. Countries do learn from each other and they should. I don't think I would feel that any impediment to growth that existed now are necessarily ones that have to be permanent." That nuance matters to long-term investors. Buffett wasn't writing India off. He was saying the opportunity wasn't yet structured in a way that fit Berkshire's model. And he was leaving the door open for that to change. His final line said everything: "People in India are going to be living a lot better 20 years from now than they are now." Source: 2010 Berkshire Hathaway Annual Shareholders Meeting

Black Edge

17,526 просмотров • 1 месяц назад

I don’t think enough people are talking about Local Law 97 in New York City. It’s a carbon tax on the real estate industry in one of its largest markets in the world. This has profound implications for the real estate industry not just in New York City, but across the United States: This sort of regulation is on the docket in a whole bunch of cities. Cities are largely progressive. The real estate industry is concentrated in cities and also cities’ largest source of carbon emissions. So it follows that local regulation by America’s mayors is going to have a gigantic impact on the real estate industry, as cities enact regulations to decarbonize. So for New York City, Local Law 97 goes into effect next year. The good news is, under next year’s emission standards, about 80% of buildings should make the cut. But by 2030, as the emissions standards intensity, only about 25% of buildings would make the cut without any retrofitting. Yes, retrofitting is expensive. And it gets more expensive the older the building is. New York City has a lot of pre-war buildings. But it’s a fact that sustainable buildings are worth more money—it’s true today as much as it will be true in the future when LL97 is in effect. So real estate owners need to spend the money now to retrofit their assets in preparation for Local Law 97, and it’ll pay dividends in the future, because sustainability is good business. Overall I think a regulatory imperative for the real estate industry is a good thing. It’s going to lead to more sustainable buildings and more valuable assets that have more functional longevity to them, preparing the real estate industry for the future. For what it’s worth, there are two other forces converging upon the real estate industry and forcing it to decarbonize: Capital markets: Preferentially deploying capital to sustainable assets Private markets: The biggest tenants have ambitious sustainability pledges, and the real estate industry is a huge part of the supply chain to someone like Walmart or Amazon or Netflix. They don’t want to lease an inefficient building.
6:16

I don’t think enough people are talking about Local Law 97 in New York City. It’s a carbon tax on the real estate industry in one of its largest markets in the world. This has profound implications for the real estate industry not just in New York City, but across the United States: This sort of regulation is on the docket in a whole bunch of cities. Cities are largely progressive. The real estate industry is concentrated in cities and also cities’ largest source of carbon emissions. So it follows that local regulation by America’s mayors is going to have a gigantic impact on the real estate industry, as cities enact regulations to decarbonize. So for New York City, Local Law 97 goes into effect next year. The good news is, under next year’s emission standards, about 80% of buildings should make the cut. But by 2030, as the emissions standards intensity, only about 25% of buildings would make the cut without any retrofitting. Yes, retrofitting is expensive. And it gets more expensive the older the building is. New York City has a lot of pre-war buildings. But it’s a fact that sustainable buildings are worth more money—it’s true today as much as it will be true in the future when LL97 is in effect. So real estate owners need to spend the money now to retrofit their assets in preparation for Local Law 97, and it’ll pay dividends in the future, because sustainability is good business. Overall I think a regulatory imperative for the real estate industry is a good thing. It’s going to lead to more sustainable buildings and more valuable assets that have more functional longevity to them, preparing the real estate industry for the future. For what it’s worth, there are two other forces converging upon the real estate industry and forcing it to decarbonize: Capital markets: Preferentially deploying capital to sustainable assets Private markets: The biggest tenants have ambitious sustainability pledges, and the real estate industry is a huge part of the supply chain to someone like Walmart or Amazon or Netflix. They don’t want to lease an inefficient building.

Brendan Wallace

24,033 просмотров • 3 лет назад

Warren Buffett and Charlie Munger on why they won't hire a quant, even though Jim Simons proved it works: A questioner points out that Jim Simons' Medallion Fund returned 39% net of fees for three decades, then asks whether Berkshire would consider hiring a quant lieutenant to work alongside Ted or Todd. Buffett's answer is immediate: "Well, I'll say no to the second part." Then he hands the analysis to Munger, who breaks down exactly where quantitative investing worked and where it didn't. Munger notes that the leading quant fund did fabulously on short-term trading: "They found little algorithms that worked... they had predictive value, and as long as they kept working, they just kept doing it as long as the money kept coming in." But the same approach hit a wall when stretched to a longer horizon: "When they got to using the same system... for long-term stock predictions, the record was not nearly as good." Munger also highlights a constraint most people miss. The edge had a ceiling built into it: "In the short-term stuff, they found that if they tried to do it too much, they destroyed their own advantage, so there was a limit on the amount they could make." His verdict on the people behind it is admiring rather than dismissive: "But they were very, very smart... very smart and very rich." Buffett echoes the respect, calling Jim Simons "very high grade," before explaining why none of this changes Berkshire's approach: "We're not trying to make money trading stocks. I mean, the answer is we don't think we know how to do it. If we knew how to make a lot more money trading stocks, we'd probably be trading stocks too, but we don't know how to do it, and we really don't trust anybody else to do it for us. It's that simple."
1:26

Warren Buffett and Charlie Munger on why they won't hire a quant, even though Jim Simons proved it works: A questioner points out that Jim Simons' Medallion Fund returned 39% net of fees for three decades, then asks whether Berkshire would consider hiring a quant lieutenant to work alongside Ted or Todd. Buffett's answer is immediate: "Well, I'll say no to the second part." Then he hands the analysis to Munger, who breaks down exactly where quantitative investing worked and where it didn't. Munger notes that the leading quant fund did fabulously on short-term trading: "They found little algorithms that worked... they had predictive value, and as long as they kept working, they just kept doing it as long as the money kept coming in." But the same approach hit a wall when stretched to a longer horizon: "When they got to using the same system... for long-term stock predictions, the record was not nearly as good." Munger also highlights a constraint most people miss. The edge had a ceiling built into it: "In the short-term stuff, they found that if they tried to do it too much, they destroyed their own advantage, so there was a limit on the amount they could make." His verdict on the people behind it is admiring rather than dismissive: "But they were very, very smart... very smart and very rich." Buffett echoes the respect, calling Jim Simons "very high grade," before explaining why none of this changes Berkshire's approach: "We're not trying to make money trading stocks. I mean, the answer is we don't think we know how to do it. If we knew how to make a lot more money trading stocks, we'd probably be trading stocks too, but we don't know how to do it, and we really don't trust anybody else to do it for us. It's that simple."

Black Edge

35,601 просмотров • 2 месяцев назад

Warren Buffett on why chasing yield on cash is a mistake: A Berkshire shareholder, Ed Schmidt, asks where all the sidelined money is being held, pointing out that every option looks bad: Banks paying nothing, risky corporate bonds, and government bonds that "seem less and less sound as each day passes." Buffett agrees the choices are poor, but says it doesn't matter, because Berkshire treats short-term money completely differently from most investors. "He's certainly right that all the choices are lousy for short-term money now, but we don't play around with short-term money." He explains that in 2008, before the crisis hit, Berkshire owned no commercial paper and no money market funds. The big money stayed in treasuries, earning almost nothing, and Buffett is blunt that the temptation to reach for a little more is exactly the trap to avoid: "The last thing in the world we would do at Berkshire is to try and get five or 10 or 20 or 30 basis points more by going into some other things with our short-term money." His framing for why is simple: "It is a parking place. It's an unattractive parking place, but it's a parking place where we know we'll get our car back when we want it." The reason that matters became clear in September 2008. Berkshire had committed $6.5 billion to the Mars-Wrigley deal months earlier, long before anyone knew what that autumn would bring. When the date arrived, the form of the money was everything: "I had to show up with $6.5 billion. I couldn't show up with a money market fund or some commercial paper or anything of the sort. I had to show up with cash." That's why his conviction lands where it does: "Virtually the only thing I feel good about in terms of having large amounts of ready cash is treasury bills." Charlie Munger puts it more sharply, reframing the whole question as a discipline issue rather than a yield issue: "I think it's really stupid to try and maximize returns on short-term money if you're an opportunistic game the way we are, where we want to suddenly deploy money." He points to pipelines that came up for sale on a Saturday and had to close by Monday. There was no room to be stuck in "some dubious instrument" when the cash was suddenly needed. Buffett adds his own version of the same story, a pipeline whose seller feared bankruptcy the following week and needed the money immediately, with regulatory clearance still pending. Berkshire offered to close early and let the regulators review everything afterward, even unwind the deal if required. The point being that readiness, not return, is what closes deals: "Our ability to come up with cash when people need it, and when the rest of the world is petrified for some reason, has enabled several deals to get done." And that is the entire logic behind holding tens of billions in treasuries earning almost nothing: "When somebody comes to us and they say we need a deal right now, we can do it, and they know we can do it, and it can be big. It just has to be attractive."
5:21

Warren Buffett on why chasing yield on cash is a mistake: A Berkshire shareholder, Ed Schmidt, asks where all the sidelined money is being held, pointing out that every option looks bad: Banks paying nothing, risky corporate bonds, and government bonds that "seem less and less sound as each day passes." Buffett agrees the choices are poor, but says it doesn't matter, because Berkshire treats short-term money completely differently from most investors. "He's certainly right that all the choices are lousy for short-term money now, but we don't play around with short-term money." He explains that in 2008, before the crisis hit, Berkshire owned no commercial paper and no money market funds. The big money stayed in treasuries, earning almost nothing, and Buffett is blunt that the temptation to reach for a little more is exactly the trap to avoid: "The last thing in the world we would do at Berkshire is to try and get five or 10 or 20 or 30 basis points more by going into some other things with our short-term money." His framing for why is simple: "It is a parking place. It's an unattractive parking place, but it's a parking place where we know we'll get our car back when we want it." The reason that matters became clear in September 2008. Berkshire had committed $6.5 billion to the Mars-Wrigley deal months earlier, long before anyone knew what that autumn would bring. When the date arrived, the form of the money was everything: "I had to show up with $6.5 billion. I couldn't show up with a money market fund or some commercial paper or anything of the sort. I had to show up with cash." That's why his conviction lands where it does: "Virtually the only thing I feel good about in terms of having large amounts of ready cash is treasury bills." Charlie Munger puts it more sharply, reframing the whole question as a discipline issue rather than a yield issue: "I think it's really stupid to try and maximize returns on short-term money if you're an opportunistic game the way we are, where we want to suddenly deploy money." He points to pipelines that came up for sale on a Saturday and had to close by Monday. There was no room to be stuck in "some dubious instrument" when the cash was suddenly needed. Buffett adds his own version of the same story, a pipeline whose seller feared bankruptcy the following week and needed the money immediately, with regulatory clearance still pending. Berkshire offered to close early and let the regulators review everything afterward, even unwind the deal if required. The point being that readiness, not return, is what closes deals: "Our ability to come up with cash when people need it, and when the rest of the world is petrified for some reason, has enabled several deals to get done." And that is the entire logic behind holding tens of billions in treasuries earning almost nothing: "When somebody comes to us and they say we need a deal right now, we can do it, and they know we can do it, and it can be big. It just has to be attractive."

Black Edge

46,500 просмотров • 2 месяцев назад

Warren Buffett on why having less money can be one of the biggest advantages in investing: When asked about the best period of his investing career, Warren Buffett pointed to his early years — not because he had more resources, but because he had far less capital to manage. "My best period was right after I met Ben Graham in early 1951. From the end of 1950 through the next 10 years, returns averaged about 50% a year... but I was working with a tiny tiny tiny amount of money." Buffett explained that he spent countless hours searching for overlooked opportunities, reviewing thousands of pages of company information by hand. "I went through the pages of the manuals page by page. I probably went through 20,000 pages in the Moody's industrial, transportation, banks and finance manuals. And I did it twice. I actually looked at every business." Because he was investing relatively small amounts, he could buy into tiny, deeply undervalued companies that would have been too insignificant for large investment firms. The result? He'd find one or two businesses he could put $10,000 or $15,000 into that were 'ridiculously cheap. As Buffett's capital grew, however, those opportunities became less meaningful. "As soon as you start getting the money up into the millions, many millions, the curve on expectable results falls off just dramatically." He argues that individual investors with small portfolios and a willingness to do the research can often access opportunities that are unavailable to large institutions. "If you're working with a small sum of money and you're really interested in the business and willing to do the work, there's no question in my mind. You will find some things that promise very large returns compared to what we will be able to deliver with large sums of money." Charlie Munger added that investors with limited capital should embrace areas of the market that large firms often ignore. "A brilliant man who can't get any money from other people and is working with a very small sum probably should work in very obscure stocks searching out unusual mispriced opportunities." Buffett also observed that many talented people on Wall Street choose a different path — not by seeking exceptional investment performance, but by managing other people's money. "Most smart people in Wall Street figure that they can make a lot more money, a lot easier, by getting an override on other people's money... the monetization of hope and greed is a way to make a huge amount of money." To illustrate the point, he recalled a friend with little investing success who was nevertheless planning to launch a large hedge fund. "If you looked at this fellow's schedule D on his 1040 for the last 20 years, you'd think he ought to be mowing lawns. But he may get his 125 million." Buffett concluded by arguing that, on Wall Street, marketing often earns more than investment skill. "The biggest money made in Wall Street in recent years has not been made by great performance, but has been made by great promotion." Source: Warren Buffett and Charlie Munger at the Berkshire Hathaway Annual Shareholders Meeting
4:51

Warren Buffett on why having less money can be one of the biggest advantages in investing: When asked about the best period of his investing career, Warren Buffett pointed to his early years — not because he had more resources, but because he had far less capital to manage. "My best period was right after I met Ben Graham in early 1951. From the end of 1950 through the next 10 years, returns averaged about 50% a year... but I was working with a tiny tiny tiny amount of money." Buffett explained that he spent countless hours searching for overlooked opportunities, reviewing thousands of pages of company information by hand. "I went through the pages of the manuals page by page. I probably went through 20,000 pages in the Moody's industrial, transportation, banks and finance manuals. And I did it twice. I actually looked at every business." Because he was investing relatively small amounts, he could buy into tiny, deeply undervalued companies that would have been too insignificant for large investment firms. The result? He'd find one or two businesses he could put $10,000 or $15,000 into that were 'ridiculously cheap. As Buffett's capital grew, however, those opportunities became less meaningful. "As soon as you start getting the money up into the millions, many millions, the curve on expectable results falls off just dramatically." He argues that individual investors with small portfolios and a willingness to do the research can often access opportunities that are unavailable to large institutions. "If you're working with a small sum of money and you're really interested in the business and willing to do the work, there's no question in my mind. You will find some things that promise very large returns compared to what we will be able to deliver with large sums of money." Charlie Munger added that investors with limited capital should embrace areas of the market that large firms often ignore. "A brilliant man who can't get any money from other people and is working with a very small sum probably should work in very obscure stocks searching out unusual mispriced opportunities." Buffett also observed that many talented people on Wall Street choose a different path — not by seeking exceptional investment performance, but by managing other people's money. "Most smart people in Wall Street figure that they can make a lot more money, a lot easier, by getting an override on other people's money... the monetization of hope and greed is a way to make a huge amount of money." To illustrate the point, he recalled a friend with little investing success who was nevertheless planning to launch a large hedge fund. "If you looked at this fellow's schedule D on his 1040 for the last 20 years, you'd think he ought to be mowing lawns. But he may get his 125 million." Buffett concluded by arguing that, on Wall Street, marketing often earns more than investment skill. "The biggest money made in Wall Street in recent years has not been made by great performance, but has been made by great promotion." Source: Warren Buffett and Charlie Munger at the Berkshire Hathaway Annual Shareholders Meeting

Black Edge

13,003 просмотров • 1 месяц назад