Attendees pass a cardboard cut out of Warren Buffett, chairman and chief executive officer of Berkshire Hathaway. (Photographer: Daniel Acker/Bloomberg)

Buffett Says He Had Underestimated Jeff Bezos

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Buffett: Whats Jeff Bezos has done is a miracle. I had underestimated him.

Don’t think of businesses as technology or not. I am more interested in whether businesses are understandable to us, have durable competitive advantages or not and whether price is favourable.  
Warren Buffett

On Cryptocurrencies

Buffett: Anytime you are buying a non-productive asset, you are basically hoping someone else in the future buys it an even more inflated price hoping to repeat the same.

Advice To Investors

Buffett: Investors can learn a lot by going out and doing things yourself.

What can Berkshire do to increase women’s participation at senior levels and board levels?

Buffett: I feel optimistic about the future because there will be lot more selection by merit than by inheritance.

On Corporate Profit Uptick Due To Tax Breaks

The American industry has gotten incredibly more profitable in the last 20-30 years. People haven’t been able to gauge the impact of the tax breaks introduced in the U.S.
Warren Buffett

On Medical Costs Going Up

Buffett: It’s a tape worm eating into the competitiveness of American businesses! Need creative solutions.

On Emerging Market Investing

Buffett: There are far more opportunities to do with smaller amounts of money than we can do. Our problem is size not geography. But the first choice even with a smaller corpus would be to comb the U.S.

What can the younger generation of both China and the U.S. do?

Buffett: It’s better you can understand the culture of another society, the more beneficial it is...I’m bullish on the futures of the U.S., China and the world at large. People will lead better lives in the years ahead.

On Newspaper Business

Munger: Going to miss newspapers if they disappear, and the figures are not looking good.

On Investments In Capital-Intensive Businesses

Buffett: Buying into capital-intensive businesses because we aren’t finding capital-light businesses at cheap valuations.

On Apple

Buffett: Delighted to see Apple re-purchasing shares; may end up owning 6-7 percent of Apple with passage of time due to buybacks.

  • Would be difficult for Apple to make a worthwhile $100-150-billion acquisition.

Would you look for mis-priced stock opportunities?

Munger: If the gap between value and price isn’t attractive, just move on to other opportunities. If you want a formula, you should go to graduate school.

On Elon Musk

Elon may turn things upside down in some areas. I don’t think he’d want to take us on in businesses like candy.
Warren Buffett, Chairman, Berkshire Hathaway

Also Read: Buffett to Musk: `There Are Some Pretty Goods Moats Around’

Munger On Bureaucracy

Bureaucracy is like a cancer -- and it functions like a cancer. And we’re very anti-bureaucracy. In that case, we’re very different from Anheuser-Busch at its peak.
Charlie Munger, Vice-Chairman, Berkshire Hathaway

On Fed Rates And Bonds

Low interest rates were unfair to old savers, but favourable to Berkshire Hathaway’s shareholders said Munger at the AGM today. "We are all a bunch of undeserving people, and hope we continue to be so”.

Long-term bonds are a terrible investment at current rates or closer to current rates, Buffett said.

It’s almost ridiculous when you think about it — the Federal Reserve is doing all in its power to make sure you don’t get more than half a percent a year. I would stick with productive business or productive assets.”
Warren Buffett, Chairman, Berkshire Hathaway

Also Read: Buffett Says His Star Stock Pickers `Slightly’ Beat the S&P 500

On Special Dividends

On being asked about his views on a one-time special dividend to return capital to shareholders, Buffet said that it was unlikely that he would ever do one.

If we thought we couldn’t use capital effectively, we would try and think of means of returning capital.
Warren Buffett, Chairman, Berkshire Hathaway

Billion Dollar Question

Where would you invest $1 billion right now?

My first inclination would be to comb through things in the U.S. ... I probably wouldn’t get into very small markets.

On Emerging Markets

Would you consider more investing opportunities in emerging markets if you had lesser money?

Buffett: There are opportunities to do with smaller amounts of money that we can’t do. Our problem is size, than geography.

'Even Donald Trump Can Be Right,' Says Munger

On being asked about how the trade tariffs between U.S. and China affect Berkshire Hathaway, Buffett said that while steel costs have increased lately "I don't think either country will dig themselves into something that precipitates ... any real trade war...The president needs to be an ‘Educator-in-chief’ when it comes to trade.”

Munger agreed that the conditions in steel were almost unbelievably adverse to the American steel industry.

Even Donald Trump can be right on some of this stuff.
Charlie Munger, Vice-Chairman, Berkshire Hathaway

Buffett On Wells Fargo

If Wells Fargo is a chronically leaking vessel, at what levels of leakage would Berkshire consider changing vessels?

Buffett: Wells Fargo had a faulty incentive system, which is a cardinal sin. It’s not unique for big institutions to have troubles. Wells Fargo made a big mistake. I like it as an investment. I see no reason why Wells Fargo can’t come out stronger...I see no reason why Wells Fargo as a company, from both moral and investment standpoint, is inferior than any other big bank.

Munger: If I have to say which bank is likely to behave the best going ahead, I’d say it will be Wells Fargo, of all of them...I think Harvey Weinstein has done a lot for improving behavior too.

The bank has been grappling with a number of issues arising from a consumer banking scandal that arose in September 2016. Employees of the company had opened as many as 3.5 million bogus accounts. The bank still faces a bevy of other lawsuits on related matters.

Also Read: Wells Fargo Settles Fake-Accounts Lawsuit for $480 Million

Buffett On Cyber Risks To Companies

Buffett said that he was skeptical on the being a pioneer of doing business in the cyber security area. It is uncharted territory and will only get worse, he said.

We have a very good idea of natural disasters, but don’t know what we are doing with insuring cyber risk. We don’t want to be a pioneer of doing business in the cyber arena...Frankly, I don’t think we or anybody else really knows what they’re doing ... It’s just really, really early in the game. We don’t know the interpretation of the policies will be.
Warren Buffett, Chairman, Berkshire Hathaway

Also Read: Buffett Cautious on Cyber Insurance Because No One Knows Risks

Buffett Says

Buffett On Potential Acquisitions

My phone is not ringing off the hook with good deals. 
Warren Buffett, Chairman, Berkshire Hathaway

Win-Win Situation For U.S., China

On being asked about the trade talks between U.S. and China, Buffett said that the world "will not sacrifice world prosperity based on differences that arise on trade”. U.S. and China’s current trade gap is close to 3 percent of the gross domestic product, he said, adding that he wouldn’t want the gap to get wider.

It is a win-win situation when the world trades. Both Democrats and Republicans believe in the benefits of free trade. We will have disagreements with each other and other countries on trade... It’s just too big and too obvious. The benefits from trade are huge and the world depends on it.
Warren Buffett, Chairman, Berkshire Hathaway

Also Read: Trump Team's Trade Mission to China Lays Bare Yawning Divide

Munger On Buffett's Semi-Retirement

Charlie Munger, the vice-chairman of Berkshire Hathaway spoke about Buffett’s semi-retirement at the AGM.

He sits around reading most of the time and thinking, and every once in a while he talks on the phone. I can’t see any difference… Warren is very good at doing nothing.
Charlie Munger, Vice-Chairman, Berkshire Hathaway

Buffett Says

Long Term Investment Vs Short Term Reactions

Warren Buffett starts the session by talking about long term investing versus short term reactions. “In investment, you cant really fail at it unless you buy the wrong stock or get excited at the wrong time,” he said, speaking about the advantages of long term investments.

Q&A With Buffett

The question and answer round with Warren Buffett starts.

What To Expect From The AGM

Investors from across the world will converge on Omaha for the annual general meeting of Warren Buffett’s Berkshire Hathaway Inc. If asked, the world’s most famous stock picker is likely to say stocks will continue to go up, writes Stephen Gandel for Bloomberg Gadfly. If pressed, however, the Oracle of Omaha this time may have a harder time than usual justifying his rosy crystal ball, Gandel writes.

Read the full article here.

Berkshire Marks First Net Loss Since 2009

A change in accounting rules fueled a $1.14 billion loss at Warren Buffett’s Berkshire Hathaway Inc. in the first quarter. This was the company's first net loss since 2009.

The rule will produce some “truly wild and capricious swings in our GAAP bottom line,” Buffett had said in his annual letter to shareholders, released in February. The accounting change “will severely distort Berkshire’s net income figures and very often mislead commentators and investors.”

Also Read: Buffett’s Accounting `Nightmare' Fuels First Loss Since 2009

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