At Berkshire Hathaway’s annual shareholder meeting on Saturday, dozens of questions were asked on topics such as investment strategy, artificial intelligence and the politics of the two legendary investors at the helm of the conglomerate: Chairman Warren Buffett and Vice Chairman Charlie Munger.
CNBC quoted part of a conversation between Buffett and Munger that was reviewed by Al Arabiya.net.
Many people do stupid things
Munger said value investors should be prepared for lower returns as competition intensifies. But Buffett said there are still opportunities given that many people have a short-term perspective and often do stupid things in a panic.
“What empowers you is other people doing stupid things…In the 58 years that we’ve been at Berkshire, the number of people doing stupid things has increased significantly,” Buffett added.
focus
Munger said it’s “crazy” to teach small investors how to diversify when investing in common stocks.
“One of the ridiculous things that is taught in today’s university education is that broad diversification is absolutely essential when investing in common stocks… It’s a crazy idea. It is not easy to have a large number of good features that can be easily implemented. identified. And if you only have 3, I’d rather have the best of them than the worst of them.”
He said that investors need to know themselves and their strengths. “We are not very smart, but we kind of know where the edge of our intelligence lies… This is a very important part of practical intelligence… If you know the limits of your abilities well, you should ignore most of the ideas of our experts about what I call “removing defects” from portfolios.
Write down your goal and follow it
Buffett gave advice on how to live, spend and invest without harm.
And I advised you to make sure that you do not make mistakes that take you out of the game or bring you closer to the exit. You shouldn’t spend your nights worrying about investing” and assuming you have money to invest at all… you should get used to spending a little less than you earn and you can spend a little more than you earn. … but you’ll be in debt and you’ll probably never get out of debt.” The only exception is home mortgages.
Not smarter, but wiser
Buffett said investors don’t need to be experts in the technical aspects of a business if they can understand the basics and are willing to learn.
He added: “We are interested in always owning a great business… We are learning a lot along the way… We are constantly learning about how consumers behave. I certainly couldn’t learn the technical details.” business, and it would be nice if I knew, but this is not necessary. …we work at Apple… but I don’t understand phones at all, but I understand consumer behavior. …we are learning all the time, in all our activities. …we don’t get smarter with time, but…we do get a little wiser.”
