Warren Buffett discusses managed futures funds, recognizing money-making opportunities, insurance coverage, stock performance, investment choices, and the speaker's support for Planned Parenthood. They also discuss investment risk, owning good businesses, NYSE trades, managing a large stock portfolio, decision making in energy generation, choosing heroes, ethanol production, protection against inflation, starting businesses at a young age, the evolving role of directors, the decline of newspapers, divesting from Petro-China, shareholder concerns, and the dilemma of divestment.
Choosing role models is important to shape behavior and values.
Risk comes from the nature of certain businesses, not market volatility.
Berkshire Hathaway considers attractiveness, stock availability, and reporting thresholds when allocating capital.
Decisions on public utility matters are determined by regulatory authorities.
Berkshire Hathaway was urged to divest from Petro-China to pressure China and Sudan to end the genocide in Darfur.
Deep dives
Importance of Choosing Role Models
Choosing role models is important as they can shape our behavior and values. It is crucial to associate with people who are better than us and have qualities we admire.
Market Volatility Not Indicative of Risk
Market volatility does not accurately measure risk. Risk comes from the nature of certain businesses and not knowing what you're doing. The concept of beta and volatility as measures of risk is often misleading.
Considerations in Adding Capital to Positions
When deciding to allocate more capital to a position, factors such as attractiveness of the investment, ability to buy more of the stock, and reporting thresholds are taken into account. Berkshire Hathaway looks for opportunities where they believe they can earn better returns than government bonds.
Role of FERC and State Commissions in Decision Making
Decisions regarding issues like dams on the Klamath River or other public utility matters are determined by regulatory authorities like FERC and state commissions. Berkshire Hathaway follows the decisions made in accordance with public policy and the interests of all stakeholders.
CNPC's role in the genocide in Darfur
The resolution presented at the meeting highlighted the connection between CNPC (Chinese National Petroleum Company) and the genocide in Darfur. It was argued that CMPC funds the Sudanese military, participates in force displacement, and facilitates the killing of hundreds of thousands of Darfuris. Berkshire Hathaway was urged to divest from Petro-China, a subsidiary of CNPC, as a symbolic and ethical action to put pressure on China and Sudan to end the genocide.
The importance of strong corporate governance
The lack of strong corporate governance structures and management overlap between CNPC and Petro-China was emphasized. It was stated that Petro-China is essentially an artifact created to distance certain stakeholders from the actions of CNPC, and that the two companies essentially operate as one entity. The argument was made that engagement with Petro-China should be a minimum requirement to investigate the connections between the two companies and their potential contributions to the genocide.
A call for action and activism
Various speakers highlighted the devastating impact of the genocide in Darfur and emphasized the need for action. They called on Berkshire Hathaway and Warren Buffett to take a stand, divest from Petro-China, and send a message to China and Sudan that there are consequences for their actions. It was suggested that if Berkshire Hathaway were to lead the way, other companies would follow suit, leading to a potential change in China's behavior and an end to the genocide in Darfur.
The Importance of Separating Investments from Commodities
Warren Buffett discusses his view on commodities and explains that Berkshire Hathaway does not have a long-term view on commodities. He clarifies that their investment decisions are based on the value of individual stocks rather than predicting the price of specific commodities. Buffett emphasizes that Berkshire Hathaway prefers businesses that require minimal capital investment for high returns. He gives the example of owning Pasco, a steel company, which offered great value and had a low-cost producer advantage.
The Challenges of Newspapers in the Digital Age
Buffett and Munger offer insights on the newspaper industry, specifically referencing the struggle faced by The New York Times. They believe that newspapers have become overpriced and their valuation is based on past performance, rather than adapting to the digital landscape. They explain that while The New York Times may have the advantage of a high reputation, it still needs to find ways to monetize its online presence. Ultimately, they suggest that the Times' unique position in the market may give it an advantage over other newspapers in transitioning to the internet.
