Welcome to the end of the week and another edition of Happy Hour! Just sit back, relax, and enjoy your end of the week roundup of interesting reads in the land of money.
BRK Meeting Review
The annual pilgrimage to Omaha, the value investor’s mecca, was this past weekend. I wasn’t in attendance (not a shareholder). But enough travelers take notes every year, plus the media coverage, that anyone can get information on it. Every year there’s a few niblets to take away from the event.
On a lesson learned about power of brands:
“We’ve done very very very well with See’s” over time, he says. And he says it has made a major contribution beyond its earnings: “It opened my eyes to the power of brands. … you can say we made a whole lot of money in Coca-Cola” because of what Buffett learned about the power of brands from See’s. He says he’s not sure he would have made that Coke investment without that lesson.
“It’s main contributor to Berkshire was ignorance removal,” says Munger. – MoneyBeat
Energy, and alternative energy, was discussed often being a big part (and growing) of BRK’s business through railroad, pipeline, and energy utility:
Mr. Buffett says Berkshire will continue to invest in businesses like its railroad business and its energy arm. The latter is more likely to be an acquirer.
“I hope that more possible deals for Berkshire Hathaway Energy will come along, and I think they will,” he says. – Dealbook
On early mistakes and how far they’ve come:
To answer your questions, I will continue to make mistakes. There were four department stores on the corner on the Howard and Lexington in Baltimore in 1966 when Charlie and I and Sandy Gottesman bought it. You can’t think of a worse idea than buying a department store in the mid-1960’s. Luckily for us, Sandy was good at scrambling out of it and sold it and we took that $6M and turned that into about $45 billion in Berkshire Hathaway.
CM: I talked about removing your ignorance. There is also not quite as important a thing as scrambling out of one’s mistakes—the department store, the trading stamps, the textile. Imagine what we would be if we had a better starting story. – CanadianValue via Scribd
One last note, if you’re going to read one source, Canadian Value has the most thorough notes I’ve found for this year’s meeting.
Last Call
- Voodoo Investment Strategies – Morningstar
- Where Outperformance Comes From – Housel
- Early Tap of 401(k) Replaces Homes as American Piggy Bank – Bloomberg
- Time to Worry About Stock Market Bubbles – NY Times
- Inflation May Hit the Poor Hardest – Five Thirty Eight
