TIP721: Berkshire Hathaway Annual Shareholders Meeting 2025 w/ Clay Finck & Kyle Grieve
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You're listening to TIP. On today's episode, Kyle and I reflect on our weekend at the Berkshire Hathaway Annual Shareholders Meeting in Omaha and play a few of our favorite clips from the Q&A session with Warren Buffett, Greg Abel, and Ajit Jain. The weekend in Omaha is always one of my favorite of the year as I get a chance to reconnect with kindred spirits and attend many wonderful events throughout the weekend. In this episode, we cover our thoughts on Buffett's announced retirement of CEO at Berkshire Hathaway

How Buffett and Abel's management style might differ as CEO. Why Buffett seeks to surround himself with wonderful people. How Buffett and Abel balance patience with acting quickly and opportunistically. How Berkshire views their investments in Japan, their recent investment activity, and Buffett's thoughts on today's market and much more. With that, let's get right to it.

Since 2014 and through more than 180 million downloads, we've studied the financial markets and read the books that influence self-made billionaires the most. We keep you informed and prepared for the unexpected. Now for your hosts, Clay Fink and Kyle Grieve.

Welcome to the Investors Podcast. I'm your host, Clay Fink. And today, Kyle and I, we just got back from the Berkshire Hathaway Annual Shareholders Meeting in Omaha, and we'll be sharing our reflections from the meeting, as well as a few of our favorite segments from the Q&A session with Warren Buffett, Greg Abel, and Ajit Jain. And amazingly, I heard at the start of this meeting that this was Warren Buffett's 60th Annual Shareholder Meeting. So that's that alone is just like

mind-blowing. And it's no surprise how popular the event was this year. And this is by far one of my favorite weekends of the year. I get to be surrounded by kindred spirits and like-minded people. And in the podcasting world, just so much of our life is spent in isolation, reading and whatnot. And I'm sure many in the audience can resonate with that. So this was my sixth meeting that I've attended. And I'd say it was probably my favorite one yet,

It was quite memorable and even a bit emotional. So the whole arena was packed until the end of the Q&A. And I think in most years, you'd see a number of empty seats just a couple of hours in by 9, 10 AM. But for whatever reason, this definitely was not the case. So the best place to start here is actually at the end. At the end of the session, Buffett announced that he was hitting the five-minute mark and

everyone in the audience didn't realize that they were about to witness history and the end of a legacy. Buffett would announce that he would be stepping down as the CEO of Berkshire Hathaway at the end of the year, and Greg Abel would become the new CEO of the company. So Buffett, of course, is going to remain the chairman of the company and continue to oversee what's happening. So after sharing that he had no intention of selling any of his personal shares in Berkshire,

he received just a roaring standing ovation in an arena full of followers of Berkshire. It was just a really cool experience and a really unique moment in the history of Berkshire in Buffett's 60th meeting. And to the best of my knowledge, Buffett has never sold a share of Berkshire and never will, which is just mind-blowing. The long-term thinking that this guy has and living off money that he made a lot of times just off his personal account or what he's doing outside Berkshire, which likely isn't

that much, really. He then had a quote that I'll share here. The decision to keep every share is an economic decision because I think the prospects of Berkshire will be better under Greg's management than mine. And we'll be getting to this later on just how Buffett, time and time again, he just continually praises others. And I think that is a trait that I just see in so many people here in the value investing community. And I was happy to see Buffett make this announcement at the age of 94 to help ensure that

There's going to be a smooth transition to Greg as the new CEO. And in hindsight, it's just amazing that he waited this long to make that transition.

Yeah, you're totally right about this being just a historic annual general meeting, Clay. So I was just ecstatic to be here for this one. It was obviously Warren Buffett, someone I hold in very, very high esteem. I've only been to two events, but this one was definitely my favorite for the obvious reason that it was so monumental. I also just thought the meeting just went really, really well the way it went. I mean, last year, just like you pointed out, and probably as you might know other years, it just seemed like

the audience just kind of fizzled out. And this time it was very vibrant. I was really surprised at the very end how I just looked around and I was like, oh my God, there's so many people here. It felt like, I don't know how many people left last year, like hours beforehand. So yeah, it was a really cool and special moment. But I think even before Buffett officially passed the baton to Greg, it was clear that he was still just doing other things behind the scenes. I think that he was really trying to just give Greg more airtime. And obviously I think he knew beforehand that was the reason he wanted to do that. But

it really clear to see after the fact. And I just think that that just struck me as a really classy move and just a subtle signal that Buffett is just really confident in Greg as a future leader of Berkshire. So there are three other themes that I found pretty fascinating. So the first was just some of the comments around Japan and the strength of those partnerships that I found really, really interesting for some reasons that we'll go into later. And then second, I thought the conversation around the importance of a strong currency was just really, really relevant today. I think

Most of the time, it probably doesn't matter that much, but just what's going on in the world today, I thought it was something that he spoke about quite a lot compared to other years. And lastly, I just love Warren's broader reflections on how to live a meaningful life and position yourself for long-term success. We're going to dig in a lot more into that throughout this episode. Now, before I hand it back to you, Clay, I just wanted to say I wasn't really surprised, to be honest, that he did this. I mean, I was surprised, but

I actually got a chance to speak to a friend on Thursday, and we were talking about Berkshire and just the cash position and what they're trying to do with it. And the conversation actually got steered towards, okay, well, maybe they're having this big cash position specifically to give Greg a war chest to manage once he takes over. And maybe that's this weekend, who knows? So we actually brought that up before the fact. So I just feel like Warren probably exited at the right time. I think that's

doing it on your own accord rather than having to be forced to do it at a later time is just the way to go. And, you know, so using a sports analogy, I think he really, I felt he stepped down kind of like right after winning the championship. Whatever, pick a sport, doesn't really matter which one, because I think every sport has its problems. So, you know, you have these other players, unfortunately, they might win a championship and then their career continues to extend. And you just see these players, they get tossed around to different teams and

Their game obviously is just nowhere where it used to be. And then unfortunately, they're just forced to retire because no one really wants them because they're just, their talents just aren't there anymore. And I think Warren just left at the top of his game. And I think he just did it with a lot of grace.

Yeah, well, I would add that, you know, retiring at 94 isn't cutting himself short by any means, like some athletes would do. So he's just performed exceptionally well in managing Berkshire since 1965, just the entire way when you give him a long enough time horizon and runway. And he also made a funny comment at the meeting that he isn't doing anything to try and make Greg look good, you know, whether it be trimming down the apple position or

or whatever else he's doing, what he believes is in the best interest of the partners at Berkshire. And during the meeting, I did feel that the baton was gradually being handed to Abel as he answered many of the questions, not just on the energy business, but also on business strategy, philosophy, the future of Berkshire. And it was back in 2018 that Abel was promoted to the vice chairman of the board.

and named to oversee all non-insurance operations. I'm not sure what year it became clear that he would be the successor whenever they decided to make that transition. And Abel, he joined Berkshire in 2000 when Berkshire acquired MidAmerican Energy. And he's just played a critical, critical role in Berkshire's success ever since. And while the fundamentals of Berkshire's strategy largely remains unchanged, one area where Abel could

potentially shake some things up is just his involvement in the operations of the subsidiary. So I think during the meeting, they discussed how Buffett might know some of these businesses really well and Abel might not as much just because he's been here just over two decades. So get in touch with management, learn more about their businesses, and maybe take more of an engaged role than what Buffett would do. Buffett has this hands-off approach, and it does seem that Abel's

does like to be more engaged and potentially look for ways where maybe certain subsidiaries could collaborate or just share ideas or just take that more active, engaged role. And Buffett kind of jokes that Abel just works harder than Buffett. Abel did also emphasize just his commitment to continue to ensure that managers do have full autonomy in making decisions that are best for the organization. So it's definitely still in line with Berkshire's culture. Robert Leonard

And Greg, I think is just an interesting guy because while he's clearly a very, very talented manager, I mean, let's be honest, I just don't think he'll ever live up to the standards that Warren Buffett provided for Berkshire Hathaway shareholders for all these years. But even then, I still think Warren made the right choice. It's really clear that, to me at least, that Warren and Greg are probably two different people, just in terms of

of their general temperament. So for instance, Warren's got that unique charm. He likes to poke fun of himself, likes to tell interesting stories. And then somehow he just always tends to loop it back to the main point in some incredibly insightful way. And then when you looked at some of Greg's answers to some of the questions, it was a huge contrast. He's just a lot more straightforward and to the point. It's not necessarily that his answers are bad or anything. That's just in his nature. So maybe you could say he's a little bit more corporate in the way he delivers things compared to Warren.

But I wanted to double down on your point there, Clay, about Buffett's points that he thought Greg would do an even better job than Warren would at managing Berkshire. So I think just given the scale that Berkshire is at today, Greg just doesn't have as steep of a hill to climb, I think, as Buffett did in those early days. Buffett had to run the investment portfolio and he had to run the subsidiaries for just multiple decades. And I think he just did it better than literally anybody else on planet Earth could have done.

So to ask someone to try to replicate that version of Buffett is just, it's impossible. But I think now that Berkshire is a larger business, it's not going to be growing anywhere near historical growth rates. I mean, it's already been declining now for quite a while. I just think there's a little bit less pressure. So I think Greg is just really well set up to hopefully put some of those management skills that obviously Warren talked at length about to good use. And I think that you already outlined. So

I think if just thinking, going back in time, creating an alternate universe, maybe if we went back 30 years ago and Berkshire needed a CEO that could balance things with capital allocation, things with private and public businesses, then maybe this would be seen as a huge negative. But I feel like now, given that Berkshire is the size that it is, I think this is probably going to be smooth sailing, just in a slightly different way. So

you know now you got greg and he's going to be there and he's going to be focusing on management more on the private side of berkshire and i think he'll be you know leaving the public side more and more to todd and ted

Yeah. I mean, when you look at the early days of Berkshire, it requires someone like Buffett to be scrappy and creative to transform this terrible business into this gigantic conglomerate. I'm reminded of just the Apple transition from Steve Jobs to Tim Cook. They obviously benefited from having someone that's more buttoned up, a little bit more corporate and just knows the best practices of running an organization. Whereas Buffett might be someone that's much better

and just starting from scratch and building something from the ground up, which is two different skill sets that are both incredibly, incredibly valuable. And one thing about Omaha, one word I should say that I think of when it comes to just Omaha and getting together at these certain types of events is serendipity. When I just look back at my journey in value investing, and it's just a long, random journey of one moment of serendipity after another. So

I got into investing in general because I was just interested in learning how to make my money work harder for me. And like many others, I came to stay in the space for the relationships that are built and the serendipitous ways in which the value investing community can help me live a better life. And while I do enjoy going to the meeting, really my favorite part of going to Omaha is meeting with old and new friends that I typically only get to see once or twice a year.

And I spent much of my weekend with our TIP Mastermind community. We had around 40 of our members in Omaha. We hosted a bus tour and a couple of dinners and socials. And it was just a wonderful experience for me, especially. There were also a number of other things happening. I attended a Monish Pavarais talk on Friday morning, which I think the video should be made public soon. I also attended the Markel Brunch on Sunday, which is just a wonderful networking event to see people I just don't get to see

throughout much of the year. And there's just so many other events I haven't named here on Friday, Guy Spears ValueX. And especially Friday, there's a lot of stuff going on every single year. And I noticed that I'm just able to build much deeper connections with people when I do meet them in person. So for whatever reason, the conversation just seems to be more organic and natural. The connection feels more real.

And it just tends to lead down to paths that otherwise wouldn't go down. And it's just one of those feelings that you know it when you experience it. And I feel like every year I get more of those moments when I go to Omaha.

Yeah. I mean, I think my journey definitely shares that serendipitous feel, but I was thinking more about just Buffett's life and how much serendipity I think he had in his life. I think born inside of him is this person who's deeply curious and maybe that's not a thing of serendipity, but I think what happened in a lot in his early days after that is, so you think about he wanted to learn at this young age, he started buying stocks. I think his first one he bought out was 11 years old. I mean, and then he even had capital from his sister. Obviously it was a very small amount that they split on.

And then from there, you know, he had a father who was somewhat involved as a, I think he was a broker for a couple of years. So he had kind of that, that, uh, that angle as well. And then, you know, he, he got Benjamin Graham as a teacher. I mean, how lucky would you have to be to get to that point? And then, and then, you know, he even wanted to get a job with Benjamin Graham, but he said no.

just because of other extenuating circumstances. And then eventually he got in there with him for just a few years, learned a ton. And then after Benjamin Graham shut down his fund and Buffett left, he was just going to retire basically. He was already probably, I think, pretty close to being independently wealthy, obviously nowhere close to where he was now.

Then just through talking about what he wanted to do with his own money, he found a group of other people that were very close to him that wanted him to manage their money and he said, "Okay." It's just all sorts of little things that happened that, especially in those early days that I think got him to where he is today. I think it's just really cool to think about all the things that just happen in your life and where it can take you.

It was just a fantastic weekend all around. And I think I walked away just learning a ton and feeling even more connected to some of the incredible people that are part of the TIP network.

To your point on serendipity, I'm also reminded of GEICO. Buffett went back to whatever year it was. He knocked on the door at GEICO and the janitor opened it and let him in and talked to one of the executives. And he's just surprised by how much Buffett was curious to learn about insurance and what he already knew at that age. And he found GEICO through Ben Graham. And then now today, we're talking about GEICO for many of the questions at every single meeting.

And just for the record, for those curious, everyone's asking what's going to happen to the Berkshire meeting in the future. As far as we know, TIP will be in Omaha in 2026. I know I will. I'm based in Nebraska. I'm sure Kyle will as well. We don't know whether Buffett's going to be on stage or not. That's yet to be determined, but we don't have any reason to believe that next year's meeting won't be just as exciting as meetings in the past. And there's very likely going to be

a ton of events around the weekend and many wonderful people making the trip. So it's still well worth going, in my opinion. Robert Leonard :

Before we get to the Q&A segment here, at the end of the first session in the meeting that went a couple hours long, they chatted briefly just about the financial results for the most recent quarter. At the end of the quarter, Berkshire reported a $328 billion cash position that's up 10 billion over the quarter. Berkshire didn't buy any shares back in 2025, which is no surprise given how much shares are up over the past 12 to 18 months.

Since 2019, on average, they've bought around 2.4% of shares outstanding per year. They showed this share count since 2019. Buffett highlighted that at the end of 2022, there was an excise tax that was implemented on buybacks. It's a 1% tax. There's an additional frictional cost whenever any company is making share repurchases. This not only impacts Berkshire, but it also impacts the businesses they own as well. He pointed out how Apple is doing

$100 billion in share repurchases a year, meaning that they're paying an additional $1 billion in taxes on those repurchases. And finally, I wanted to highlight just a few of my favorite quotes from Buffett during the meeting. He's just one of the most quotable people on the planet. A couple of these quotes are tied into the clips, but these are so good, they're probably worth mentioning at least twice here. So I have four quotes here I'm going to share, then I'll let Kyle share some reflections, and then we'll move on to get to the first clip here.

So the first quote I have is, the world is not going to adapt to you. You're going to have to adapt to the world. On concentration, he stated, Charlie thought we did too many things and that we were never concentrated enough. Of course, Buffett mentioned Charlie several times during the meeting. On temperament, he stated, people have emotions, but you have to check them at the door when you invest. And finally, he stated, you get a few breaks in life in terms of people you meet

who just change your life dramatically. If you have a handful of those, you treasure them.

Great quotes. You picked some good ones there. So I really resonated a lot with a few of these. So I wanted to just share some of my points here. So I really liked the comment on Charlie. I thought it was great because I think it just reminds us all that there's just an opportunity cost to pretty much everything that we do. When I think of opportunity costs, my mind tends to think about it purely from a financial standpoint. For investing, for instance, if I buy stock XYZ, it means I'm not buying stock ABC. So when XYZ

does nothing while ABC catapults upwards, it really stinks. But I think Buffett was probably speaking a little more broadly here. Given Berkshire's size, their investable universe is actually quite limited. Even though Berkshire could technically buy nearly any business out there, it's hamstrung by its size. If a good deal is available, but there's just no chance of it actually moving the needle for Berkshire, which is most investments, they just don't bother with it.

And then the other quote you listed there about treasuring the few people who have changed your life, that just really, really hit home for me. Warren has spent so much time thinking about all the people in his life and how they've affected him in a positive light. And I just think his words here are really just full of wisdom. So to me, the biggest takeaway is that when you meet someone who just elevates you, whether that's personally, professionally, whatever it may be, you got to just double down on those types of relationships.

Because those are the ones that I think are probably going to bring you the most amount of joy, the most amount of meaning, and maybe even some success over the long run.

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All right, back to the show. Of course, the person that Buffett treasured probably more than anyone is Charlie Munger. Those two met in 1959, and they were essentially best friends for many, many years ever since then. So it's a good example of treasuring those that are closest to you. So let's transition here to play a few clips from the Q&A session with Warren Buffett, Greg Abel, and Ajit Jain.

If you're interested in checking out the full Q&A, you can find it on CNBC's YouTube channel. Buffett had a response here that I thought would be a good one to include at the top, given that we touched on the topic of surrounding yourself with people that help lift you up. And that's really what a lot of this community is for me. It's that sense of community and that sense of camaraderie in going to Omaha and seeing all these people I get to see once or twice a year. And

I think the greatest things in life come from compounding and the people you surround yourself with either help reinforce those positive things in your life or they're doing the opposite. So here we'll go ahead and play the first clip. Hi, my name is Marie. I'm from Melrose, Massachusetts. Thank you for the time today. As a young person interested in investing like myself,

I would love to hear your insights, Mr. Buffett. What were some pivotal lessons you learned early in your career? And what advice do you have for young investors who are looking to develop their investment philosophy? Thank you. Those are good questions. I wish I thought of myself earlier in my life. Who you associate with.

It's just enormously important. And don't expect that you'll make every decision right on that. I mean, but you're going to have your life progress in the general direction of the people that you work with, that you admire, become your friends. I mentioned a few fellows that have died in the last couple of years. Well, all of those people were people that, you know, if we were working together today,

on something one ten thousandth the size of Berkshire I mean they'd be the kind of people you'd choose you just there are people that make you want to be better than you are and you want to hang out with people that are better than you are and that you feel are better than you are because you're going to go in the direction of the people that you you associate with and uh and that's

That's something you learn, and of course you learn it late in life. It's hard to really appreciate how important some of those factors are until you get much older. But when you've got people around you, like Tom Murphy, and his name, Sandy Gottesman at Walter Scott, at the

You're just going to live a better life than you do if you just go out and look at somebody who's making a lot of money and decide you're going to try and copy them or something of the sort. I tried to be associated with smart people, too, where I could learn a lot from them. And I would try to look for something that I would do if I didn't need the money. I mean, what you're really looking for in life is something where you've got a job that you'd hold if you didn't need the money. And I've had that experience.

Charlie had it for a very, very long time. In fact, all the fellows I named had it. And they also, every one of those ones I named, they always did more than their share. And they never sought more than their share of the credit. They just behaved as the way you'd like anybody you work with. And when you find them, you treasure them. And when you don't find them...

you still keep doing whatever causes you to eat or enables you to eat, but you don't give up on looking around. And you will find people do wonderful things for you. I mentioned earlier going down to Geico and knocking on the door when the door was locked. I mean, who knows what was behind that door when I went in. But in 10 minutes, I found I had a man that...

was going to be just wonderfully helpful to me. And of course, if somebody's going to be helpful to you, you want to try to figure out ways to be helpful to them. So you get a compounding of good intentions and good behavior. And unfortunately, you can get the reverse of that in life too. And, you know, with a lot of, I was lucky in having a good environment.

for living that kind of a life. And other people, you know, have a whole different environmental situation. They have to overcome it. But don't feel guilty about your good luck if you've got, you know, if you've got, well, if you live in the United States, there are 8 billion people in the world and there's 330 million in the United States. You've already won the game to a great degree and then just keep making the most of it. But

You don't want to associate with people or enterprises that ask you to do something or tell you to do something that you shouldn't be doing. And that's one of the problems. Different professions select for different types of people. And it's interesting to me that in the investment business, so many people get out of it after they've made a pile of money that they're

You really want something that you'll stick around for, you know, whether you need the money. Craig doesn't need the money. She doesn't need the money remotely, but they enjoy what they do. And they're so damn good at it. You know, it's just, well, I've had the advantage of seeing how that works over time. The best manager I ever knew. And there's a lot of contention for who that would be. But actually it was Tom Murphy Sr. that, who lives almost 98 years.

I've never seen anybody that could get the potential out of other people more than Murph could. I mean, if you wanted to become a better person, you went to work for Tom Murphy. There are all kinds of successful people that don't have that sort of, don't bring that to the party. And I'm not saying that's the only way to succeed, but I think it's

I think it's the most pleasant way to succeed for sure. And I think that the Berkshire experience is pretty dramatic. I mean, to operate with Sandy Gottesman from 1963 until he died a couple years ago, and Walter Scott for 30 years and

operated with them for 25 years or so right yeah 30 yeah and and uh you know you really can't miss it uh

You know, you'll learn all the time, but you'll not only learn how to be successful at business, you'll learn how to be successful at life. And so that's my recommendation. And for some reason, apparently a little longer, too, because it's pretty amazing. I mean...

These people I'm talking about, including myself, I mean, I mean, you know, I like to attribute it to this and a few other things, but I think a happy person lives longer than somebody that's doing some things that they don't really admire that much in life.

So this was just a great clip. And I think the part of it that I find most inspiring was just how much Warren just really, really emphasized surrounding yourself with the right people. You often hear the saying that you're the average of the five people that you surround yourself with. And I think Warren says he surrounded himself with just the best of the best. And when you hear all the names of people that he associates with, whether Bill Gates, Charlie Munger, it's just people that are...

amazing people. And I think that is also part of the reason why Warren Buffett is so amazing.

I'll jump in here and mention that, you know, I just noticed throughout the meeting that he would just continually praise others. Right. I think that's just another reason why there's such a strong sense of community in this space. So people are just pretty quick to lift up ladders up and praise others. And, you know, even in the space when I reach out to someone and ask for help or ask for, hey, if someone will give a presentation to our group or come on our show or whatever it is.

Very often, I'm getting a very positive response. And I think it's just super powerful and humbling to surround yourself with these types of people that are just givers and givers, and they just help lift you up.

Another takeaway I think here is in relation to just finding a job that you love. I have to say that I think I personally am just incredibly fortunate to have a job that I truly love. So funny story regarding this is when I first started with TIP. So there were a couple of times I'd have events in my calendar that needed my attention. And unfortunately, there were multiple times where I was just so focused and so in the zone that time just literally just disappeared to me. I just didn't pay attention to it because I was so

engrossed in what I was doing. I was basically in the flow state. And I think I would be in this flow state and it would just be hard for me to get out of it unless I forced myself with an alarm, which I now do. So, but in some of the other jobs I've had, that was never the state because I would usually be looking at the clock as much as possible, just hoping that it would be time to go home rather than continue working. So-

I think if you can find a job that is just so enjoyable that you just become immersed in that work that you love and where the line between work and fun is just so blurry that it pretty much doesn't exist, you've found a job that you just genuinely love and that's what you should do for the rest of your life. So I think Warren embodies this just better than anybody. Over the last 40 years, he took a salary of $100,000 per year to run Berkshire Hathaway. Total that up and that's $4 million. Again, not adjusting for inflation here, but you know,

just think about $4 million and look at pretty much any CEO who manages a S&P 500 company, and they probably make that in a year. So just to put that into perspective, it's pretty inspiring and it's pretty impressive that he just… It was very clear that money just wasn't the only thing that he put that importance on. And I think if you have any investor or shareholders who own Berkshire,

If there was a scenario where you just said, would you have paid Warren Buffett 10 times, 20 times what he made over all those years to run the company? I don't think you're going to find one person who's going to say no. So I think just for Warren, Berkshire wasn't just about the money. He got so much joy and intellectual stimulation and friendship just from going to work and connecting with people that could help him and raise him up like we've been talking to. So wealth was just a byproduct of doing what he truly loved. Robert Leonard

Yeah. And I'm actually pretty lucky that I just happened to tune into Buffett's advice early on in life because he was actually a key reason why I decided to join TIP related to his advice of just doing work you enjoy, doing work that doesn't necessarily feel like work a lot of the time. And yeah, there's so much more to money when it comes to a job. And it's kind of funny that the richest person in the world is telling you not to go to work for money

Sega just released an episode with Monish and they sort of touched on this topic as well. Monish mentioned that if he could make more money, but the quality of his life declined in any way, then he just wouldn't pursue that opportunity. So for example, he mentioned the possibility of owning a second home. And for him, it's just like a no brainer that it would be detrimental to his happiness because it just brings on this whole new set of headaches. And it's just hard for me to disagree with them. Sometimes one home can feel like a lot to keep track of.

But we'll go ahead here and jump to the next clip discussing the role of patience for investors. I really liked this question. He touches on this idea of patience being dynamic. Sometimes it can be super valuable, and other times you need to act with a sense of urgency. Buffett and Greg Abel touch on this further here. So we'll go ahead and play the second clip.

Hi, Mr. Buffett. My name is Daniel and I'm from Tenafly, New Jersey. First of all, I just want to say how grateful I am for getting the opportunity to ask you a question. When it comes to your principles of investing, you often talk about how important it is to be patient. Has there ever been a situation in your investing career where breaking that principle and acting fast has benefited you? Thank you. Well,

That's a good question. And there are times when you have to act fast. In fact, we made a great deal of money because we're willing to act faster than anybody around. Jessica Toombs, she's the step-granddaughter of Ben Rosner, manager of ours.

And in 1966, I got a call from a fellow named Phil Steiner in New York. And he said, I represent Mrs. Annenberg. And there were actually nine Annenberg sisters, I believe, before Warwick Annenberg came along as the son. But he said, we have a business we'd like to sell you. So I called Charlie up. And I got a few details. And it sounded very interesting. And...

Charlie and I went back to the office of Will Felsteiner, and New York was a marvelous guy. Never met him since, but he was handling things for Mrs. Well, A. Simon Pichu, and her name was Annenberg.

And her husband had been the partner of Ben Rosner, but he had died. And Ben got kind of tense about working with her. And so he offered us this business at a bargain price. He offered us a business for $6 million. It had $2 million of cash. It had a $2 million piece of property in the 900 block of, what's the key street in Philadelphia down there? Market Street. And, uh,

And it was making $2 million a year pre-tax, and the price was $6 million. And Charlie and I went back to this place, and Ben Rosner was there. And he just was upset about doing business with his partner's widow. She was extremely wealthy.

And he just didn't, he wasn't enjoying it. He was very nervous about selling it. And he said to me and Charlie, he said, I'll run this business for you until December 31st. And then I'm out of here. And I got Charlie, we went out in the hallway and I said, if this guy quits at the end of the year, he can throw away every book on psychology I've ever read. And so that began a wonderful, we bought the company, had a great relationship.

And did I know that morning when I got a phone call from Will Faustiner, there'd be this background about it. I've had a couple of times, and that was one of them, where people in the East felt that they had a stereotype in their mind of what people from the Midwest were like, and they

Ben had been married, his first marriage was to a woman from Iowa, and he just figured that anybody from the Midwest was okay. The trick when you get in a business with somebody, or you get in a room with somebody like that, and they want to sell you something for $6 million that's got $2 million of cash and a couple million of real estate and is making $2 million a year, you don't want to be patient then. You want to be patient and waiting to get the occasional call. My phone will ring sometime.

you know, with something that wakes me up. I may be sleeping in there or something, but you just never know when it'll happen, and that's what makes it fun. I mean, it's...

So patience, it's a combination of patience and a willingness to do something that afternoon if it comes to you. You don't want to be patient about acting on deals that make sense. And you don't want to be very patient with people that are talking to you about things that will never happen.

It's not a constant asset. It's not a constant liability to be patient. Well, Warren, I was going to add, as you're being patient, I happen to know, and I think that goes for Ajit also and all our managers, we're very patient when we're looking at opportunities. And as you touched on, we want to act quickly. But while we're being patient, never underestimate the amount of reading and work that's being done.

to be prepared to act quickly. Because we do know, be it equities, but I would include a variety of private companies that when the opportunity presents itself, we're ready to act. And that's a large part of being patient is using it to be prepared.

Yeah, and of course, it doesn't come in anything like an even flow. I mean, the most uneven sort of activity you could get into. The main thing you have to do is you have to be willing to hang up after five seconds, and you have to be willing to say yes after five seconds. Absolutely. And you can't be filled with self-doubt in the business. You just forget it, and you're going to work, go into some other activity. But, I mean, one of the great pleasures...

It is a great pleasure, actually, in this business, is having people trust you. And that's really why I work at 90, when you've got more money than anybody could count. You know, if they started today and had the machines that are helping them and everything else, it means nothing in terms of how you're going to live or how your children are going to live or anything else. But both Charlie and I

We just enjoyed the fact that people trusted us and they trusted us 60 years ago or 70 years ago. And partnerships we had, we never sought out professional investors to join our partnerships. Among all my partners, I never had a single institution. I never wanted an institution. I wanted people. And I didn't want people that were sitting around and

having people present to them every three months and tell them what they want to hear and all that sort of thing. And that's what we got, and that's why we've got this group here today. It's all worked out. But you don't want to be patient when the time comes to act. You want to get it done that day.

Now, Buffett is probably one of the best when it comes to acting opportunistically. I wouldn't personally advise anyone to try and time the market by holding a lot of cash in their portfolio. Buffett actually believes that this is much of Berkshire's competitive advantage. And where a lot of their opportunity lies is in having this large pile of cash and being ready to act big when the right opportunity presents itself. So for example, if we go back to the great financial crisis, just after the collapse of Lehman Brothers,

Berkshire put up $5 billion in a Goldman Sachs deal to receive 5 billion in preferred shares with a 10% annual dividend, in addition to a bunch of warrants to buy more shares in Goldman. That was exercisable over five years. So this deal was hugely profitable for Berkshire, and it came because Goldman was just desperate for a capital infusion, and they just really needed that confidence from the market that they were going to be well-financed and weather through the crisis because

confidence and trust is so critical when it comes to banks. And a similar deal was made with Bank of America in 2011 during the European debt crisis. Shares of Bank of America were tanking, and Berkshire was, again, able to deploy billions of dollars into preferred shares and warrants. And as a result, Bank of America today is one of Berkshire's top three positions according to their most recent 13F filing. Robert Leonard

In a world where so many firms are just highly leveraged or have what we can call an optimal amount of leverage, Berkshire prepares for these, what we can call just outlier scenarios where a highly leveraged institution gets into trouble. They find themselves needing capital when it's most difficult to get capital, and Berkshire comes in and gets a heck of a deal. I'm reminded of another Buffett quote here. He said,

cash is to a business as oxygen is to an individual. Never thought about when it's present, the only thing in mind when it's absent. And on the contrary to being impatient at times, I also recall a quote from Monish. He shared in his talk back on Friday, he told this elaborate story of someone giving the advice, fast is slow. And the way I interpret that is that

when it comes to investing is that by going too fast can actually lead to inferior results. So if you're chasing a hot stock or you're rushing to make a decision, it can lead to potentially poor performance. Or even if you look at a business, say if you're scaling up a business, for example, if you're scaling up too fast, you might have a team that's burnt out, you might have a fragile revenue base, or just other downstream consequences that end up hurting you in the long run. So

Sometimes it's just the case that fast is slow.

Yeah, I really like the fast is slow framework that Monish discussed in his talk. I think it basically, honestly just works perfectly well with the story that Buffett just gave. And I think the story is just great because it's just a very vivid description that illustrates that obviously Warren is known for being incredibly patient, but in this case where he had this deal that was just a home run, you got to act very, very fast. Otherwise, you run the chance of that deal just going to the next person. So

What he said here oddly kind of reminds me of a quote from Lennon, which is, there are decades where nothing happens, and then there are weeks when decades happen. Now, I know it's kind of in different contexts, but the point being that a lot of things in terms of investing can happen in a very short period of time. You mentioned Bank of America, where they need this instant capital injection as fast as possible. They're scrambling to get these deals done. And if they can't get it done, theoretically, the company just is done. And-

You know, if on the other hand, Buffett is just standing on his hands and saying, okay, well, let me think about this for a month. Well, chances are in a month that company's gone or they're going to find someone else to give that deal to. I just think that Buffett and Greg Abel explained it really well here. You know, speaking about specific deals, even outside of those deals, I mean, a lot of the time Buffett is not doing anything, but you know, we all know he reads five or six hours a day.

And so that's prep time. That's time reading and researching things, industry, specific people, history, chatting with other people. And all of that culminates to just help him, and hopefully Greg as well, just better understand these deals that are going to be coming to them on a pretty regular basis. But on the other hand, if you're just unprepared, you're not doing reading, learning, you're just kind of stuck doing what you always do, well then when a deal comes onto your desk, you're just not going to be prepared. And unfortunately,

a good deal can become no longer good if you take too long. So I got a couple of just scenarios here. So let's say a deal comes to you and maybe you're just not prepared. So there's kind of three possibilities. The first one is that you just completely miss the great opportunity as it goes to someone else. And you just say, okay, this is out of my circle of competence. I just don't understand it. As Buffett would do, he just put it in a too hard pile. Wouldn't feel bad about it, but that is a scenario. And I'm sure that's probably the one that happens to him most often. The second scenario is that maybe you do like the deal, but you actually want to

you want to try to understand it a little bit better. So in that case, well, understanding things takes time, right? And with a lot of these deals, you don't have time. So if you were to do that, you might run the risk of just that deal becoming less and less attractive. And then on top of that, kind of just as a corollary, there's also the chance where, yes, okay, maybe you will have some time to do your due diligence. But also what happens sometimes if a company is looking for cash or looking to be acquired,

it might not be that they're only wanting to sell to you. They might want to sell to someone else. I know in Warren's case, sometimes he's the only buyer out there, which is a huge advantage for him, but that's not an advantage that everyone has. So if one deal is being shopped, let's say to Clay and I, Clay's prepared and I'm completely unprepared. Clay knows, wow, this is an amazing deal. I'm like, ah, I need three weeks to think about it. Well, then Clay's probably going to pick it up and I'm going to be twiddling my fingers and hating myself for not getting in on a good deal. So I think

Even though it can sometimes appear to the untrained eye that maybe there's a deal that's being executed too quickly, I think there's probably certain people that might be in the know who just know that this deal has been building up for a long period of time. So many outsiders, for instance, might look at Berkshire and Apple and say, okay, well,

Berkshire just did really, really good on Apple. They got lucky. But I just don't think that's the case. I mean, if you just observe all the lessons that Warren's talked about, if you go way further back in time before he even thought about buying Apple, decades before that, he was talking about what he learned from See's Candy, from Coca-Cola, and you can pretty easily connect the dots that the Apple acquisition was truly a buy that was decades in the making. So I'm reminded here of just a great quote by one of my favorite philosophers I want to

and this part off with, which is by Seneca. And that is, luck is what happens when preparation meets opportunity.

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All right, back to the show. I think there's the patience in doing the research and doing the due diligence and waiting for that right opportunity. But there's also the skill of having the patience to let a business compound once it's in your portfolio. They've, of course, trimmed down the Apple position in recent years, but they've let it run many times when people would say it was overvalued and the stock would double in a couple of years. And I think that's

Active decision to hold an exceptional business can be harder than many people would probably be led to believe because there's 250 trading days in a year. And I also think back to my conversation with Francois Vershon. He recently purchased Booking Holdings, which we'll be discussing in next week's episode. He was studying that industry for 20 plus years before he even initiated a position. Imagine how well someone knows a business and an industry after 20 years of reading their reports, following the competitors and whatnot.

I think that there's a lot of value in having that patience and making sure you're ready to act when the time is right. Next here, we're going to turn to a question on Berkshire's investment in Japan. The interesting part about this answer is less about his sentiment in Japan, to me at least, and more about how he goes about finding new opportunities. So rather than just waiting for the phone to ring and it's Goldman Sachs needing cash,

he's continuously sifting through opportunities and always looking for the next gem that he might not know about or just always looking for that next potential investment. At Monish's talk on Friday, he talked about how he was sitting across from Buffett and he noticed the Japanese company handbook on his desk. And Buffett was clearly using this book as a source of potential opportunities and Monish picked it up and dog-eared some of his favorite businesses for Buffett to take a look at. So

It's a breath of fresh air to have the greatest investor of all time using a Moody's manual or using the Japan handbook instead of AI or some fancy tool to invest billions of dollars. It's essentially exactly what he's done since the beginning. So anyways, here's a clip on Japan. Mr. Buffett, Mr. Abel, and Mr. Jin, good morning. I'm S.T. Chung.

I am from Hong Kong. Mr. Buffett and Mr. Munger did a very good and successful investment in Japan in the past 5 or 6 years. The recent CPI in Japan is currently above 3%, not far away from its 2% target. Bank of Japan seems very determined in raising rates.

while Fed, ECB and other central banks are considering to cut them. Do you think BOJ makes sense to proceed the rate hike? Will its planned rate hike deter you from further investing Japanese stock market or even considering to realize your current profits? Thank you very much.

for arranging this greatest event every year. Finally, I wish you healthy always and keep holding this shareholder meeting.

Well, I'm going to extend the same goodwill to Japan that you've just extended to me. I tell other people in Japan, determine their best course of action in terms of economics. It's an incredible story. It's been about six years now, as you pointed out. I was just going through a little handbook. It probably had 2,000 or 3,000 Japanese companies in it. One problem I have is that

I can't read that handbook anymore. The print's too small, but the...

And here were these five trading companies. They have a special name for them in Japan, but they were selling at ridiculously low prices. And so I spent about a year acquiring them, and then we got to know the people better, and everything that Greg and I saw, we liked better as we went along. So we got fairly close to the 10% limit that we told the company we would never exceed without their permission.

And so we did ask them recently whether Limit could be relaxed, and it's in the process of being relaxed somewhat. We, I would say that, I'll speak for Greg beyond me, that in the next 50 years, and I hope he's running things in, we won't give a thought to selling those. I mean, they had...

Japan's record has been extraordinary, actually, in terms of my guess is that Tim would tell you, Tim Cook would tell you that iPhone sales there are about as great as any country outside the United States. American Express would tell you that they...

So, their product very, very well in Japan, Coca-Cola, that we do business with. Another big investment of ours, they do extraordinarily well in Japan. They have a number of habits in a civilization that operates differently than ours. Japan is by far the biggest. This is the container they've always preferred.

They're soft drinks and they have a whole different sort of distribution system there. But we have been treated extremely well by the five companies. They talk with Greg primarily. I went over there.

year or two ago. Greg's more cosmopolitan than I am, so he's a... Which isn't saying much, actually. But... Very little. But he is... I don't know...

How many times do you think you've met with representatives of one company or the other? Yeah, when you think of the five, there's definitely a couple meetings a year, Warren. And I think the thing we're building with the five companies is, one, it's been a very good investment. But we are really, as Warren touched on, we envision holding the investment for decades.

50 years or forever. But I think we also are building relationships to do incremental things with each of those companies. And we really do hope to do big things with them globally. They bring different perspectives and different opportunities. And we see and that's the that's why we're building that long term relationship with them. It's super long term. And and they have a much different.

They have different customs. They have different approaches to business. That's true around the world. And we don't have any intention in any way of trying to change what they do because they do it very successfully. And our main activity is just to cheer and clap. And I can still do it, 94. So...

We will not be selling any stock. I mean, that won't happen in decades if then. And my guess is that they will find things because they cover the world pretty much, the five trading companies. We will find things occasionally, maybe very large for any individual company there.

They may in some way be assisted by some help we bring to the situation. That will be an expanding relationship. It's too bad that Berkshire has gotten as big as it is because we love that position and I'd like it to be a lot larger than it is. But even with the five companies being

They're very large companies, and they're large companies in Japan. And we've got, at market, in the range of $20 billion invested, but I'd rather have $100 billion than $20 billion, and that's the way I feel about it. Several other investments we have, but size is an enemy of performance at Berkshire, and I don't know why.

any good way to solve that problem but but uh charlie always told me that having a few problems was good for me i never quite understood that but if you listen to him moralize you would understand and uh

And it's not an impossible problem at all. The Japan investment has just been right up our alley. Do you want to add anything on that, Kurt? No, I think you've touched it. But as you said, it's right up our alley. And I absolutely agree, Warren. I do believe we'll see some very large opportunities long term. And that's just been a great plus of that relationship. Yeah.

Yeah, I would say they would like to present us with opportunities. We would like to receive them. We've got the money. We both get along very well with each other. And they have some different customs than we have. They drink the number one Coca-Cola product. They drink over there something called Georgia coffee. So I haven't converted them to Cherry Coke, and they're not going to convert me to Georgia coffee. It's

It's a perfect relationship. I just wish we could get more like it. I never dreamt of that when I picked up that little, it wasn't so little, it was about that thick, but sometimes two companies to a page and a couple thousand pages, I believe. But it's amazing what you can find when you just turn the page. We showed a movie last year that about turned every page.

And I would say that turning every page is one important ingredient to bring to the investment field. And very few people do turn every page, and the ones who turn every page aren't going to tell you what they're finding. So you've got to do a little of it yourself.

Yeah. So Clay, I really liked what you said there about just going down to the absolute basics. I mean, you and I, we're a lot younger. We both like using tech. I know I like it. I lean on it a lot. It helps me save a lot of time. But it just goes to show you that even in today's day, because I think Buffett's had these now for, I think, five-ish years, you can just go and flip through a book and find amazing ideas with that. No technology needed or necessary. I mean,

So it's an interesting thing to think about. It's interesting because also to Charlie's point there about doing five things instead of 50, maybe they felt that some levels of technology added just unneeded complexity. And so that's why they kind of skipped it. But there are a few nuggets from this clip that I've really found interesting. So the first one is that Buffett said that they're talking with some of these companies specifically to see if they can actually get the 10% limit relaxed. So they own about...

10-ish percent of that company. And they've talked with management and said that they don't want to get more. Usually that's just because they want to make sure that management doesn't get angry that they want to come in there and be activists and mess around with the business. So I think this really indicates that maybe they're willing to increase their position size if allowed. And this is also interesting to me because from what I've heard, the positions almost doubled, I believe, since they initially bought them. So that would mark a pretty large increase in, I guess, what they think the intrinsic value has gone up by.

And then secondly, I thought that Greg mentioned a few things that were really relevant. So he said that they'd been in contact with these businesses pretty regularly and are discussing some potential future partnerships. And then he also mentioned just global opportunities. So I think for Berkshire, partnering with other businesses that they obviously know and trust and have researched a lot makes a lot of sense. They also have that high degree of trust that they can lean on. And it just makes sense as well, because obviously, if these companies, there's

they're still big companies, but they're obviously a lot smaller than Berkshire. And if they have an interesting deal that they feel is in Berkshire's wheelhouse, well, having that connection and trust based already means that maybe they can find some interesting opportunities. And then just kind of piggybacking on that to the whole patience point, Greg mentioned that he felt similar to Warren, that there's going to be some vast, vast opportunities over the longterm. And I think that this just further emphasizes the points made earlier about being patient versus moving fast.

Obviously, Greg, he specifically said that he does a lot of things in the background that you don't see or probably give credit for, but he's doing these things to understand and improve his understanding of industries or businesses that he's looking at. So I think Greg really understands, just like Buffett, that he's doing all this work. And sometime in the future, who knows if that's one year, five years, 10 years, 20 years, there's going to be a huge opportunity for them to hopefully deploy some of this cash, which is going to continue to balloon up. And he'll be able to take advantage of it once that happens.

Yeah, the 10% limit's interesting. It'll be interesting to see how far they'll be able to push it because Berkshire is obviously a very friendly partner when it comes to being a pretty non-active shareholder. And the bet on Japan is just pretty interesting. Obviously, valuation is one side of the equation, but they're talking about their prospective returns even going forward being very good.

Especially Japan, a lot of people talk about the Bank of Japan intervening with the currency constantly. There's the population decline and the deflation in the economy. So to hear Greg Abel and Buffett speak so positively of these companies, I think is super interesting. And what also stood out to me about this clip was Greg mentioning that they want to own these businesses forever. And Buffett agreed with them. And Buffett's 94 years old, and here he is thinking 50 years out, which is quite an admirable trait to have.

as an investor. You just have to be operating on a whole different spectrum for most investors to be flipping through the Japanese handbook to look through the next stock you want to own for the next 50 years. So I'll leave it at that for the Japanese segment. We'll jump here to a clip that Kyle picked out on Buffett's advice for emerging countries wanting to attract institutional investors. Kyle Pritchard :

Good morning, Warren and Greg, Ajit. Thank you so much for hosting this event. Good to be here. My name is Dashboi Undegar and I'm from the great country of Mongolia. A little bit of background about my country. Mongolia is an emerging market and landlocked country sandwiched between Russia and China.

But we are rich in history and minerals and have full democracy and growing economy. Last week, we hosted our second annual Mongolia Investor Conference in New York to attract investors like yourself.

I know you meet and give advice informally to government leaders such as South Korea, China and India. What advice would you give to government business leaders of emerging markets like Mongolia to attract institutional investors like yourself?

It'd be great if you have long-term plans for exposure to emerging markets as a hedge or an opportunistic investment. Lastly, I welcome all of you to Mongolia, and my country folks would be very happy if you can make it to our economic forum this July. Thank you. Yeah.

I have trouble planning a trip to Council Bluffs, which is just a few miles from here. Takes an optimist. Actually, I met a fellow here at the annual meeting probably 20 years ago or more.

who did a lot in Mongolia, and he did very well in Mongolia and actually moved there for quite a while. I would say that if you're looking for advice to give the government over there, it's to develop a reputation for having a solid currency over time. I mean, we don't really want to go into any country where we think there's a

a chance i mean a significant probability of runaway inflation it just it's too hard to figure people the other people figured out ways to make money in in hyperinflationary situations but that's not our game and i i don't think i'd play it well so that would be a factor with us

The chances are we won't find anything in Mongolia that fits our size requirements aside from that. But like I say, I think my friend that I met here 20 years ago has done very well in Mongolia. And if the country develops a reputation for being...

business-friendly and currency conscious. And I think that that bodes very well for the residents of that country, particularly if it has some other natural assets that it can build around. I don't know that much about the minerals there or anything of the sort, but I mean, who would have been on the United States in 1790? But

It didn't have to have perfection. We just had to be better than the other guys for quite a while. And we started out with nothing. And we ended up with close to 25% of the world's GDP and faster growth rates and generally sounder currencies and all kinds of things that I wish you well.

Yeah. So I really liked this clip, not because I have any interest in investing in Mongolia, but I just thought that there were a couple powerful messages that we should consider, especially in today's just volatile currency environment.

So, Buffett mentioned how important it is to develop a reputation for having just a solid currency over time. And I think this means having a currency that has just a very low likelihood of being overly depreciated over time. And this is among many reasons that Warren has, I think, just tended to stick to the US, where the currency has historically been one of the strongest in the entire world. But for other investors out there looking at emerging markets, I think you just have to factor this into your investments.

If you were to get, say, a 10X on an investment in a foreign currency, but the currency devalues just at a very, very high rate, there's a chance that your investment just isn't producing any value or it can even go down. So the second point here was that

You want to be invested in countries that have policies that are friendly to foreign businesses. I think this is how most great countries have attracted outside wealth. China did it, the US did it and continues to do so. And I think there's many other countries that are attempting similar strategies. And there's just numerous reasons why this is such an advantage. The first one being that you attract capital to your country, which helps create jobs and more tax dollars. And then as an added benefit to that,

If there's foreign investors who are having a lot of success investing in your country, they're going to look for more and more opportunities. They're going to attract other investors, and you just get this prosperous flywheel effect. If, on the other hand, investors all have just abysmal experiences, it can be really, really hard to attract capital back in. And I think this is kind of what has happened in China. And while China definitely has some really good companies, I think it's probably going to be kind of hard for them to attract foreign capital in large amounts again in the future.

And, you know, they probably will, but I think it's going to be pretty slow going here.

Yeah. So if you're a US investor investing internationally, you're looking at international stocks. I think the currency risk is something certainly you should pay close attention to just because the stock goes up 20% and your benchmark's 15% doesn't necessarily mean you achieve that 15% return. In recent years, there's been a US dollar headwind in terms of investing in these international countries. So that's something definitely you should be factoring in. And it's interesting...

You included this segment considering our previous segment on Japan. In terms of its population, Japan is number 11 in the world in terms of the number of people living in their country, but they have the fifth largest economy in the world after just recently being surpassed by India. Their GDP is growing quite rapidly. I think it's like a 6% rate in recent years. And Japan, they have significant exports in different sectors, including automobiles, electronics.

and this helps strengthen their economy, strengthen the value of the currency. And then the yen, this leads to it playing a pretty key role in global trade. And that just provides stability to the currency relative to a smaller emerging market, since many of these international players are going to be holding yen in their reserves to help facilitate trade. And that's sort of what Buffett's looking for here is that stability and trust in that currency. Robert Leonard : There was also another question

where Buffett was asked if they would hedge the risk of the devaluation of the US dollar. There's plenty of talk throughout the day on fiscal deficits and where the US is going to be heading. And it's a valid question considering that Berkshire owns a massive tranche of US dollars and US treasuries, both of which would not be protected by the devaluation of the currency. But

But he did discuss his concerns related to whether the US will get their deficits in check to prevent runaway inflation. And I guess on the flip side, the businesses that he owns are going to be protected to a large extent to runaway inflation. But it's something that top managers at Berkshire are certainly aware of and keeping their eye on. And maybe that's potentially why they're looking to

diversify a little bit outside the US in some ways, even though throughout the day, he did also express his optimism and bullishness on the US more broadly. So we wanted to play one more question here on Berkshire's recent activity and his take on today's market. This is another shorter one, but I thought it's an interesting one that we'll cap off the episode with.

The first quarter ended March 31st, and it did show that Berkshire's cash pile expanded from the end of the last year. But the greatest market turmoil came in April. Martin Devine, a shareholder from Scotland who is attending the meeting today, wants to know, has the recent market volatility presented Berkshire with opportunities? And Martin just wrote in an addendum in the last 40 minutes or so.

pointing out that you mentioned Berkshire almost invested $10 billion recently, wanting to know if you could talk more about that. Well, I can give you a good answer to the second part, which is no. But $10 billion wouldn't have done that much. That's the other side of it. What has happened in the last 30, 45 days, 100 days, whatever you want to pick up, whatever this period has been,

It's really nothing. There's been three times since we acquired Berkshire that Berkshire has gone down 50% in a fairly short period of time, three different times. Nothing was fundamentally wrong with the company at any time, but this is not a huge move. The Dow Jones average hit 381 in September of 1929. It got down to 42.

So that's probably going from 100 to 11. This has not been a dramatic bear market or anything of the sort. I mean, it's got 17 or 18,000 days. There's been plenty of periods that just are dramatically different than this. I mean, the day I was born, the Dow Jones was at 240. And my first, that was August 30th, 1930. And the

Between that and the low, it went from 240 to 41. I mean, that's... So if people think that it made a really major change, it didn't. If it had gone up 15% instead of down 15%, people think they take that with remarkable grace. But...

If it makes a difference to you whether your stocks are down 15% or not, you need to get a somewhat different investment philosophy because the world is not going to adapt to you. You're going to have to adapt to the world, and you will see a period in the next, certainly in the next 20 years, you'll see a period that will be in, somebody in the market described one time as a hair curler compared to a,

Anything you've seen before. I mean, it just happens periodically. The world makes big, big, big mistakes and surprises happen in dramatic ways. And the more sophisticated the system gets, the more the surprises can be out of right field. That's just...

That's part of the stock market. And that's what makes it a good place to focus your efforts if you've got the proper temperament for it and a terrible place to get involved if you get frightened by markets that decline and get excited when stock markets go up. I don't mean to sound particularly critical. I mean, I know people have emotions, but you've got to check them at the door when you invest.

So this is a great clip to end in light of the recent volatility related to the US tariff announcements. Occasionally, declines in the stock market are just to be expected. And Buffett highlighted that shares of Berkshire have had declines of 50% in a short period of time on multiple occasions. And the underlying business of Berkshire just wasn't materially impacted. So

If anyone's interested in backing up the truck after a 15% decline in the S&P 500, as Buffett alluded to, you're likely in for a rude awakening at some point over the next 10, 20 years.

Yeah, I think this is just a really good reminder to just zoom out and look at your portfolio from a thousand yard view. There's just events like what we're living through now that happen pretty regularly through history. It might not be the exact same event, but a lot of these events are a lot more painful as well than what was just happened to us. So if you were to look out, say 10, 20 years from now, do you think that this will be an event that has fundamentally changed the market?

I think maybe the average person, obviously the market did go down, so the average person might say yes. But I think as the pain subsides, then we get more and more normalcy back into the market and time goes by, there's just a really good chance that this is just a temporary blip and an ongoing growth story, onwards and upwards.

So the world has events that cause certainty. And I think when you take a closer look at Buffett, he's just profited from this uncertainty specifically by being greedy when others are fearful. And so I looked at Dataroma, I looked at Q4, which was the most recent quarter where they show his activity. And it showed that he added a couple of companies. He added Domino's, Pool Corp, Sirius XM Holdings, Verisign, Occidental Petroleum, and Constellation Brands.

Now, I looked at each of those businesses and just wanted to see what their stock prices did since then. And so from Q4, a couple of them, Pool, SiriusXM, Oxy, and Constellation Brands have all decreased in price. So looking at the world from Warren Buffett's view, there's probably a good chance whenever the Q1 numbers come out that maybe he's added to some of those names.

He also made the point that I'll reiterate here that if the recent events have shaken you emotionally, then perhaps you should consider changing your investment philosophy. And I thought those were just powerful words. That wraps up today's discussion. If you're interested in joining some really high quality TIP events later this year in the fall, we're hosting our summit in the mountains of Big Sky, Montana at the end of September and our TIP Mastermind communities getting together in New York City in October.

You can reach out to Kyle or I if you're interested in learning more about either of those. And then we have information on our website as well for both. So with that, I think we'll close it out there. For those we met in Omaha, it was great to see you and we hope to see you again next year. And if you haven't been to Omaha yet, you're certainly invited to come hang out with us next year and come say hi and connect with other like-minded value investors. So thanks a lot for tuning in and we hope to see you again next week. Thank you for listening to TIP.

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