University of Berkshire Hathaway: 30 Years of Lessons Learned from Warren Buffett & Charlie Munger at the Annual Shareholders Meeting
Posted by jack_miller | Published 7 months ago
With 446 ratings
By: Daniel Pecaut, Tom Parks, et al.
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Will there ever be another investing book quite like this? It's unlikely.
University of Berkshire Hathaway is a remarkable retelling of the lessons, wisdom, and investment strategies handed down personally from Warren Buffett and Charlie Munger to shareholders during 30 years of their closed-door annual meetings.
From this front row seat, you'll see one of the greatest wealth-building records in history unfold, year by year.
If you're looking for dusty old investment theory, there are hundreds of other books waiting to cure you of insomnia. However, if you're looking for an investing book that's as personal as it is revelatory, look no further.
Packed with Buffett and Munger's timeless, generous, and often hilarious wisdom, University of Berkshire Hathaway will keep serious investors listening late into the night:
- Get unique insight into the thinking, strategies, and decisions- both good and bad - that made Buffett and Munger two of the world's greatest investors.
- Understand the critical reasoning that leads Buffett and Munger to purchase a particular company, including their methods for assigning value.
- Learn the central tenets of Buffett's value-investing philosophy "straight from the horse's mouth."
- Enjoy Munger's biting wit as he goes after any topic that offends him.
- Discover Buffett's distaste for "commonly accepted strategies" like modern portfolio theory.
- See why these annual meetings are often called "an MBA in a weekend."
If you are a Buffett or Munger or Berkshire Hathaway fanatic, you will love this book.
However, if you merely admire these gentlemen's competence and, so, actually expect to learn something material from a book which boldly states that it will teach you such, you will be very disappointed.
The authors apparently have attended the Berkshire Hathaway shareholders meetings for the past 30 or so years and have written a gossipy summary at the end of each year for their friends and associates.
Apparently realizing that Buffett and Berkshire are not "branded" and, so, a book about them is highly salable, they have decided to profit from their decades-old summaries by binding them together and implying there are "lessons" to be learnt.
There are not.
Unless, you really find something enlightening in an annual update on the insurance premium float held by BH or want to hear repetitively how much Buffett admires Ajit Jain's ability to increase that float amount when Buffett felt there was no other insurance avenues to gain such increases.
You will "learn" that Buffett and Munger have little use for most of Wall Street's practices and financial theory. However, you will not particularly learn much more since all the authors do is state these gentlemen's position and, thereafter, report a "sassy" zinger by Munger or a "playful quip" by Buffett. I read this book to learn financial knowledge, not to learn that Munger is a bit of a jerk and Buffett is not as funny as he seems to think he is.
Even when financial theory is discussed, it is only to have Munger state it is "stupid" or, for variety, "dumb".
Portfolio theory is stupid, derivatives are stupid, executive compensation practices are stupid.
On the other hand, Berkshire Hathaway's practices are the "best".
Of course, the analogy is often false. BH is a conglomerate, yet Munger keeps treating it as if it were a simple corporation which happened to provide insurance coverage, along with Coca Cola, chocolate, railroad services, etc.
It is not. It is a conglomerate which owns several other corporations. So, stating that BH's policy of letting the CEOs of these corporations control the business and, otherwise, basing their salary on their corporation's profit is not particularly actionable in a regular corporation, where you cannot let a division operate independently nor allow an executive at a naturally profitable division make more salary than an executive who operates a less profitable but perhaps more integral and vital division.
Yet, Munger has no problem acting as if a conglomerate like BH is comparable to the typical corporation where salaries are not based upon the corporation's profit margin.
Same goes for portfolio theory. Buffett and Munger have gotten rich from buying a few companies. Good for them. However, to assume everyone has the knowledge and capacity to select three or four stocks which will steadily rise in profit is, let me say it, stupid given the obvious fact that Buffett is famous for being able to do what no else can do, pick such stocks. Yet, repeatedly we read Munger stating portfolio theory is stupid because a person can just pick three "solid" stocks and he/she won't have to worry about risk and, so, need not diversify his/her portfolio to reduce such risk.
As to Buffett, a "cute" story is told about how he knew an owner of an excellent business who would implode once or twice and state he intended to sell his business. After a week of ranting, the owner would calm down and admit he had a good business which he loved. Buffett got close to a friend of the owner and told him to let Buffett know the next time the owner imploded. When the next implosion occurred, Buffett immediately called up the owner to ask how things were going and, as expected, the owner ranted about how he had enough and would sell his business to the next willing buyer. Buffett promptly states he is that willing buyer and the owner in his rage says its a deal. A week later the owner calls back and heavily implies he now regrets the deal, hoping Buffett will rescind. Buffett, however, plays dumb and so the owner has to go through with the sale.
Despite the author's portrayal of this as a "cute" story, it is not. It is a ruthless use of another's known vulnerability for one's own gain. It is not a gentlemanly act. It is, however, an acceptable business act.
The authors apparently realize this and, so, try to imply the story as a morality tale, the owner was "emotional" and Buffett was "even-keeled" and, so, the owner caused his own loss by being "emotional". Morale: don't get emotional when you are investing.
However, the only "investor" in this story is Buffett, who has created nothing but simply cleverly bought other persons' realized visions. The owner actually built the business and, not surprisingly, he was more invested emotionally in it than would be an investor, like Buffett, who just sees the business as a money maker and so does not care a lick for the actual product, history, etc which were built with the blood and sweat of the owner. I accept Buffett's machination, however, my sympathy is entirely with the owner and Buffett's indifference is not a moral victory in my book.
(Nota bene: I am discussing how Buffett and Munger come across in the book due to the author's failure to provide their reasoning. Please note that I fully expect that Buffett and Munger could easily explain the above depictions by the author as limited and an inaccurate summary since the author are more interested in showing Buffett and Munger as "personalities" than in actually explaining, let alone debating, the nuances of their investment philosophies)
The book is an okay read. Pleasantly gossipy and Buffett's and Munger's policy of keeping it simple comes through, which is nice to see. Munger may overuse "stupid" and, otherwise, fail to expand on his reason for such dismissive opinion, however it is clear that he and Buffett believe investing is too glamorized by Wall Street and the media and if one were to "look behind the curtain" he/she would see investing is too often sold as a form of gambling rather than what these gentlemen do believe, that investing is placing one's assets in a slightly more profitable place than a US Treasury bond and, so, the investment should be nearly as secured as it would be in such a bond.
Ironically, if there is any lesson to learn it is that one should not expect to get rich from investing - unless you can buy an insurance company and cleverly use its float to invest in other companies to increase profit and, thereby, use massive amount of insurance funds rather than just your meager personal assets to increase your own wealth.
In the end, the book is pleasant fluff with no educational merit. So, if you find reading about Buffett, Munger, or BH to be "entertaining", you should read it. Otherwise, give it a pass. I wish I had.
However, if you merely admire these gentlemen's competence and, so, actually expect to learn something material from a book which boldly states that it will teach you such, you will be very disappointed.
The authors apparently have attended the Berkshire Hathaway shareholders meetings for the past 30 or so years and have written a gossipy summary at the end of each year for their friends and associates.
Apparently realizing that Buffett and Berkshire are not "branded" and, so, a book about them is highly salable, they have decided to profit from their decades-old summaries by binding them together and implying there are "lessons" to be learnt.
There are not.
Unless, you really find something enlightening in an annual update on the insurance premium float held by BH or want to hear repetitively how much Buffett admires Ajit Jain's ability to increase that float amount when Buffett felt there was no other insurance avenues to gain such increases.
You will "learn" that Buffett and Munger have little use for most of Wall Street's practices and financial theory. However, you will not particularly learn much more since all the authors do is state these gentlemen's position and, thereafter, report a "sassy" zinger by Munger or a "playful quip" by Buffett. I read this book to learn financial knowledge, not to learn that Munger is a bit of a jerk and Buffett is not as funny as he seems to think he is.
Even when financial theory is discussed, it is only to have Munger state it is "stupid" or, for variety, "dumb".
Portfolio theory is stupid, derivatives are stupid, executive compensation practices are stupid.
On the other hand, Berkshire Hathaway's practices are the "best".
Of course, the analogy is often false. BH is a conglomerate, yet Munger keeps treating it as if it were a simple corporation which happened to provide insurance coverage, along with Coca Cola, chocolate, railroad services, etc.
It is not. It is a conglomerate which owns several other corporations. So, stating that BH's policy of letting the CEOs of these corporations control the business and, otherwise, basing their salary on their corporation's profit is not particularly actionable in a regular corporation, where you cannot let a division operate independently nor allow an executive at a naturally profitable division make more salary than an executive who operates a less profitable but perhaps more integral and vital division.
Yet, Munger has no problem acting as if a conglomerate like BH is comparable to the typical corporation where salaries are not based upon the corporation's profit margin.
Same goes for portfolio theory. Buffett and Munger have gotten rich from buying a few companies. Good for them. However, to assume everyone has the knowledge and capacity to select three or four stocks which will steadily rise in profit is, let me say it, stupid given the obvious fact that Buffett is famous for being able to do what no else can do, pick such stocks. Yet, repeatedly we read Munger stating portfolio theory is stupid because a person can just pick three "solid" stocks and he/she won't have to worry about risk and, so, need not diversify his/her portfolio to reduce such risk.
As to Buffett, a "cute" story is told about how he knew an owner of an excellent business who would implode once or twice and state he intended to sell his business. After a week of ranting, the owner would calm down and admit he had a good business which he loved. Buffett got close to a friend of the owner and told him to let Buffett know the next time the owner imploded. When the next implosion occurred, Buffett immediately called up the owner to ask how things were going and, as expected, the owner ranted about how he had enough and would sell his business to the next willing buyer. Buffett promptly states he is that willing buyer and the owner in his rage says its a deal. A week later the owner calls back and heavily implies he now regrets the deal, hoping Buffett will rescind. Buffett, however, plays dumb and so the owner has to go through with the sale.
Despite the author's portrayal of this as a "cute" story, it is not. It is a ruthless use of another's known vulnerability for one's own gain. It is not a gentlemanly act. It is, however, an acceptable business act.
The authors apparently realize this and, so, try to imply the story as a morality tale, the owner was "emotional" and Buffett was "even-keeled" and, so, the owner caused his own loss by being "emotional". Morale: don't get emotional when you are investing.
However, the only "investor" in this story is Buffett, who has created nothing but simply cleverly bought other persons' realized visions. The owner actually built the business and, not surprisingly, he was more invested emotionally in it than would be an investor, like Buffett, who just sees the business as a money maker and so does not care a lick for the actual product, history, etc which were built with the blood and sweat of the owner. I accept Buffett's machination, however, my sympathy is entirely with the owner and Buffett's indifference is not a moral victory in my book.
(Nota bene: I am discussing how Buffett and Munger come across in the book due to the author's failure to provide their reasoning. Please note that I fully expect that Buffett and Munger could easily explain the above depictions by the author as limited and an inaccurate summary since the author are more interested in showing Buffett and Munger as "personalities" than in actually explaining, let alone debating, the nuances of their investment philosophies)
The book is an okay read. Pleasantly gossipy and Buffett's and Munger's policy of keeping it simple comes through, which is nice to see. Munger may overuse "stupid" and, otherwise, fail to expand on his reason for such dismissive opinion, however it is clear that he and Buffett believe investing is too glamorized by Wall Street and the media and if one were to "look behind the curtain" he/she would see investing is too often sold as a form of gambling rather than what these gentlemen do believe, that investing is placing one's assets in a slightly more profitable place than a US Treasury bond and, so, the investment should be nearly as secured as it would be in such a bond.
Ironically, if there is any lesson to learn it is that one should not expect to get rich from investing - unless you can buy an insurance company and cleverly use its float to invest in other companies to increase profit and, thereby, use massive amount of insurance funds rather than just your meager personal assets to increase your own wealth.
In the end, the book is pleasant fluff with no educational merit. So, if you find reading about Buffett, Munger, or BH to be "entertaining", you should read it. Otherwise, give it a pass. I wish I had.
The book encapsulates the incredible journey of Warren Buffett and Charlier Munger using the Berkshire Hathaway annual shareholder meetings as a source of wisdom about their investment philosophy. The miracle of Berkshire Hathaway has been analysed numerous times - by way of an autobiography of Buffett, analysis of speeches, writings, investments, etc. to garner the secret sauce of the success - but using annual meetings and the proceedings is a rare but unique method. One common denominator is the simplicity of investment methods (Ben Graham's 1934 & 1949 books remains their Bible) and consistency. Buffett/Munger methods are timeless - the emphasis on large margin of safety (gap between value and price - focussing on businesses that have predictable cash flows like food, daily use items with high brand recall), use of intrinsic value as a decision point (not daily vagaries of stock price movements or use of hyper technical and fancy methods involving graphs, buzzwords, consultant driven acronyms), avoidance of "two super-contagious diseases, fear and greed", ignoring macroeconomic factors (rather solely focussing on value of the company), and lastly, able and trustworthy management (paper record of actual performance not interviews). On personal habits, their willingness and eagerness to learn, relearn and continuously updating their knowledge by reading, networking, and understanding are remarkable. Not that all decisions have been right - Salomon Brothers surely was, but on account of impeccable integrity and stature of Buffet, Hathaway could wriggle out without much ado. The book has lot of witty one liners - that convey the essence of what is Berkshire like "The danger of relying on historical statistics or formulas is that you end up betting on a 14-year-old horse with a great record but is now ready for the glue factory", or, "Where a large corporation might go bonkers and develop an entire floor of currency traders—probably hedging the company on currencies for which it had no exposure—Berkshire seeks to keep things simple, “so the chairman can sit and read annual reports all day”, or It is crazy to give up something you know for something you do not”, or "Unlike a crowded theater where you can just leave your seat and run for the exit, in finance, you must find someone to take your seat", and "Buffett opined that envy is the least fun of the seven deadly sins because it leaves you feeling awful." The book is an essential read as it chronicles how brick by brick Berkshire was built, and the timeless concepts and thinking that went behind it.
A real life guide on how to make sensible investment decisions and how to create real high powered growth by sensible and honest management through choice of the right people to grow the business.
A nice summary written from a different angle.
Great and easy to read book
Okay so this book must be rated a 4 star for the obvious reason: It brings you to the high table with Buffet-Munger combined.
I am only taking baby steps towards investing and getting access to golden words of wisdom from the Masters makes a lot of diffetence. Even if you can get that one sentence which can influence your thinking, a book is a buy. And trust me, this book has more that its share of brilliance.
This book is exactly what it claims to be- classnotes from the highlord's sessions.
I am only taking baby steps towards investing and getting access to golden words of wisdom from the Masters makes a lot of diffetence. Even if you can get that one sentence which can influence your thinking, a book is a buy. And trust me, this book has more that its share of brilliance.
This book is exactly what it claims to be- classnotes from the highlord's sessions.
Very good
Firstly, if you intend on reading this book, I believe it is necessary to have some background on Finance, Economics or being a somewhat experienced investor. This way you can enjoy much more, as the book is not focused on people that don’t have any knowledge of how the stock market works.
Have said this, and writing as a newcomer to the world of investments and, more precise, to the world of stock market, shares, bonds etc., the book shows how the minds of Warren Buffet and Charlie Munger works and why they are so good at what they do at Berkshire.
There are several precious tips on what to do with money and how to invest it on the stock market to see it grow. Also, we are told about the power of compounded interests, as the money must be invested for a long time (and, by doing it, you have interest over interests, and the capital grows in a much faster pace). Finally, and one of the most valuable lessons: be fearful when others are greedy, and be greedy when others be fearful. To implement this idea, Buffet and Munger highlight the importance of having some capital on the treasury or other bonds, where they can withdraw it and use to buy stocks and companies when their prices are low/ suffer on a crisis. They insist on the idea of buying shares when they are cheap, not expensive.
A must-read piece for anyone who plans to invest.
Have said this, and writing as a newcomer to the world of investments and, more precise, to the world of stock market, shares, bonds etc., the book shows how the minds of Warren Buffet and Charlie Munger works and why they are so good at what they do at Berkshire.
There are several precious tips on what to do with money and how to invest it on the stock market to see it grow. Also, we are told about the power of compounded interests, as the money must be invested for a long time (and, by doing it, you have interest over interests, and the capital grows in a much faster pace). Finally, and one of the most valuable lessons: be fearful when others are greedy, and be greedy when others be fearful. To implement this idea, Buffet and Munger highlight the importance of having some capital on the treasury or other bonds, where they can withdraw it and use to buy stocks and companies when their prices are low/ suffer on a crisis. They insist on the idea of buying shares when they are cheap, not expensive.
A must-read piece for anyone who plans to invest.
Coming from someone who had a basic understanding of the finance world but thought it was too complicated, I always thought I would try to read up on Warren Buffet, the one who has been quoted a lot of times as the single greatest investor of the century. And as luck would have it, this book came up first on the search and was promptly picked up. It was good. No complaints at all.
O livro da visão dos acontecimentos nas reuniões da BH e consequentemente dos eventos ocorridos na empresa que levaram uma "malharia" falida a se tornar uma das maiores companhias do mundo.
Obrigatório para investidores, fãs do Charlie, Buffett e da própria Berkshire
Obrigatório para investidores, fãs do Charlie, Buffett e da própria Berkshire
This book is an excellent compilation of all BH Annual meetings. Though this material is recorded in various places, in newspapers etc, it is extremely scattershot. Having them in a book really saves times and chronologically streamlines the evolution of Value Investing methodology of Warren Buffet and Charlie Munger. Many times worth the money!!
I have read a few books on investing and I was recommended to read this book as it is a collection of all Berkshire Hathaway meetings. Reading this book feels like you are actually attending the Annual meetings in Omaha. Great work by the authors by compiling all that comes out from the brilliant minds of Warren Buffet and Charlie Munger for 30 years running. It gives an insight on how to invest and what to avoid in the world of investing. Highly recommended for simplification of what seems a difficult world of investing.
The book provides excellent insights from the masters of investing in a very digestible form. For people who have not been fortunate enough to attend Berkshire annual shareholder meetings, this book provides key insights from these dozens of annual meetings. The book is very readable and compelling. I have already recommended the book to my friends who are passionate about investing.
University of Berkshire Hathaway is a recommended read for all those who want to know what drove Buffet and Munger to take the decisions they took since the start of their association with Berkshire Hathaway. It gives an insider view of Berkshire Hathaway's AGM with authors' own commentary.
However, to get the most out of this book I would recommend readers to have The Intelligent Investor, edited by Jason Zweig, so that they can get context of the decisions made by Buffet and Munger and how they have evolved teachings of Benjamin Graham with changes in the economy.
However, to get the most out of this book I would recommend readers to have The Intelligent Investor, edited by Jason Zweig, so that they can get context of the decisions made by Buffet and Munger and how they have evolved teachings of Benjamin Graham with changes in the economy.
I've long been an admirer of Warren Buffet. Years ago I was in a business training seminar and the presenter suggested we choose a business person we admire and copy them. I chose Warren Buffet and learned all I could about him. It's refreshing to revisit those thoughts and feelings I had then as I was taken through the 30 years of the Annual Shareholders Meetings as viewed through the eyes of two very talented and successful investors. The wisdom and wit of both Warren Buffet and Charlie Munger are showcased here and if it were only for that, this book is highly recommended. But for me the highlights of this book is the reaffirmation of Buffet's philosophy for living.
Living rich isn't about 'having' - one only needs so much. "After you have enough for daily life, all that matters is your health and those you love. Likewise in work, what really matters is that you enjoy it and the people with which you work." And he likened caring for our bodies to caring for one's car: "... we each receive one body and one mind for a lifetime. You cannot repair them at age 60. You must maintain them. One’s greatest asset is one’s self. Develop your mind and good health habits when you are young, and it will enhance your life. If not, you may have a wreck at age 70."
And what about developing oneself? "Buffett suggested it is helpful to list the qualities you would want in a friend and then seek to instill those qualities in yourself. He emphasized that it’s a matter of choice, not DNA. Anyone can develop good character and quality lifetime habits." And finally, I was so impressed by this comment: "Buffett claimed that you are successful if the people you hope love you, do love you. He and Munger agreed that making money is no replacement for friendship and happiness."
Similarly, I am impressed by their generosity in sharing what made Berkshire Hathaway the success it is, and how important it is in a nation to cultivate the principle of fairness.
The book is full of observations by the authors; lots of resources pointing to an understanding of the investment sector and how to develop an investor's mind. This is one book I'll be referring to many times in the future. And it's one I highly recommend whatever level of investor you are, or if you are 'only' interested in understanding the man behind this amazing company.
Living rich isn't about 'having' - one only needs so much. "After you have enough for daily life, all that matters is your health and those you love. Likewise in work, what really matters is that you enjoy it and the people with which you work." And he likened caring for our bodies to caring for one's car: "... we each receive one body and one mind for a lifetime. You cannot repair them at age 60. You must maintain them. One’s greatest asset is one’s self. Develop your mind and good health habits when you are young, and it will enhance your life. If not, you may have a wreck at age 70."
And what about developing oneself? "Buffett suggested it is helpful to list the qualities you would want in a friend and then seek to instill those qualities in yourself. He emphasized that it’s a matter of choice, not DNA. Anyone can develop good character and quality lifetime habits." And finally, I was so impressed by this comment: "Buffett claimed that you are successful if the people you hope love you, do love you. He and Munger agreed that making money is no replacement for friendship and happiness."
Similarly, I am impressed by their generosity in sharing what made Berkshire Hathaway the success it is, and how important it is in a nation to cultivate the principle of fairness.
The book is full of observations by the authors; lots of resources pointing to an understanding of the investment sector and how to develop an investor's mind. This is one book I'll be referring to many times in the future. And it's one I highly recommend whatever level of investor you are, or if you are 'only' interested in understanding the man behind this amazing company.
Thank you for that book (and e-book)!
What a wonderful ride through so many years of BRK annual meetings. The authors pinpointed the most interesting bits and pieces. While reading year after year of Buffett's and Munger's pearls of wisdom you realize, what massive organisation is growing there, what happened in all those years!
Highly entertaining, highly informative, highly inspirational!
Thank you for many great hours of reading/listening (audible).
What a wonderful ride through so many years of BRK annual meetings. The authors pinpointed the most interesting bits and pieces. While reading year after year of Buffett's and Munger's pearls of wisdom you realize, what massive organisation is growing there, what happened in all those years!
Highly entertaining, highly informative, highly inspirational!
Thank you for many great hours of reading/listening (audible).
This book presents a great summary of the Berkshire annual shareholder meetings and is a must read for anyone who is interested to understand Berkshire better. This book is also a good recap of the annual letters written buy Buffett and will serve as a great guide for anyone trying to learn the approach of value investing.