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."
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.
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.
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.
Obrigatório para investidores, fãs do Charlie, Buffett e da própria Berkshire
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.
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.
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).