The longest, most boring – unproductive? – Warren Buffett show

May 06, 2019 12:26
Berkshire Hathaway chairman Warren Buffett and vice chairman Charles Munger are mobbed by media representatives and fans before the company's annual shareholder meeting in Omaha, Nebraska, on Saturday. Photo: Reuters

It's probably the longest talk show on earth – and hosted by the oldest men to lead such an affair.  

I am, of course, talking about Berkshire Hathaway's annual shareholders' meeting in Omaha, Nebraska, over the weekend. 

It has always been a well-attended gathering, despite the fact that it charges at least HK$2.5 million per head. (That's the price of one Berkshire A share; you have to be a shareholder in order to gain entrance.)

The 50,000 people in attendance, including the overseas audience like myself who stayed up late to watch it live, plodded on through the convention in the hope of acquiring some useful tips from these two fountains of investment wisdom.

But, sorry to say, the 89-year-old chairman, billionaire and philanthropist Warren Buffett, and his trusted sidekick, the 95-year-old Charles Munger, seemed to offer more questions than answers for their loyal fans.

We don't expect senior citizens to be absolutely entertaining throughout the six-hour show, but I do admire their energy and dedication as they fielded questions from people as young as a nine-year-old girl and as old as a 90-year-old man who wanted to know how to make more money. I fell asleep in the middle of the night and found they were still talking when I woke up.

Unfortunately, many of the shareholders probably ended up disappointed by what they heard, although the company reported a huge quarterly profit.

For one, Berkshire is now investing in the e-commerce giant – at its peak.

With an accumulated cash pile of US114 billion, the company probably saw things differently than simple people like us.

But my question is, why didn't it consider investing in Jeff Bezos' gold mine over the past 20 years when its share price was as low as a few dollars in 2000, and below US$300 five years ago – or  even when it was below US$1,400 just six months ago?

Berkshire's current stake in Amazon was acquired when the share price was almost US$2,000.

Dear old Charlie Munger had to admit the painful truth: it was a screw-up.

"I don't mind not having caught Amazon early," Munger said. "The guy [Jeff Bezos] is kind of a miracle worker, it's very peculiar ... But I feel like a horse's ass for not identifying Google earlier ... We screwed up."

Well, as they say, better late than never.

Berkshire jumped in for 5 percent of Apple two years ago and almost got killed amid the Sino-American trade war last year, but the stock ended up getting a near 20 percent return over the last 12 months.

And to be exact, it was not the idea of Buffett and Munger, but rather their money managers Todd Combs and Ted Weschler.

Still, one does not need to stay up late and listen to precious advice from the investment gurus to add Apple or Amazon to their portfolio.

What ever happened to Berkshire's vaunted principle of value investing?

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EJ Insight writer