scorecardresearchBerkshire Hathaway annual meeting: 7 investment lessons from Warren Buffett

Berkshire Hathaway annual meeting: 7 investment lessons from Warren Buffett and Charlie Munger

Updated: 08 May 2023, 04:17 PM IST

Berkshire Hathaway’s annual shareholders’ meeting is much sought after as both new-age and veteran investors look forward to Buffett’s and Munger’s views on the stock market and their views on investing.

Warren Buffett shared his key takeaways during this year's annual shareholders' meet.

Warren Buffett shared his key takeaways during this year's annual shareholders' meet.

The much-awaited Annual Shareholders Meeting of Berkshire Hathaway was presided over on May 06, 2023 by the Chairman and Chief Executive Officer of the company, Warren Buffett and other important officials. In the session that lasted for another five hours, Buffett shared key investment lessons for his shareholders and followers to learn from. These include:

Index fund investing is a great way to earn returns

Warren Buffett sticks to his earlier investment philosophy of relying more on index funds to create wealth in the long run. Buffett during the annual general meeting said, “Index funds are a great investment tool because the costs are low.” His love of index funds is evidenced by the fact that he directed his trustees to invest 90 per cent of his estate in an S&P 500 index fund for the benefit of his wife after his death. He always recommends that consumers invest in S&P low-cost index funds.

Learn from other’s mistakes

Everyone makes mistakes once in a while. In fact, making mistakes is a great way to learn from them. However, this does not give anyone leeway to make stupid mistakes. Buffett said, “While it’s good to learn from your mistakes, it's better to learn from other people's mistakes.” During the conference, he also warned attendees not to make mistakes that might force them to leave the game. He also stated that people should spend somewhat less than they earn in order to avoid falling into a debt spiral.

Be rationale while investing

Warren Buffett reiterated his past investment motto, saying that it is critical to be as sensible as possible. He narrated, “We may make bad investment decisions plenty of times. The key is to try to stay as rational as possible.”

View on real-estate investments

Shareholders were curious to know his views on the commercial real estate market. When asked what he thought about the future of this market, Buffett shared, “Buildings generally don’t go away, but most people like to buy with non-recourse in real estate.” He said that the value of the real estate market is mostly determined by how much money can be borrowed without repercussion, and the implications are beginning to be felt.

Why prefer value investing?

According to Warren Buffet, opportunities in value investment arise when others are busy doing “dumb things”. In contrast to his beliefs, Charlie Munger stated that value investors should be content with earning less due to increased competition.

Rely on old-fashioned intelligence

Charlie Munger, Vice Chairman, Berkshire Hathaway, has recently emphasized the significance of old-fashioned intellect. He also urged on the United States to engage in extensive free trade with China. When asked how his company operates, he stated that it mostly focuses on capital allocation. Munger added, “We want companies with good management in place to run daily operations.”

Hold and sell strategy works

Charlie Munger explains why he is never in a hurry to sell any particular stock. Charlie Munger, speaking about his company's strategy, stated that Berkshire Hathaway solely uses straightforward estate planning to “hold the goddamn stock”. He also stated that the best opportunities emerge when other people make mistakes. Aside from that, he warned that value investing may become more difficult due to increased market competition.

Warren Buffett is a name to reckon with in the investing world. His views on investing strategy, though old-fashioned and unconventional, have stood the test of time. When most other fund managers resorted to new investing strategies, his belief in “index fund investing”, “value investing” and “holding the stock” has helped him earn returns even in a tumultuous market and in the face of strict competition.


Warren Buffett says that investors should assess company's competitive advantage before investing into it.
First Published: 08 May 2023, 04:15 PM IST