On Saturday, the annual meeting of Berkshire Hathaway was held, where the head of the company, billionaire investor Warren Buffett, and his vice-chairman Charlie Manger, answered the shareholders’ questions within five hours.
Money, retail, healthcare – questions and answers have touched on a variety of topics. Here are six tips that can be learned from this meeting.
1. Act quickly
During the meeting Buffett remembered the scandal with counterfeit accounts of Wells Fargo, which erupted at the end of last year, and explained what went wrong. Buffett elaborated on this incident, pointing out the company’s three main mistakes: an ill-conceived incentive program, an irresponsible leader and an incorrect assessment of the consequences.
However, the biggest mistake Buffett called the actions of the former head of the company, John Stumpf – after learning about the situation in 2012, he reacted sluggishly and ineffectively.
“In such cases, you can not pull. The Director-General was to act immediately. But it did not happen, “says Buffett.
Let’s remind, Berkshire owns almost 10% of actions Wells Fargo.
2. Participate in several projects at once
Both Manger and Buffett admire the talent of the founder and leader of Amazon, the owner of the Washington Post publishing house and the founder of the Blue Origin aerospace company Jeff Bezos. Buffett stressed that Bezos not only created Amazon, but also participated in a number of parallel projects.
“He did brilliantly from the Washington Post. Bezos is not just a sponsor, but a real leader. ”
3. Do not overestimate the impact of the economy
Buffett is not too worried about the future of the US economy: “The whole world is under pressure, but we know that everything will be fine with America. Of course, the economy will have problems regardless of who is in charge of the country. And any president will be blamed for these problems. ” The economic downturn may be useful for some companies.
In the case of Berkshire Hathaway, for example, a recession in the economy leads to a reduction in the cost of investment, explained Buffett.
4. Go online
Buffett believes that large retailers will suffer with the transition of consumers from shopping centers to online shopping. In particular, because of this, he sold most of Wal-Mart’s shares earlier this year.
“The world is developing. It’s an endless process, but its speed is getting higher. ”
5. Do not try to keep up with the changing legislation
Buffett explained that the reduction in corporate and investment taxes planned by Trump could help companies such as Berkshire Hathaway ultimately reduce their tax obligations.
However, he does not believe that this should be decisive. On the question of investing in investment projects, provided that the government keeps its promise regarding tax incentives for investment, Buffett replied: “Let’s live – we’ll see.” It is important not to rush to rebuild the business because of possible changes in the legislation.
“Let’s do it, because the tax laws seem to change – it does not sound too reasonable.”
Manger and Buffett came to the conclusion that companies are unlikely to change their main investment policy due to “a small tax bump.”
6. Do not miss the opportunity
The prophet from Omaha told us what business decision he had to regret: he did not buy Google shares when there was such an opportunity. They had to be purchased before the IPO of the company. However, even after it was not too late – it was enough to meet with representatives of Google.
“I knew these guys. So I had a great chance to ask questions and find out more – but I missed it, “says Buffett. Manger agreed with this, calling the missed opportunity their “worst mistake in the technology sector.”