2009 Berkshire Hathaway Annual Meeting Notes
Thursday, July 2, 2009
Friday, June 19, 2009
Is Tiger Woods Loss Averse?
There has always been a bit of crossover between golf and poker. Whether it’s the legendary wagers placed on the course between poker giants Ivey, Brunson and the like or Dusty Schmidt’s million dollar golf and poker hybrid challenge, some similar threads undeniably run between the two games. That’s why a new study that focuses on risk aversion in professional golfers may be especially interesting to poker players.
The study in question, “Is Tiger Woods Loss Averse? Persistent Bias in the Face of Experience, Competition, and High Stakes”, is the work of University of Pennsylvania professors Devin G. Pope and Maurice E. Schweitzer. Pope and Schweitzer studied over 1.6 million putts...
Annals of Innovation: How David Beats Goliath (Malcolm Gladwell)
When Vivek Ranadivé decided to coach his daughter Anjali’s basketball team, he settled on two principles. The first was that he would never raise his voice. This was National Junior Basketball—the Little League of basketball. The team was made up mostly of twelve-year-olds, and twelve-year-olds, he knew from experience, did not respond well to shouting. He would conduct business on the basketball court, he decided, the same way he conducted business at his software firm. He would speak calmly and softly, and convince the girls of the wisdom of his approach with appeals to reason and common sense.
The second principle was more important. Ranadivé was puzzled by the way Americans played basketball. He is from Mumbai. He grew up with cricket and soccer. He would never forget the first time he saw a basketball game. He thought it was mindless. Team A would score and then immediately retreat to its own end of the court. Team B would inbound the ball and dribble it into Team A’s end, where Team A was patiently waiting. Then the process would reverse itself. A basketball court was ninety-four feet long. But most of the time a team defended only about twenty-four feet of that, conceding the other seventy feet. Occasionally, teams would play a full-court press—that is, they would contest their opponent’s attempt to advance the ball up the court. But they would do it for only a few minutes at a time. It was as if there were a kind of conspiracy in the basketball world about the way the game ought to be played, and Ranadivé thought that that conspiracy had the effect of widening the gap between good teams and weak teams. Good teams, after all, had players who were tall and could dribble and shoot well; they could crisply execute their carefully prepared plays in their opponent’s end. Why, then, did weak teams play in a way that made it easy for good teams to do the very things that made them so good?
Tuesday, June 16, 2009
1927-1933: Chart of Pompous Prognosticators
Berkshire Hathaway Letter to Shareholder, 1980:
We believe that short-term forecasts of stock or bond prices are useless. The forecasts may tell you a great deal about the forecaster; they tell you nothing about the future.
Friday, June 12, 2009
Wednesday, June 10, 2009
Thursday, May 21, 2009
Watching the money flow...
An obscure story...that might be a sign of where the world is going:
May 22, 2009 (China Knowledge) - Coca Cola Co Ltd, the U.S.-based soft drink giant, plans to invest US$2 billion in China in the next three years, which is more than the total investment Coca Cola poured into China in the past 30 years, sources reported.
Wednesday, May 20, 2009
South Korea: Party like it's 2004?
Then:
On Korean stocks
- Citicorp sent him a manual on Korean stocks
- Within 5 or 6 hours, and found 20 stocks selling at 2 or 3x earnings with strong balance sheets
- Korea rebuilt itself in a big way post 1998. Companies overbuilt their balance sheets
- Daehan Flour Mill – 15,000 won/year earning power. Stock was selling at 2 and change times earnings.
- Warren’s strategy was to buy the securities of 20 companies thereby spreading his risk. Some of the companies will be run by crooks.
- He doesn’t know any of the companies and he’s never been to Korea before. Information on these companies is available over the Internet in English.
- Also, the won has strengthened, which was an added bonus.
- The investment presented an opportunity to make 150% at which point the stocks would still only be selling at 7 or 8x
- It’s ridiculous to say there’s an efficient market.
- They put $100MM into this by doing very little work.
...Visited in 2007
Now:
The billionaire yesterday told reporters he had a book about South Korea’s publicly-traded companies that he studied for possible investments, and had bought a stock for his personal portfolio...Buffett said he would consider only investing in South Korean companies if he was starting an investment firm from scratch because of the extent of their undervaluation.
Buffett told reporters Sunday (local time) that the world's 13th largest economy will better weather the current global economic downturn than other major economies, and will resume an ascent as soon as the world economy returns to normal. He held a press conference after Berkshire's shareholders' meeting in Omaha, Nebraska.
``The Korean economy will cruise smoothly over the next few years. In particular, the manufacturing sector has achieved an outstanding performance over the years and will do the same in the future. Berkshire is now seriously considering purchasing shares of several Korean companies,'' he said.
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