The investment community returned to the entity during the Spring Festival Gala. Berkshire Hathaway, helmed by Warren Buffett, held its annual general meeting on April 30. According to “Wall Street News”, unlike the online shareholder meetings in the past two years, in addition to changing to a physical shareholder meeting this year, this year’s question and answer time has been extended to five and a half hours. Buffett and his old partner Charlie Munger personally Answers to many questions from shareholders and outsiders. “Business Times” compiled four key questions and answers for investors. Buffett and Menger talked about investment, Bitcoin, and advice to young people.
Q: If you had only one stock to choose to fight inflation, what would you choose?
Buffett:The best thing you can do is be exceptionally good at something. With or without financial benefit, people will give you something they produce in exchange for something you can provide (skills),The best investment is to invest in yourself. Do what you are good at and become a useful person to society, so you don’t have to worry about the devaluation of money due to high inflation.
Q: What do you think about Bitcoin and virtual currencies?
Buffett:I will not buy bitcoin. For example, if he were to sell a 1% stake in all farms in the United States with total assets of $25 billion, or a 1% stake in all condos in the United States, he would do it. And if someone wants to sell all bitcoin at $25, he won’t buy it. Farms and apartments are productive, they have output, they have rent, but Bitcoin has nothing. Bitcoin is not a productive asset, its value depends on how much the next buyer is willing to pay the seller. Now there are many people participating in this gambling game, but these funds change hands between different people, but the owners are different, some of them win and some lose.
Buffett also said why buy bitcoin, Berkshire can also produce its own currency. At the end of the day, there is no reason for the U.S. government to let another currency replace the dollar we now prefer.
Menger:In my life, I’ve tried to avoid something that’s stupid, evil, and makes me look worse than everyone else, and I think bitcoin accounts for all three. Call it stupid because its value will go to zero, and evil because it weakens the sound American financial system. Also, countries like the US look stupid compared to countries that have already banned Bitcoin.
When you have your own retirement account and your financial manager tells you to invest all your money in Bitcoin, say no.
Q: How was the purchase price determined for the acquisition of Alleghany Corp, a property and casualty reinsurance company?
Buffett:This is the price after Alleghany paid Goldman Sachs consulting fees on its own, and the previous purchase price was $850 per share.
He then recalled how, in the late 1970s, two investment banks were persuaded to seek a “fairness opinion” on the pricing of a takeover deal by paying each investment bank as little as $60,000. He said that was also the advice from Menger, which was to contact 10 investment banks and offer a very low, possibly insultingly low price. Make the same offer to all 10 banks, and if there is no agreement to provide a fair opinion, go back to the first bank and make a slightly more offer.
The analysis pointed out that Buffett has said a lot about showing off how he avoided the high consulting fees of investment banks. He likes to use super low prices to “shop around” to get a fair opinion from investment banks on acquisition pricing, which just shows that he has been pursuing “cheap bargains and discounts”, even if it’s just for acquisition-related consulting fees.
Asked what he thought of GAAP accounting standards, Buffett said that GAAP does not represent the actual value of a business, and it is difficult to develop accounting standards that apply to every company. GAAP as a practice is more like protecting auditors who would otherwise be sued.
Q: Do you have any advice for young people if they don’t know what to do yet?
Buffett:I want to be an investor, and it just so happens that my dad does this and loves it. I have enough books at home for me to read. It’s a coincidence. But I do think that finding what you really want to do and doing it for life, finding out what the world you want to live in, working for people you really respect, that’s what I did after graduation. I want Benjamin. The world of Graham, the father of modern security analysis. Then he did hire me, and then I worked for myself, I just wanted to work for myself.
Menger:My advice is to find what you’re really not good at and avoid them. Even if you’re smart, you can’t do things well that you’re not interested in.
Further reading
Buffett reiterates that Yongjian refutes retirement rumors
Criticizing Bitcoin as “rat poison”, the stock god was scolded
The god of stocks re-emerges!Warren Buffett among the top five richest people in the world