Every year in May Warren Buffett, who is an extraordinary investor, invites shareholders of his public company, Berkshire Hathaway, to a Q&A session, where he and his business partner Charlie Munger answer questions about investing, market trends and life in general.
It’s a financial education in and off itself and on Youtube you can watch the full Berkshire Hathaway Annual Meeting for Shareholders 2023 Q&A.
As beginner investors it can be a huge tasks to watch the 5-hour Q&A sessions so here is my main take aways and investing insights, that I believe that you as a new investor can take from the meeting.
1. Think Long Term
Buffett said that the world today is primarily short-term focused. But if you can change your mindset and think long-term when it comes to investing decisions you have a unique edge over everyone else.
Most people today are focused on instant gratification. Being smack centre of short term thinking myself, it can be difficult to step outside this mindset.
As a short term thinker you might experience buying that café latte even though you know that if you save the money, you could afford to take a vacation or checking instagram even though you need to finish that report that could give you a promotion long-term.
From an investing perspective it could be to never start investing in stocks and missing out on opportunities; or jumping in and out of the market and paying too much in fees and taxes, that you wouldn’t have had to pay if you had stayed in the stock for a longer time period.
Long-term investing is about staying with your position for 5-10-20 years. To be a long-term thinker, practice delayed gratification and do you best to save money for investing.
2. Zero Emotion-Decisions
One of the questions at the meeting was: “Mr. Buffett and Mr. Munger, you’ve found the sweet spot between being conservative and aggressive investors. Do you ever make bad investments because of emotions?”
Buffett could not recall one time that he made an emotional business decision and Munger backed him up.
I will be the first person to admit that I have made very emotional investing decisions in the past. From being overly excited, to sad or fearful of not understanding what went on in the stock market etc. etc. Which is why I’m so relieved that I’m investing using Buffett’s strategy now. In the beginning of this new investing strategy I was very emotional too, but as I get more experienced it’s possible for me to set the emotions to the side, review my case (the one I built using my checklist) and jump on the opportunity when it comes. It’s something that can be taught and practiced – if I can do it you can too.
One last important piece of advice from Buffett:
“You don’t want to be a No-Emotion-person in all your life, but you definitely want to be a No-Emotion-person in making an investments or business decision.”Warren Buffett
3) How People Behave As Consumers
Circle of Competence and Moat is about consumer behaviour. If the two words sounds strange – click on the links to dive into the concepts (they’re not complex to understand).
This topic was very interesting because we as investors can make it very difficult for ourselves and unintentionally create complexity in our investment strategies. But at the Berkshire Hathaway Annual Meeting 2023 Buffett highlighted the importance of looking at the consumer and be a life long learner of consumer behaviour.
It’s definitely something that I will focus more on – instead of getting too wrapped up in key performance indicators or SWOT analysis or anything like that. Instead focus on the end consumer and their behaviour.
An example that Buffett gave was with Apple. When people would rather sell their second car and take the bus than have to part with their iPhone, you know that the product is incredibly important in people’s lives.
Of the close to 50 questions asked at the Berkshire Hathaway Annual Investor Conference these were some of the most important pieces of advice that I want to share with someone who is just starting on their investment portfolio.