Warren Buffett, CEO of Berkshire Hathaway, and his late Vice President Charlie Munger. JOHANNES EISELE/AFP via Getty Images
Warren Buffett honored his late companion Charlie Munger in his annual letter as the “architect” of Berkshire Hathaway.
The star investor also complained about punters who bought “hot stocks” and “lottery tickets”.
Buffett put forecasters in their place who warn of crashes and recessions. “Experts should always be ignored,†he explained.
This is a machine translation of an article from our US colleagues at Business Insider. It was automatically translated and checked by a real editor.
Warren Buffett paid tribute to Charlie Munger, named four of Berkshire Hathaway’s biggest bets and commented in his annual letter to shareholderswhich was published on Saturday, also expressed his frustration.
The US star investor and CEO of Berkshire Hathaway turned against stock market gamblers and speculators, rejected Wall Street forecasts and put supposed experts in their place.
Munger, Buffett’s business partner and Berkshire’s vice chairman for more than four decades, died in November at the age of 99. He shaped Berkshire into a global conglomerate and helped Buffett move from bargain hunting to buying companies at fair prices.
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In 1965, Munger is said to have given him some groundbreaking advice. “Warren, forget about ever buying a company like Berkshire again. But now that you control Berkshire, add to it wonderful companies that you buy at fair prices, and give up buying fair companies at wonderful prices.†Munger hadn’t even joined Buffett at the time.
“Although I was in charge of construction for a long time, Charlie should forever be recognized as an architect,” said Buffett in his letter, in which he describes himself as the “general contractor” who implemented his companion’s vision.
Based on the Letter from last year Buffett praised Berkshire’s large holdings in Coca-Cola and American Express, which he hasn’t touched in over two decades, as emblematic of his company’s long-term investing style.
Buffett also praised the US oil company Occidental Petroleum, in which he has built up a stake of almost 28 percent over the past two years. He welcomed the company’s support for U.S. energy independence and pioneering carbon capture.
Buffett also highlighted investments in five Japanese trading houses that he has built since July 2019. He praised their restraint in executive compensation, their discipline in paying dividends and their long-term, conservative management.
Berkshire too big to grow?
However, the stock market guru seems to have resigned himself to the fact that Berkshire has become so big that there are hardly any other options for the company to develop.
He explained that Berkshire had become so large – at the end of December the company had net assets of $561 billion, more than any other American company – that it was extremely difficult to… to make purchases large enough to significantly accelerate the company’s growth.
“There are only a handful of companies left in this country that have the ability to truly move Berkshire forward, and they have been chosen by us and others an infinite number of times,†he said, adding that there are also outside the There are practically no suitable companies in the USA.
“All in all, we have no chance of achieving a sensational performance,†he said.
Buffett also criticized speculators in his letter, noting that stock traders were “neither more emotionally stable nor better educated” than when he was a student. He also pointed out that the proliferation of stock trading apps has made daily buying and selling easier than ever.
Buffett: Markets “more like casinos than when I was a teenager.”
“The markets today are much more casino-like than they were when I was a teenager,†he said. “The casino now lives in many houses and attracts residents every day.“
With that in mind, Buffett said he thinks of Berkshire shareholders as long-term shareholders, rather than people who used their excess money to “buy lottery tickets or ‘hot stocks.'”
Buffett also dismissed the legions of experts who predict stock market crashes and recessions or give stock tips on television. “Experts should always be ignored,†he said, wondering why they would share their predictions if they were sure they would come true: “It would be like finding gold and then giving one to your neighbors Give a map showing the location where it was found.“
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