Buffett Q&A - II

| May 08, 2018
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This time he answers questions on CNBC post-shareholder meeting with additional details:

  • On the market: Stocks aren’t in a bubble now. Though said some private deal valuations are getting high and it’s harder to find bargains these days.
  • On the economy: Thinks the economy has picked up steam. “Yeah, I see a lot of numbers (from all BRK’s businesses). Business is generally pretty strong.” He cited railcar loadings, etc. Also notes you’ve seen some inflation.
  • On employment trends: Says he thinks it’s hard for unemployment to really go much lower as they have a ton of jobs available. “If a resource is scarce, prices go up.” Says certain job lines are much harder to fill these days (construction cited specifically).
  • On potential trade wars: “I don’t think we will have trade wars of significance.” He thinks there will be trade movements though. Says a trade war with China would be negative for all involved as they have a common interest.
  • On Amazon / Jeff Bezos: Still laments not buying it in the past, says what Bezos has done is incredible.
  • On moats: Cited iPhones, Costco, and Elmer’s glue as examples
  • On Apple: Says he doesn’t have to do anything because the company will buyback so many shares, so his ownership stake will go up naturally. He recently bought a ton more AAPL shares. Said he currently owns around 5% of the company but he’d like to own 100% of it. The consumer behavior was the main driver behind his ownership, as the device has woven itself into consumer’s daily lives and minds, and it’s a very useful product.
  • On owning banks: Has owned one in the past and loves the banking business but doesn’t want to now because of the bank holding co act. Says Wells Fargo (WFC) was slow to act in addressing bad actions but still has a fundamentally solid business.
  • On bitcoin: Compared it to the tulip bubble years ago. Says it’s a non-productive asset and just sits there.
  • On autonomous vehicles: ‘Net it will be bad for the car insurance industry if autonomous vehicles become the norm.’ It will be very hard to pick winners in 5 years.
  • On reading he recommends, Buffett again pointed to Chapter 8 of The Intelligent Investor. But this time around he also recommended Chapter 4 of Steven Pinker’s new book, Enlightenment Now.

Ends his interview by reiterating: “It’s very important in life to associate yourself with people that are better than you.”

 

Stay Tuned, Disciplined & Patient! {TJM}

The Investor & Character Equation (ICE) | S + R = O

 

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