Learning from Warren Buffet Annual Share Holders Meet

 2^nd May 2021

Learning from Warren Buffet Annual Share Holders Meet

Dear Fellow Travelers,

Namaste! Let us go to Master today for learning from his Wisdom. He shares wholeheartedly and analytically. So, one can think and apply it in his life. Today I will deal with his sharing purely from the learning point of view. Those who have time can see the recording on YouTube. Those who do not have one can read this.

To whom do you BET when you invest?

He said, I don’t know what will happen to Market Tomorrow, Next Week, Next Month, or Next Year. According to him, it is next to impossible to predict the market. He is ready with – ANYTHING CAN HAPPEN in the market.

So, he is betting on Businesses he likes and understands and he is ultimately betting on the power of the USA to come out from any troubles.

Ultimately, all investors in any country are betting on their country when they invest in any business or company in that country.

We are betting on India when we are investing in our companies and businesses. As per our larger prediction – India will be a superpower by 2032. So, those who are betting on India will bless us for our call.

What should you do with our stocks if you have bought before the Pandemic started?

He said Market is Manic Depressive. He will offer his prices each day. At this price, you can sell your stake to him or you can buy his stake.

If you hold the shares – there is no compulsion to sell them as long as there is no fundamental change in the business post-pandemic and you trust the management to come out of the situations.

The price is not the indicator for the value of the business.

Right time to Invest: -

He said I don’t know what is your meaning of Right Time. Most investors consider the right investment decision only and only if the prices go up after their purchase. According to him, this is not his definition of the right time.

He is betting on the USA and businesses he likes and understands. He has faith that the company he has invested in will come out of this troubled period in the coming time. Ultimately, he is betting on the power of the USA.

If you are investing in India and if you have no faith deep down on India’s better future, you will not wait for the right time to SELL.

He says to be the partner in the businesses of the company you invest in and sleep.

His attitude on Selling shares?

He said when he buys – he buys as much as he can. He holds as long as he can. But when he changes his mind – he sells 100% of those shares. (he was answering on Selling Airline Stocks).

Normal people do not have this kind of clarity and honesty when they go to the market. They get carried away by GREED and FEAR and they buy little and sell little. Ultimately, they end up remaining Normal.

On Berkshire Underperformance: -

Last month only we wrote our post on Berkshire underperformance against the S&P index for the last 13 years. An investor also asked about this underperformance in the meeting

Buffett said – I don’t guarantee that it will outperform index sometime in near future. All I can say is that 99% of my money is invested in Berkshire. It means I will give 100% of my attention to the company but it doesn’t mean it will outperform the index.

Most normal investor lacks this kind of commitment towards their investments.

One more thing he added about the disadvantage of the size. He said – if he invests say USD 1 bln and it doubles immediately then they will make a post-tax profit of USD 791 million. USD 791 million is not worth when the company’s worth is about USD 350 Bln.

In many normal portfolios of Rs.10 lakhs or below, I have seen some petty investments of Rs.10000 to Rs. 20000. Now if this doubles, a normal person becomes happy that he has doubled his money. But the fact is earning Rs.10000 on a total portfolio of Rs.10 lakh is 1% only. So, learn to have a totality perspective on your portfolio.

What next?

Bet on India. Invest in companies you like or you understand and hold them for a longer period of time. Your generations will bless you.

Have a Great Learning.

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Live With Passion…Invest With Passion.

Hitesh Parikh.