I managed to attend another Berkshire Hathaway annual meeting this month. I'm still not sure how many of these I've been at over the years, but I have a Warren Buffett-signed program from 2003 hanging on my office wall, so it's been more than 15 years now.
A general observation: I've never seen as many people at this meeting. Attendance had seemingly reached a peak once the meeting began to be live-streamed a couple of years ago. However, this year there were more folks than ever waiting to get inside the arena at 7a.m., and more than ever in the overflow rooms. I had my worst arena seat in years (although not bad) and I was a single. But I got a great seat after lunch, and that's when the best Q & A happened anyway.
Some other observations:
On Buffett and Charlie Munger's active oversight of the organization
Buffett joked that he'd been semi-retired for decades. He said, "I think, actually, semi-retired probably catches me at my most active point." Charlie Munger then adds, "Warren is very good at doing nothing."
On Berky's huge investment in, and impression of, Apple
Buffett liked that Apple is spending a lot of money buying back shares. That means Berky's stake will grow on its own. Apple is similar to Berky in that they both have over $100 billion in cash to invest, and it isn't easy to find companies to acquire that are large enough to move the needle.
On cryptocurrency
Buffett and Munger couldn't say enough bad things about it. "Cryptocurrencies will come to bad endings," said Buffett. He mentioned how it's similar to gold as in that it's not a productive asset, so price was dependent on people who want it, not actual value. Munger was more blunt, with what I though was the best line of the day: "(It's like) someone else is trading turds and you decide you can't be left out."
On Amazon and Google (Alphabet)
Buffett and Munger both said they admired those companies, although Munger said he had been to the Google campus and thought it looked like a kindergarten. They wished they'd have invested in them, but they took their lack of foresight in stride, with Buffet saying, "There is not a penalty in investing if you don't swing at a ball in the strike zone as long as you swing at something eventually."
Sunday, May 20, 2018
Friday, May 4, 2018
Old Business / New Business
I’ve taken the last month off of blogging because I’ve been a little busy with something else. Over the past month I've started my own financial planning firm.
This is something I’ve wanted to do for a while, but I didn't until now thanks to a need for medical insurance. In this case, Necessity was truly the Mother of Invention. (That's a long story, and maybe one good enough for a separate blog entry another time.)
Thanks to a lot of planning, I only had about 10 different things that needed to be done in the last month, down from a list of more than 20 when I began. While I probably had a few more things to do than other start-up businesses thanks to state and federal securities regulations, I have new respect for anyone who starts their own organization.
In my case, I'd compare starting your own business as similar to building a new house rather than moving into a nice existing house. It doesn’t take anywhere near as much time to buy an existing home, and frankly, you get more bang for your buck with fewer problems. The house has settled, the landscaping is done, the window treatments are in place, etc. It’s just a much simpler process.
But that existing house isn’t going to be exactly what you want. Maybe it isn’t quite in the right location, or maybe the layout isn’t exactly the best, or maybe it could use new appliances. In the end, if you really want to customize your lifestyle, you have build your own house, and that comes with a lot of extra time and expense and contracting headaches. For all that work, however, you’re going to have things the way you want them, or at least very, very close to it.
When I joined another financial planning firm in the past, it was analogous to moving into an existing home. The branding was completed, the accounting was set up, the compliance work was done, and so forth. It could have used a few updates (people), but it was really only a matter of moving in the furniture in getting started.
Starting my own firm, though, I had to build or re-build all of those things from scratch, and it takes a lot of time and effort. I fully expect it will be worth it.
In the future, I’ll probably write more specifically about a few of the decisions I made -- some that worked, and some that now only seemed like a good idea at the time.
This is something I’ve wanted to do for a while, but I didn't until now thanks to a need for medical insurance. In this case, Necessity was truly the Mother of Invention. (That's a long story, and maybe one good enough for a separate blog entry another time.)
Thanks to a lot of planning, I only had about 10 different things that needed to be done in the last month, down from a list of more than 20 when I began. While I probably had a few more things to do than other start-up businesses thanks to state and federal securities regulations, I have new respect for anyone who starts their own organization.
In my case, I'd compare starting your own business as similar to building a new house rather than moving into a nice existing house. It doesn’t take anywhere near as much time to buy an existing home, and frankly, you get more bang for your buck with fewer problems. The house has settled, the landscaping is done, the window treatments are in place, etc. It’s just a much simpler process.
But that existing house isn’t going to be exactly what you want. Maybe it isn’t quite in the right location, or maybe the layout isn’t exactly the best, or maybe it could use new appliances. In the end, if you really want to customize your lifestyle, you have build your own house, and that comes with a lot of extra time and expense and contracting headaches. For all that work, however, you’re going to have things the way you want them, or at least very, very close to it.
When I joined another financial planning firm in the past, it was analogous to moving into an existing home. The branding was completed, the accounting was set up, the compliance work was done, and so forth. It could have used a few updates (people), but it was really only a matter of moving in the furniture in getting started.
Starting my own firm, though, I had to build or re-build all of those things from scratch, and it takes a lot of time and effort. I fully expect it will be worth it.
In the future, I’ll probably write more specifically about a few of the decisions I made -- some that worked, and some that now only seemed like a good idea at the time.
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