By Mike Gallagher, Portfolio Manager
Every year, Berkshire Hathaway’s shareholders meeting is held in Omaha, Nebraska, which is considered the Mecca of the investing world. Most people think New York City or London holds this title, but Omaha has one thing they don’t…Warren Buffett. Each year, nearly 40,000 people travel from all over the globe to listen to, and hopefully gain insight from “Uncle Warren”—the chairman of Berkshire Hathaway.
The first investing book I ever read (based on Buffett’s glowing review) was The Intelligent Investor by Benjamin Graham, Warren’s mentor. Graham was also the forefather of what would become the Chartered Financial Analyst (CFA) designation, the professional certification for financial analysts. For the past 15 years, I’ve kept tabs on Warren and religiously read his annual letter to shareholders. It is with this backdrop I finally crossed the pilgrimage to Omaha off my bucket list.
Warren (88) was joined on stage with his long-time business partner, Charles Munger (95). Warren and Charlie, known for his humorous quips, took six hours of questions from shareholders with topics ranging from investing successes and mistakes to advice for people just starting their careers. On the latter, Charlie offered the following, “I think the right strategy, for the great mass of humanity, is to specialize. Nobody wants to go to a doctor that’s half-proctologist and half-dentist.”
On display at the meeting was the second-to-none investing track record of Warren and Charlie, as evidenced by the price of Berkshire Hathaway’s stock. In 1980 it traded around $300 per share and today it trades around $300,000 per share. This growth helped make Warren the third richest person in the world. (The second richest person, Bill Gates, was also in attendance). It’s no wonder people look to him for insight!
Warren shares insight through his investment philosophy rather than what investments they may be buying or selling (they keep that close to the vest) or an economic forecast (they don’t forecast). It may not surprise you to find our investment philosophy at TPG and Warren’s align in many ways.
Below are some Buffett quotes about investing we think are good, timely reminders, especially in the current environment:
- “In the 54 years [Charlie Munger and I] have worked together, we have never forgone an attractive purchase because of the macro or political environment or the views of other people. In fact, these subjects never come up when we make decisions.”
- “In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts: the Depression, a dozen or so recessions and financial panics, oil shocks, a flu epidemic, and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.”
- “American business—and consequently a basket of stocks— is virtually certain to be worth far more in the years ahead.”
- “If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes.”
- “We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”
- “Success in investing doesn’t correlate with IQ … what you need is the temperament to control the urges that get other people into trouble.”
Here’s some additional life wisdom from the “Oracle of Omaha”:
- “If you’re not happy with $50,000 in the bank, you’re not going to be happy with $50,000,000 either. There is no correlation between money and happiness after a certain point.”
- “Someone’s sitting in the shade today because someone planted a tree a long time ago.”
- “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”
- “I believe in giving my kids enough so they can do anything, but not so much that they can do nothing.”
- “If you’re in the luckiest 1% of humanity, you owe it to the rest of humanity to think about the other 99%.”
- “Basically, when you get to my age, you’ll really measure your success in life by how many of the people you want to have love you actually do love you.”
We wish you a wonderful and safe summer! Please don’t hesitate to reach out with any questions or to schedule an investment review.
Mike Gallagher and the TPG Investment Committee