Podcast Summary
Berkshire Hathaway Annual Shareholders Meeting: A Value Investor's Event: The Berkshire Hathaway Annual Shareholders Meeting is a must-attend event for value investors, attracting 40,000 people in 2023 and featuring Warren Buffett's address on May 6th.
The Berkshire Hathaway Annual Shareholders Meeting is a highly anticipated event for value investors, with an estimated 40,000 people attending in 2023. This podcast was born at this very event back in 2014, and it's where the hosts and many listeners will be coming together again in May 2023 for four free events. The main event, however, is Warren Buffett's address to shareholders on May 6th. Unlike most company annual meetings, this one is a significant draw for tourists and commerce in Omaha, Nebraska, and has grown in popularity over the years due to Buffett's global recognition. If you're a value investor, this event is not to be missed.
A unique experience for investors to learn from Buffett and Munger: Thousands gather annually for Berkshire Hathaway's Q&A session, attracted by the unpredictability of questions and wisdom shared by Buffett and Munger, creating a dedicated and loyal community of investors.
The Berkshire Hathaway Annual Meeting is more than just a business event. It's a unique experience where investors, both new and seasoned, gather to learn from Warren Buffett and Charlie Munger. The day-long Q&A session, which attracts thousands of people, adds to the allure of the event. The unpredictability of the questions and the wisdom shared by Buffett and Munger keep attendees engaged and coming back year after year. The annual meeting also includes other events, such as shopping days and a movie, adding to the overall experience. The dedication and loyalty of attendees, some of whom have had their entire wealth tied up in Berkshire Hathaway shares for decades, speak to the significance of this event in the world of value investing.
Networking and learning opportunities at Berkshire Hathaway Annual Meeting: Attending Berkshire Hathaway Annual Meeting offers unique chances to network with value investors, learn from financial book authors, and explore Berkshire's businesses firsthand, enhancing value investing knowledge and connections.
Attending the Berkshire Hathaway Annual Meeting is not just about listening to Warren Buffett and Charlie Munger's insights during the Q&A session. It's also about networking with other value investors, learning from the authors of influential financial books, and exploring Berkshire's vast business empire firsthand. The event offers unique opportunities to connect with like-minded individuals, gain knowledge from industry experts, and immerse oneself in the value investing community. The networking events, such as the picnic at Nebraska Furniture Mart and the Markell brunch, are often highlighted as valuable experiences that extend beyond the formal meeting. Overall, the Berkshire Hathaway Annual Meeting is more than just an event; it's an experience that provides invaluable learning opportunities and fosters long-lasting connections within the value investing community.
Networking opportunities at Berkshire Hathaway Annual Meeting: Attendees travel far for valuable networking, forming long-lasting relationships and collaborations at various unofficial events.
That the Berkshire Hathaway Annual Meeting is not just an official event, but also a platform for various unofficial networking opportunities. These events range from meet and greets at bars to early morning gatherings for the TIP community. People from all over the world travel great distances to attend, demonstrating the strong desire to connect with like-minded individuals in the value investing community. The networking events are valuable because they require a significant investment of time and resources, making attendees serious about their interest in the subject matter. Many long-lasting business relationships and collaborations have been formed at these events. For instance, some hosts, like Robert and Trey, were first discovered at the TIP events before being hired. Overall, the Berkshire Hathaway Annual Meeting is more than just a business event; it's a unique opportunity for individuals to build a network and learn from each other.
CIP Team Organizes Four Industry Events in Omaha: The CIP team is hosting four industry events during the Berkshire Hathaway Annual Shareholders Meeting in Omaha, offering free drinks and appetizers at various downtown locations, with smaller, quieter events on Thursday and Sunday and busier ones on Friday and Saturday.
The CIP team has organized four events during their industry gathering in Omaha, Nebraska, spread over four days from Thursday to Sunday. The events will take place at various downtown locations, including the Blatt Beer and Table and Blue Sushi. The Thursday and Sunday events will be more intimate and quieter, while Friday and Saturday are expected to be busier due to a larger number of attendees flying in for the Berkshire Hathaway Annual Shareholders Meeting. The Thursday and Sunday events are ideal for those who prefer smaller, more focused networking opportunities. All events will be first come, first serve, and will offer free drinks and appetizers. If you're interested in attending, you can sign up for the We Study Markets newsletter on theinvestorspodcast.com/newsletters or simply Google We Study Markets.
Register for TIP events to communicate with attendees and access exclusive opportunities: Registering for TIP events grants access to a WhatsApp group chat, weekly Zoom calls, special podcast guests, and opportunities to build relationships with like-minded investors.
Attending the free events related to the TIP community requires registration to help the organizers plan accordingly. Elliott Bisnow, the host, emphasized the importance of registering for the events you plan to attend, which will also grant you access to a WhatsApp group chat for seamless communication with other attendees. Additionally, Bisnow shared his plan to arrive at the Berkshire Hathaway meeting around 6:50 am and invited those interested to meet up with him and the TIP audience there. The TIP Mastermind community, another initiative by Bisnow, offers value investors weekly live Zoom calls, access to special podcast guests, and opportunities to build lifelong relationships. Overall, these initiatives aim to provide a supportive network for investors to learn, connect, and grow together.
Exploring Yahoo Finance's Features for Investors and Berkshire Hathaway Annual Meeting Tips: Yahoo Finance is a popular platform for investors, providing access to investment accounts, analyst ratings, research, and customized charts. Early arrival is recommended for the Berkshire Hathaway Annual Meeting, and The Investor's Podcast offers events for fans to meet hosts and network.
Yahoo Finance is a valuable tool for investors, offering features like linking in all investment accounts, analyst ratings, independent research, and customized charts. The platform is used by over 90 million monthly users and is a go-to destination for staying informed about financial news and analysis. For those attending the Berkshire Hathaway Annual Meeting, Stig Brodersen suggests arriving early for a full experience but also encourages attendees to consider their energy levels and schedule. The Investor's Podcast events are open to fans of the show and offer opportunities to meet the hosts and like-minded individuals. To get access to the events and itinerary information, listeners can visit theinvestorspodcast.com/birkshire. The attendees are mostly individuals interested in the show and potentially looking for opportunities within TIP.
Networking opportunities at Berkshire Annual Meeting: Attending Berkshire Annual Meeting with a shareholder credential provides access to industry leaders and valuable networking opportunities within the value investing community.
Attending events in the value investing community, such as the Berkshire Annual Meeting, can lead to valuable connections and opportunities. These events attract industry leaders and offer a unique chance to network with like-minded individuals. To attend the Berkshire Annual Meeting, one only needs to hold at least one share of Berkshire stock, and each shareholder is provided with four credentials. If you're unable to get your credentials in time, you can still attend by knowing someone who is a shareholder and can provide you with an extra credential. The events are a great opportunity to learn, network, and potentially discover new opportunities within the value investing community. So, if you're interested in attending, keep an eye out for open positions at The Investor's Podcast, and don't miss your chance to be a part of this exciting community.
Preparing for TIP Conference: Credentials and Accommodation: Expect challenges with extra credentials and high accommodation prices at the TIP conference. Consider staying in nearby towns or sharing accommodations to save costs.
While attending the TIP conference in Omaha, attendees should not worry too much about obtaining extra credentials and should be prepared for expensive accommodation options. Stig Brodersen shared his experience from past events where extra credentials were readily available and security was not overly strict. However, he warned that accommodation prices skyrocket during the conference weekend, with even budget hotels charging Manhattan-like prices. He suggested considering staying in nearby towns or looking into Airbnb or sharing accommodations with other attendees to save costs. Overall, while there may be challenges with credentials and accommodation, the benefits of attending the TIP conference are worth the effort and investment.
Book flights and hotels early for TIP events: Secure the best deals by booking flights and hotels for TIP events well in advance. Admire and invest long-term in Berkshire Hathaway, using intrinsic value techniques to evaluate its worth.
For those planning to attend the TIP events in Omaha, it's essential to book flights and hotels well in advance to secure the best deals. Employers may also cover some costs for attending educational events like this. Stig Brodersen suggested checking Berkshire Hathaway's recommended hotels on their website. Elliott Bisnow encouraged listeners to register for the events and join the WhatsApp group chat for any questions. Regarding Berkshire Hathaway stock, both hosts expressed their admiration for the company and their long-term investment in it. Stig Brodersen, who has held Berkshire Hathaway stock since 2013, considered it his biggest individual stock position and around half of his total investable portfolio. Elliott Bisnow also emphasized the importance of using intrinsic value techniques, as taught by Buffett, to evaluate the company's worth.
Berkshire Hathaway's Long-Term Outperformance Amidst Skepticism: Berkshire Hathaway has consistently outperformed the S&P 500 despite facing skepticism during bull markets. Its value investing strategy presents buying opportunities during market highs.
Berkshire Hathaway, led by Warren Buffett, has consistently outperformed the S&P 500 over the long term. This was evident during the past 12 months where Berkshire experienced a smaller loss compared to the broader market. However, Buffett's value investing strategy has faced skepticism during bull markets, such as the 1999 tech bubble and the recent high-flying growth stocks trend in 2021. Despite this, history has shown that such periods often represent buying opportunities for Berkshire Hathaway. As of the current price, Berkshire Hathaway is still considered a good investment by Stig Brodersen, despite its high valuation. It's important to distinguish between the stock's price and its intrinsic value. Berkshire's B shares, which have fewer voting rights, are trading at a significant discount to its A shares, but for retail investors, the voting rights do not matter. Buffett, who owns a large portion of the stock, holds the majority of the voting power and is unlikely to be overruled by investors. Therefore, the additional value of A shares is negligible.
Berkshire Hathaway's B Shares: An Alternative for Affordable Investing: Warren Buffett issued B shares in 1996 to meet investor demand, but disapproved of selling air shares. Buffett only buys back shares when they're undervalued, and in Q3 of 2023, he bought back $1B worth. Buffett prioritizes businesses over buybacks, and the current price is near his buying range, but watch out for rising interest rates.
Berkshire Hathaway's B shares were issued in 1996 due to high demand from investors to invest with Warren Buffett but unable to afford the expensive A shares. Buffett disapproved of the scrupulous practice of selling air shares, so he issued B shares, which were the same as A shares but traded at a lower price. Buffett's insider buying is an essential factor in assessing Berkshire's intrinsic value. He only repurchases shares if he can buy them at a discount. In Q1 of 2023, Buffett bought most of his shares between $312 to $322, but in Q2, he bought very little due to the opportunity cost of other cheaper stocks and companies. Buffett prioritizes investing in businesses over buying back his own shares. In Q3 of 2023, Buffett bought back $1 billion worth of Berkshire stock, which is less than a 1% annualized buyback yield. The current price of Berkshire stock is somewhat in the middle of what Buffett is currently buying back shares for. However, it's important to note that when interest rates rise, all assets, including Berkshire Hathaway, decrease in value.
Higher Interest Rate on Cash Savings and Executive Ownership: Public.com offers a higher interest rate for cash savings at 5.1% APY. Berkshire Hathaway's Greg Abel shows confidence through share purchases, while Buffett promotes executive ownership and decision-making for shareholder benefits.
Public.com offers a higher interest rate of 5.1% APY on their cash account compared to various other financial institutions, making it an attractive option for earning on cash savings. Buffett's right-hand man, Greg Abel, has also shown confidence in Berkshire Hathaway by purchasing shares in the open market, signaling his belief in the company's value. Buffett encourages his executives to think like owners and prioritize the company's goals beyond personal financial gains, ensuring their independence and ability to make tough decisions for the benefit of shareholders.
Valuing Berkshire Hathaway goes beyond focusing on small percentage changes: To estimate Berkshire Hathaway's value, consider its operating earnings, asset quality, interest rate environment, equity holdings, and cash reserves. Normalize earnings, assign a multiple, and factor in these additional elements to determine an intrinsic value of around $900 billion and a price-to-book ratio of 4.1.
Valuing a stock like Berkshire Hathaway goes beyond focusing on small percentage changes. Instead, it requires looking at the company's operating earnings, the quality of its assets, and the interest rate environment. By normalizing operating earnings and assigning an appropriate multiple, we can estimate the value of Berkshire's operating businesses. Additionally, its significant equity holdings and cash reserves should also be considered. Based on this analysis, Berkshire Hathaway's intrinsic value is estimated to be around $900 billion, giving it a price-to-book ratio of around 4.1. However, the exact valuation can depend on one's perspective and desired margin of safety. For instance, some may argue that Berkshire is slightly undervalued, while others might consider it fairly valued. Overall, Berkshire Hathaway's stable business and solid downside make it an attractive stock for long-term investors, even if they accept a slightly lower margin of safety. For more insights on valuing Berkshire Hathaway, listen to our interview with Chris Broomstrom on Episode 438.
Berkshire Hathaway's Attractive Investment Opportunity: Berkshire Hathaway's stock offers a compelling investment opportunity with a significant discount, high earnings yield (6.5%), and safety from cash and short-term treasuries. Despite an inverted yield curve, its long-term potential remains attractive.
Berkshire Hathaway's stock, despite not having the largest discount to intrinsic value compared to other stocks, still offers a compelling investment opportunity with a significant discount and a high earnings yield. The company's earnings yield currently stands at 6.5%, higher than the 10-year treasury rate, making it an attractive investment for those with a longer-term horizon. Additionally, the increasing interest rates impact Berkshire's investment in cash and short-term treasuries, providing a safe return and allowing the company to consider more investment opportunities with higher opportunity costs. However, it's important to note that this discussion does not include Berkshire's bonds for its insurance operations, which are part of the matching process to ensure sufficient funds for claims. The current economic situation with an inverted yield curve adds an element of complexity to the analysis.
Value investing can outperform growth investing during inflation: During inflation, value stocks like Apple have thrived over growth stocks. Buffett's experience and understanding of inflation is crucial, and Apple's intrinsic value is either fairly valued or slightly undervalued based on growth assumptions and a 10% discount rate.
During inflationary periods, value investing can outperform growth investing. This was highlighted during the discussion about Berkshire Hathaway's investment in Apple, which makes up approximately 5th of the company's market value. The speakers emphasized that managing a company during high inflation is vastly different than during low inflation, and Buffett's experience and understanding of inflation is invaluable. Furthermore, during inflationary times, value stocks like Apple have thrived relative to growth stocks. Apple's intrinsic value was assessed, and it was determined that the stock is either fairly valued or slightly undervalued based on certain growth assumptions and a discount rate of 10%. The recent quarterly earnings report showed revenue growth of 8% year over year and earnings growth of 9% for the fiscal year 2022, which held up well despite the macroeconomic environment. Overall, the speakers emphasized the importance of understanding inflation and its impact on investing, and the potential for value investing to outperform during inflationary periods.
Apple's iPhone and Services Segments Drive Growth: Apple's services business, including Apple Music, Apple Pay, Apple Care, and iCloud, has 900 million paid users and is expected to reach one billion soon, contributing significantly to Apple's revenue with higher margins due to recurring revenues.
Apple's iPhone and services segments are key drivers for the company's growth, with iPhone sales up 7% and services sales up 14% year over year. The services segment, which includes Apple Music, Apple Pay, Apple Care, and iCloud, is a smaller but significant contributor to Apple's revenue and has higher margins due to recurring revenues. Apple's services business now has 900 million paid users and is expected to reach one billion users soon. The iPhone made up 52% of Apple's revenue in fiscal year 2022, while the services business grew from 17% to nearly 20%. Apple's overall revenue grew by 8%, and free cash flow grew by 20% year over year. However, the strengthening dollar puts pressure on Apple's earnings due to the majority of their business being conducted outside of the US. Buffett's investment in Apple has been successful, and he continues to buy more, with Berkshire purchasing 4 million shares in Q2 2022 at roughly $160 per share. Apple's multiple has been trading at elevated levels since the pandemic, but it's important to consider the industry when comparing multiples.
Apple's Stock Price and Buffett's Investment: Buffett's investment in Apple and its share buybacks have led to compounding effects, making it a great company trading at a likely fair price.
Apple's stock price has significantly increased in recent years, and while it may not be considered a bargain, it is a great company trading at a likely fair price. Buffett's investment in Apple, along with the company's own share buybacks, has led to compounding effects that increase Berkshire Hathaway and Apple shareholders' ownership. Buffett is a fan of share repurchases, and Apple's focus on bottom line profits and subsequent allocation of capital into buybacks is a significant factor in his continued investment. The speakers also encourage listeners to learn more about Apple and Berkshire Hathaway by checking out relevant episodes for deeper analysis.
