Buffett: One of worst mistakes people make is investing based on current headlines. His first investment was in 1942 when the headlines were very dire. We were loosing the war at that time. He never invests on what he expects to happen over the next six months.
We were adding to some stocks we owned on Friday. Today we are buying them cheaper. On Friday he invested about $60 million in stocks they already own. When he is adding to a stock they account for about 10% of the daily trading of that stock. He does not want to disturb the price.
Berkshire has 270,000 employees. Some of them will do something wrong today.
Google IPO – He does not know what the company will look like in ten years. He will not invest in it.
He repeated he would rather own farm land then gold.
Berkshire is experiencing small improvements in some of the business’s it owns at this time, but growth is not accelerating now. The big five business’s should all set records this year. He sees small improvements in the housing industry now.
You are not taking risk off when you go into cash now. You are ensuring you lose purchasing power over time.
He has no idea where oil prices are going now. We made a mistake when we went into Conoco.
Individual equities are very attractively priced now. They are one of the least risky investments that he knows.
The question was asked what % should an investor starting out today put in Berkshire? Buffett said an investor today should not expect the returns of the past. Their is hardly any chance the investor loosing over the long term. He would expect they would beat the market going forward. He has 98.5% of his money in Berkshire. Many of his family members have 80% invested in it.
He feels comfortable with this. There are some things that are better investments but Berkshire should be a very good investment.
At the annual meeting he was asked many questions about dividends. He will try to explain his thinking again on dividends in his next annual letter.
Buffett looked very sharp throughout the interview. He had great recall on things that happened 30 or 40 years ago. Seemed like we was really enjoying it. He said he felt great and had a high energy level.
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