Bitcoin is worthless, the stock market is like a casino, praise Chinese companies! Read buffett's shareholders' meeting

Top 10 Golden Sentences of the 2022 Buffett Shareholders' Meeting

• 1 BUFFETT: The U.S. stock market over the past two years has been like a casino, and the way Wall Street makes money is by speculating.
• 2 Munger: In China, you can buy better companies at a lower price.
• 3 Buffett: Unlike farms and apartments, Bitcoin does not produce value.
• 4 WARREN BUFFETT: I've been investing since I was 11 years old, and a book (Smart Investors) has made me revolutionize the way I invest.
• 5 BUFFETT: The best way to fight high inflation is to invest in yourself.
• 6 Munger: "Removing Buffett" is the most ridiculous criticism I've ever heard.
• 7 WARREN BUFFETT: We are also not good at accurately grasping the timing of investment, and missed the opportunity of the stock market plunge in March 2020.
• 8 BUFFETT: Inflation robs people who hide their money under their mattresses.
• 9 BUFFETT: Buybacks are fantastic, I want to have more of Apple's shares.
• 10 Buffett: It's more important to be a better person in the second half of your life than to show off your wealth.

"Investment Spring Festival Gala" hit hard! The 2022 Buffett shareholders' meeting was held at 20:00 Beijing time on April 30, and the Q&A session of the shareholders' meeting began at 22:15 that night, and the 92-year-old "stock god" Buffett and the 98-year-old Munger appeared together again, and Tencent News conducted a full video broadcast.

At the six-hour shareholder meeting, Buffett, Munger and two executives, Greg Abel and Ajit Jain, answered questions from shareholders on the Fed, the U.S. stock market, high inflation, Berkshire's investment strategy, and China opportunities.

Before the start of the conference, Berkshire reported first-quarter earnings, and due to investment losses and weak insurance underwriting performance, Berkshire's first-quarter net profit was $5.46 billion, down 53% year-on-year. In terms of investment, Buffett has significantly increased his holdings in Chevron and Western oil companies.

So far this year, Buffett has continued to buy stock in Occidental Oil Company, worth a total of about $7.2 billion, accounting for 14.6% of Occidental oil's outstanding stocks; earnings documents also show that as of the end of the first quarter, Berkshire Hathaway's investment in Chevron was $25.9 billion, equivalent to holding about 159 million shares, up sharply from about 38 million shares held at the end of the fourth quarter of last year.

It is worth mentioning that on the eve of the shareholders' meeting, the "stock god" was "impeached" by Berkshire Hathaway shareholder CalPERS (California Civil Service Pension Fund, the largest public pension fund in the United States). CalPERS said it would vote for a shareholder proposal by Berkshire Hathaway to remove Warren Buffett from his chairmanship. However, at this year's shareholders' meeting, the motion that the chairman and CEO must be appointed by different people were finally rejected, and Buffett will continue to hold both positions.

The following is a summary of the main points of the conference (click for more content: 50,000 words full version!) Transcript of the 2022 Buffett Shareholders' Meeting):

Talk about Berkshire

BUFFETT: Bought $51.8 billion in the first quarter and didn't buy back shares in April

Buffett said at the shareholders' meeting that the company bought a total of $51.8 billion in stock in the first quarter and sold $10.3 billion at the same time. Between the end of February and mid-March, $41 billion in shares was bought in one go. Despite the sharp drop in cash levels, Buffett said the company would keep enough cash safe and that the company had not launched a stock buyback since April.

WARREN BUFFETT: While the market will go crazy, Berkshire is sensible enough to invest

Buffett said that while the market will do crazy things, Berkshire invests not because it's smart, but because it's sane enough. Munger added that fast-forwarding and fast-out of the stock market in a matter of days is like rolling dice.

Buffett called Berkshire "better than the banks."

Warren Buffett has long made fun of investment bankers and their institutions — saying they encourage mergers and spin-offs for fees rather than improving companies. Today, he noted that Berkshire Hathaway is always cash-rich and "does a better job than banks" at providing credit lines to companies in need when needed.

BUFFETT: Berkshire adheres to a corporate culture of integrity

Buffett said that as the management of a public company, we must lead by example, and doing bad things is like a snowball, and the company will be destroyed sooner or later. Munger also added that he believes Berkshire's culture will continue after they leave, but that may not be the case for many other companies.

WARREN BUFFETT: Cash is like oxygen, and it saves a fair amount of cash at any time

Buffett said that while Berkshire appears to be slowing down on investment activity, it has spent more than $40 billion in the three weeks it began Feb. 21. As of December 31, 2021, the company had $143.9 billion in cash and U.S. Treasury bonds, which fell to $102.7 billion by March 31, 2022.

Buffett said that in all the historical records, if you don't have money on hand today, you won't be able to operate tomorrow, or you won't be able to play it. Cash is like our oxygen, we have made a corresponding commitment to ourselves, and we will keep a considerable amount of cash at any time.

WARREN BUFFETT: There will still be buybacks in the future, but it depends on the investment decisions made in the same period

Buffett said at the shareholders' meeting that the company will also consider buybacks in the future, but depending on the valuation of its own company and the investments in the same period, the company will weigh whether to use the funds to buy back shares or invest in other companies.

Talk about investing in Apple, Blizzard, American Express, Western oil

WARREN BUFFETT: American Express and Apple's buybacks have brought huge gains to Berkshire

Buffett said at the shareholders' meeting that after Berkshire invested in American Express many years ago, Berkshire's shareholding in American Express has increased from 11.2% to 20% with years of American Express buybacks, and the same is true for Apple's investment, which has brought considerable benefits to Berkshire in the past few years.

Buffett on Apple: Buybacks are great! I want to have more shares

At the 2022 Berkshire Annual Meeting, Buffett praised the benefits of the buyback, he said that as long as the price is right, repeatedly buy back his own shares is not bad, he took Apple as an example, apple buys back nearly 100 billion shares every year to bring Buffett hundreds of millions of dividends, he said "I want to have more apple shares."

WARREN BUFFETT: It's still buying Blizzard stock

Buffett said they continued to buy Blizzard stock after Microsoft's official acquisition. As of yesterday, Berkshire owns 9.5 percent of Blizzard stock and would file a report if it reached 10 percent.

As for the timing of the initial deal (a month before Microsoft's official acquisition), Buffett said this has happened before. Examples include Monsanto before Bayer's acquisition, or IBM's acquisition of Red Hat. Buffett also said it is not clear whether regulators will approve Microsoft's acquisition, but believe they know that Microsoft has such financial strength.

BUFFETT: Occidental oil companies have a good annual report, so I decided to invest in it

Buffett said he also thought that Western oil companies reported very well, so he decided to invest in it. Speaking about the huge investment in Occidental in early March, Buffett said he bought 14 percent of the latter's outstanding stake in the first two weeks of March, worth more than $7 billion, and that only 60 percent of Occidental's shares could be tradable. He said the short-term volatility in the market since late February caused by the "gambling mentality" has allowed him to find good long-term opportunities. Munger also said that he finally found a more worthwhile investment than U.S. Treasuries.

Talk about the market

WARREN BUFFETT: Thank you fed for paying tribute to Powell for taking off his hat

At the shareholder meeting, Buffett praised Fed Chairman Powell's decisive and swift move and said he should be "hatted." Buffett said that if a similar crisis repeats, Berkshire, which holds a lot of cash, can be like the Federal Reserve that rescued the market. Volcker, then-Fed chairman in the 1980s, told me that the Fed could do whatever we needed to do. That's true in 2008 and 2020, and it's going to happen again in the future, when you want Berkshire to operate there like the Fed, and if the economy doesn't work, it's always going to happen.

WARREN BUFFETT: The U.S. stock market has been like a casino for the last two years, and the way Wall Street makes money is by speculation

Buffett said that this market is difficult to figure out, there is a lot of turmoil, the US stock market is like a casino, everyone is gambling in it, this phenomenon is particularly obvious in the past two years, but also driven by Wall Street, because the stock market has indeed been very bullish in the past two years.

Buffett said that while the market will do crazy things, Berkshire invests not because it's smart, but because it's sane enough. Munger added that fast-forwarding and fast-out of the stock market in a matter of days is like rolling dice.

WARREN BUFFETT: We just bought when we thought it was cheap and missed the opportunity in March 2020

At berkshire's shareholder meeting, when asked about "how to seize the investment opportunity," Buffett replied that we don't buy and sell because of market or economic conditions, because we don't know what the actual situation is. During the 2008 financial crisis, everyone panicked, and we didn't seize the investment opportunity at that time; we missed the opportunity to crash the stock market in March 2020. So we are not very good at accurately grasping the timing of investment, we just buy when we think the investment object is cheap.

Talk about investing in China

Munger: In China, you can find lower prices and better quality stocks

At berkshire's shareholder meeting, Munger acknowledged that investing in China is indeed more difficult than in the United States. But the reason he invested in China was that he was able to buy better companies in China at lower prices.

Talk about leaving office

"If the two leave, it will not affect the company's operations," Buffett responded positively

Buffett insists there's no reason to worry about where the company will go after he leaves office, because Berkshire will forever retain a culture that puts shareholders first. Stressing the importance of corporate culture, he said you must understand that corporate culture accounts for 99% of the company. "If we had the same culture, we would be alive for another hundred years from now."

Buffett said that for a long time to come, it is unlikely that anyone will buy Berkshire. Even if I'm gone, the corporate culture won't change much, and the shareholder relationship won't change much. Berkshire is not going to end. Berkshire's path is a step-by-step approach, not a grand plan at the beginning. We hope that everyone will agree and that everyone's thinking will be synchronized. The shareholders are all partners in Berkshire. If we want to revise our corporate culture, we need to put compliance with the law first. Buffett said, I hope everyone trusts me.

Talk about high inflation

BUFFETT: It's not a bad thing for the Fed to send money Munger: Powell is a hero

In response to shareholder questions about "how inflation affects Berkshire's business," Buffett said that in their opinion, many companies are doing "very well." Buffett further elaborated that this round of inflation is very different from previous experience. In the company's furniture store, although the price of furniture is rising rapidly, the wealthy people are still willing to pay. But in the early years, sometimes people didn't have any money in their hands, and they couldn't even afford to buy candy.

Buffett said the government has given people a lot of money, and at some point that money can't be worth that much. However, Buffett also defended the decision of the "helicopter money" policy, believing that it was the right choice.

Munger echoed this view and praised Powell as a hero without whom the economy might have collapsed.

WARREN BUFFETT: The best investment in high inflation is to invest in yourself

When asked about "which stock should you buy under super inflation," Buffett responded at the shareholders' meeting that what is more important at this time is your personal ability, others are trading your ability, and the best investment is to develop yourself.

Talk about Bitcoin

Munger: If someone suggests you invest in Bitcoin, you simply decline

In response to a follower's question about "Which stock would you invest in given the current level of inflation," the Berkshire executive did not say where he would invest his money, but made it clear that he would not invest in Bitcoin.

"When you have your own retirement account and your amiable investment advisor advises you to invest all your money in Bitcoin, you're saying 'no,'" Munger said. ”

For Fidelity, Munger's answer is undoubtedly "bad news." Just this week, the investment firm just announced that it would allow employees to deposit bitcoins into their retirement accounts.

WARREN BUFFETT: Unlike farms and apartments, Bitcoin doesn't produce value

Buffett once again slammed cryptocurrencies at shareholders' meetings, saying that unlike farms and apartments, bitcoin does not produce value, and its price will only depend on how much the next person who buys it is willing to pay. Cryptocurrencies may now have a magical appeal due to hype, but they don't have the capacity to do so.

Munger: Bitcoin's final value will go to zero

Munger said at the shareholders' meeting that I have encountered some things in my life, and I need to avoid very stupid, very evil things, and things that will bring harm to others, and I think Bitcoin has all three points. The first point is obvious, there is a good chance that the value will eventually change to zero.

Bitcoin is not a productive asset, its value depends on how much the next person pays the last person who owns bitcoin. Now you see that there have been a lot of commissions paid, and there are many more, and these are a lot of people who have come to participate in this gambling game, the hype game. But the money moves around different people, they just change the owner, they just change the owner, they just change all of it. There are those who stand and those who lose. But this money you can actually use to do a lot of things, there are some things that are valuable but there is no way to produce tangible assets.

Talking about "Removing Buffett"

Munger lashed out at the shareholder proposal to remove Buffett from his chairmanship: the most ridiculous criticism

Munger lashed out at the call to separate Berkshire's chairmanship from ceoship, saying, "It's the most ridiculous criticism I've ever heard, like when Odysseus came back from winning the Battle of Troy, someone said I don't like the way you hold a spear when you win the battle." There are people who have never run any commercial company, don't know anything, and I don't think it's overwhelming to be chairman and CEO at the same time."

In April, CalPERS, the California Civil Service Pension Fund, the nation's largest state public pension fund, revealed that it intended to vote for a shareholder proposal from Berkshire Hathaway to remove Buffett from his chairmanship but remain ceo.

Talk about Internet broker Robinhood

Munger criticized Internet broker Robinhood: Speculators are getting retribution

Munger said of Robinhood, a well-known retail brokerage and known as the "retail base", that it allows all people to join in short-term gambling and speculation, "I think this is a very disgusting behavior," Buffett agreed.

"You see last year they made a lot of money by speculating and selling stocks, and you see they have retribution now." A lot of insider traders are traders on their platform and we're watching them get retribution. "I don't think we should criticize, but I really can't help it." ”