Bring it on

It’s always rejuvenating to attend the Berkshire Hathaway Annual Meeting in Omaha. This time was no different. Even as the world is clueless and worried about which way the global stock markets will turn from here, considering the monetary explosion, it’s business as usual for Warren Buffett and partner Charlie Munger. The best take away from this year’s meeting was Munger’s statement reaffirming, “Micro is what we look at and macro is what we put up with”.

Buffett and Munger have always followed a bottom-up approach, focusing on picking the right businesses run by competent managements at a price that offers an adequate margin of safety. Discounting the fact that Buffett’s opportunity set, limited by Berkshire’s gargantuan size, is different from that of most investors, Buffett’s twin approach came across clearly — first, keep cash ready, so you can grab the opportunity when it presents itself; and second, focus even more on the ground rules. Buffett is sitting on a cash hoard of $60 billion which earns pretty much nothing but he says that even though it is shown on the liability side of the balance sheet, it’s actually an asset as Berkshire “will find things to do.” 

Less than a week after the Annual Meeting, amid wet weather in New York, hedge fund legend Stanley Druckenmiller made a convincing presentation at the Ira Sohn Conference, underscoring why the stock market looked too risky. Even if that prediction comes true, Buffett’s wisdom should not just help protect capital but also maximise return over a longer time frame, leveraging on any opportunistic moves. 

Apart from meeting notes and photos from the Berkshire weekend pilgrimage, we have a feature on how the prospect of widespread negative interest rates is impacting investor sentiment. Then, we have three fabulous interviews. Tren Griffin, the author of Charlie Munger: The Complete Investor, talks about Munger’s mental models and what he learnt from other investors; Jeremy Miller talks about his takeaways from Buffett’s partnership letters; Bob Robotti, a seasoned value investor who hunts in the small-cap space, highlights the importance of staying power and patience to make the most of one’s investments.