2004 Annual Meeting
Annual meeting discussing Berkshire's stock split debate, intrinsic value calculations, and Buffett's advice to investors to buy an index fund if they can't pick stocks.
2004 Annual Meeting
Date: May 1, 2004 Location: Omaha, Nebraska Attendees: Warren Buffett (73), Charlie Munger (80) Source: Full Transcript
Overview
The 2004 annual meeting discussed Berkshire's position on stock splits, intrinsic value calculations, and Buffett's advice for ordinary investors. The meeting emphasized the importance of understanding what you own.
Opening
Buffett on Berkshire:
"Our stock doesn't split. We believe in keeping it that way."
On why no split:
"A high price keeps short-term traders away. Long-term investors benefit."
Business Results
On the year:
"We've had another good year. The businesses are strong."
On intrinsic value:
"Our intrinsic value grows faster than book value."
Key Topics
Stock Split Debate
On splits:
"We won't split the stock. It serves no useful purpose."
On Class A:
"The Class A is priced for a reason. It keeps the right shareholders."
Intrinsic Value
On calculation:
"Intrinsic value is about future earnings. Book value is history."
On the gap:
"Intrinsic value exceeds book value significantly."
Advice to Investors
Buffett's simple advice:
"Most investors should buy an index fund. They can't beat the market."
On picking stocks:
"If you can't analyze businesses, don't try to pick stocks."
On diversification:
"Diversification is for those who don't know what they're doing."
Investment Mistakes
On errors:
"I've made mistakes. That's part of the game."
On learning:
"You learn more from failures than successes."
Notable Quotes
"We won't split the stock. It serves no useful purpose."
"Most investors should buy an index fund."
"If you can't analyze businesses, don't try to pick stocks."
Key Themes
- No Split - Keeping Class A expensive
- Intrinsic Value - The important number
- Index Fund - Advice for ordinary investors
- Mistakes - Part of the game
- Long-Term - Focus on understanding
Related
This summary captures the key topics from the 2004 transcript.