2007 Annual Meeting
Pre-crisis annual meeting where Buffett warned about housing bubble, introduced Iscar and TTI acquisitions, and discussed the "swimming naked" analogy.
2007 Annual Meeting
Date: May 5, 2007 Location: Omaha, Nebraska Attendees: Warren Buffett (76), Charlie Munger (83) Source: Full Transcript
Overview
The 2007 annual meeting was held before the financial crisis. Buffett warned about the housing bubble, introduced the Iscar and TTI acquisitions, and gave the famous "swimming naked" analogy. The meeting showed Berkshire's confidence while highlighting emerging concerns.
Opening
Buffett on acquisitions:
"We've added Iscar and TTI to the family. They're wonderful businesses."
On the management:
"Iscar is led by Jacob Harpaz. TTI by Paul Andrews. Both are exceptional."
Business Results
Strong Performance
On the quarter and year:
"Operating earnings are up. The businesses are performing well."
On insurance:
"Float continues to grow. We've had good underwriting results."
Key Topics
The Swimming Naked Analogy
Buffett's famous warning:
"You only learn who has been swimming naked when the tide goes out."
On the housing market:
"The housing bubble will end. People are behaving recklessly."
Housing Bubble Concerns
On the危险的:
"Everyone believes house prices will rise forever. They've forgotten about risk."
On lending standards:
"Mortgage lenders have lowered standards. This will end badly."
On the coming problems:
"We're not exposed directly. But the economy will slow."
New Acquisitions
On Iscar:
"Iscar is a world-class manufacturing company. The precision tool business is excellent."
On TTI:
"TTI is the leading electronic components distributor. Paul Andrews runs it brilliantly."
Investment Philosophy
On intrinsic value:
"We're always calculating intrinsic value. Price is what you pay, value is what you get."
On patience:
"We can wait. The right opportunity will come."
Derivatives Warning
Munger on derivatives:
"Derivatives are spreading. The risks are building."
On the system:
"One day we'll look back and wonder what we were thinking."
Notable Quotes
"You only learn who has been swimming naked when the tide goes out."
"Everyone believes house prices will rise forever."
"Mortgage lenders have lowered standards. This will end badly."
"Derivatives are spreading. The risks are building."
Key Themes
- Housing Bubble - Buffett's warnings
- Swimming Naked - Famous metaphor
- Iscar & TTI - New acquisitions
- Derivatives - Munger's concerns
- Patience - Waiting for opportunities
Related
- meeting-2008 - Financial crisis
- meeting-2006
- warren-buffett
- charlie-munger
- berkshire-hathaway
- iscar
- tti
This summary captures the key topics from the 2007 transcript.