2018 Annual Meeting
Annual meeting with Charlie Munger covering Apple investment, Elon Musk competition debate, healthcare partnership with Amazon/JPMorgan, and Berkshire's $100B capital position.
2018 Annual Meeting
Date: May 5, 2018 Location: Omaha, Nebraska Attendees: Warren Buffett, Charlie Munger Source: Full Transcript
Overview
The 2018 annual meeting featured Warren Buffett and Charlie Munger in their traditional Q&A format. Major topics included the Apple investment, Charlie Munger's debate with Elon Musk about competitive moats, the new healthcare partnership with Amazon and JPMorgan, and Berkshire's growing capital position.
Business Results
Accounting Rule Changes
Buffett addressed the new accounting rule requiring mark-to-market losses:
"Accounting-rule net loss 'not representative' of the business. These are paper losses, not real economic losses."
Precision Castparts Performance
On the PCC acquisition:
"Precision Castparts is 'a very good business.' We're pleased with the acquisition."
Key Topics
Apple Investment
Buffett discussed the Apple holdings and buybacks:
"Why Apple and thoughts on Apple's buybacks. We like the business."
American Express
On the long-held Amex position:
"I like very much our holdings of American Express. It's been a wonderful investment."
Wells Fargo Recovery
On the scandal-plagued bank:
"Wells Fargo will emerge stronger after its 'big mistake.' They have a strong franchise."
Health Care Partnership Announcement
Major announcement of the Berkshire-Amazon-JPMorgan healthcare venture:
"Health care costs partnership with Amazon and JPMorgan. We're attacking a huge 'industry moat.'"
Elon Musk vs. Moats
Buffett responded to Elon Musk's comments about moats:
"Buffett vs Elon Musk on whether competitive moats are 'lame.' Munger defended the moat concept strongly."
On the competitive threat Tesla poses:
"Musk may be right about some industries, but moats still matter in most businesses."
Cyber Insurance Caution
On cybersecurity insurance:
"We don't know what we're doing in cyber insurance. It's a new and uncertain market."
Munger on China and Stocks
Munger shared his views on international investing:
"Munger is more interested than Buffett in Chinese stocks. He sees value there."
Duracell Performance
On the battery business:
"Duracell should be earning more money than it is now. We're working on that."
Bonds vs. Equities
Munger on fixed income:
"Long-term bonds are 'almost ridiculous' at current rates. Equities make more sense."
Berkshire's Bureaucracy
Humorous commentary on corporate structure:
"A bureaucracy is sort of like a cancer. It grows and becomes self-perpetuating."
Commercial Insurance Innovation
On new insurance experiments:
"We're experimenting with lower-cost commercial insurance. Innovation in insurance matters."
Succession and Being Missed
On what happens when he's gone:
"I like to think I'll be missed a little bit, but you won't notice it. The businesses will keep running."
Ajit Jain Discussion
Buffett on insurance pricing:
"Buffett talks to Ajit Jain about insurance pricing because it's fun. He loves the intellectual challenge."
Steel Tariffs and Trade
Munger weighed in on trade policy:
"Munger on steel tariffs: 'Even Donald Trump can be right sometimes.' Trade benefits are huge."
Berkshire's Capital Position
On deploying the growing cash pile:
"Through it all ... America really, really moves ahead. We're finding ways to put capital to work."
Gen Re Expansion
On the reinsurance business:
"We'll have a somewhat larger operation at Gen Re. The opportunities are growing."
Notable Quotes
"A bureaucracy is sort of like a cancer. It grows and becomes self-perpetuating."
"I like to think I'll be missed a little bit, but you won't notice it."
"Long-term bonds are 'almost ridiculous' at current rates."
"Even Donald Trump can be right sometimes."
Key Themes
- Healthcare Disruption - Partnership with Amazon and JPM
- Musk Debate - Moats vs. competitive threats
- Apple - Growing technology investment
- Capital Deployment - Finding uses for $100B+
- Munger's Wisdom - Chinese stocks, trade, long-term thinking
Related
- meeting-2019 - Next year's meeting
- meeting-2017 - Previous year's meeting
- warren-buffett
- charlie-munger
- berkshire-hathaway
- apple
This summary captures the key topics from the full 2018 transcript.