Sunday, May 14, 2006
Wesco Annual Meeting
Selected points mentioned by Charlie Munger at Wesco's Annual Meeting, held on May 11, are listed below.
Complete notes are located here. [PLEASE DO NOT LINK TO THIS FILE. THANKS]
An introductory text in economics says people makes decisions based on their opportunity cost. There is this company in an emerging market that was presented toOn Berkshire's Float, which has grown very quickly over the past few years:
. “I don’t feel more comfortable buying that than I do of adding to Wells Fargo.” He was using that as his opportunity cost. No one can tell me – tell me why I shouldn’t buy more Wells Fargo. Warren is scanning world, and trying to get his opportunity cost as high as he can so that his individual decisions better. Why is freshman economics class so inconsistent with what so many experts are doing, and they are charging a fortune. I believe in crazy waves of mental conformity based on social approval. I believe in baptism. I’ve seen it done. The worshipping at the temple of diversification is really crazy. 10 securities can make you rich. Why do you need 300 securities with huge fees to get rich? How can you be so unskeptical about human nature? Warren
Q: How do you value the float at Berkshire Hathaway? Characteristics of equity, or discount it?
CM: We love having the float at
Berkshire. If we didn’t have it, it would be worth than it is. It will grow more slowly in future than the past. Not enough float around in world casualty market [for us to grow faster]. We think it will be big advantage. We don’t think it is a model that will help with other investment opportunities.
Thank you for sharing the links to the Notes of Peter Boodell. ;-)
I have taken the liberty to send your links in BRKNEWS.
All the best,
BRKNEWS http://groups.yahoo.com/group/brknews/ [Warren Buffett and Berkshire Hathaway News links]
FUTILE FINANCE ? http://futile.free.fr/