25 May 2021
Warren Buffett, The Oracle of Omaha
- Posted by Dejan Pekic BCom DipFP CFP GAICD, Senior Financial Planner
Berkshire Hathaway Inc. (Berkshire) held its shareholder Annual General Meeting (AGM) as a virtual event on the 1st May this year.
You may be asking, what is Berkshire?
It is a publically listed American multinational conglomerate holding company headquartered in Omaha, Nebraska and run by Warren Buffett and Charlie Munger.
However its business is simply the business of investing in other businesses.
Berkshire is effectively a LIC (Listed Investment Company), a listed professionally managed fund with Warren Buffett and Charlie Munger as its PMs (Portfolio Managers).
In saying that, Berkshire has been the ultimate professionally managed fund given that for every US$10,000 invested in Berkshire in 1965, investors would have US$281.06 million by the end of 2020 compared to US$2.36 million if invested in the S&P 500 index.
Talent, specifically having the right PM talent working for you is the key to achieving above index performance over the medium to long term.
A couple of thoughts and insights that Warren Buffett shared during the AGM was that Berkshire is seeing ‘substantial inflation’ and he is still negative on Bitcoin.
Has Warren Buffett been wrong in the past?
Yes, but he is more often right than wrong and we concur that inflation is rising which as a causal effect increases interest rates but how high can interest rates actually go given the lack of wage growth?
Not much in our professional opinion because a rampant rise in interest rates would financially destroy Western economies.
At Newealth we are always looking to support and promote our clients wherever possible and if you have any ideas or comments, please feel free to email me or to call me on +61 2 9267 2322.