This past weekend, Berkshire Hathaway held the 51st edition of its annual meeting.
During the meeting Berkshire CEO Warren Buffett and vice chairman Charlie Munger held court for six hours, fielding questions from journalists, analysts, and Berkshire shareholders.
What did they say? Lots of things.
And while the Berkshire meeting has the corny name of “Woodstock for Capitalists,” this overwrought metaphor makes unserious what is, in fact, a great experience for investors who know the way to learn isn’t just wholesale absorbing one person’s way of thinking, but grabbing bits and pieces along the way.
Berkshire’s annual meeting is if nothing else, a piece.
The biggest headline to come out of this year’s meeting is Buffett’s basic refusal to answer Andrew Ross Sorkin’s question about whether Berkshire shareholders should be proud to own shares of Coca-Cola (Disclosure: I own a few Berkshire shares.)
It was a classic “gotcha” question that piggybacked off comments from hedge fund manager Bill Ackman made last year. Of course, Ackman wasn’t just broadsiding Buffett and Berkshire for no reason: Munger had called pharmaceutical company Valeant “deeply immoral.” Munger called also Valeant a “sewer” on Saturday; Buffett said the business was “enormously flawed.” This dispute, it seems, will continue.
But getting back to the Coke issue raised Saturday, Buffett simply eluded Sorkin’s question.
Instead Buffett talked about choice, about how much Coke he chooses to consume — four or five cans per day — and about how no one forces anybody to drink it. Munger, a lawyer by trade, argued that asking only about the negative impacts of Coke ignores the product’s advantages. Which are basically that it tastes good. Which makes some sense: it’s just liquid candy.
But as he has in the past and will in the future, Buffett argued that he simply drinks Coke because he likes it, adding that if you do what you want you’ll live longer. Which is the perfect kind of unprovable life lesson that looks great on a poster.
None of this, however, changes the fact that Coca-Cola is very, very bad for you and that Buffett is very, very unconcerned with this. You will be less healthy if you drink lots of Coke, and Buffett’s habits are, like his investing successes, yet another reason you will not be the next Warren Buffett. He really is one of a kind.
And this unapologetic attitude towards choice is, in short, the entirety of the applicable lessons one can glean from listening to Buffett talk about whatever it is he wants to talk about during the annual meeting: make your own decisions.
I wrote Saturday that Buffett is an American and media fascination: he is from Omaha and still lives there, is fabulously rich, and at 85 has enough energy to sit on stage for hours and answer questions while most of his audience has started dozing off. At one point, it looked like Munger was losing the thread, too.
At various points during the meeting, however, when Buffett was asked specific questions about the morality of Coca-Cola or the process he uses to determine what stocks to buy, he demurred, time and again.
The specifics, to Buffett, are not your business to judge and the results his alone to live with. In this much Buffett is clear: he does not care what anyone else, even other Berkshire shareholders, think about his choices.
Buffett’s daily routine of sitting in his office and quietly reading annual reports all day is the stuff of legend. But this also reveals the entirety of how much you’ll know about his investment process outside of tracking the actual investments he makes. He’ll never be at an investment conference pitching an idea or on TV talking about why a company’s multiple looks attractive. All you know is he reads a lot.
Buffett buys some things and doesn’t buy others; you, the Buffett-watcher, can figure out why on your own. The Berkshire meeting, then, isn’t about listening to what Buffett actually says but about absorbing what he stands for.
Buffett sits there and preaches, giving the audience a window into his worldview, one which says everybody has to make their own choices and the government ought be there to help. You’re free to agree or disagree.
But he’ll never tell you what to do.