Alex Morris (of TSOH Investment Research fame) spent countless hours combing through three decades of Berkshire Hathaway annual meetings, collecting the wit and wisdom of Warren Buffett and Charlie Munger on almost every subject under the sun.
The result — Buffett & Munger Unscripted — does for the Berkshire AGMs what Lawrence Cunningham’s The Essays of Warren Buffett did for Buffett’s shareholder letters. Together, they form a Buffett anthology of sorts that will keep the Oracle’s (and Charlie’s) words alive for generations to come.
Morris recently sat down with the Masters in Business podcast to discuss what he learned from such a comprehensive deep dive into Buffett and Munger’s minds.
Below are a few highlights from the hour-long conversation…
✨ Buffett and Munger spent their lives assiduously avoiding stupidity, while still swinging hard when the odds tilted in their favor. Never overly reckless or reticent when making investment decisions, just relentlessly rational.
What mistakes are you looking to avoid is a great place for starting to figure out where you’re trying to go. That’s what they have done their entire career. It’s funny how that mindset of ‘don’t be stupid’ can still be connected to really big swings at points in time. That seems like an aggressive act and kind of a risky thing, but I think when you actually pair them together, they can work well.
It’s very easy to get overconfident in your abilities and to make mistakes — particularly when you start doing things with options or leverage — that are truly devastating. If you just avoid those things, it’s much easier to at minimum stay in the game and to get to a decent place is [not] overly difficult.
✨ Morris called Buffett’s bet on Apple “one of the great investments of all time”. Largely because he recognized this was less of a technology story than a bulletproof consumer brand that customers loved.
Warren spoke about how, at the Nebraska Furniture Mart, people come in and buy a TV and they’re looking at the number of pixels, the quality of the screen, they’re comparing the prices, etc. [But] when it comes to an iPhone versus an Android, it doesn’t matter if an Android phone is 60% cheaper — some people were absolutely going to buy the iPhone no matter what.
✨ Buffett and Munger don’t play the money game like everyone else.
Everybody knows that Berkshire owns Coca-Cola [stock], but I think the part sometimes people don’t know is that Warren started buying it in ‘88 or ‘89 [and] bought his last share in ‘94. And he hasn’t bought or sold a single share since then.
At a point in time, it was more than 30% of Berkshire’s equity portfolio. It’s not like it was 2% of their portfolio that they’re not touching. It was a hugely important position — and he hasn’t touched it in more than thirty years.
When someone is really good at investing — like they are — and they do something like that and you look around and see nobody else is really acting in this way, it’s something that stands out and is noteworthy.
✨ The changing of the guard atop Berkshire might pull the annual meeting back to its business-focused roots.
In the early days, the questions [at annual meetings] were really focused on Berkshire and investing. As time went on, they became a lot more about life advice and other things that, while still interesting, are not really Berkshire-specific.
When he got to things like GEICO and telematics or BNSF where their results were lagging some of the other Class I rails, I think Warren had a tendency to not want to point fingers at the managers and wouldn’t really talk specifically about the issues there. Which, for the people who are kind of diehard Berkshire shareholders, we want to hear those things.
Greg [Abel] took those questions head-on, which was really refreshing to hear.
More news and notes from the Berkshire Hathaway orbit…
Warren Buffett celebrates his 96th birthday on Sunday. Many happy returns of the day for the Oracle — which will hopefully be full of bridge and Blizzards!
To mark the occasion, this month’s transcript for paid supporters will be a rare-ish Buffett (and friends) television interview from the mid-2010s. Look for it on Monday morning. If you’ve been on the fence about upgrading, there’s no time like the present.
It really is the Wild West out there. BNSF Railway has been dealing with a rash of railcar robberies in recent months — and the latest one featured an unfortunate Berkshire Hathaway-related twist. Thieves made off with $123,000 worth of Brooks running shoes. But, thankfully, the shoes’ time on the run was short-lived.
After a BNSF train made an emergency stop in a remote stretch of the San Bernardino County high desert, the crew noticed three vehicles lurking suspiciously nearby and alerted local authorities. Barstow sheriff’s deputies responded and found two of these vehicles — stuffed to the gills with stolen Brooks products — abandoned in the desert.
BNSF confirmed that this merchandise had been pulled straight off the raided boxcar.
iPhone 17 remained the world’s best-selling smartphone in the second quarter. According to Counterpoint Research’s sales tracker, the base iPhone 17 model topped the list with 6% of global smartphone unit sales. iPhone 17 Pro Max and iPhone 17 Pro rounded out the top three. It was an all-Apple podium.
Looking ahead, the highly-anticipated foldable iPhone is expected to be unveiled next month at Apple’s “Surprise and Shine” event. And Mark Gurman of Bloomberg — who sometimes seems like he has a direct line into Cupertino — shared positive early buzz about the device from people who have already gotten hands-on time with it. “[They] like how it fits in a pocket, the feel and durability of the advanced hinge mechanism, and the new iPad-like app layouts that take advantage of the largest internal display.”
The Financial Times didn’t pull any punches in its retrospective of the Vicki Hollub era at Occidental Petroleum. And Berkshire’s involvement with the oil giant was not spared the rod, either. FT calculated that Berkshire’s total investment in Oxy — from the financing of the Anadarko acquisition to Buffett’s subsequent common stock purchases — produced an internal rate of return of ~7.3% over the past seven years.
“You can say clearly that capital would have been better invested in Apple,” investor Bill Stone told the paper. “You can’t call it anything but disappointing.”
Christopher Bloomstran was equally blunt, branding the investment “mediocre” — but stopped short of writing it off altogether. “It has not been a home run yet,” he said. “[Oxy] overpaid for Anadarko, contributing to the performance of the common [stock]. But the preferred has been a very good investment [for Berkshire].”
Berkshire’s strategic partnership with Tokio Marine was done, in part, to free up capital for the Japanese insurer to acquire other international companies. And it may already have something in its crosshairs. The Financial Times, building on reporting from The Australian last month, names Suncorp as the most likely target. Tokio Marine quietly vetted the Australian insurer, along with others like Insurance Australia Group and Canada’s Intact Financial Corporation, over the past few months.
“The plan is for the two groups to make sizable acquisitions together,” says FT, “that use Berkshire’s balance sheet alongside Tokio Marine’s operational expertise and its record in identifying takeover targets.” Stay tuned.
The new Kraft Heinz x Disney alliance has already started rolling out at the parks. At the recent D23 fan convention, Kraft Heinz representatives said that the company’s top priority is to get condiment dispensers installed throughout Disneyland and Walt Disney World as fast as possible. Mission accomplished on that front.
Buffett has long praised Coca-Cola for its ability to always be front and center in the places where people are happiest — like the Disney Parks, the Olympics, etc.
And, soon enough, the brand itself becomes inseparable from those warm, fuzzy emotions and memories. Hopefully, similar things will happen for Kraft Heinz as it settles into its new life at The Happiest Place on Earth.
Admittedly I’m no analyst, but OXY paying off that preferred doesn’t seem so easy to me, I think they will, but its a lot of $
Thanks for featuring the MiB podcast - greatly appreciated!