Warren Buffett, Charlie Munger & Bill Gates Interview

Berkshire Hathaway's annual meeting was this past weekend and was filled with wit and wisdom from investing legends.  In a separate interview, CNBC's Becky Quick sat down and talked with Warren Buffett, Charlie Munger, and Bill Gates.

Here's some takeaways followed by the full 2-hour video below.  The first hour was just Buffett by himself and then Munger joined in, and finally Gates joins at around 1hr 20.


Buffett, Munger & Gates Interview 2019

- Buffett says continued trade war would be bad for the whole world

- On Kraft Heinz (KHC): "The company has my confidence."  If he just owned Heinz, he says he'd be doing better but they paid too much for Kraft.  On overpaying: "Time usually works it out, but capital could have been better deployed."

- On the Occidental Petroleum (OXY) deal he's backing:  They've committed the $10 billion 100% and they don't have control over what OXY does with the money or the terms of the deal, etc.  While the 8% preferred is a sweet deal for him, he noted that, "It's a bet on oil prices over the long-term more than anything else.  It's also a bet on the fact that the Permian Basin is what it's cracked up to be."  He and Munger feel good about doing the financing of the deal and they could have done $20bn instead of the $10bn if needed.

-  He likes when Apple (AAPL) goes down, "Because they're repurchasing shares and when they repurchase shares our interest goes up and we don't lay out a dime; I love it."  He's "wildly" in favor of the company's $75 billion buyback.

- "I will always react well to declining prices."

- He thinks China and the US will be the two big superpowers over the next 100 years and that the two won't always get along and there will be disagreements over various things.

- On Wells Fargo (WFC):  Munger said: "I think it's a fine company; so they made one bad decision about an incentive plan.  I regard it as an honest mistake not as some deep moral failure ... they just had a blind spot."

-  Buffett said: "Charlie beats this into me all the time:  As soon as you find a mistake, do something about it.  And sometimes that's unpleasant.  But I've gotta do it."

-  Bill Gates on China/US: "It's the most important relationship in the world."

-  Gates is also concerned about intellectual cooperation being slowed down between the two countries and things like artificial intelligence

- "Anger drives out reason." ~ Munger

"  I think people should have modest expectations" about stock returns going forward, Gates says.  He thinks valuations have gotten high and he's amazed at that, but he hasn't made many changes to his Foundation's equity portfolio.

-  "I think stocks are ridiculously cheap... if you believe that 30 year bonds at 3% makes sense." ~ Buffett

- Buffett on what he's been reading lately:  Melinda Gates' book The Moment of Lift


Video of Interview

Embedded below is the 2-hour interview with Warren Buffett, Charlie Munger, and Bill Gates:

Warren Buffett, Charlie Munger & Bill Gates Interview

Today on CNBC, Berkshire Hathaway's Warren Buffett was interviewed by Becky Quick and talked about a range of topics.  Charlie Munger and Bill Gates later joined the conversation.  Here's some takeaways and quotes:


Warren Buffett's Thoughts

On the market: Stocks aren't in a bubble now.  Though said some private deal valuations are getting high and it's harder to find bargains these days.

On the economy:  Thinks the economy has picked up steam. "Yeah, I see a lot of numbers (from all BRK's businesses).  Business is generally pretty strong."  He cited railcar loadings, etc.  Also notes you've seen some inflation.

Says he thinks it's hard for unemployment to really go much lower as they have a ton of jobs available.  "If a resource is scarce, prices go up."  Says certain job lines are much harder to fill these days (construction cited specifically).

On potential trade wars:   "I don't think we will have trade wars of significance."  He thinks there will be trade movements though.  Says a trade war with China would be negative for all involved as they have a common interest.

On Amazon / Jeff Bezos:  Still laments not buying it in the past, says what Bezos has done is incredible.

On moats: Cited iPhones, Costco, and Elmer's glue as examples

On Apple: Says he doesn't have to do anything because the company will buyback so many shares, so his ownership stake will go up naturally.  He recently bought a ton more AAPL shares.  Said he currently owns around 5% of the company but he'd like to own 100% of it.  The consumer behavior was the main driver behind his ownership, as the device has woven itself into consumer's daily lives and minds, and it's a very useful product.

On owning banks:  Has owned one in the past and loves the banking business but doesn't want to now because of the bank holding co act.  Says Wells Fargo (WFC) was slow to act in addressing bad actions but still has a fundamentally solid business.

On bitcoin:  Compared it to the tulip bubble years ago.  Says it's a non-productive asset and just sits there.

On autonomous vehicles: 'Net it will be bad for the car insurance industry if autonomous vehicles become the norm.'  It will be very hard to pick winners in 5 years.

On reading he recommends, Buffett again pointed to Chapter 8 of The Intelligent Investor.  But this time around he also recommended Chapter 4 of Steven Pinker's new book, Enlightenment Now.

Ends his interview by reiterating: "It's very important in life to associate yourself with people that are better than you."


Charlie Munger's Thoughts

On the biggest thing he and Buffett have disagreed on:  Munger wanted to buy the French stake in Costco.  Buffett didn't and says he should have.  "Charlie really wants to wait for the fat pitch."

Munger said, "There's a million ways to be irrational." And while Berkshire makes mistakes, they make them far less frequently than others and he thinks that's their main advantage.

Munger noted: "The Munger family is invested in China substantially.  Since about 14 years ago, and I did it because I respected the man that was going to do the investing (Li Lu) and it looked undervalued and the companies looked very strong."  Today, he says the best companies in China are still cheaper than the best companies in the US.  "I don't think it'd be all that hard for people to find 4 or 5 companies in China to invest in."

He also said he wished Berkshire owned more of Apple.  He likes that it's reasonably priced and strong, a 'very desireable combination' as well as 'very intelligent management.'

On bitcoin, Munger called it worthless artificial gold.  "It's a scumball activity."

On potential trade wars with China: "It would be insane for them not to work together."

On what he's been reading recently:  A book by a Chinese economist, though he didn't mention the name specifically.


Bill Gates' Thoughts

He said that "T-bills set the rules" and he pointed out that since the 10-year yields 3%, you've got that hurdle to get over by taking more risk.  He says asset class returns will be lower over the next 10 years.

On bitcoin: There's some really good technology as far as sharing databases etc, but the coin itself is a speculative thing.  He received some for his birthday a while back but sold it, so doesn't own it now.  Called it a greater fool investment, and said he'd short it if there was an easy way to do so.

Gates says there are tech stocks that are undervalued, but you're going to get very high variance as the winner in some markets gets a high share of the profit pool.

He owns a ton of Microsoft (MSFT) obviously, but revealed he has a 'fantasy stock portfolio' of companies he thinks will do well but doesn't own.  "The top tech companies have a very strong share of the profit pool right now."  He obviously declined to reveal names.

Gates also echoed Munger's China sentiment that it looked attractive.

On tech and data privacy, thinks regulation is inevitable.  But the big companies will handle that.

On Tesla (TSLA): thinks they have a great product but a very high valuation and a lot of competition coming.  Says autonomous and electric vehicles are coming simultaneously and thinks 15 years from now things will be very different.

On what he's been reading recently:  Hans Rosling's book Factfulness.  Says it helps you think about a lot of different things in the world.

Warren Buffett, Charlie Munger & Bill Gates Interview

Becky Quick on CNBC recently sat down with Berkshire Hathaway's Warren Buffett for a one-on-one interview and then was later joined by Charlie Munger and Bill Gates for a discussion on a myriad of topics.  Here are some highlights:

Warren Buffett's Interview

-  Talked about technology stocks a lot at Berkshire's annual meeting.  Munger said they missed Google (GOOGL) and Buffett thought they should have had some insight into it because GEICO was a heavy user of it for advertising and paying per click.  He wasn't sure if there was a first mover advantage or if increased competition was going to come along (Bing, etc) or if there were going to be technological advances he couldn't understand.  "If I were forced to buy it or short it, I'd buy it.  Same with Amazon."

-  Apple (AAPL) shares were much more reasonable compared to future earnings so that's why he bought that tech stock.  Likens the consumer nature of the product as a way for him to easily tell what's going on with customer preference.  "You can't move people by price in the smartphone market remotely like you can in appliances ... the loyalty is huge."  Notes that most items are price sensitive (TVs, etc) but AAPL's products don't seem to be.

-  Recently highlighted how Buffett sold some IBM and he said that they've experimented with IBM's Watson at GEICO.  In that space you have to worry about somebody coming in and jumping ahead with the utility.  "The biggest value will come when it replaces human labor." 

-  Doesn't make trades on the basis of political election outcomes, doesn't look much at quarterly GDP numbers.

-  Railroad figures show the economy is doing 'OK', 2% rate or so.  Natural gas has gone up in price so that dictates the use of goal a lot of places, so coal shipments are up the most % wise. 

- Housing market is getting better, but not 'booming.'   Berkshire owns Clayton homes (manufactured homes), Acme brick, Berkshire Hathaway realty, Shaw flooring, Benjamin Moore paints. 

-  "Credit card volume will tell you a lot about the consumer., what their attitude is."

-  "Packaged goods has generally been a very profitable business."

-  Largest investor in four major airlines (UAL, DAL, AAL, LUV): Airlines have found a very high percentage of customers are price conscious.  Yet most consumers are captive to whatever airline flies the route they need to take.  Thinks consolidation of the industry has helped and it's no longer a 'suicidal business.'

-  "I have no idea what the market will do in the short-term."  They've got $95 billion sitting around and it doesn't make him happy that he's not earning anything on it.  Says it's getting tougher to buy businesses these days, "Once you buy a business, the business doesn't know what you paid for it."  "It's a very tough period to allocate capital."

- Says he's still cheap but not as cheap as he used to be. "You can afford to overpay a bit for a really fine business depending on your degree of certainty that it's a really fine business."

- Buffett says one thing he mentioned at the annual meeting no one really appreciated: that the five largest businesses today by market value ($2.5 trillion or more) you could run those businesses with no equity capital.  That's a completely different world than the past when industrial giants needed a lot of capital.

-  Didn't buy Amazon (AMZN) because of "stupidity."  Says he was impressed by Bezos long ago but didn't think he could pull off what he has.  On shares currently: "It's a big valuation ... I'm not buying any.  These are powerful ideas with big potential and he's executed."

-  One essential factor that determines what he thinks about market valuations: "The most important item over time in valuation is obviously interest rates."  "Anybody that prefers bonds to stocks today is making a big mistake.  It's ridiculous for somebody to buy a 30 year bond at these rates."

-  "Every smart guy is tempted by leverage, and some of them are broken by it."



Then at the end of Buffett's 1-on-1 interview, Charlie Munger and Bill Gates also joined Buffett to talk about healthcare, tax reform, mistakes they've made, and other topics.


Embedded below is the video of Warren Buffett, Charlie Munger, and Bill Gates's interview on CNBC:



For more from these investors, be sure to check out Warren Buffett's recommended reading list as well as Charlie Munger's favorite books.

Warren Buffett & Bill Gates' Talk at Columbia University 2017

Berkshire Hathaway's Warren Buffett and Microsoft's Bill Gates recently gave a talk at Columbia University.  They chatted about a wide range of topics and did a Q&A session as well.

Embedded below is the video of Warren Buffett & Bill Gates' talk at Columbia:



If you missed it, we also highlighted Buffett & Gates interview with Charlie Rose.  And we've also posted up notes about the new documentary Becoming Warren Buffett.

Warren Buffett's Interview With Charlie Rose: "Bought $12 Billion of Common Stocks Since Election"

Charlie Rose recently sat down with both Warren Buffett of Berkshire Hathaway as well as Bill Gates of Microsoft. 

They started off talking about the giving pledge and philanthropy and they've been surprised at the overwhelming participation. 

On business, Buffett noted that it's imperative that he be able to know and understand the business and to stay within that sphere of competence.  Of his two younger managers (Ted Weschler and Todd Combs), he notes, "I have two people who themselves have different circles of competence."  They weren't chosen because of that, but it's nice to have a huge circle he says.

He says it's harder to find acquisitions mainly because of the size of Berkshire these days.  On how he finds them, he might get a call, he might be thinking about certain areas.  Occasionally, he decides to act.

One key takeaway from the interview was that Buffett said,"We've bought $12 billion net of common stocks since the election.  (Ted and Todd) have probably bought some too." 

When asked by Rose about his purchase of airline stocks last year, Buffett said it was largely his decision to do so.

The conversation then shifted to allocation of time and Gates poignantly noted that, "You control your time.  Sitting and thinking might be a much higher priority.  It's not a proxy of seriousness that you fill every minute of your schedule."

Buffett added, "I can't buy time" and Rose noted it's the most precious resource.

Buffett thinks a 4% growth rate that the Trump Administration is targeting is pretty high and in actuality, a 2% rate would be fantastic and could potentially be possible.

Embedded below is the video of Charlie Rose's interview with Warren Buffett:

Forbes Billionaire List 2011: Top Investors That Made the Cut

Forbes is out with its billionaire list: 2011 edition. This year, the list features 1,210 billionaires with a total net worth of $4.5 trillion. Digest that for a second. What might surprise you even more is the number of prominent investors that grace this accomplished list.

Notable Moves From Last Year

Last year in a quick scan, we highlighted 36 top investors on Forbes' list. This time around, we found 48 prominent investors. The top three slots remain unchanged from 2010 with Carlos Slim Helu, Bill Gates, and Warren Buffett occupying their same respective positions. It should come as no surprise that many of the founders of the top 10 biggest hedge funds also grace this list of billionaires.

Moving Up: John Paulson moved up six slots on the list by adding to his fortune by 33% (+$4 billion). Appaloosa Management founder David Tepper jumped up 50 spots on the list as he boosted his net worth by almost 43% to $5 billion.

Moving Down: Energy trader John Arnold's fortune shrank by $0.7 billion and as a result he dropped 124 spots. David Shaw's net worth declined by 12% and he fell 166 slots on Forbes' list. Wesco and Berkshire Hathaway veteran Charlie Munger somehow saw his savings swoon by 41% as he slid 558 spots.

Net Worth Up, Rank Down: George Soros saw his personal warchest grow by only $500 million (we use the term 'only' very loosely) and thus was leapfrogged by numerous other investors on the list. Paul Tudor Jones found himself in a similar scenario where he increased his net worth by $100 million but slipped 39 rungs on the ladder. It appears as though the rich were simply getting richer faster than these two hedge fund titans.


Top Investors on Forbes' Billionaire List
(Click links for recent activity from each manager):

1. Carlos Slim Helu $74b: Made money in telecom but still a large investor
2. Bill Gates $56b: Invests via his Cascade vehicle
3. Warren Buffett $50b: Berkshire Hathaway (see his reading list)
26. Prince Alwaleed $19.6b: Famous for his investment in Citigroup
39. John Paulson $16b: Hedge fund Paulson & Co (see his year-end letter)
46. George Soros $14.5b: Soros Fund Management
57. Paul Allen $13b: Made money via Microsoft but invests (Vulcan)
61. Carl Icahn $12.5b: Recently announced he's returning outside capital
74. Jim Simons $10.6b: Renaissance Technologies Medallion Fund
114. Steven Cohen $8b: SAC Capital
162. Ray Dalio $6b: Bridgewater Associates (see his recent interview here)
169. Stephen Schwarzman $5.9b: Blackstone Group
208. Sam Zell $5b: Real estate and private equity
208. David Tepper $5b: Appaloosa Management (cautious but optimistic)
235. Bruce Kovner $4.5b: Global macro hedge fund Caxton Associates
268. Robert, Daniel, & Dirk Ziff $4b each: Brothers from Och-Ziff
281. Henry Kravis $3.9b: Co-founder of KKR
304. Eddie Lampert $3.6b: ESL Investments (runs Sears Holding Co)
310. Leon Black $3.5b: Founded private equity firm Apollo Management
336. Paul Tudor Jones $3.3b: Tudor Investment Corp
336. Daniel Och $3.3b: Och-Ziff
336. John Arnold $3.3b: Energy trader of Centaurus Capital
362. Peter Kellogg $3.1b: Wall Street specialist firm Spear, Leeds & Kellogg
459. Stanley Druckenmiller $2.5b: His Duquesne Capital recently shut down
459. Mark Cuban $2.5b: Made his fortune in technology but is avid investor
512. Julian Robertson $2.3b: Tiger Management founder
512. Ken Griffin $2.3b: Citadel Investment Group founder
540. David Shaw $2.2b: Founder of D.E. Shaw & Co
540. Philip Falcone $2.2b: Harbinger Capital focusing on 4G network
564. Bill Gross $2.1b: PIMCO's bond vigilante
651. Wilbur Ross $1.9b: Specializes in leveraged buyouts
651. Izzy Englander $1.9b: Millennium Management
692. Leon Cooperman $1.8b: Omega Advisors (see his recent interview)
692. Alan Howard $1.8b: Hedge fund firm Brevan Howard
736. Louis Bacon $1.7b: Global macro hedge fund Moore Capital Management
736. Ken Fisher $1.7b: Fisher Investments
736. Glenn Dubin $1.7b: Highbridge Capital
736. Stephen Mandel $1.7b: Hedge fund firm Lone Pine Capital
782. Richard Chilton $1.6b: Chilton Investment Company
833. Michael Price $1.5b: MFP Investors
833. James Dinan $1.5b: York Capital Management
833. Peter Thiel $1.5b: Made fortune in tech, runs hedge fund Clarium Capital
833. Marc Lasry $1.5b: Avenue Capital
879. T. Boone Pickens $1.4b: This energy maverick also manages a hedge fund
993. Henry Swieca $1.2b: Highbridge Capital
993. Howard Marks $1.2b: Oaktree Capital
1140. Charlie Munger $1b: Berkshire Hathaway
1140. Nelson Peltz $1b: Trian Fund Management


Overall, prominent investors comprise around 4% of this exclusive list. For more recent investor accolades, be sure to also check out the top 10 biggest hedge funds in 2010 as well as the list of 2010 hedge fund returns.

Forbes Billionaire List: Hedge Fund Managers That Made The Cut

Forbes is out with their annual list of billionaires and we're here to highlight the various hedge fund managers on the list. In the past, we'd also posted up last year's Forbes billionaire list if you wanted to compare between them.

Mexican billionaire Carlos Slim tops the list this time around, displacing Bill Gates from his previous perch. Slim's fortune now sits at $53.5 billion, up $18.5 billion from the year prior. Bill Gates increased his wealth by $13 billion to bring his total to $53 billion. Warren Buffett's fortune grew $10 billion, up to $47 billion now. We've covered Slim a few times on the site before, most notably for his investment in the New York Times (NYT). And of course we've detailed Warren Buffett's actions countless times on the blog, most notably with Buffett's portfolio and his recommended reading list. As for Gates, we'd posted his 2010 annual letter for those interested.

Here's the group of prominent hedgies that landed on Forbes' esteemed billionaire list with their rankings, respective fortunes, and links to our coverage of each manager:

1. Carlos Slim ~ $53.5b
2. Bill Gates ~ $53b
3. Warren Buffett of Berkshire Hathaway ~ $47b
35. George Soros of Soros Fund Management ~ $14b
45. John Paulson of Paulson & Co ~ $12b
59. Carl Icahn of Icahn Partners ~ $10.5b
80. Jim Simons of RenTec ~ $8.5b
113. Steven Cohen of SAC Capital ~ $6.4b
171. Stephen Schwarzman of Blackstone Group ~ $4.7b
212. Ray Dalio of Bridgewater Associates ~ $4.0b
212. Daniel, Dirk & Robert Ziff of Och-Ziff ~ $4.0b
212. John Arnold of Centaurus Energy ~ $4.0b
258. Bruce Kovner of Caxton Associates ~ $3.5b
258. David Tepper of Appaloosa Management ~ $3.5b
287. Daniel Och of Och-Ziff ~ $3.3b
297. Paul Tudor Jones of Tudor Investment Corp ~ $3.2b
316. Eddie Lampert of RBS Partners ~ $3.0b
354. Stanley Druckenmiller of Duquesne Capital ~ $2.8b
374. David Shaw of DE Shaw Group ~ $2.5b
437. Julian Robertson of Tiger Management ~ $2.2b
488. Philip Falcone of Harbinger Capital Partners ~ $2.0b
488. Ken Griffin of Citadel Investment Group ~ $2.0b
488. Bill Gross of PIMCO ~ $2.0b
556. Alan Howard of Brevan Howard ~ $1.8b
582. Izzy Englander of Millennium Partners ~ $1.7b
582. Charlie Munger of Berkshire Hathaway ~ $1.7b
655. Stephen Mandel of Lone Pine Capital ~ $1.5b
655. Louis Bacon of Moore Capital Management ~ $1.5b
655. Leon Cooperman of Omega Advisors ~ $1.5b
721. Marc Lasry of Avenue Capital ~ $1.4b
773. Richard Chilton of Chilton Investments ~ $1.3b
773. Glenn Dubin of Highbridge Capital ~ $1.3b
828. Peter Thiel of Clarium Capital ~ $1.2b
880. Nelson Peltz of Trian Partners ~ $1.1b
880. T. Boone Pickens of BP Capital ~ $1.1b
880. Henry Swieca of Highbridge Capital ~ $1.1b

On a year over year basis, Stephen Cohen increased his wealth by $900 million, while RenTec's Jim Simons boosted his fortune by $0.5b. Tiger Management's legendary fund manager Julian Robertson saw a $900 million increase in his net worth as well. David Tepper of Appaloosa Management saw an impressive increase as he gained $2.3 billion in one year's time as his hedge fund's bet on financials paid off handsomely. Besting Tepper though was John Paulson. The subprime maestro doubled his fortune from $6 billion last year to $12 billion this year as his impressive run continued. Overall though, the rich get richer. You can view Forbes' full list of billionaires here as well as Forbes' in-depth look here.

For more rankings in hedge fund land, head to the breakdown of the world's largest hedge funds, as well as last year's billionaires list.

Bill Gates' Annual Letter 2010

Presented without comment is Bill Gates' annual letter for 2010. Today is 'wisdom Wednesday' here at Market Folly as we look to share a plethora (yes, a plethora) of insightful resources. The letter is embedded below and you can also download the .pdf here.

Warren Buffett & Bill Gates Speak at Columbia Business School

Recently, legendary investor Warren Buffett and Microsoft founder Bill Gates sat down with CNBC's Becky Quick for a town hall type event at Columbia Business School on November 12th, 2009. We wanted to make sure everyone had a chance to see/read about the event so here it is.

Embedded below is the video of them on CNBC, RSS & Email readers come to the blog to view it:




Or, if you prefer, you can also read the full transcript (warning: it's very lengthy). Embedded below is the transcript of the event (RSS & Email readers come to the blog to read)




You can also download the .pdf of the transcript here. Definitely worth a read/listen so make sure you check it out!



Source: video and transcript from CNBC

Warren Buffett's Successor At Berkshire Hathaway (BRK.A)

Hat tip to My Investing Notebook for stumbling upon this video. Who will be Warren Buffett's successor? It is a very interesting question indeed. There have been many postulations and the like, but most likely no one will know until the day itself comes. That certainly won't stop speculation in the mean time though. Fact: the most discussed item on the agenda at Berkshire Hathaway board meetings is the succession plan. One particularly hot topic is how Buffett is essentially irreplaceable in his dual role as chief investment officer and chief executive officer. So, it only makes sense that you will most likely see one person handle CEO duties and another individual with investing prowess handle the portfolio in the future.

For whatever reason, the two names that pop up most frequently in the discussion are David Sokol and Byron Trott. Sokol is currently the CEO of one of Berkshire's companies, MidAmerican Energy. Trott, on the other hand, was a longtime banker at Goldman Sachs who has worked with Buffett on numerous deals in the past, including Buffett's recent investment in GS last year. Trott has since started his own venture fund backed by Buffett, making the ties that much more interesting.

Buffett and board member Bill Gates chatted with Bloomberg about Berkshire and the potential succession plan in a 20-minute video interview embedded below. Additionally, they interviewed Sokol and Trott as well on the same topic.

Here's the video:



For more on Buffett, we recently detailed his recommended reading list and don't forget to check our Buffett's top 25 quotes.