Warren Buffett’s annual report out today. The report always begins with a big chart showing Berkshire stock performance. Here’s the bottom of the chart, showing how much better you’d be doing with Berkshire stock versus an index mirroring the S&P500.
Many of Berkshire holdings — like Apple — are in the S&P500. But it also contains a lot of junk which Buffett doesn’t own.
Buffett has two types of investments — those companies he owns outright (it’s an amazing collection) and the few that he simply owns shares in — and hence has no control. Like Apple and American Express.
Control comes from (1) allocating cash (aka capital) between all the fully–owned companies –from Fruit of the Loom to NetJets, to See’s Candy to Benjamin Williams (the paint company), and (2) choosing the CEOs to run the companies. Berkshire Hathaway is the most successful conglomerate in the history of the world.
I’ve owned BRKB over the years. But I never achieved the returns with my investments that the table suggests. Pity I didn’t put a $10,000 into Berkshire in 1965, it would be worth $380 million.
On the other hand, I started a company with no money and sold it for a lot of money. That’s an infinite return.
You can read the full Berkshire annual report here.
Buffett included Charlie Munger (now aged 99) quotes Buffett loved, including these:
+ The world is full of foolish gamblers, and they will not do as well as the patient investor.
+ All I want to know is where I’m going to die, so I’ll never go there.
+ Patience can be learned. Having a long attention span and the ability to concentrate on one thing for a long time is a huge advantage.
+ Don’t bail away in a sinking boat if you can swim to one that is seaworthy.
+ Warren and I don’t focus on the froth of the market. We seek out good long-term investments and stubbornly hold them for a long time.
+ There is no such thing as a 100% sure thing when investing. Thus, the use of leverage is dangerous.
+ You don’t need to own a lot of things in order to get rich.
+ You have to keep learning if you want to become a great investor. When the world changes, you must change.
+ Warren and I hated railroad stocks for decades, but the world changed and finally the country had four huge railroads of vital importance to the American economy. We were slow to recognize the change, but better late than never.
My note: Buffett and Munger hated technology for eons. But then changed. Now one of their major holdings is Apple.
My favorite Charlie Munger quote: “Warren, think more about it. You’re smart and I’m right.”
Nvidia is way overpriced.
But what an inspiration to savor. It’s in all the right places. And now it’s the stock that will benefit most from generative AI. I found this (and lot more) in a recent Nvidia presentation.
Click through this wonderful presentation: NVIDIA-Investor-Presentation-Oct-2022
Having happiness as you age
You graduate from a good school, get a good job, start a successful business, achieve fame and fortune.
Then you get older. Things change. There’ s family. There’s money. You’ve done it. Your happiness ebbs.
What can you do about it? There’s no easy answer because managing your new wealth — the wealth you always wanted — is enormously harder than creating it. You have no control any longer. Control bring happiness. But lack of control brings frustration and unhappiness. Many of us face this. I face it.
The standard solution is give stuff away. Make your life more compact easier to manage. Be healthy. Spend time with your friends. Social interaction is key. All the longevity studies show it. It’s hugely important to laugh with your friends. Focus also on doing something that makes you happy. I really like writing this blog, though I don’t get paid and it’s not making me famous.
Harvard Business School has a professor of “happiness.” (I’m not making this up.) He spoke before HBS alumnae at a 2022 reunion event. For the video lecture, click here.
More tech tips
+ Many websites don’t work well with a laptop. Use your phone. Craigslist doesn’t work with my laptop, but works with my iPhone.
+ Apple App Store is stupid. Last week’s password doesn’t work this week. Make a new one. Include one capital letter and one symbol. This works F**kApple2.
+ Newer software isn’t always better. Especially software from Microsoft, which tends to take away useful features in its newer releases.
+ A 15% discount is not worth giving anyone your email address. You’ll be bombarded forever and never get off the list.
+ Whirlpool appliances are awful. Cheap and unreliable.
+ LG and Kia make really great stuff. Susan and I just rented a Kia Sportage from Budget. It’s a remarkably good car, fun to drive,
+ I switched my iPhone from Safari to Chrome. Easier and more logical to use.
+ I can hold a decent conversation on my Apple Watch. My watch does not have a separate cell phone line, but uses my iPhone which is often in a different room being charged, or sitting on the bench in the middle of the tennis court.
+ I prefer Google Chrome as my laptop browser of choice. It has a great password and form filler-in manager.
+ AirTags are the greatest way to track your luggage. Someone takes your bag off the baggage claim carousel. You can chase them. If it’s buried on the carousel. You can find it.
+ Your airline (especially JetBlue) doesn’t remember you’re TSAPre. Check when you book online.
+ X1 has credit cards you create and then cancel whenever you want. Super convenient for trial subscriptions.
+ Friends are falling on the last step going down. Please hold the hand rail.
+ Everything is easier and faster the second time. It’s also easier if you just do it and stop procrastinating it.
+ Statins really work.
+ Most software works logically, if you think illogically .
+ Most important: You are getting older. You shouldn’t be getting more feeble, i.e. running short of breath. Go see a cardiologist. If he says you’re doing fine, go to another one. Doctors are humans. They’re rushed. They make mistakes.
When something is different. Even the smallest thing. Especially the smallest thing – like that mole on your back. A friend died of a tiny melanoma on his back because his doctor dismissed it. Ditto for the friend who dismissed by one doctor and then needed triple bypass — as diagnosed by the second doctor.
You need to research and think about your own body. Keep track of what’s changing. Don’t take drugs just because some doctor prescribed them. Research. Research. Research.
In praise of napping
Most of us don’t sleep enough. Can you nap and feel a million dollars? Learn to nap — anywhere and everywhere.
I once studied marketing
But this?
How big (oops small) is this market? Why am I amused? Cost $129 or so. Or 5.7 times what you pay for an Amazon Essentials pair of jeans. Click here.
Apple rumors
There are rumors that Apple will soon introduce a glucose monitor that won’t involve pricking your finger — as most diabetic sufferers do several times every day. It’s a gigantic market.
Tennis is still the best sport as you age
That’s why I’m playing every day.
And why I’ll be back tomorrow. Harry Newton
