Berkshire Hathaway’s Annual Meeting 2020 — Key Lessons

I’ve been following Berkshire Hathaway’s annual meetings a, in a recent virtual meeting “Oracle of Omaha” tried to give us a little jolt of optimism & some interesting takeaways.

Image Source: Yahoo Finance

Exercising caution: Unlike the 2007–08 crisis, in which Berkshire invested heavily, presently it is sitting on a $137 billion cash pile & is a net seller of equities in 2020. Even with the market hammering prices on many assets, Buffett still hasn’t found an acquisition target worthy.

Equities > all else: According to him equities have superior wealth-creating potential & will still outperform bonds, treasury bills, and other instruments over the long run unless we see them as short-term gambling instruments.

Airlines have landed: Buffett has been bullish on airline stocks but he sold his entire stake worth ~$6 Billion last month. The lesson here is to accept mistakes and make amends. And, in case things fall apart we shouldn’t shy away from exiting our positions.

Cash is king: Lastly, he emphasized to stay away from leverage is it increases the risk significantly, not to borrow money to invest in equity as no one knows what’s going to happen tomorrow.

On a lighter note: You and Warren Buffett have something in common. “It’s been seven weeks since I’ve had a haircut,” he said.

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