BzBee Investor: Berkshire Hathaway AGM 2023 (Omaha)

After a few years of thinking of going to the Berkshire Hathaway AGM in Omaha. It finally happened this year.

There are also many other events happened over the extended long weekend from Thursday to Sunday.

I have attended a few (see some pics at the end of the post):

1. Friday Morning - Mohnish Pabrai's talk at the University of Nebraska.

I found out about Mohnish from his cloning strategy. Here's a link to his Youtube video: Mohnish Pabrai: thou shall be a shameless cloner.

During the talk, Pabrai shared some interesting insights on investing. He discussed how successful investors like Warren Buffett and Benjamin Graham made most of their gains from a few great decisions throughout their lifetime. For example, Graham made 50% of his lifetime gain from one single investment (GEICO). According to Pabrai, holding on to these winners and letting them thrive is key to investing success.

Pabrai shared an interesting quote: "Do not cut the flowers and water the weeds." This made me reflect on the common practice of portfolio rebalancing in the investment industry. Typically, when one investment outperforms others and grows to a larger position in the portfolio, managers will sell some of it and reallocate funds to other investments. People who really get it call this 'diworsification'. It leads to suboptimal returns as it fails to fully capitalize on the winners. Rebalancing aims for only average.

Pabrai shared some stats on Buffett's decisions, noting that only about 4% of them were outstanding and the rest were average.

The takeaway was that investing can be forgiving - you can make many mistakes and still do well as long as you keep the winners and let them grow in your portfolio. So don't cut the flowers.

2. Friday afternoon - Value investment panel at Creighton University.

This is a talk from some money managers. Prepared questions were quite generic - things that you would've read or heard online somewhere. But it got more interesting when people asked them questions on the spot.

3. Saturday - BRK AGM

We lined up at 3.50am to get the seats closer to the stage where Buffett and Munger speak. I was great to feel the energy there in person. Youtube should have a complete recording of the meeting and I am sure there are a lot of different articles out there on different pieces.

I've met people come from all over the world... South Africa, Luxembourg, France, Japan, Hongkong, UK, and of course Canada and US. One thing I noticed is there's been an increasing amount of students and some <18 asking questions.

4. Sunday Morning - Merkel Corp brunch & shareholder meeting

Similar to BRK's AGM, Markel Corp also held a Q&A session for its shareholders and provided breakfast at the Mariott. Copycat of BRK, Markel is a holding company with an insurance division that generates float from the premiums collected. It then uses the float to acquire whole businesses (venture division) or buy publicly traded stocks (investment division). Markel's management refers to these divisions as the company's "3 engines".

The company has a market cap of ~18B at the time of this writing. It went IPO in 1986 at ~$8/share and today's price is $1369. Representing a compounding annual return of ~15% since inception. However, the performance for the last 20 years is around 10% annually.

Markel appears to be following in the footsteps of Berkshire Hathaway, and it will be interesting to see how the company develops over time. I might look into it more.

Overall I had a lot of fun at Omaha. There were some key learnings that can be pivotal for my personal investing journey such as "don't cut the flower". I was quite inspired to hear that investing can be forgiving.

Also being surrounded by like-minded people is great. And I got to catch up with some friends that I haven't seen for a while. I definitely feel more aspired after the trip.

Until next time!

In the conference center