The Canadian Investor - 10 Lessons from Seeing Warren Buffett in Person

Episode Date: May 15, 2023

In this episode, Braden breaks down his takeaways from attending the Berkshire Hathaway annual meeting. If you’ve never been to the annual Berkshire meeting to see Warren Buffet and Charlie Munger in person, this is the episode for you! Symbols of stocks discussed: BRK-B, BRK-A Check out our portfolio by going to Jointci.com Our Website Canadian Investor Podcast Network Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital Want to learn more about Real Estate Investing? Check out the Canadian Real Estate Investor Podcast! Apple Podcast - The Canadian Real Estate Investor  Spotify - The Canadian Real Estate Investor  Sign up to Stratosphere for free 🚀 our platform for self-directed stock investing research. Register for EQ Bank, the seamless digital banking experience with better rates and no nonsense.See omnystudio.com/listener for privacy information.

Welcome back into the show. This is the Canadian Investor Podcast, made possible by our friends and show sponsor, EQ Bank, which helps Canadians make bank with high interest and no fees on everyday banking. We also love their savings and investment products like GICs, which offer some of the best rates on the market. I personally, and I know Simone as well, is using the GICs, which offer some of the best rates on the market. I personally, and I know Simone as well, is using the GICs on a regular basis to set money aside for personal income taxes in April of every year. Their GICs are perfect because the interest rate is guaranteed, and I know I won't be able to touch that money until I need it for tax time. Whether you're looking to set some money aside for a rainy day or a big purchase is

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Yeah, I mean, it's a fun little change. I mean, I think either way, it's pretty good. It's fun when we go back and forth a little more, but switching things up, it'll give me a break for, you know, keep my saliva and all that. Don't dry my mouth too much. You'll be primed and just ready for some good one-liners for the episode yeah exactly so uh you you go ahead you lead this one brayden okay so today we're gonna do a recap of my last like four or five days in om, Nebraska for many events, meeting investors, meeting some internet friends,

and of course, seeing the very sharp 99-year-old and 92-year-old Charlie Munger and Warren Buffett, respectively. And so I'll just kind of go through everything. Basically, what I've done, Simone, is I haven't refined it a lot. So I'm just going to be kind of winging a lot of this because I just had an ongoing note in my phone and I've just pasted it here for the episode. But I think it's structured pretty well. And I'm going to also go over 10 distinct lessons from things that they've said during the q a session while i was watching it live so uh i i encourage you to jump in comment ask questions during that during that time but we should start with my airbnb story did i tell you this yet yeah like i kind of half understood, but yeah, why don't you bring me up to speed?

So I went to Omaha and where I was staying was I'm in this like investing community and my co-founder got me in it. It's just this online forum. It's like value investors and professional fund managers. And I mostly have gone in there because a lot of people were actually using Stratosphere and interested in the platform, using it for their business. So I was just engaging with them. I just thought it was a great marketing tool, as well as there's some really, really smart people in there.

So I joined this community. And so next thing you know, I'm going to Omaha with them, staying in this Airbnb. We have like a bunch, we have like three houses side by side and we all have our own room in there. And there's, it's all owned by the same Airbnb owner. And these houses are like carbon copies of each other. And so I arrive in Omaha at midnight and i go to the airbnb everyone's already there to sleep so i'm trying not to make too much noise but this is an old house with the creakiest floors on planet earth and you know when you're trying not to be

loud you're way louder yeah i already have a heavy foot and i'm like oh man these guys are gonna hate me next morning i realized i slept in the wrong house i went in the wrong airbnb it was still with the group so it's not like that crazy but like i was not in the right house and the key code works on all three houses the owner yeah that's probably that's not the best idea i think yeah like what security is that so that's like i don't you know you don't you don't question it when you type in the right key code to the door like anyway you got lucky there were beds left yeah there was yeah there was one left and uh anyway so did you switch back to the right one or you just stay there i switched back because i went to the other house and i was like oh this

is kind of an upgrade of a room okay if not i would have just stayed and like i was with these with these german and austrian guys in the other house and they're they were great like they're they're awesome um anyway so let's get on to this Saturday because the Saturday is the Berkshire meeting. It's a full, full day, but I'll start from the top. So you're in this arena sits, I think they said there was 40,000 people there. It was full, more than standing room. I don't think there was 40,000 people there. It was full, more than standing room.

I don't think there was that many people, but that's how many shareholder cards they gave away. So let's call it 25,000 people there. This arena is full, including everyone having to stand in the concourse areas and in the upper deck on all the walkways were full of people so it was more than full and they start off with a movie did you know about the movie no i didn't know about the movie and actually question for you how like do you sign up to go there to the arena or it's just first come first serve

it's this it's open seating it's first come first serve but you you have to have your shareholder credentials card okay but you can also go as a shareholder credentials guest if you're with a shareholder and you can and like, for instance, gave me one of his shareholder credential cards because they give you more than one if you want one. Okay. Yeah. Because I was like, I don't think you own Berkshire stock. Yeah.

I actually don't own Berkshire stock. I would be happy to own Berkshire stock. Yeah. But I think you're looking at very similar to market returns, which is fine, which is great. I mean, the blue chip of all blue chips. So the movie all right so they start with this movie and i can't describe the plot because it seems like

it's a bit of a rite of passage there being during the movie they're very strict there's a thing warren comes out and says do not film this anyone caught filming like you'll get kicked out like the shareholders will be pissed like it's not cool right basically and so it's the it's the kind of like novel thing about being there and it is brilliant it's skit skit done really by buffett and charlie oh man oh man from the 1980s no like some of them seemed pretty recent okay okay some of them for sure were not recent but but still they would be like in their 80s late 80s like a few maybe early 90s the tell is that they did not have white hair that's uh yeah or he certainly did yeah or had hair for charlie and charlie's pretty bald i think right yeah yeah at the ripe age of 99 we'll uh we'll give him a break so the movie is howls it's hilarious and these two guys that that leads me into my first point is these

guys are jokesters it's always been a common theme of the meeting to have a lot of humor in there. Charlie with his one-liners, Buffett loves telling jokes. He said that that was his first thing that he asked AI was to tell it jokes when Bill Gates came over to his house to show him chat GPT. And the whole vibe there is these two guys have a real appreciation for comedy and humor and the the movie is fucking hilarious dude uh it's it's good stuff so but you know that i mean they love sprinkling and jokes yeah no exactly i mean not too much to add there i you know i do would just with what i've watched before and the hour and a half or so that I watched this morning because I wanted to, you know, see a bit how it went. So I can I could chime in a little bit.

And there's always that humor. And it's almost, you know, the little kind of banter back and forth and you know charlie having zero filter and warren buffett being like more you know how would i diplomatic diplomatic is probably that the better word where charlie doesn't give a beep so yeah no and he's carrying less and less which you know i'll probably do the same at that age question if i make it yeah i do have a question for you because that's been one of my kind of criticism from uh you know buffett but i think especially charlie is um do they get any questions about you know why they invest in china in Chinese companies? Oh, yeah. Oh, yeah. Dude, Munger's weird about it. Yeah. Okay. I mean, he has been for what I've seen.

He's bringing up some of his portfolio companies. And I'll talk about that in one of my lessons, actually. I'm going to have a section on China. Okay. As do-it-yourself investors, we want to keep our fees low. That's why Simone and I have been using Questrade as our online broker for so many years now. Questrade is Canada's number one rated online broker by MoneySense. And with them, you can buy all North American ETFs, not just a few select ones, all commission-free so that you can choose the ETFs that you want. And they charge no annual RRSP or TFSA account fees. They have an award-winning customer service team with real people that are ready to help if you have questions along the way.

As a customer myself, I've been impressed with Questrade's customer service. Whenever I call or email, every support rep is very knowledgeable and they get exactly what I need done quickly. Switch for free today and keep more of your money. Visit questrade.com for details. That is questrade.com. Here on the show, we talk about companies with strong two-sided networks make for the best products. I'm going to spend this coming February and March in an Airbnb in South Florida for a combination of work and vacation and realized, hey, my place could be a great Airbnb while I'm away. Since it's just going to be sitting empty, it could make some extra income.

But there are still so many people who don't even think about hosting on Airbnb or think it's a lot of work to get started. But now it is easier than ever with Airbnb's new co-host network. You can hire a local quality co-host to take care of your home and guests. It's a win-win since you make some extra money hosting on Airbnb, but can still focus on enjoying your time away. Find a co-host at airbnb.ca forward slash host. That is airbnb.ca forward slash host. All right, so let's get into it. Here are my 10 lessons from the meeting and we'll go one by one and then I'll give you a chance to comment. So the quote here from Charlie Munger, value investing is getting harder, but the opportunity remains of people being stupid

is still there. If you're willing to look five years, 10 years, and 15 years in a short-term focused market, the opportunity is still there. So these guys say this all the time, but it sets the stage for a couple of things. They've been saying the same things consistently for 50 years straight. And that's why people like them so much. They've been true to their word. And I agree. They said that it's getting more and more hard to find value investing ideas. And it's even more and more hard for them deploying so much capital. But people do a lot of stupid things, quote Charlie Munger. And so that's kind of your opportunity. Yeah. And it goes back to the last episode, the earnings and news. The one I led is we were talking about Aritzia, but I think it kind of goes back into that is,

I think now value investing, you really have to zone in on companies that are in the short term are experiencing some kind of headwinds and you have to be able to properly project what it will be in 5, 10 and 15 years and be able to identify the ones that will, yes, face some short term headwinds. They're not existential or anything like that. The market may think they are, but if your assessment is correct, then that's usually when you find the best value, at least in my opinion, is longer term, but as being able to identify those companies, which is not easy. It's not easy to identify those because oftentimes, you know, there's going to be some pretty significant headwinds going on and it's being able to determine whether it's a you know it's short

term and it's not existential basically yeah good point and that also gets me thinking about like those short-term issues that you have a guide down or something and then every single analyst you know marks their little spreadsheet with earnings per share guidance down. And then you have all this systematic selling from funds and algos that stock drops like a rock for just like one line item on the earnings call, but a light guide. Everyone rushes to fill out their spreadsheet and then boom, the systematic selling begins. So I don't know how much of that happens in terms of being able to quantify it but we know what happens i mean it could also just be uh you know a sector you have a company we talked about bellwether stocks recently where maybe a bellwether company for that sector posts some pretty bad earnings but there's another company that's actually firing on all cylinders

doing quite well and it just takes a hit just based on that you know that's just not sister company but that company in the same sector that posted not great results or poor guidance which you know may have an impact on them but may not so I think that's usually a time you see that too. It's like the last 25 quarters of advertising stocks that go down because Snapchat reports first with some crappy numbers and then everything else falls. All right. Number two, Buffett would love to be born today with a small amount of money to show that the process is the exact same. You know, this is a game for them. They love the game. They love the hustle and they love making money. And Buff says, like, you know, kind of following up on that second point when they're talking about how it's getting harder. And he said, with a lot of confidence, if I was born today with a small amount of money, I could do this again.

And who's to doubt him, right? He says, I got some luck along the way, but the process is still the same and it takes a long time, right? Like that's still there. And then Munger said, well, go ahead. you can do that but i don't want to see my big pile turn into a small pile so have fun with that no i mean there's not much to add there i think it's just i think they're just contrarians in nature and they're not afraid to follow their conviction in companies that you you know, the market is down on and they'll, you know, they'll put their money where their mouth is and it's worked out pretty well for them. I mean, they're not, and I think it's important for people to remember. I think they

even touched on it a little bit. You know, they said they're not emotional when it comes to business decisions, but, you know, they've made errors too, whether they're emotional or not. I mean, clearly they're saying they're not, but they've made errors. And I think that's important to know that one of the probably the best investor, I think for according to most people, at least in terms of the stock market,

has made mistakes. So it's okay to make them as long as your winners outweigh that i think that's the that's important to remember that's right uh a profound quote that i wrote down and i i saw almost everyone in the stadium quickly run to their notepad or phone to write this one down and it's just so casually just slips in all these kinds of like really amazing quotes on the fly. And Warren said, to live a good life, quote, write your obituary and reverse engineer it. And I thought that was really quite profound. You know, one of the

questions from the Q&A was like passing on a legacy, how to teach your kids about, about being great, you know, how to live a good life, like looking back, you know, in your old age now, and he said, write your obituary and reverse engineer it. And it's kind of an exercise I want to do now, but it's also very intimidating. It's, it's, it's a very intimidating exercise to do it and i'll let you know if i do it but well yeah because i'm i'm very nervous well yeah because you have to think about dying that's what it is like it's like that yeah it's also quite yeah it's

unsettling for a lot of people and you know i i watch and when they talked about that and that stood out as me too um as i was uh watching like oh that's an interesting quote and i was especially listening to the other part you mentioned you know about talking to your kids about money and the legacy you leave behind your kids and that's something definitely for me that you know as a new father that's like i want to make sure my daughter early on understands the basics and uh you know i want her to be financially independent but also you know obviously i'd like to leave her something when i pass away so um that that was a section that i found pretty interesting too yeah super profound

and uh yeah i i want to do it but i'm obviously very well one thing you said number four making sure you're you you talk to your kids about it or those who are in your wheel because they've noticed a lot of the time is people you know end up leaving money the you know the beneficiaries don't even know and then you know they find out there's a lot more money than they thought and then everyone lawyers up and then the family breaks down because of money issues so just i think i think my takeaway with that was just communication with your family yeah he started the answer to that question about the will and like how to, how to hand off wealth to your kids with, well, from my view, just make sure them seeing the will for the first time. Isn't when you die. Yeah, yeah, exactly.

I was like, yeah, that seems pretty simple, but it probably happens all the time. You know, like make sure someone who is going to be involved in your will doesn't see it for the first time after you're gone. All right, number four, quote, you can always romanticize about the past, but it's a better place now than when I was born. This was Warren Buffett talking about America as a country. Because of course, you know, it's held in there. There's lots of Americans there. There's like, like I said, 25,000 plus people there live. And a lot of questions are on the empire that is America, because they have bet on America time and time again and built massive fortunes. And many Americans talking to them this weekend, they think that the country is super divided. And I think that that's no surprise to anyone. Kind of culturally, you have this like huge split,

politically, culturally, whatever. And he's just said this multiple times throughout the meeting. Anytime that came up about America, because he talks about it a lot, is we certainly have problems but we've had a lot of problems in the past and the problems are better now than when i was born uh 92 years ago and i mean you can't it's it's really it's really hard to argue with that yeah no it is and i think there was a nugget, too, where he said he's more optimistic than Charlie.

I think I caught that. I thought that was pretty funny. He did say that on a handful of occasions. Yeah, exactly. And I mean, look, I think you can go back in time and there's always going to be issues clearly um you know right now i think with social media the internet a lot of it is more apparent i would say and i think one of the things dividing people is kind of people getting into these eco chambers of that follow their belief system and you know we don't get really political but i

think you know one of the issues we're seeing whether it's us canada or elsewhere in the world is you know those echo chambers and the fact that people are kind of reluctant to engage to anyone that's kind of outside of that and you know i think people listening to the podcast kind of know i like to look at things from all the different angles um and you know i think more people should be doing that because then when you put you know you kind of approach situation you put yourself in other people's shoes whatever their situation is you know you may not agree with them but you can at least understand where they're coming from really funny because in the second half of the, on this exact topic of the political discussion in America,

he actually brought up Elon Musk. Oh boy. I didn't get that far. Yeah, this was after lunch. He brought up Elon Musk and said, you guys should all go listen to his thoughts on the Bill Maher interview. And so I went and go and listen to it last night. And it's basically about,

you know, why he bought Twitter and this, the political discourse being very on uneven. And so clearly Warren watched it and, and, and agreed with it with Elon's takes. So I thought that was quite interesting. Like he's not,

he's not a normal 92 year old, you know, like he's, he's out here watching YouTube videos of Mr. Elon Musk. All right. Number five, quote, this is Buffett quote. I've never looked at where someone went to school when hiring ever in his whole career. And I wanted to bring this up because young people, myself, I used to, looking back, I think it's ridiculous. And you hear it here from Buffett, who's hired countless people, maybe, you know, one of, like, if you look at the extension of Berkshire, one of the largest employers on the planet. And Warren said, I've never cared or never looked at where someone went to school. And I wanted to bring this up

because young people listening, if you have imposter syndrome about where you went to school or what degree you took in school, do not over index on that because the world doesn't care as much as you think. Maybe it matters for your first job ever, and then it doesn't. And so to not to over index on that or have imposter syndrome about competing with Ivy League school people or that kind of stuff. If you went to those schools, great. If you didn't, don't worry. Yeah, I totally agree with that. I mean, i've been uh you know we did some hiring for the podcast but also in large corporations i've been part of like hiring uh staffing uh town acquisition had a couple years there didn't really love it but uh all that to

say that you know i think it's completely irrelevant where someone went to school. I've always had the, maybe not always, but as I've gotten in my later 20s and my 30s, I kind of came to the realization that, you know, depending on the amount of education you'll have and not the school you went to, just the level of education, it will not close any door for you, especially if you're looking to get a job in a big corporation where they're more stringent on the requirements so having that education won't close any doors but where you got it doesn't really matter and honestly it's what you do once you got through the door which will have the biggest impact and what you do afterwards. And, you know, I know some people that have had great careers that, you know, only have a high school education.

I mean, the downside with that is oftentimes they do have to work really, really hard to get to the same place as someone else. But I totally agree, especially when you can save money, not get into debt and still get an education that most employers will, you know, whether you have your bachelor from Harvard or, you know, Ottawa U or wherever it is, if it's the same degree, I mean, if you do well in interview and you have those interpersonal skills, which I think are way more important, you should go pretty far as well. Next one here i have the one you yeah i haven't seen it it's just four it's because it's three words it's too

too short china tension and their thoughts there so uh the chinese you know america chinese tensions was one of the questions and i I don't remember what the question was about, but it was basically just, what do you think here? What can be done? That kind of thing. And they were both very quick to answer with the very same type of opinion on this, that America and China not getting along is bad for humanity. It's quote-unquote nonsense and should be stopped immediately. And that both countries have a lot of value to add. Both can get along and both can be better, stronger getting along than fighting.

and both can be better, stronger getting along than fighting. And you know, Munger's been very pro-China. There's no way around it. There's just absolutely no way around it. He has been for years now. And they've both been very quick to answer whatever your kind of political thoughts are here. It doesn't matter. These two countries are going to prosper better and longer if they get along.

Yeah, I mean, look, for me, I feel like I'll have to look at it. I feel like they're kind of beating around the bush and, you know, they don't want to get into it. That's kind of the sense I've had listening to them in the past when it came to the China question and CCP. And just to be clear, you know, I've been to Taiwan, so I've been to Taipei, so I've seen also the other side of it. And it's not the Chinese people per se, it's just the CPP and the control that they seem to have on their population and the surveillance state that's there. And also the control they have on businesses.

And I'm surprised they didn't at least touch on that where the kind of unilateral decision that a handful of people can take, which can impact investments in a good or bad way. Right. and impact investments in a good or bad way right um so i i think i read what they're saying is not like we agree with the way they do business because of course they don't right there yeah this is the the mecca of capitalism is this meeting right um which is the opposite of it's more that tensions between the two superpowers. It's more the tension. It's they think that America and China will thrive better not fighting, even though their values might be entirely different. I wish someone would have asked them, don't you see the CCP and the power being in the hand of a few people

as a potential business risk? I would have liked to hear their reaction on that i'm not sure if they would have answered the question but that that's the question i would have liked to hear their thoughts on yeah that's fair enough i yeah i mean i certainly agree with you i would have liked to hear that as well. But I also agree that it's a tricky... They kind of hinted basically, like Warren

Brough brought this up a few times with geopolitical tension. He goes, look, this isn't the same as soon as we decided to build a nuclear bomb. As soon as the nuclear bomb was invented with the Manhattan Projectattan project for world war ii he goes quote he quote i remember this he goes quote it's something we needed to do

but changed everything yeah and that's true with with tensions globally right yeah i think he was responding to that uh when they had an ai question i think he was comparing ai because i that's one of the parts i did listen to yeah he's like there's a few technological advances that changed the world forever uh and he he was he was bucketing ai in there and also the nuclear bomb uh it's true i mean it's the world is never the same after that invention because there's always that threat. You can't just go around. You can't just go around. You know, the stakes are high, right? Okay. Funny one here I picked up. They were talking about Ben Graham, you know, giving their respect to, you know, the father of value investing. And Charlie said, Ben Graham's returns came from a growth stock named Geico. And that's really funny because of course,

he's known as the value investor, the father of value investing. And he did caveat and said that he bought it when it was undervalued. But the fact that a large amount of money from these guys and from their mentor, Ben Graham, the father of value investing. Their return decomposition has come from businesses that grow. Not from turning around a cigar butt to get one last puff and sell it for a re-rate on the valuation multiple. The compounding has come from the growth of these businesses over time. So, deep value investors move aside. Yeah. Deep value investors move aside. Yeah. Deep value investors move aside, or if it's in deep value, at least I hope the business is

growing. But if it is, it's probably not deep, deep value. All right. Number eight, Apple. Let's talk about Apple. So there was a question from the Q&A. the guy said i was at a value investor meetup this morning or yesterday morning here in omaha with azwa thamadorian am i saying his name right he's a professor yeah i've heard he's very popular famous and um what's he's a professor somewhere, Oswald Tamadorian. He's a... Yeah, I think I've heard him on the... He's a professor... On Lot's podcast, yeah. Yeah, I'm trying to find out what school he is a professor at. Anyways, he's wrote many books

and he's a professor here at New York University, it looks like. Okay, sure, whatever. It said that Oswald was very nervous as soon as a position was so big and that he would never have a position more than 30%. And he says, well, why is Apple such a big business? And what do you think on that? And Munger says, I'll take this one.

I think he's certifiably insane. And leave it at that. And everyone starts, of course, dying and laughing. And then Buffett expanded on this. And he said, look, Apple is a better business than any single business that Berkshire Hathaway owns outright. And he was very persistent on that. He says, we own some great assets. We own some wonderful businesses, the insurance business, the railroad, the energy business. None of them are as good as Apple in terms of business quality. And for someone to say, well, you own 100% of the railroad, no one would ever say that because they own it outright. Position sizing, you look like Berkshire Energy and Berkshire Insurance or something, and they're about the same as the Apple position, which is publicly traded.

And he says, you don't see anyone coming to us and say, why do you own 100% of the railroad? It's a completely ridiculous thing to say. And so he thinks that their concentration in Apple against the public portfolio, sure, it is massive. And they think that it's ridiculous to question it. Basically, it was their quick answer and that Munger called selling some of it diversification as he likes to do. Yeah. And from their perspective, I get what they're saying from an investor perspective for their own portfolio. I would go ahead and disagree just because everyone's level of comfort with such a large position will be different. I mean, if someone holds like 30, 35% in Apple, you know, Apple can still sink 5, 10% in one day. So what, what do you do when that happens?

You panic and sell your position. Um, so I think it's definitely personal per and I would say, you know, I use the sleep test, right? So if it's making you stress at night and you can sleep because your position's too big, then you probably should trim it. So, uh, it's kinda, I use the quality of life, uh quality of life test to know whether the position's too big or not. As do-it-yourself investors, we want to keep our fees low. That's why Simone and I have been using Questrade as our online broker for so many years now. Questrade is Canada's number one rated online broker by MoneySense. And with them, Questrade is Canada's number one rated online broker by MoneySense. And with them, you can buy all North American ETFs, not just a few select ones, all commission free so that you can choose

the ETFs that you want. And they charge no annual RRSP or TFSA account fees. They have an award winning customer service team with real people that are ready to help if you have questions along the way. As a customer myself, I've been impressed with Questrade's customer service. Whenever I call or email, every support rep is very knowledgeable and they get exactly what I need done quickly. Switch for free today and keep more of your money. Visit questrade.com for details. That is questrade.com. That is questtrade.com. Here on the show, we talk about companies with strong two-sided networks make for the best products. I'm going to spend this coming February and March in an Airbnb in South Florida for a combination of work and vacation and realized, hey, my place could be a great Airbnb while I'm away.

Since it's just going to be sitting empty, it could make some extra income. But there are still so many people who don't even think about hosting on Airbnb or think it's a lot of work to get started. But now it is easier than ever with Airbnb's new co-host network. You can hire a local quality co-host to take care of your home and guests. It's a win-win since you make some extra money hosting on Airbnb, but can still focus on enjoying your time away. Find a co-host at airbnb.ca forward slash host. That is airbnb.ca forward slash host. For the last two, let's move on to timely topics, some big macro stuff and banking. So let's do banking first. Don't you feel like this year we've talked more about banks than

the previous three years on the podcast? Yeah. Combined. Yeah. And then some. Maybe if you combined all the three previous years and multiplied it by five you'd still probably not have as much discussion on banking as we've had in the past three months um so warren buffett on bank failures you and i have talked about this a lot and i agree with with basically his his thing here is that the incentives and the bank executives of these companies that are failing, getting off with no, getting them getting off scot-free is a very bad lesson to learn. Like them not getting any sort of consequences, these bankers for being reckless with depositors and mismatching their balance sheet and not understanding how duration works should face consequences or else

this is a very bad lesson to learn. And that people running the banking industry have more important jobs and have important jobs and that they're learning the wrong lessons right now about risks and incentives. And then I think I quoted this on the last episode, Charlie Meyer said, bankers should act more like engineers managing risk, not all trying to get rich. And Buffett said, quote, banking can have new inventions, but it has to have old values. Brilliantly said, and I couldn't agree more, especially around incentives. This is a bad lesson to learn if there's no consequences yeah exactly and i think and i mean look last year i know we saw a lot of things happen with crypto right so we saw a lot of failure of centralized crypto organization

and people were quick to point it out but one thing i'll say about crypto is um you know they're going after the ones that you know committed fraud and committed illegal things but they're not bailing them out and that's one of the risks we talked about you know comparing that to svb for example is um i don't know what the term was that you use i think you talked about it, like the social cost or whatever it is. But when you end up and kind of bailing them out, you kind of, you know, almost reward this kind of bad behavior saying like, well, I mean, there's not any major consequences. The government is going to be there. And I mean, look, they even major consequences. The government is going to be there. And I mean, look, they even said it. I listened to it.

They should, you know, they said, look, if they haven't bought, you know, bailed out SVB, the depositors, like the consequences would have been massive and pretty. I can't remember the term they used during Warren. I think it's Warren that talked about it. Remember the term they used during Warren? I think it's Warren that talked about it. But again, I think that's something as a society we need to look at because it's not good and it's going to create even, you know, these kind of behaviors in the future. They'll manifest in some kind of other way if they don't think there's consequences and they're going to get bailed out. It's a long string of bad lessons, isn't it?

Yeah, exactly. and they're going to get bailed out. It's a long string of bad lessons, isn't it? Yeah, exactly. Along, you know, from depositors being bailed out, which I think they should, but it's still like, you know, incentives not aligned. And then on the executives. I can tell you one thing people have learned.

I've learned their lessons with crypto to be careful with centralized exchange that are not in their country or offshore. It's a hard lesson to learn. No one likes to lose money, but it shows that if you have some consequences, you know, maybe rough in the short term, but you definitely learn from it. Talk about consequences. I didn't get to that one. Yeah.

Money printing. There was countless questions about inflation and money printing. Charlie Munger quoted it, called it, quote unquote, extreme levels. then they were talking about it and inflation and and printing money in this like kind of never-ending cycle and you know where does it all go and this is amazing by the way this might be my favorite whole little back and forth you know what i'm just gonna chime in first is you remember that tweet from the bank of canada that was saying like basically telling people like we don't print money like you have no idea what you're talking about here's why yeah yeah exactly it just kind of reminds me of that how like you know out to lunch they were when you know yeah yeah anyways go on so bad okay so um he called it extreme uh they both said, you know, it's kind of staggering, but, you know, it is what it is. And Buffett said, you're okay for now. And then jumped in, cut him off. Charlie said, so is the man who jumps off the building until he hits the floor. off charlie said so is the man who jumps off the building until he hits the floor and i was like damn that was that was quick you know i hope to be that quick

what i'm not building is really tall you're okay for now jumps in yeah so is the man who jumps off until it's four and then and then warren starts laughing and he goes yeah he's probably okay until about the sixth floor. That's a good quote. Yeah. Really good. Right. Really. I didn't see a lot of people pick up on that because it was just a really quick interaction. And, uh, I loved it because it's, it's a, it's a great analogy, right? You know, like, yeah, you're fine. You know, you jump off ice grave, you're, you know, you're having a, you're skydiving, enjoying the scenery until about the sixth floor when you realize it's all about to end very quick. And sure, that might be dark and morbid, but what's, what gives, right? Like at the levels that I print,

I mean, we've already seen how much inflation has kind of changed everyone's life in the past 12, 16 months. I mean, it's changed both of ours and every single Canadians and every single person in currencies that are deflating a lot, are inflating a lot worse than the US dollar. Yeah. And I mean, at the end of the day, unfortunately, our politicians, and again, I'm not talking about any kind of side or anything like that. It's pretty much the same across the board, to be honest, is they just have different, they view the spending in different ways. But until we have our politicians that kind of end up reining in the spending a little bit, you know, something's got to give at some point. You issue more debt and you pay more interest because interest rates are higher. At some point, your interest on your debt becomes so large that you have to do something. And usually it's either a soft default with more money printing, looser conditions,

and you devalue the debt by doing that, or you have a hard default and you don't pay your debt, which would be the case if the US.S. does not come to an agreement for the debt ceiling. I don't think we'll see that. But, you know, I think unfortunately, like, look, I don't want to be a Charlie Munger here, but I think something will some hard decisions will have to be taken. And I mean, you know, you have to hope that we have politicians that think more longer term but that's not what they usually do they you know that's the reality i know i don't want to sound too uh too down on that but um you know you have to sometimes make the hard decisions yeah yeah well said all right three more things before I talk about the experience and recommendations. Other things I've written down here, they are built different. This is a long meeting. Like, I don't know how they have that kind of duration. Number two, the adoration they have for each other, particularly Warren's adoration for Charlie.

warren's adoration for charlie um it's just really it's it's quite beautiful honestly um watching them in person and watching their exchange watching buffett be both diplomatic and cover charlie's back when he says some savage stuff but also just like recognizing how impressive it is that he's up there at the age of 99. He's going to be 100 on January 1st. He's born on New Year's Day. And so it's just really, it's kind of beautiful watching the two of them, the adoration that they have for each other. Last thing here is they're really good at looking at things in aggregate because they're asked a lot of hard questions and they're asked a lot of questions about various topics.

From asking a 92-year-old and a 99-year-old what they think about artificial intelligence and technology to the macro economy to the ins and outs of Berkshire Hathaway and all the different businesses that they run inside of it. Hathaway and all the different businesses that they run inside of it, they will discuss many different topics off the back of other topics and talk about the pros, talk about the cons. And they use a word net net a lot. They say net net. So they're really good at looking at things in aggregate. They'll be like, these are the pros, these are the cons. But net-net, this is a way to think about it. Net-net, the world's better now than it is before. You know, this is better, this is worse. This is a problem we have now. This is a problem that we might not be able to solve.

But net-net, X, Y, Z. I think that's a pretty good framework to think about a lot of things and have like a kind of balanced view and they're really good at it. Yeah. No, I think that's kind of the sense I got with, you know, past meetings and this one listening to it. So not too much to add to that. Then, you know, I think it. You can just pull it.

Yeah. I have nothing to add. That's it. Keep going. That's what Charlie always does. That's what he always does. All right. The experience.

So the people, the people you meet, everyone has like so many layers to them. Especially if they're not just, I run a fund and there's lots of those too. You know, I run a, I run a fund and no offense to those people but

if they're not that person they typically have like ridiculous layers to them like they run some ridiculously niche business or um they've done x y and z like they're these people are onions they have a lot of layers to them entrepreneurial immigrants uh people with huge businesses like like huge businesses um some guy like that's like sells like he's like the largest distributor of bone broth like what like okay like a chicken broth and and uh and and meat bone broth. Okay. Interesting. Nine to fivers with, with side hustles. Um, a lot of Europeans, a lot of Indians, a lot of tons of Germans and not just the guys I was Airbnb and being with like others,

it feels like no one had just one thing. And it seemed like everyone was really bad at answering the question. What do you do? Like, you you know when you have like 10 things to talk about like it's not really easy to answer and i agree with that like it's hard for me to kind of summarize it in one quick thing you know like oh by the way i also have this podcast it's the it's the biggest finance podcast in canada and it's like oh wait like how do you not lead with that you know and it's like, Oh wait, like, how do you not lead with that? You know? And it's like, well, there's other stuff going on too, you know? And everyone felt so multidimensional and that was awesome. But it's also like, I feel like we all need to come up with a more catchy, catchy synopsis while networking. Cause it goes a way like i was thinking on the on my way home like i just think i think i need to be better at that because it makes the conversations better and it

makes you an easier person to talk to and network with uh by just having like you know some go-to's it's not a bad it's not a bad idea to have a couple go-to's in the back pocket you know no and um one thing that i i learned um i was talking to in the back pocket, you know? No. And one thing that I learned, I was talking to Stig Brodersen, you know, the investor podcast guy. He says, I asked him about the podcast business and he says, we optimize for happiness. And I was like, what does that mean? So like we were digging into that. I thought that was quite an interesting conversation. Every European I met is a hardcore deep value investor. I don't know what it is. I know they're not all, but like deep, deep value, like every single European I met. So that seemed to be some

sort of trend. A comment on meeting internet friends. I have written down here, uh, meeting internet friends is always fascinating. Cause you know, someone you've made DM with on Twitter, fair amount of times exchanged with online, maybe even had zoom calls with, and then you, you meet them in person. It's always, uh, it's always a fascinating time and you kind of learn who you, who each other really are really quick. always a fascinating time and you kind of learn who you, who each other really are really quick. And then Simone, I'll last, I have three notes here on recommendations to myself and anyone, if they want to go to the event in Omaha in the future. Number one tip is plan a rough itinerary of every block of time while you're there. I had a bit of a, I'll figure it out attitude and realized that

every event you go to with some awesome people that you'd love to meet, like literal billionaires, you don't have your name on the RSVP. And so they, you can't go in. And all you had to do was like last week, just put your name on the, like fill out their form. Like, it's not like you had to pay. You didn't have to be some fund manager. You don't have to be a billionaire. You just have to be on their list. That's it. So do that. Don't do what I did and, and, and join a bunch. Even if you don't want to go, like maybe put yourself on there. Go for around six 30 in the morning to get a good seat. That's, that's when I went and I think it was perfect. I think this is the one thing I did really well, which was I didn't go too late, but I also didn't go too early

because a lot of people go absurdly early, like 2 a.m., like, you know, then at four to get a good spot on the floor. But the marathon is a, the meeting is a marathon in itself. And then if you're going to want to be in the right places and meet cool people, do drinks at the Hilton lobby after go for dinner with cool people that you've been wanting to meet, you're just not going to be in a good shape at, you know, 8 PM. If you've been up since two, like that's just not, not the, don't do that. Like my recommendation is don't be the guy who shows up super early, uh, to say you did it because it's going to be mid, it's going to be lunch and you're going to be like falling asleep. Um, and then, uh, my third recommendation is you can definitely find like I did, uh, people to split an Airbnb, like a sweet

spot. That's close. That's good. But like nearby, you'll meet some people. Um, you can split Airbnbs with people and it'll be like a fourth, the whole, the whole stay will be like a fourth of the price of a hotel each night. Cause hotels especially if you don't book early are absurdly expensive in omaha for the weekend and are not worth it to stay in like some you know hampton suites for like a thousand bucks a night in omaha nebraska like that's not worth it and don't do that so uh those are my three no that's pretty good i mean i'm definitely uh i'm a little jealous i'll try to go um i don't know maybe next year i'll see uh but uh maybe you'll meet the century mark but uh definitely you know taking some notes and uh glad we were able to get a breakdown of the experience yes sir so that's it um and of course course, I'll be mixing in all these quotes on the podcast now that I'm just so cultured after going to the... My two favorite quotes are definitely, write your obituary and reverse engineer it. And the second one, which is, you can kind of split this with anything, he said banking banking can have new inventions but

it has to have old values i i think that's quite profound not only with banking but just with everything like you have to be rooted even though there can be new inventions in the way the financial system works it doesn't mean that we can be reckless. No, that's true. No, nothing to add. Nothing to add. Nothing to add. Okay, Charlie. Thanks so much for listening to the show, guys.

Really appreciate you tuning in. That's my like kind of 10 lessons from going to the AGM in person. And if you want to see, to support the show and see us in person, that will be July 7th, Friday evening. Mark your calendar. Now we're going to be able to get you guys tickets soon. They will sell out very fast. So don't pull a me and wait on a bunch of stuff for the Berkshire planning, because then you'll be like, oh,

small brain. I didn't get a ticket. And I'm going to be like, man, I, I, you're not on the, I didn't write your name on the list here,

but like, I can't help you. Sorry, pal. So don't, you don't want that to happen. No, exactly.

Yeah. It'll be fun. We'll see. I'll see you in a few days here on the pod. We are here Mondays and Thursdays on the Canadian investor podcast. If you want to support the show, you can obviously come to our event and you can also go to join tci.com and we thank you very much. Take care.

Bye-bye. The Canadian Investor Podcast should not be taken as investment or financial advice. Brayden and Simone may own securities or assets mentioned on this podcast. Brayden and Simone may own securities or assets mentioned on this podcast. Always make sure to do your own research and due diligence before making investment or financial decisions.