Berkshire Hathaway’s annual meeting is about more than the company itself. Many attend and watch the meeting as a way to get advice and information directly from Warren Buffett, the titled Oracle of Omaha and one of the most successful entrepreneurs in the world.
With quite a lot happening on the global stage, there were many curious to hear Buffett’s opinions. Here are a few of the key points to take away from the 2018 Berkshire Hathaway meeting.
1. Warren Buffett Doesn’t Believe in Cryptocurrency
Buffett has been outspoken about his disdain for cryptocurrency, and the Berkshire Hathaway meeting was no different.
“It’s something where people who are of less-than-stellar character see an opportunity to clip people who were trying to get rich, because their neighbor’s getting rich buying this stuff that neither one of them understands,” said Buffett. “It will come to a bad ending.”
Buffett’s criticism levied at cryptocurrency appears to be focused on the fact that many investors do not understand the technology or its market forces, and are consequently essentially gambling on the value of the product.
2. Buffett Defended Against Elon Musk’s Criticism of “Moats”
Earlier in the week, Tesla and SpaceX CEO Musk had criticized the concept of “moats”; a company’s competitive advantages within its industry space. Buffett defended the concept of moats with the example of See’s Candies, a company that he has seen as having a wide moat.
Though Buffett acknowledged Musk’s ability to disrupt other areas, such as the automobile industry, he remarked that Musk wouldn’t want to start a candy company that would compete with the already established and long-running brand, See’s Candies.
3. Buffett’s Newspaper Businesses Are Still Struggling
Buffet acknowledged that his newspaper businesses are still trying to figure out a strategy for the new era, and that they will be exploring new strategies.
4. He Isn’t That Worried About Politics
“Multiple times in my life people have felt the country was more divided than ever,” Buffet remarked. “I’ve gone through periods where people I knew and admired thought … that there would never be another election.” Buffett does not seem overly concerned about the current political situation in the United States, nor does he see the divisive politics as a reason to stay out of the stock market. Rather, he believes that regardless, America will be moving ahead.
In terms of the animosity between the United States and China, Buffett was optimistic — he believes that neither country will let one another become embroiled in a serious trade war, and that instead, the two global powers will come to understand that they need each other to build their collective prosperity.
5. Buffett Believes Cybersecurity Risks Will Become Worse
Buffett noted that a critical problem regarding cybersecurity is that it’s unpredictable; no one knows how the situation will get worse or when a cybersecurity incident could strike. “Cyber is uncharted territory,” said Buffett. “And it’s going to get worse not better.”
6. What Buffett Really Thinks About Apple
When describing why he believed Apple was such an important stock, Buffett underscored the fact that Apple built its products with consumers in mind. Rather than the technology, the important part of the Apple ecosystem was in now it understood customer behavior and attempted to fulfill customer needs.
These actions, Buffett noted, struck him as having some permanence within the market. Buffett’s decision making process regarding this technology giant seems to have been ore about the company’s mission and goals rather than the components of its products; something for investors to take note of.
7. He Thinks Wells Fargo Will Recover
Buffett noted that Wells Fargo had made mistakes int he past, but saw no reason “why Wells Fargo as a company, from both an investment standpoint and a moral standing, going forward is in any way inferior to the other banks with which it competes.” Buffett still likes Wells Fargo as an investment and supports Tim Sloan as a manager, and believes that Wells Fargo is attempting correct the mistakes that it made in the past.
As always, Warren Buffett has tempered much of his advice and observations with moderation. The Berkshire Hathaway meeting indicated that Buffett is a little conservative on the side of many of the changes that are occurring, but is also moving away from the disruption that is occurring in many industries.