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Berkshire Hathaway held its 2024 shareholders meeting last Saturday. It was the first meeting after the passing of Charlie Munger, Warren Buffett’s long time business partner and friend. The meeting had a special tone, perhaps due to Munger’s death. While investing and business topics were present as always, the most valuable parts of the meeting were about life.
As the years go by it is becoming more apparent that Buffett’s financial success has a purpose. It is in service of something else, a message: that you can do well in life while being honest and kind.
Evolving
Capitalism is a reflection of our savage nature. Kill or be killed, disrupt or be disrupted, your margin is my opportunity, and so on.
Buffett’s story is deeply inspiring in showing that we can be more than animals looking for the next meal.
We can engage in capitalism -or any other system- as caring human beings. We can win without having to defeat anyone else.
The recent push towards investing that takes into account environmental, social and governance factors (ESG) has been tainted by people who use it as a marketing tool. Buffett is evidence that business can be a force for good without having to craft a special communication strategy. For instance, 52% of Berkshire Hathaway’s energy generation -a major business for the conglomerate- comes from renewals, well above the 22% average in the US. You would never know it from hearing Buffett, who does not use this fact to promote himself or the company.
Leading by example is powerful enough. And all of us in the business world are better off by having Buffett and Munger as two of the most notable leaders of our times.
Highlights
Below is the list of my favorite reflections from the meeting. You can see the full meeting on YouTube.
1. Share life only with people you trust.
“If you don’t live a life where you surround yourself and limit yourself to people you trust, it won’t be much fun.” “So when you get that in your life, you know, you cherish those people and you sort of forget about the rest.”
The notable part for me here was the recommendation to limit ourselves only to those people we trust. That sounds, well, too limiting.
It is easy to convince ourselves that we need to endure people we don’t trust or like as a fact of business life. Success demands it. Or does it?
Buffett built a $900 billion company without compromising on this point. That’s the ceiling for now. Perhaps if you are going for $1 trillion you might need to accept low quality people in your life. But if you can settle for something in the hundreds of billions, there are no excuses, it can be done.
2. Be kind, this is always within your power.
“And then I think the one thing that you can aspire to be, because this can be done by anybody and it’s amazing, doesn’t have anything to do with money. But you can be kind.”
The words kindness and billionaire are not usually part of the same sentence. But after a long life well lived, this is where Buffett lands.
All along he has been generous in sharing his knowledge and his wealth (100% of it). He gives credit to others enthusiastically and never criticizes by name. He has held on to weak businesses and underperforming managers for way too long, knowing full well that he was not maximizing economic output.
There is something about character though.
Great people attract great people. Working together as a team, they can be unstoppable. And kind.
3. Don’t punish yourself over past decisions.
“I don’t believe in beating yourself up over anything you’ve done in the past.”
This was in response to a question about how he would spend his time if he could do it all over again. Specifically, he was asked if he would spend more time with loved ones rather than at work. Perhaps.
We cannot change the past, or expect to live a mistake-free life.
We can learn and move forward. He has applied this principle to his investment mistakes and the results have been quite satisfactory. His answer here suggests that this is his approach to life in general. Live forward and do not punish yourself for being human.
4. On being trustworthy.
“I just like the feeling of being trusted. Charlie felt the same way.”
Buffett explains that this is a key motivation for him to keep working. He enjoys working for shareholders who have entrusted their money to him.
Charlie Munger once said that “The highest form which civilization can reach is a seamless web of deserved trust. Not much procedure, just totally reliable people correctly trusting one another.”
We are not there yet, but Buffett and Munger prove that you can do very well while being trustworthy. Rather than going for small-minded short term advantages -sometimes present in the world of finance- they bet on the long term effects of honesty and respect.
5. On the opportunities for young people today.
“You’re entering the best world that’s ever existed, and you want to find the people to share it with and the activities to participate in that fit you.”
Traditional and social media would have you believe that the world is about to end. Every day another injustice, a new crisis.
While that is part of reality, Buffett points us to the full picture, which is as good as it’s ever been. It is up to us to make it even better. And if we choose to do it with people we trust, like and sometimes even love, the conditions are there for a life worth living.
In Conclusion
Berkshire Hathaway has delivered outstanding returns to its shareholders. An investment of $10,000 in 1965, when Buffett took over as CEO, would now be worth $425 million. The graph below shows the comparison to a similar investment in the S&P500 index, which appreciated to $3 million (that’s the hardly visible red line at the bottom of the graph).
Now we know. It is possible to perform at the highest levels while behaving honorably and with kindness. A wonderful example for all of us.
