buffett 2013 AM

http://dealbook.nytimes.com/2013/05/04/live-blog-berkshire-hathaways-2013-shareholder-meeting/


Q Asked about Herbalife and Ackman's fight and multi-level marketing.
A Mr. Buffett replies that the ultimate test is whether there’s a market for the goods being sold. And in the case of Pampered Chef, he says, there’s no question that there is. (BH owns Pampered Chef, also an MLM)

Qut still, interest rates will rise, and it will be a “shot heard around the world.”

A separate question from Ms. Quick: How does the policy affect Berkshire’s companies? Mr. Buffett notes how asset prices have risen because of the abundance of cheap debt, as well as lowering the costs for a deal like the Heinz takeover.

“This is like watching a good movie, as far as I’m concerned,” he says, “because I don’t know how it will end.”

Mr. Buffett says that the past decade has generally been rough for business. That said, if the market continues to rally as it has this year, Berkshire will suffer its first five-year period of trailing the S.&P. 500.

“It won’t be a happy day, but it won’t discourage us,” he said. He added as a caveat that the company is likely to outperform the market in down years.

• What Buffett says about his research and process in making investments given there are legendary stories of his past due diligence, including of American Express, where he hired advisers. That contrasts to the $5 billion he put into Bank of America in 2011, which Buffett has admitted he decided in the bathtub would be a good idea and called.
• “You have to love something to do well at it. ... It is an enormous advantage if you absolutely love what you are doing. ... The nature of it is that intensity adds to your productivity.

  That follow-up shareholder asked them about metrics and screening for stocks, and Buffett and Munger both said they don’t really look at numbers.
• “We are looking at businesses exactly like we are looking at them if somebody came in and asked us to buy the whole business,” Buffett said. He said they then want to know how it will do in ten years.

  Munger was even more forceful: “We don’t know how to buy stocks by metrics ... We know that Burlington Northern will have a competitive advantage in years ... we don’t know what the heck Apple will have. ... You really have to understand the company and its competitive positions. ... That’s not disclosed by the math.

  Buffett: "I don’t know how I would manage money if I had to do it just on the numbers"

  Munger, interupting, "You’d do it badly."