Buffett, Munger Talk about AI, De-Dollarisation, EV, China-US Relations, Global Supply Chains at Warren Buffett and Berkshire Hathaway’s 2023 Annual Meeting

On Saturday night, Beijing time, Warren Buffett And Berkshire Hathaway’s 2023 Annual Meeting was held in Omaha, Nebraska, the hometown of Warren Buffett. The Q&A session of the management team attracted the most attention. 92-year-old Buffett and 99-year-old Munger answered a total of more than 5 hours of questions.

The topics they talked about include AI, the US banking crisis, de-dollarisation, electric vehicle transformation, China-US relations, Japanese investment, global supply chains and a series of investments related to Berkshire's holdings.

22:29 [Buffett: The soaring period of the US economy is ending]

Berkshire Hathaway CEO Warren Buffett says the economy's "incredible (soaring) period" is ending and expects most business earnings to be lower going forward; Berkshire bought $3 billion this year U.S. Treasury bills in dollars, yielding 5.9%.

22:40 [Buffett talks about rational investment]

Buffett said in response to questions that he and Munger have been making balanced investment plans and decisions. He does not recall making any emotional investments. Charlie is very sensible.

Munger said that he does not make emotional decisions.

22:46 [Buffett: If the deposits of Silicon Valley Bank are not guaranteed, it will have a catastrophic impact]

Warren Buffett, CEO of Berkshire Hathaway, said that if the deposits of Silicon Valley Bank were not guaranteed, it would have a disastrous effect; it is impossible to imagine that anyone would allow the United States not to raise the debt ceiling and risk destroying the world's financial system. risk default.

22:54 [Buffett: I don’t understand AI, you can ask Munger]

When Buffett talked about artificial intelligence, he said that artificial intelligence can do almost anything, which made him a little worried. People once invented the atomic bomb with good intentions, but did it benefit the world for the next two hundred years? Just like Einstein commented on the atomic bomb, Buffett said that AI may change many things in the world, but it cannot change human thinking and behavior. AI might be beneficial 200 years from now, it's a big step for technology.

Munger replied: If you go to the factory of BYD in China, you will see robots everywhere, and the usage rate is very high, so I think the use of robots will increase globally.

23:00 [Investment logic under artificial intelligence]

When answering the investment changes in the era of artificial intelligence, Charlie said: We have to get used to the fact that we will not make more money in the future than before.

Buffett: The world is constantly changing, such as automobiles, airplanes, energy, etc. Many new things are always happening, which will generate more investment opportunities.

23:45 [Munger hates current investment managers]

Munger said that he hates the current investment managers and hopes that no one will enter this industry.

00:20, May 7 [Buffett talks about investing in Japan]

Buffett said that the decision to invest in Japan (trading company) is actually very simple and easy to understand. We may have had business dealings with these five companies. Collectively, they earned about 14 percent on "what we're going to pay for them," Buffett said, while paying decent dividends and, in some cases, repurchasing shares while holding "we can Business "understood as a whole".

00:35 [Buffett talks about China-US relations]

Buffett: The United States needs to build a good relationship with China and conduct more free trade, which is in the common interests of the two countries. I think everything that creates conflict between these two countries is stupid.

02:33 [US middle school students ask Buffett how he views de-dollarisation]

A 13-year-old American middle school student said that she has participated in the Berhikel shareholder meeting for the sixth time, hoping that Buffett will talk about the debt ceiling and global de-dollarization.

Buffett responded that the U.S. dollar is indeed still a reserve currency now, but it may not be so in the future. I don't think anyone fully understands what's going on, maybe Powell knows better, but he also has no way of controlling the situation, he has no way of controlling fiscal policy.

02:45 [Why is it so much more expensive for Berkshire to buy a truck gas station Pilot than for BP to buy Travel Centers? 】

Buffett: Berkshire's purchase of Pilot is a three-stage transaction. The first stage is at a good price, and the second stage is very beneficial to the seller due to their excellent performance last year. Since we purchased our stake in Pilot in 2017, the stake has been accounted for as "equity". In early 2023, Berkshire will purchase an additional interest in Pilot, which will increase our ownership to 80% and result in the full integration of Pilot's earnings, assets and liabilities in our financial statements. It is not reasonable to compare Pilot with Travel Centers. Pilot's location is much better than the latter.

02:55 [Buffett: Inflation is the most important problem to be solved at present]

Berkshire Hathaway CEO Warren Buffett said that inflation is the biggest problem that needs to be solved at present. Printing money all the time is insane and cannot continue to do so. When the epidemic occurs, it is like fighting a war. No one knows how much money to print before there will be problems until it gets out of control. "We need to be very careful, and it's hard for the US to see things turning around if they go too far." He also pointed out that pension plans allow people to put money in the bank, but when it is finally withdrawn, there is no certainty that the purchasing power of the currency will still be the same as before. These are all related to the macroeconomic system and cannot be predicted, but this is not a good phenomenon.

03:15 [Buffett talks about the investment logic of Chevron and Occidental Petroleum]

Buffett: When you drill a well, you get a lot of oil very quickly, and then the production slowly drops to zero. I like Occidental's position in the Permian Basin. Occidental Petroleum has many high-quality oil wells, which is a completely different oil business. In the past few months, the company has also redeemed $400 million to $500 million of preferred stock at a price of 110% above par value (Note: Berkshire reduced its holdings of Chevron in the first quarter)

There's a lot of hype right now that we're going to buy Occidental Petroleum, but we're not going to. Occidental Petroleum's management is something we admire. We may increase our holdings in the future, but we are currently satisfied with our positions.

03:20 [Buffett comments on Musk]

Buffett: Musk is a very good entrepreneur, he has many dreams, and his dreams are the basis of what he is doing now. I don't think he would have achieved what he is today if he hadn't done some extreme things and set extreme goals. Musk likes to accomplish the impossible. Everything he does requires this kind of guts and determination, and even some madness.

04:15 [How to view the impact of the rapid electrification of the automotive industry]

Buffett: Berkshire is unlikely to invest in automaker stocks like GM or Ford. Charlie and I always thought the auto business was just too tough. Berkshire leans more towards the car dealership business, with 78 dealerships in the United States. These dealerships generate more than $8 billion in annual revenue, making Berkshire one of the largest dealer groups in the United States.

Buffett emphasized: "I can only tell you that although the auto industry will not disappear, the auto industry will definitely be different in 5 to 10 years from now, whether it is the car structure or the market structure. Deployment of capital and risks are bound to happen. "

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