My Berkshire Hathaway 2023 takeaways from Warren Buffett and Charlie Munger.
Buffett and Munger gave advice about how to succeed as an investor despite disruptive technologies like artificial intelligence (AI).
I discuss the two shareholder questions and answers which revolve around the impact of AI and robotics technologies on the stock market, society, and the future of “value investing.”
Charlie brought up electric vehicle maker BYD and how their Chinese factories use a lot of robotics, and how we’ll see more of them in the world. However, “I am personally skeptical of some of the hype that has gone into artificial intelligence. I think old-fashioned intelligence works pretty well,” Charlie contended.
Warren added, “There won’t be anything in AI that replaces Ajit” Jain, the head of Berkshire insurance. And AI won’t be able to tell jokes, so at least comedians will still have a job in the future.
Warren warned about not being able to put the genie back into the bottle by saying, “when something can do all kinds of things, I get a little bit worried because I know we won’t be able to un-invent it.”
He further quoted Albert Einstein who said after the atom bomb, “this has changed everything in the world except how men think.” So while AI can be of great help to us, fundamentally how humans think and behave will not depend on what happens with AI.
As to how investors can remain successful with the rise of disruptive technologies, Charlie answered “I think value investors are going to have a harder time now that there’s so many of them competing for a diminished bunch of opportunities. So, my advice to value investors is to get used to making less.” Not super encouraging but we should brace ourselves to work harder or smarter if we want to succeed at investing.
Despite Charlie’s gloom and doom, Warren “would argue that there are going to be plenty of opportunities.”
This idea should really encourage you when Warren said, “what gives you opportunities is other people doing dumb things.” Like the stock market crashing due to irrational fear, and then one can buy wonderful companies on sale!
Warren Buffett was critical of those who sell investing advice because “investing has disappeared so much from this huge capitalistic market that anybody can play in, but that the big money is in selling other people ideas. It isn’t outperforming.”
Charlie Munger pounded on wealth management by saying, “there is so much money now in the hands of so many smart people, all trying to outsmart one another and out-promote one another, getting more money out of other people. And it’s a radically different world from the world we started in. And I suppose it will have its opportunities, but it’s also going to have some unpleasant episodes.”
At least Warren reassured individual investors in reiterating, “if you’re running small amounts of money, I think the opportunities will be greater” than if you had to manage the $700B Berkshire Hathaway enterprise.
Warren Buffett added that the “world is overwhelmingly short-term focused,” but despite this, we live in “a world that’s made to order for anybody that’s trying to think about what you do that should work over five, or ten, or 20 years. And I just think that I would love to be born today, and go out with not too much money, and hopefully turn it into a lot of money. And Charlie would too, actually.” So keep hope and invest well!
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