I finally made it to the Berkshire meeting

Key takeaways from my trip to Omaha

This year it finally happened, I could finally make the pilgrimage to Omaha. I traveled with Jurgen Vluijmans, Pieter Slegers (Compounding Quality), and Kristof Heyndrikx (From Growth to Value). That certainly led to interesting conversations about quality investing, growth investing, and value investing, with Jurgen as the referee.

During our journey, we had plenty of time for that due to delays, canceled flights, etc. The return journey lasted a whopping 39 hours due to tornado alarms. We also stayed together in an Airbnb.

On-site in Omaha, there are various events throughout the week that you can participate in, some of which are invitation-only. This ranges from breakfast meetings with the Good Investing community to an exclusive event at the Golf Club, breakfast with Vitaly Katsenelson, ValueX BRK, (a lot of) networking with other fund managers, the Markel brunch, and of course, Berkshire's annual general meeting.

In addition to Warren Buffett's meeting, I greatly enjoyed the ValueX event. This was also live-streamed on X and YouTube, you can rewatch it here. If you don't feel like watching the 4 hours of presentations, I recommend taking the time for Luca Dellana's presentation (at minute 54) and Paul Johnson's (at 4 hours 23 minutes). Dellana explains why controlling losses is so important, and Johnson gives a fun visual presentation of what you're paying for the current company and what for growth.

The first half hour of the Berkshire meeting was a tribute to Charlie Munger, Warren Buffett's business partner for decades. Buffett referred to Munger as the architect of Berkshire Hathaway, a nod to his love of architecture.

How Berkshire looks today is thanks to Charlie Munger; he dreamed it, designed it, and oversaw it. Charlie was the genius, Warren was the contractor who carried out the work. Buffett further praised Charlie as a partner, but most importantly, he strongly emphasized, "Charlie never lied to me."

From the tribute to Charlie, I picked out the following statements from Munger that I'd like to share with you.

• It's extraordinary how resistant some people are to learning anything

• I realized that what I needed to get ahead was to compete against idiots, thankfully there is a large supply

• Every time you see the word EBITDA in presentations, substitute it with “Bullshit Earnings”

• About Cryptocurrencies: I like it a lot less than you do. Professionals going into trading crypto, it’s just disgusting. It’s like someone else is trading turds and you decide you can’t be left out.

• For those in business schools, I advise you to learn to do it our way, but as long as you are in school you have to pretend to do it their way.

• To say derivative accounting is a sewer is an insult to sewage.

• If people weren’t so often wrong, we wouldn’t be so rich.

• We didn’t find a trick. It isn’t brilliance, it’s just avoiding stupidity

• It’s not about diversifying so you have one of everything, one horse, one rabbit,.. It’s about the opportunity cost. A lot of opportunities should be dismissed right away because of opportunity costs. Other ways aren’t better, the only way is measuring an investment against the opportunity costs.

• More on this topic: It is like marriage. When you get married you have to choose the best one that will have you. The rest of life is the same.

• If I can be optimistic when I’m nearly dead, surely the rest of you can handle a little inflation.

• If you mix raisins with turds, they are still turds. (when talking about the good things about the internet combined with chain letters and ponzi schemes).

• A director, that needs the money, getting a $150.000 from a company, is not an independent director.

In the newspaper, I read that Buffett was at the peak of his abilities. This wasn't how we felt it. Buffett was very emotional before lunch, his voice cracking, and at one point he was so distracted that he answered beside the question. At one point, as he had done for decades after giving a commentary, he turned and said, "Charlie..." However, this time Charlie wasn't there anymore to add color to the answer. It was an emotional moment for everyone present.

In the second half, he managed to pull through and also cracked jokes regularly again. He closed the meeting by saying, "I hope you all will be back next year, but more importantly, I hope I'll be back next year."

Here are some of the lessons, whether new or not, that I noted:

• stocks are business, treat them as such

• The market is there to serve you, not to guide you, use it as such

• Always surround yourself with people you look up to and trust

• Every investor makes mistakes. It’s about how you handle them

• Hire for integrity, intellect, and hard work. Skill can be taught

• Think in the long term. You can’t make a baby in one month by getting 9 women pregnant. There are laws of nature. (when someone asked about why Berkshire still invests in fossil fuel, meaning that the technology is not yet there to have enough electricity just from wind and solar).

• The best way to be successful in life is to outwork everyone

• Capital allocation is by far the most important task of management.

• Take a simple idea and take it seriously (as Charlie used to say)

• The best businesses have a high ROC and plenty of investment opportunities

• The future is per definition uncertain. That’s why you want to use a margin of safety

Buffett also named Greg Abel as his successor. At least, he said it was the board's task to appoint the next CEO, but if they didn't choose Abel, he would come back to haunt them.

Why Greg Abel? Because Abel allocates capital and isn't a pure investor. He looks at which companies he finances. He looks at businesses.

However, the most important point I take away is the question of what an investor should do if they start from scratch today.

Buffett answered that as an investor, you should go where the competition is weakest, and the competition is weakest in smaller companies. Practically, that means learning everything you can about these small companies, examining each one, and determining if it's a good investment. To find great investment ideas, sift through thousands of investment opportunities.

The question posed in the Belgian business newspaper, De Tijd, is whether Buffett has finished the investment game. I think we can indeed say so. For us as investors, it's important to remember that he gained his edge in the game by focusing on small caps, and he would do the same again today.

Coincidentally, that is where I focus on at Valuing Dutchman.

During the trip to Omaha, I was invited to provide insights on Belgian national Radio, Radio 1, and De Tijd

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