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Berkshire Hathaway AGM 2023: Investors, finally ignore Warren Buffett!

In the film “Margin Call – The Great Crash”, which retells the events surrounding the fall of the investment bank Lehman Brothers, the bank’s CEO explains: You either have to be the first in the market, or the smartest, or you have to cheat. That’s the only way to get to the top. If you take the point about cheating descriptively and not as a request, you have to say: The man is right (even if his bank goes down the drain).

Hardly anyone knows this better than Warren Buffett. The 92-year-old star investor was the first in many respects and joined numerous companies early on. And he was often – if not always – the brightest, seeing opportunities where others were blind. (As far as we know, he did not cheat.)

Because Buffett has become one of the richest people in the world, crowds of investors made the pilgrimage to Omaha, Nebraska, again last weekend. It was there that Buffett and his 99-year-old partner, Charlie Munger, held their Berkshire Hathaway holding company’s annual shareholders’ meeting (AGM). It is now more like a folk festival – and is in stark contrast to the sterile virtual general meetings of many DAX companies. While their bosses sometimes hide behind a camera from the questions of critical shareholders, Buffett and Munger spend hours answering questions from the shareholders.

The winner takes it all

There is nothing wrong with investors wanting to experience the “Woodstock for Shareholders” at least once in their lives, or if they follow the live stream spellbound. On the other hand, it is questionable if small investors want to take something away from the AGM for their own investment strategy. Or from the filings that Berkshire has to file with the US Securities and Exchange Commission for each quarter. Or from interviews given by the “Oracle of Omaha”.

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Buffett isn’t where he is today because he generously shares investment advice. But because he was often the first, and sometimes the smartest. The investor bought his first shares at the age of eleven, had raised his first million by the age of 30, and had not even cleared the hurdle to become a billionaire before he was 60. His investment strategy is largely based on maintaining a high cash ratio and striking at favorable moments.

Retail investors couldn’t even copy this strategy if they had the same information as Buffett. And they don’t do the latter, ever — not even by following the Berkshire AGM or studying Buffett’s SEC filings. The investor is always early. Buffett tends to invest for the long term. Only: It’s no use to investors if they get in later and at higher prices than he does.

Or when the investor makes short-term adjustments – like in spring, when he surprisingly shaved his stake in the chip manufacturer Taiwan Semiconductor. Those who wanted to follow suit sold at lower prices. Buffett’s deal had sent the stock price plummeting.

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Yes: Buffett’s approach to buying good stocks cheaply is worthy of emulation. And the Berkshire AGM is always entertaining. However, private investors should not base their investment strategy on what the star investor says or does in everyday stock market life.

Also read: Is Buffett too old to run Berkshire?

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