CMQ Podcast: Warren Buffett's Warning To Investors in 1999 (And 2021)

Warren Buffett’s opening remarks at the 2021 Berkshire Hathaway Shareholders Meeting included several points that were nearly identical to points he made in 1999.

  
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CMQ Investors,

Warren Buffett’s opening remarks at the 2021 Berkshire Hathaway Shareholders Meeting included several points that were nearly identical to points Buffett made during his presentation at the Sun Valley Conference in 1999.

Most investors should find this scary, interesting, or both.

  • This episode (CMQ #012) provides the important details about that 1999 presentation. Listen via Apple or Spotify.

🎧 More About Episode #12

I made the aforementioned connection because I read The Snowball, a critically-acclaimed biography about Buffett that the Washington Post called “the most detailed glimpse inside Warren Buffett and his world that we likely will ever get.”

The episode focuses on Chapter Two of The Snowball. It covers Buffett’s presentation at the Sun Valley Conference in 1999.

This chapter, by itself, is worthy an episode. Combined with the fact that Buffett’s 2021 opening remarks borrow from his 1999 presentation, this chapter deserves our attention right now.

Based on author Alice Schroeder’s description, the investing environment and perception of Warren Buffett in 1999 sound eerily similar to today.

💬 Charlie Munger: “There is no better teacher than history in determining the future...There are answers worth billions of dollars in a $30 history book."

I am not making any promises or claims about finding answers in this episode that are worth billions of dollars. However, the information I share in Episode #12 helped me take a more sensible approach to investing this year. I believe it will also help me avoid the permanent loss of capital in the future.

I think you’ll understand why at the end of the episode.

As always, I hope you find it useful!

Sincerely,

Franco


🔑 Timeless Lessons

What does Buffett tell us all to consider? Here are some of the key points from the 1999 presentation and 2021’s opening remarks:

  • Manage your expectations about future returns.

  • Don’t try to pick the winners in new, transformative industries. Most of us will fail trying do this.

  • Remember that the world can change in dramatic ways

  • Avoid being too sure of yourself (i.e. overconfidence bias)

We may need a separate post or episode in the future where we dive deeper into the lessons.

💬 Charlie Munger: “If you're a duck on a pond, and it's rising due to a downpour, you start going up in the world. But you think it's you, not the pond.”


💡 Episode Trivia / Worksheet

I would like to just go over two items that I would like particularly new entrants to the stock market to ponder just a bit before they try and do 30 or 40 trades a day in order to profit from what looks like a very easy game. —Warren Buffett (2021)

The two items, as specified by Warren Buffett, are below.

  1. The first item was a list of the 20 largest companies in the world by market cap.

    👉 Try This: Take a list of the top 20 largest companies circa 1989. How many are still on the list in 2021?

    —The answer is zero.

  2. The second item was a list of all the automotive companies that started with the letters “MA”.

    👉 Try This: Take a list of all the ~2000 automotive companies that were founded in the first half of the 1900s. How many still exist?

    —The answer is three.


🔥 Bonus Content

The Fortune article about Buffett’s presentation at Sun Valley included commentary from Jeff Bezos:


🔗 Relevant Links

  • Mr. Buffett on the Stock Market (1999) — Fortune

  • Berkshire Hathaway Annual Shareholders Meeting Transcript - Rev


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