Berkshire Hathaway Annual Meeting 2023: The State of Value Investing

Warren Buffett and Charlie Munger differed on the future of value investing at the Berkshire Hathaway shareholders’ meeting.

Warren Buffett and Charlie Munger differed on the future of value investing during the Q&A session of the 2023 Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) investors’ meeting.

Motley Fool advisor Jim Gillies shares his impressions and takeaways from the meeting.

Are value investing's big profits over?

Transcript

Nick Sciple: Our friend Jim Gillies attended [the Berkshire Hathaway shareholder meeting] in person this year. Annually, tens of thousands of people descend upon Omaha, Nebraska, to hear what Warren and Charlie have to say about the markets and to see lots of other people that share their very particular interest, which is investing.

So Jim, since you were there, what was the vibe of the Berkshire Hathaway meeting this year? I understand you’ve been to some of the meetings in the past as well. Maybe how does it compare to the vibe to previous meetings?

Jim Gillies: Very optimistic, very much a party, it’s very much a lot of old friends getting together, even if you’ve never met these old friends. There’s a very definite sense of community.

I was going in with a little bit of trepidation this year. Let’s be honest: Warren is 92, and I’ve thought the last few meetings he’s been slowing down. I’ve thought the last few times I’ve seen him on CNBC recently, he’s been slowing down. Charlie is 99 and starting to look at. I was concerned. To be perfectly maudlin, part of my rationale for going was this could be the last meeting of the Warren and Charlie show.

I was pleasantly surprised. I thought they were both far sharper than they’ve been the last couple of years when I’ve been watching virtually and, of course, for a couple of years when we all had to watch virtually, I thought they were sharper. I thought Charlie was especially sharp, like rapier sharp – he cut a few sacred cows there! They did slow down in the afternoon, but then again so did everyone else. I can neither confirm nor deny there was a member of the Fool contingent who may have nodded off midway through the afternoon and we had the picture.

But no, I thought it was a good meeting. If you’ve watched any of these, you’ve seen any of these over the past, the questions aren’t terribly new. There’s a lot of stuff that’s a lot of repeats from years prior and questions and answers, Buffett will always talk about, the one very common thing I think I’ve seen practically every time: What country does Buffett say you should bet on for capitalism? America. Buy America, I’m thinking back to, was it ’99 or 2000 when the article in Fortune magazine was Buy America. So that was very popular.

Buffett has also mastered the art, I think, of occasionally answering the question he wants to answer rather than the question you just asked, which I love. So when people wanted to talk about AI, Buffett talked about the risk of nuclear. He did compare AI to nuclear: Some things can’t be unintended, some things can’t be undone once they are known and understood. He mentioned AI there and then of course went on a bit of a talk about nuclear and not in the power sense, which of course, but we’re interested in, but in the, shall we say the weapons potential.

They talked a little bit about value investing. Charlie, I thought was surprisingly dour about the future for value investors. They were both well, “Value investors might have to get used to lower returns because there’s so many people doing it.” I think there was some allusion to AI. (I don’t have my notes in front of me here.)

Fools, Nick and I will be doing a session together later today for recording. It will probably go out to various places, about more digging in deep, so we don’t destroy the entire show here today talking about this, but just talking about how value investors would have to maybe accept lower returns. There’s so many people, there’s so much competition. That was Charlie’s assertion. Warren disagreed with him somewhat and I vehemently disagree with Charlie Munger and I love Charlie Munger’s impact. I might like Charlie more than Warren, frankly, because he’s just more my jam of investor. So yeah, no. I very much disagreed with that assertion. But then again, I was like, “Lower returns than what?” That would be my question, like multibaggers in 18 months? That’s difficult to do for everything including growth or whatever, but I’m not sure I’m buying it.

Fool contributors Jim Gillies and Nick Sciple have positions in Berkshire Hathaway. The Motley Fool recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.

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