Omaha's Oracle

"Surround yourself — and limit yourself — to people you trust."

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Happy Tuesday!

Warren Buffett has held an annual Berkshire shareholder meeting every year since 1973 — when it was first hosted in the National Indemnity Company employee cafeteria.

Since then, the meeting has moved venues multiple times as attendee count grew alongside Berkshire’s success — and now the 19,000 seat CHI Health Center Arena is routinely standing room only.

I did not attend the meeting in person this year, but CNBC has recordings of the morning and afternoon sessions online. I thought I would share some of my favorite takeaways.

For all quotes, I have taken the editorial liberty to “clean-up” pauses, ums, backtracking, and similar. For all questions, I have paraphrased. No meaning has been changed, but I hope the readability is improved.

Given there are others focused on the business aspects of the meeting, I’m highlighting quotes applicable to more than just Berkshire’s own businesses. If you would like to dive a bit deeper — and also get into the business side of things — I would recommend:

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Surround Yourself with the Right People

Question: Who are your most trusted advisors?

If you don’t live a life where you surround yourself — and limit yourself — to people you trust, it won’t be much fun. I mean, I literally have been in the position ever since I was in my twenties of being able to have people I trusted around me. And I’ve made mistakes occasionally, but they filtered out over time…

You can think about this, Charlie — in all the years we worked together — not only never once lied to me, but he didn’t even shape things so that he told half lies or quarter lies to sort of stack the deck in the direction he wanted to go.

He absolutely considered it of utmost importance that he never lied. Now, that occasionally got him in trouble at dinner parties or something…

But in terms of having a partner, I simply cannot think of a conversation I ever had with Charlie where he misled me or shaped it his way or anything of the sort. So when you get that in your life, you know, you cherish those people and you sort of forget about the rest.

About seven years ago, I worked with someone that was a near-constant source of negativity. They say misery loves company, and for some reason, this person’s misery was always looking at me for companionship.

I eventually changed jobs, and that person tried to stay in touch. I realized I could just choose to not stay in touch. It was my choice. It was an amazing discovery — I’ve since repeated “not staying in touch” many, many times. Just because someone is in your life today doesn’t mean they have to be in it tomorrow.

It sounds simple, but earlier in life, I felt an obligation to reciprocate relationships even if they were not positive.

Buffett is highlighting the reverse here — identify who you enjoy having in your life and keep them in it. But I think the reverse is also important — if you prune away relationships that pull you in a direction you don’t want to go while tending to those that add meaning to your life, you are sure to end up in a better spot over time.

One More Day

Question: What would you do if you had one more day with Charlie Munger?

We always lived in a way where we were happy with what we were doing every day. I mean, Charlie liked learning. He liked, as I mentioned in the movie, a wide variety of things. So he was much broader than I was.

But I didn’t have any great desire to be as broad as he was. And he didn’t have any great desire to be as narrow as I was. But we had a lot of fun doing anything...

And this you may find kind of interesting. We had as much fun, perhaps even more to some extent, with things that failed because then we really had to work and work our way out of them. And in a sense, there’s more fun having somebody that’s your partner in digging your way out of a foxhole than there is just sitting there and watching an idea that you got ten years ago just continually produce more and more profits…

You know, we started every day, and Charlie was interested in more things than I was, but we never had any doubts about the other person, period. And so if I’d had another day with him, we’d probably have done the same thing we were doing in the earlier days and we wouldn’t have wanted another.

Buffett and Munger were great business partners — so great because they had one core interest in common but a wide variety of interests that varied greatly.

Many people seek out business partners with capabilities different than their own — they are an operator and they need a finance person. So they go find a finance person. Often, however, but for the finance skill set, the person they choose as a partner might as well be the one looking back at them in a mirror.

Instead of a common vision, the partners are paired together due to a single uncommon trait. The resultant lack of diverse experience and perspective at least doesn’t make the partnership stronger — and in many cases, it is a weak foundation from which to build.

Buffett and Munger found in each other a partner approaching the same problem — investing — differently enough to have a strong foundation.

Beyond that, Buffett also reminds us here that you should focus on doing what you enjoy. If Munger was alive, they would be doing the same thing they always did. To the greatest extent we can, we should all be trying to set up ours lives in a way that allows that to be true for us, too.

Circle of Competence

Question: Do you think the markets today are similar to markets in 1999?

Charlie and I missed a lot of things. We never worried about missing something that we didn't understand. Why should we be able to predict the future of every business any more than we can predict what wheat yields are likely to be in the next year?

I feel like 1 out of 10 Buffett quotes have to do with staying within your circle of competence. One of my favorites — and one that I probably quote too often at the office — is that you should filter out opportunities that are “too hard” and just move on like they don’t exist.

I find a lot of people do the reverse — because a problem is hard, they double down on trying to understand it.

Unless something suggests you should be able to understand this terribly difficult thing in front of you, you might be wasting time. You are pretending that effort creates value, when in fact it often does not.

And — if you ask me — the fact that it feels hard might be a sign that you have ventured past the edge of your circle.

Focus Forward

Question: What would you tell your younger self to do differently?

I can figure out all kinds of things that should have been done differently — but, so what? I mean, I’m not perfect. But, I don’t believe in lots of self criticism or being unrealistic about what you are, or what you’ve accomplished, or what you’d like to do…

You don’t know where the paths would have led. I don’t think there’s any room in beating up yourself over what’s happened in the past. It’s happened and you get to live the rest of your the life and you don’t know how long it’s going to be…

I’m not really looking to change much. If I am very lucky, I get to play things out for another six or seven years — or it could end tomorrow. But that’s true for everybody, although the equation isn’t exactly the same…

I don’t believe in beating yourself up over anything you have done in the past. I believe in trying to find what your good at — what you enjoy — and then I think the one thing you can aspire to be — because this can be done by anybody and it doesn’t have anything to do with money — you can be kind — and then the world’s better off.

I find refreshing the general advice to just do the best you can.

Often this question is answered with a flavor of regret — regret from the person answering. That person says they should have done things so differently than they did that if they followed the advice they are now giving you, they would not be in the position they are today.

Every action we take involves a trade-off — and it’s easy to look backwards and imagine a better trade-off could have been made. That’s often just wishful thinking and imagining a past that never could have actually happened. It’s better to imagine the future you wish and work towards that instead.

I’m also reminded of a book from Cicero on “how to grow old” when Buffett says it “could end tomorrow. But that’s true for everybody”. Cicero says that even though a man might be young, can he be “absolutely sure that he will be alive when evening comes?

Both men were approaching their final years when they said we should treat every day as precious by focusing on being kind and helpful to those around us — and how easy is it to forget that in the mundanity of life’s back and forth. It might be best for the young amongst us to remember that advice while there is still time.

Pass it On

Question: What would you request of those that have benefited from Berkshires’ success?

If you’re lucky in life, make sure a bunch of other people are lucky, too

This was my favorite line of the entire meeting. We often forget how hard it was to get to where we are today — and how many people were there for us along the way, with an outstretched hand pulling us upward.

Without them, we may never have gotten as far as we have. It’s important to look down from where we are now and notice the outreached hands that we can now pull towards us as well.

If you found today’s issue interesting, more than anything, I would appreciate you forwarding it to someone that might also enjoy it. It is a big deal to me whenever someone reads my work, so I appreciate your support.

Have a great weekend,

EJ

Twitter / X: @HistoryEJ

Disclosure: Nothing in this article constitutes investment advice. More detailed disclosure here.

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