I went to the Berkshire Hathaway (BRK.A) annual meeting two weeks ago (I've owned some B shares in a non-Vestopia linked account for a couple of years) and found it one of the most fascinating educational experiences of my life.Other than the time in college when I saw a live debate between G. Gordon Liddy and Timothy Leary, I've never learned so much from just listening to two people talk for a few hours.

The annual meeting is a little slice of Americana that will in all likelihood disappear after Buffett and Munger are gone. Whomever takes the reins at Berkshire will be someone who, to paraphrase Buffett, can competently manage a business that requires more effort to screw up than improve. But the celebrity status will pass with Buffett and Munger, and while the annual meeting may continue to be of great interest to shareholders, I imagine it will lose its cache, at least after a couple of transitional years.

Buffett and Munger want Berkshire to be the destination of choice for families that need or want to sell great businesses but would like them to remain substantially intact into perpetuity. They figure Berkshire ought to be able to acquire, over time, one or two such businesses a year all around the world, producing an ever growing pile of cash for management to redeploy into public markets or other such private businesses. Given Berkshire's size, future returns will unquestionably not match prior returns. This is a formula for, in Buffett's words, "getting ahead, not galloping ahead. If one needs greater returns, they should sell Berkshire and look elsewhere."So why was this meeting so useful? Mostly because it's a river of insight from two people who have made huge money doing what they love, but aren't in love with the money. Personally, I far prefer the freedom and independence money provides versus the unending array of crap it can buy and I suspect they'd concur. The closest Buffett came was when he said great investors focus on process, not proceeds. 

I've met dozens of money hungry people in my career and only one has even remotely echoed that sentiment. One of my early mentors, a phenomenally successful and talented options trader, said to me that "no one sits up on his death bed and says 'I wish I'd spent more time at the office.'" Not exactly the same, but the feeling is similar: don't fall in love with money, because money will never love you back.

Secondly, I was struck by the importance they put on simplification. Wall Street has made a colossal investment in simultaneously convincing you that investing is so complicated that only Wall Street can help you navigate your investing choices. I think, and I suspect that Buffett and Munger would agree, that's pure garbage. They put their effort into simplifying things, and so can you (e.g.: no startups. That eliminates about 75% of all opportunities). If they can't understand something in about five minutes, then another five hours isn't going to help. I found their desire to simplify decision making refreshing, and very counterintuitive.I took notes as furiously as I could, and you can read them here, with minimal editing for context or content. Enjoy.

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Todd Chalem

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