The Berkshire Hathaway (NYSE:BRK-A)(NYSE:BRK-B) annual meeting is in full gear and Warren Buffett and Charlie Munger are on the hot seat in front of tens of thousands of shareholders. Here are a few great investing quotes that Buffett has delivered during the meeting.
1. "Capital ratios for larger banks are being set higher than smaller banks and that obviously impacts return on equity."
Does that sound like a pessimistic take on the banking industry? It's certainly not the most optimistic take. However, Buffett followed that line up by saying:
Are these contradictory sentiments? Hardly. This is Buffett owning up to the fact that it's going to be tougher on banks in the years to come because of higher capital requirements, but that investors can still do well investing in banks provided they focus on finding the best banks with high-quality management.
2. "If they try to time their purchases they will do very well for their broker and not very well for themselves."
For some investors the siren's song of short-term trading is strong. Surely, if an investor can only jump out of the market before dips and get back in before jumps, vast riches will soon be in hand. Buffett thinks there will be riches generated, but they'll be for the broker charging fees for those over-active trades, not the trader.
3. "We're not looking at the aspects of the stock, we're looking at the aspects of the business."
Sound familiar? Yes, it's classic Buffett. But can we really hear good, solid investing wisdom like this enough?
4. "Any company that gets its customers to tattoo ads on their chests can't be all bad."
Buffett delivered this line about Harley-Davidson (NYSE:HOG). The strong relationship that the motorcycle maker has with its customers let Buffett sleep soundly loaning the company hundreds of millions in the very depths of the crisis in 2009. There are, of course, few companies that do inspire their customers to tattoo themselves. But there are other businesses out there that serve their customers so well that they create amazingly strong loyalty. And those business can make really great investments.
5. "We will do insurance business where we think the odds favor us making an insurance profit, and if we can't do it, we'll sit on the sidelines for a while."
If you've ever wondered why Berkshire's insurance businesses have such a tremendous record of producing underwriting profits year after year, even as the industry as a whole lags far behind, look no further than the above quote. "Normal" publicly held insurers, under the pressure of Wall Street's quarterly earnings dance don't typically have the freedom (or at least the willingness) to walk away from business -- even when it's not attractive business.
That Berkshire is willing to take the short term hit to its business in order to ensure it's setting itself up for maximum long-term success puts it in a wholly different league from most of its competitors.