1/ Warren Buffett: "The pharmaceutical industry’s, obviously, been a terrific industry to invest in. I have trouble distinguishing among companies in terms of seeing which ones ten years from now might be the best ones to be in." 1997 BRK AGM buffett.cnbc.com/video/1997/05/…
2/ Buffett: "If we could buy a group of leading pharmaceutical companies at a below-market multiple, I think we’d do it in a second. We had the opportunity to do that in that 1993 period, as you mentioned. And we didn’t do it. So, we did blow it." 1999 AGM buffett.cnbc.com/video/1999/05/…
3/ Buffett: "I do think it’s very hard to pick out the winner. You know, so if I did buy them, I would buy them — I would buy a group of the leading companies. But I wouldn’t be buying them at these [1999] prices." BRK AGM
4/ Buffett was not saying there aren't people who can pick the best pharmaceutical stocks. Instead he has said: "I’m just saying that’s difficult for me." This is an example of "circle of competence" thinking. He likes to say: "Risk comes from not knowing what you are doing."
5/ Can you think of other "sector bets" by BRK? What about Japanese trading companies? Charlie Munger: "I don’t know anything about individual airlines. Neither does Warren. We bought a bunch. It was a sector bet. It’s not a bet on an individual airline." novelinvestor.com/charlie-munger…
6/ "Some investment strategies require wide diversification.
If significant risk exists in a single transaction, overall risk
should be reduced by making that purchase one of many mutually- independent commitments." Buffett wrote in the 1993 BRK Letter berkshirehathaway.com/letters/1993.h…
If significant risk exists in a single transaction, overall risk
should be reduced by making that purchase one of many mutually- independent commitments." Buffett wrote in the 1993 BRK Letter berkshirehathaway.com/letters/1993.h…
7/ Was BRK's Snowflake investment done in Todd and/or Ted's portfolio? How big is the investment? Was it coupled with other investments into a sector bet like pharmaceuticals? cnbc.com/2020/09/16/war… Barron's: "investments under $2B often reflect activity by Ted and Todd."
8/ What about the circle of competence issues on Snowflake? Who might know "ten years from now if it might be the best one to be in"?
I only work in SaaS, checks notes, every single day. The number of investors who own SaaS names and understand what they actually do is small.
I only work in SaaS, checks notes, every single day. The number of investors who own SaaS names and understand what they actually do is small.
9/ People ask me why I don't write about SaaS more since I work in SaaS every day. The answer is: because I work in SaaS every day for a real business.
When I was pushed into writing more by my friends I picked topics not directly related to my work. It makes life simpler.
When I was pushed into writing more by my friends I picked topics not directly related to my work. It makes life simpler.
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