Last updated: 10:02 / Friday, 17 February 2017
Annual shareholders' meeting

The Most Important Investment Lesson in the World for Warren Buffett is...

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The Most Important Investment Lesson in the World for Warren Buffett is...
  • Buffett is against Hedge Funds and "expensive managers"
  • Buffett might consider taking money out of banks if they charge for deposits
  • Even a Trump presidency would not destroy the US Economy or his company

At the annual meeting of his Berkshire Hathaway, Warren Buffett stated that the US, the economy and his company would continue to grow saying, is a “remarkably attractive place in which to conduct a business.” He also defended his favorite stocks, mentioning he has “not seen evidence that convinces me that it’ll be more likely I reach 100 if I suddenly switched to water and broccoli,” but not everything he said was positive. Besides mentioning that some of his holdings are hitting tough spots, the Oracle of Omaha did warn about the risk of derivatives, and against consultants and Hedge Funds.

In his opinion, and given several years of poor returns, “probably the most important investment lesson in the world,” includes ditching expensive money managers. “Supposedly sophisticated people, generally richer people, hire consultants. And no consultant in the world is going to tell you, ‘Just buy an S&P index fund and sit for the next 50 years,’" he said. “You don’t get to be a consultant that way, and you certainly don’t get an annual fee that way.” His bet that a Vanguard Group Inc. fund that tracks the S&P 500 Index could beat a basket of hedge funds from 2008 through 2017 is going strong, with a 21.9% return from the bundle of hedge funds picked by Protege Partners while the S&P 500 index fund soared 65.7% in the last 8 years. The profits of the bet will go to charity.

On a follow up interview, Buffett also mentioned that he might consider taking money out of banks if they charge for deposits. Charlie Munger and him also criticized Valeant Pharmaceuticals, and Buffett, a Hillary Clinton supporter, implied that any one president, even Trump, could not derail the US economy, or his company’s business completely. “We’ve operated under price controls, we’ve had 52% federal taxes applied to our earnings… I will predict that if either Donald Trump or Hillary Clinton become president Berkshire will do fine.” He concluded.
 

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