Wesco Financial - 2007 Meeting

CM started with a short speech on the confluence of factors in WB that contributed to Berkshire's success.
1. Mental aptitude
2. Extreme interest in the subject - there is no substitute
3. Early start
4. "Learning Machine" - avid learner. Lucky to be in a subject where he can learn effectively. It is more about learning the method of learning.
5. Decision making concentrated in one mind. Vs. Committees CM compared Singapore to USA in the pace of success.
6. Not being naive relates to mental attitude - by avoiding negatives like self-pity, envy, overspending income, being an extreme idealogue. This is maximisation of objectivity.
7. Reinforcement through rewards for good decision.
Some Mungerisms:
Quoting Will Rogers - There should be a better way to learn not to pee on an electric fence than actually doing it.
Irish Alzheimer's is when you forget everything except the grudges.
Quoting a German proverb - Man is old too soon, and too late smart
Sit on your ass and read
Academics & Learning:
Fatal disconnect of academics
pick up main ideas of each subject - for instance opportunity cost from economics
Checklist method of learning
Always invert
Sell yourself the best hour of the day
Accounting for derivatives
Marked to model and marked to market are different
Being rational
wonderful feeling to be right
even better to be trusted by others
Why Berky is not repeated
1.Simple - no advantage in being simple
2. Institutional reward system and hierarchy make it difficult
Investing in Commodities
POSCO is not, it is technology from Nippon Steel
Commodity business can be attractive at a price
Nature Vs Nurture
In a non-pathological environment, mostly pre-ordained by nature than people give credit for
Know your strengths
Don't be a prisoner to your talents
Inefficient Markets
1. Small Markets, or
2. Crazy People doing crazy things
Motivation
Wanted to be independent to make 'a man of himself'
Best from his list of human misjudgements in Poor Charlie's Almanack
Self serving bias - 'Little me wants it, why can't little me have it'
Opportunity cost
Best measure to look at life