Warren Buffett and Charlie Munger will discuss investing in Berkshire Hathaway at Berkshire Hathaway’s annual shareholders meeting, which will be streamed live on Yahoo Finance.
BECKY QUICK: That question comes from a long-term shareholder who has been here for over 25 years. His name is Ben Noel. He is from Minneapolis, Minnesota. And he says, “Mr. Munger and Mr. Buffett, after 15 years of underperformance in the market, you are cautious in predicting that Berkshire will be able to outperform the market in the future. Given that, what do you see as the arguments in favor of it?” ? ” long-term shareholders in order to keep their shares or to diversify the risk via an index? “
WARREN BUFFET: Charlie, do you want to answer that?
CHARLIE MUNGER: Yes of course. Personally, I’d rather hold Berkshire than the market. So I’m pretty happy with holding Berkshire. I think our business is better than the market average.
BECKY QUICK: Is it because you think the market is not evaluating this fairly?
CHARLIE MUNGER: Well, these are just accidents in history, and things fluctuate at all times. But on a composite basis, I’d bet on Berkshire through the market. And that assumes we’re all dead.
BECKY QUICK: [CHUCKLING]
WARREN BUFFET: I recommend it. I recommend the S&P 500 index funds and have had people for a long, long time. And I’ve never recommended Berkshire to anyone because I don’t want people to buy it because they think I’m guessing something. I never … I mean, no matter what it was sold for. And … and I made it public. I … you know I’m … in my doubts. There is one – there is a fund for mine – the one – then widow and 90% go to an S&P 500 index fund and 10% to treasury bills.
On the other hand, I am very excited about my future contributions to a group of charities that will be spread across Berkshire for over 12 years after my death. I think the odds are that Berkshire – is Berkshire – I like it, but I am not – I don’t think the average person can pick stocks. We happen to have a large group of people who didn’t pick stocks, but they picked Charlie and me to manage money for them 50 or 60 years ago. I think we have a very unusual group of shareholders who view Berkshire as a lifelong savings vehicle.
And one that you don’t have to think about. And one that they – you know, if they haven’t looked at it in 10 or 20 years – who looked reasonably good at the money. But I wouldn’t say that over time, the S&P 500 – I’m perfecting – likes Berkshire, but I – I think the person who knows nothing about stocks and has no special feelings about Berkshire, I think , they should … they should buy the S&P 500 index.