Notes on Buffett’s Meeting with Ivey MBA Students on March 30, 2012

Notes on Buffett Lecture to Ivey School Students: Ivey School_2012_Buffett_Notes

Mr. Buffett will often repeat the same concepts and stories to the students. But let’s read what he has to say about certain subjects.

On Valuation: When valuing a business we should think of it as “deferring consumption and laying money out now to get more money back at a later date”–i.e., the two birds in the bush. There are two major questions to be answered: 1. How much money will investors get back? and 2. When will they get it back?

What I seek is certainty about the pay-off, make sure there are two in the bush. The way I deal with certainty is to find companies that have historically great returns and earnings, leveraging on a competitive advantage.

Passion: My passion was valuation

Information: People have better information now, but they still react irrationally.

Advice:

  • Buy equities strategically and opportunistically.

  • But ultimately, the key to success is emotional stability.

  • Someone with intellectual curiosity can learn the profession.

4 responses to “Notes on Buffett’s Meeting with Ivey MBA Students on March 30, 2012

  1. Can we all agree to listen to everything Buffett says about business and investing, and ignore EVERYTHING else? I’m sorry, the man is just an unapologetic ignoramus outside his extremely lucrative wheelhouse, case in point:

    Q: After the financial crises, the government took various measures such as Dodd Frank Act to decrease risk in banking sector. Do you think today’s world is a safer place as a result of those measures?
    A: The U.S. is a safer place but EU is not. The U.S. economy is in a much better shape than EU which was very close to immediate liquidity crises at the end of last year. Even though EU is in a mess today, it will get past this. People and their desires would not go away. In 10-20 years, they will start consuming again.
    In U.S. the things that caused problems few years ago don’t exist anymore but bubbles will still come in future as we will have new problems then. That is the nature of capitalism. The trick is to not get too excited when everyone is and try to explore the opportunities that these bubbles will bring.

    Nature of capitalism? People will consume again?

    Thanks, Warren “John Maynard” Buffett.

  2. Mr. Buffett is part of the establishment. His father, Howard Buffett, would have considered his comments daft.

    I think our financial system is in EVEN WORSE shape than before. More concentrated banking sector, more goverhment debt, bloated FED balance sheet, more socialized financial system and Massive, but useless regulation. Thus we have the ratchet effect–the goveernment through the FED, regulations and subsidies, helps create another crisis, then cry out against greed, increase government intervention–repeat as necessary.

  3. Link to pdf appears to be broken, is there an update or can it be saved to the value vault?

  4. Dear Jay: I uploaded a new copy and fixed the link. Thanks for pointing that out.

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