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Warren Buffett u0026 Charlie Munger explains why Berkshire require atleast 10% return (2003)

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The second question was very intelligent, but I don't think Buffett & Munger addressed it very well
Comment from : @Tian-ow8ro

Only till it finishes not a sec later be ready for that all❤❤🎉🎉
Comment from : @shankarbalakrishnan2360

To shed any light on this when Warren and Charlie mention "our opportunity cost as a discount rate (on future cash flows) is 10" well that's their cost of capital when you consider the audience in front of them- who invest capital with Berks- have a bnext best alternative use of their money/b (opportunity cost) as being to invest it in an index delivering 10 pa brThe audience invests their capital in Berkshire and their opportunity cost as general public is to invest in an index producing 10 So that is the hurdle rate Berkshire has to beatbrI try to invest like these two (try!) and personally never bother fiddling with changing the discount rate in line with 7yr gilts etc; everything is discounted at 10 and more focus is on durability and size of future cash flows and analysing the business instead
Comment from : @maxt1617

they did dcf of course but usually if the stock need to dcf to last digit isn’t going to work , so they literally just skip the opportunity cost cause overall they will hold more than ten years and make the present volatility like nothing
Comment from : @hialin618

Warren Buffet said at 8:16 that they would pay out 250 million dollars if one person hits the right number in a Pepsi Cola contest Did he mean to say Coca Cola?
Comment from : @frankpinkowski534

Choosing smoothness in earnings is either for psychological reasons or because you may be unsure of your understanding of the business
Comment from : @foxbat888

Berkshire audience questioners are just awful, stupid, pathetic, and dumb Almost every one has a long-winded question (multiple part question, and multiple questions), and they are usually looking for some magic formula so they don't have to think They just don't "get" it
Comment from : @tomdallas3690

This guy def doesn’t get laid
Comment from : @adf286

Even though they have no scientific studies to back this up, the reason why they use 10 percent - and ought to - is because the long term average return of the Dow and the S&P is about 10 if you include dividends
Comment from : @valuations520

stup!d “investor” never learn not to waste time and ask questions under 20s
Comment from : @hl3641

Buffet’s first investment was a total loss…that how an investment firm is named after a New England textile company since he kept the corporate structure
Comment from : @darbyheavey406

Before asking a question at a conference like this you must clarify to yourself "am I asking a question or providing an answer - that would at the same time - also stroke my own ego?"
Comment from : @rustler160

They don't explains They explain At least are 2 words
Comment from : @Pe6ek

The guy asking the question is the reason so many people miss the forest for the trees and why warren does so well Why do all these people ask 10 minute questions and not notice that Charlie can answer everything in less than 15 seconds
Comment from : @ElewIV

The final part was amazing
Comment from : @abc18792

Such a stupid selfish question, 2 of the goats sitting in front of you and you spend 5 minutes asking a dumb question that could have been condensed into 15 words if the guy was half as smart as he wanted people to think he was
Comment from : @matmaism

What does 10 return mean Is this 10 revenue per stock price? Please someone clarify what returns refers to and percent of what it refers to Thank you!
Comment from : @phantomcreamer

The question is way to long
Comment from : @leesoyka467

Has any shareholder at any shareholder BH annual meeting EVER asked a question less than 9 minutes in length? Ever?
Comment from : @raindogs451

They need to make a Buffett & Munger cartoon
Comment from : @Furtivo95

What a nerd
Comment from : @examensexamen

10 real return, pre-tax seems like a low hurdle for Berkshire, in any interest rate environment The scale of BRK, even in 2003, was supposed to limit them, yet in an era of falling interest rates, their scale enabled them to make deals with BAC, GS, GE and OXY that easily cleared the 10 hurdle
Comment from : @BM-ru7ef

Buffet answer is at 2:33
Comment from : @Vishal-ih3tc

Look how rich and young Charlie and Warren were long live Warren long live Charlie
Comment from : @longphan3744

Opportunity cost: guessing future opportunity cost, he wants to use lesser fire power with lower returns 4:50
Comment from : @candyfloss184

Way too long of a question dude
Comment from : @Gorevet

The higher present value is worth the volatility
Comment from : @ChaceBonanno

2:36 to skip past the nerd asking the question
Comment from : @DenzelLN936

That guy asking the question wanted to show off his intelligence in front of these two, I'm guessing he didn't get a job from them, especially when he brought up the modern finance part lol
Comment from : @user-ql3ws5uz1d