2 Pearls of Wisdom From Warren Buffett and Charlie Munger

Foolish investors were glued to computer screens last Saturday.

It’s for good reason. For the first time ever, Warren Buffett’s Berkshire Hathaway streamed its annual general meeting (AGM) live to a worldwide audience. Buffett, together with his able side-kick Charlie Munger, was on hand to deliver nuggets of wisdom to the crowd – both online and offline.

From the session I picked out two thoughts which may interest investors:

Defects and advantages

“We ought to have a law … where these people shouldn’t be allowed to cite the defects without citing the advantage. It’s immature and stupid.”

— Charlie Munger

Munger delivered this zinger in reaction to pros and cons of Coca Cola here. He makes a key point. Often times, investors can get enamoured by a bull case or a bear case of a business. At worst, the same investors narrowly focus on an investment, either bullish or bearish, with no space in between.  

At the Fool, we are fans of both bull and bear cases.

We think that investors will do better if they consider both sides of the story. It also gives the investor the chance to consider as many sides of story before investing. In fact, we have published a number of bull and bear cases side-by-side. Here’s a sampling that may interest you:

  • Genting Singapore PLC (SGX: G13) – click here
  • Comfortdelgro Corporation Ltd (SGX: C52) – click here
  • Singapore Airlines Ltd (SGX: C6L) – click here
  • Keppel Corporation Limited (SGX: BN4) – click here

Going green with envy

“You don’t have to really, worry about what’s going on in IPOs [initial public offering] or people making money. People win lotteries every day but there’s no reason to have an effect on you. You shouldn’t be jealous about it.”  

“You have to figure out what makes sense and follow your own course.”

— Warren Buffett

Initial public offerings are popular among Singaporean investors. Sometimes, it’s for the wrong reasons. Some participants may be out to make a quick buck from the initial rise of the IPO. It can be fertile ground for envy to develop.

But investors should know that IPOs don’t always work out.

As my colleague James Yeo showed , some IPOs can end up significantly lower than where it started. In fact, more than half of the 2015 IPOs have ended up in the negative territory last year.

To be sure, there was one big winner last year.  However, as a whole, the performance leaves much to be desired. And certainly, as Buffett would note, no reason to be envious about.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong owns shares in Berkshire Hathaway.