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Enlightened over dinner with Warren Buffett
This was the kind of evening you read about in the newspaper or see portrayed in films: the world’s most famous investor is seated around the dining table discussing his views on business and investing with five other business leaders. What made this evening so noteworthy, however, was that the other five come from a different generation and a different investment world. Rather than traditional investments such as stocks and bonds, these five are focused on the innovative: blockchain, cryptocurrencies, Bitcoin.
The meeting was forthright and personal, and with players who lead some of the biggest companies in their fields, it was a night to remember — and to share with those not fortunate to be in attendance.
The evening took place in America’s Heartland, in Omaha, Nebraska, the small town perhaps best known for its down-to-earth resident billionaire, Warren Buffett. Over some three and a half hours, the six business leaders shared their thoughts, listened to the investment sage, and discussed the future of investing.
In addition to the Oracle of Omaha, as Buffett is often referred, which alludes to his exceptional success at the helm of his holding company Berkshire Hathaway, those around the table included eToro CEO and co-founder Yoni Assia; Litecoin founder Charlie Lee; Huobi CFO Chris Lee; head of the Binance Charity Foundation Helen Hai; and dinner organizer Justin Sun, founder of the Tron network.
20% yearly returns over 30 years makes a fortune
Sharing his impressions of Buffett and the elder’s investment philosophy, eToro’s Assia had this to say.
“It was so encouraging to hear his message. While many people say that the market is risky and dangerous, and people tend to think that investing is complicated, he doesn’t. Lots of regular people are tentative about investing in the market because the role of those in finance, at least in many cases, is to convey this feeling that investing is hard and risky.”
But not Buffett, recalled Assia.
“My biggest takeaway from the dinner was that he espouses simplicity and following rules. According to him, you simply need to invest based on the 1949 book, The Intelligent Investor, by Benjamin Graham, an investor and economist known as the ‘father of value investing,’ and you can succeed. In essence, it comes down to taking all the profits you make and then reinvesting them in the markets.”
And if you do that, said Buffett to the group, you will be rich. Assia, remembering Buffett’s words,
“You will make a lot of money, and if you continue to reinvest your profits over the long haul, you will make significant yearly returns. And that translates into a lot of money over time.”
Assia explained that he sees quite a broad view of the markets.
“I think every portfolio should include some funds allocated to value investing that are held for a very long time.”
The CEO of the leading social trading platform continued,
“It’s hard for me to say it is simple to make 20% a year. But if you can generate 20% a year for 30 years, $100,000 becomes $23 million. And that’s just by compounding. Most people don’t have that timeframe in mind when they invest or don’t believe it’s likely to generate double-digit returns over time, but some, like Warren Buffett, have been doing this — and making a lot of money — for decades.”
Electric cars? Sure. Tesla? Who knows
During the meeting, the group began to talk about specific industries including electric cars. Sun mentioned Tesla, whose stock had recently rocketed. In response, Buffett explained his view on thematic investments.
As Assia described it, Buffett said there is no doubt that electric cars are going to happen.
“When I was young, there was also no doubt that automobiles would happen. At the time, there was Ford, General Motors, and thousands of car manufacturers in the US. Today there are only three. If I had invested in all of those car manufacturers, I would have lost my money. So it isn’t enough to believe an industry is going to happen. You need to understand which businesses are going to succeed, and invest in those.”
Buffett made a similar point using cell phones as an example. Assia recalled him pointing out “that if you had a crystal ball and people told you that smartphones would change the world in 10 years, it would be a good idea to invest in smartphones. But back then, you would have invested in Motorola and Nokia, although eventually, Apple took the market. Apple is the one making money in smartphones,” said Buffett.
The future of investing as discussed over dinner
Buffett’s bottom line was this, said Assia,
“He only invests in things that he understands, and he famously doesn’t invest in new technology. Buffett continued: ‘I have 2 million shareholders and I want to invest in things that let me sleep well at night. Because I know the businesses I invest in, I also know they will be good businesses in 5 years and 10 years.’”
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