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Warren Buffett and Charlie Munger on Elon Musk, EVs, and Why Apple Still Wins

The Berkshire Hathaway Annual Meeting for 2023, led by Warren Buffet and Charlie Munger, presented several fascinating insights on investing, entrepreneurship, and the future of technology. The meeting covered an array of topics, but in this post and highlights video below, I focus mainly on their views about Elon Musk, electric vehicles, and their investment in Apple.

Elon Musk, the charismatic CEO of Tesla, SpaceX, and Starlink, was a subject of discussion. Referring to a previous comment by Munger that Musk tends to overestimate himself, Buffett agreed but emphasized that this trait does not overshadow Musk’s undeniable talent. The duo recognized Musk’s bold visions and his propensity to take on seemingly impossible tasks. Although their business style is notably different, they appreciated Musk’s entrepreneurial spirit, acknowledging that his successes often come from striving for unreasonably extreme objectives.

The conversation then steered towards electric vehicles (EVs) and their impact on the global automotive industry. Buffett and Munger have historically viewed the automotive industry as a challenging sector due to its competitiveness and the hefty capital requirements. Despite the burgeoning popularity of EVs, they maintained a cautious stance, citing the industry’s uncertain future and the significant risks involved in betting on specific vehicle manufacturers.

Apple, a significant part of Berkshire Hathaway’s portfolio, was also discussed. The tech giant now represents about 35% of their stock portfolio, a fact that sparked a debate about portfolio diversification. Buffett defended this substantial stake, arguing that Apple is a better business than any other they own. Despite selling some Apple shares earlier, which Buffett admitted was a mistake, they remain bullish on the company’s prospects, emphasizing that their investment in Apple isn’t significantly higher than their investments in other businesses like railroads. Buffett added that Berkshire’s stock portfolio is only a part of its overall investments, which include a lot of 100%-owned subsidiaries.

The meeting offered valuable insights into the minds of two of the world’s most successful investors of all time. From appreciating disruptive entrepreneurs like Musk to assessing the risks in the EV industry and maintaining confidence in their investment in Apple, Buffett and Munger continue to provide lessons in patience, discernment, and the value of long-term thinking in investing.

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