The Berkshire Hathaway Annual Shareholder’s Meeting for 2017 was last weekend. Often called the “Woodstock of Capitalism” the meeting is often filled with not only shopping opportunities and plenty of fun activities for shareholders, but also lots of investment advice from the world’s foremost investor, Warren Buffett, and his right-hand man, Charlie Munger.
Although you can watch the entire Q&A session, including some “halftime” interviews, at Yahoo Finance, there are three key lessons that were reiterated which all investors could learn from:
1. Make sure your businesses have moats, and a knight
It’s important that each business that you invest in has something that no other business can match—in other words, a moat. At the shareholder meeting, however, Buffett expanded on the analogy this year.
“View your business as a castle with a wide water way around it, and a strong Knight outside the moat warding off marauders,” Buffett said.
Of course, by ‘knight’ he doesn’t mean someone wearing armor, but rather a public face that can handle the pressures of not only the public but also the business. A capable CEO who can handle themselves and run the company well is just as important as having a product or service that can’t be matched.
2. Strive to always learn
Investors are always asking what a good business looks like, or how to pick their investments so that they’ll make the most money. What Buffett suggested as simply that there is no way to improve other than to constantly learn. Ideally, you’ll learn from your own success and others’ mistakes, but that isn’t always how it works out.
“In the early years, we were young and ignorant. We bought horrible businesses which were unfixable and we learned,” Munger said. “We could see what a great business See’s was because of what we learned.”
3. Don’t waste time regretting mistakes
Everyone is going to make mistakes—even investing geniuses like Buffett and Munger. In fact, Buffett recently came out and said that he made a mistake with IBM when he recently sold one third of his stock. He also misjudged Walmart and admitted he should have seen that coming as well.
The point, however, isn’t to waste time lamenting lost opportunities, but rather learn from them so you can avoid making the same mistakes in the future.