Warren Buffett: There’s A Good Reason Why We Don’t ‘Talk Up’ Our Investments

During the 2015 Berkshire Hathaway Annual Meeting, Warren Buffett explained why he doesn’t ‘talk up’ Berkshire’s investments. Here’s an excerpt from the meeting:

WARREN BUFFETT: Incidentally, there’s one thing I always find interesting.

We get asked questions about investments we own, and people think we want to talk them up, you know, or —

We have no interest in encouraging other people to buy what — the investments we own.

I mean, we are better off, because either we or the company is likely to be buying stock in the future. Why would we want the stock to go up if we’re going to be a buyer next year, and the year after, and the year after that?

But the whole mentality of Wall Street is that if you buy something — even if you’re going to buy more of it later on, or if the company is going to buy its own stock in — the people seem to think that they’re better off if it goes up the next day, or the next week, or the next month, and that’s why they talk about “talking your book.”

If we talked our book, from our standpoint, we would say pessimistic things about all four of the biggest holdings we have, because all four of them are repurchasing their shares, and, obviously, the cheaper they repurchase their shares, the better off we are. But people don’t seem to get that point.

Do you have any idea why, Charlie?

CHARLIE MUNGER: Warren, if people weren’t so often wrong, we wouldn’t be so rich. (Laughter and applause)

WARREN BUFFETT: He’s finally explained it to me. OK. (Laughter)

You can watch the entire discussion here: