In the 2023 Berkshire Hathaway Annual Meeting, Warren Buffett argues that opportunities in investing remain abundant, driven by others making poor decisions. He reflects on how the world has changed since 1942, noting that new technologies don’t eliminate opportunities.
Over the 58 years of running Berkshire Hathaway, he has observed an increase in people making significant, foolish decisions, often fueled by easier access to capital. Buffett highlights how some profit from starting flawed businesses, like insurance companies, regardless of success.
He believes smaller investors have greater opportunities, contrasting his optimistic outlook with Charlie Munger’s more pessimistic view. Despite their differences, both agree that opportunities persist in the market.
Here’s an excerpt from the meeting:
Buffett: You know, but I would argue that there are going to be plenty of opportunities. And part of the reason there are going to be plenty of opportunities, the tech doesn’t make any difference for any of that.
I mean, if you look at how the world’s changed in the years since 1942 when I started, you’d say, “Well, how does a kid that doesn’t know anything about airplanes, that doesn’t know anything about engines and cars, and doesn’t know anything about electricity and all that?”
But new things coming along don’t take away the opportunities.
What gives you opportunities is other people doing dumb things. (Laughter) (Applause). Well, the 58 years we’ve been running Berkshire, I would say there’s been a great increase in the number of people doing dumb things.
And they do big, dumb things, and the reason they do it to some extent is because they can get money from other people so much easier than when we started.
So, you could start ten or 15 dumb insurance companies in the last ten years, and you could become rich if you were adroit at it, whether the business succeeded or not, and the underwriters got paid, and the lawyers got paid. And if that’s done on a large scale — which it couldn’t be done 58 years ago.
You couldn’t get the money to do some of the dumb things that we wanted to do, (Laugh) fortunately. And so, I think that investing has disappeared so much from this huge capitalistic market that anybody can play in, but that the big money is in selling other people ideas. It isn’t outperforming.
And I think if you don’t run too much money, which we do — but if you’re running small amounts of money, I think the opportunities will be greater.
But then Charlie and I always differed on this subject. He likes to tell me how gloomy the world is, and I like to tell him, “We’ll find something.” And so far, we’ve both be kind of right. (Laugh)
You can watch the entire meeting here:
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