2007 Berkshire Hathaway Shareholder Meeting

Regarding the current pricing of the market, Charlie Munger remarked that this is, “not a time to swing for the fences.” Yet also cautioned that you can’t sit around waiting for twenty years for price levels like those that prevailed in 1932 and 1974 to return. Buffett remarked that despite the market levels, if he were given the choice between locking in an investment for the next ten years in long-term U.S. Treasury bonds at 4.75% and the S&P 500, he’d choose the latter. The message for individual investors seemed clear: Although things aren’t dirt cheap right now, you’ll do reasonably well with a well crafted portfolio constructed and designed to avoid major risk and permanent capital impairment.

Buffett also remarked that Berkshire Hathaway is looking for a major acquisition in the neighborhood of $40 to $60 billion. Were the price and economics right, he’d even go so far as to sell off investments to fund the purchase. The famous investing duo are optimistic about the company’s ability to profitably invest the $46+ billion pile of cash that has amassed on Berkshire’s balance sheet over the past few years. This would lead to a substantial increase in operating earnings and bring even more cash into headquarters making one of the world’s largest cash cows even more attractive.