How I met Warren Buffett and what I learnt from the Sage of Omaha (Q&A session part I) [English version/中文版]

How did it happen?

Every year, Warren Buffett organizes a lunch with 160 students coming from 8 different American universities. Nevertheless, sometimes Warren Buffett chooses to invite one foreign university amongst the 8 universities like Berkeley, Chicago Booth or the University of Creighton in Omaha.

HKUST, Oxford, Cambridge or some universities in Brazil have already joined this annual meeting and sent 20 students each to attend the event but never has Mainland China been represented before.

But this year, Mainland China and Guanghua School of Management, Peking University have been elected by Mr. Buffett to join this meeting for the first time. We were 150 students from the MBA, the Master of Finance or the Undergraduate Program to apply for the 20 seats and I managed to make it through the selection.

Thank you again Guanghua for this amazing opportunity to meet Mr. Buffett, the sage of Omaha, ranked Forbes #3 in 2017 and legendary investor.

Thank you again Mr. Buffett for the time you gave us at the Q&A session and at the lunch and thank you again for sharing with us your lifetime story and experience.

Thanks to Jeffrey Towson, our amazing teacher for accompanying us and leading us during this day trip at Omaha.

Special thanks to Robert Cheng Bao for organizing the whole event and coordinating our visit with Warren Buffett's team at Berkshire Hathaway.

Special thanks also to Mr. Jeffrey Towson and all the team of students for sharing their notes in English and Chinese and on which I base the following first part of the Q&A session.

What I learnt from Mr. Buffett

Q&A session with Mr. Buffett, part I / 第一时间与大家分享与“股神”的问答

Q1: (from Peking University) What is your latest idea for investing in China? And if you are going to do investments in China, which industries will be your priorities and why? 哪些事情对您的投资产生了重要的影响？

A: China is a huge market and there are more possibilities for us there than in any other country besides the US because of its size. My partner Charles Munger looks at China a lot. We focus not on price but on the valuation of the companies. We do close research on the companies we are interested in and try to buy the whole business when we invest.

China is just as smart and works just as hard as the US. But they didn't have the system. Now they have the secret sauce and they have compound interest working. There will be some interruptions but this will not disturb its long-term development. China and the US will become the two superpower economies in the future. We appreciate the big investment opportunities in China.

中国是一个很大的市场，具有非常多的可能性。我和我的合作伙伴Charles Munger有很多关于中国的讨论和研究，我们注重公司的价值而非股票价格，希望购买下整个企业以进行运营。在过去的50年，中国人口飞速发展，人口红利巨大。一些波折并不会影响中国发展的脚步。中、美将来会是两大经济强国。如果在中国能找到合适的行业、合适的时间、合适的管理团队，我们会毫不犹豫的投资。

My investment in Petrochina came from reading the annual report. The government owned 90% and we bought 15% of the 10% available. The investment in BYD came from Li Lu (Himalaya Capital).

我读了中国石油年度报告之后才决定投资了. 90%的股份是政府的.我们有1.5%的股份.是李录推荐了比亚迪的投资机会.

Q2: (from Peking University)：You are one of the richest men in the world, as well as one of the most generous. What is your view of wealth? Is it established at the very beginning at a young age, or is it developed through different phases of your life? 您既是世界上最富有的人之一，也是最慷慨的人之一。您是如何看待财富的？这种观念是一开始就有的，还是逐渐建立起来的？

A：This is a good question. Money can buy most things, but it cannot buy time and love. I have only one thing that I count as a luxury—a private jet. Other things are the same as yours. Money has no utility beyond a certain point and the usage is the same to everyone. If you buy ten houses, you have gone into the hotel business. Are you happier with ten cars than one good one?

Money can change the life of many people. I hoard money because it can grow faster with me. But otherwise there is no reason to hard it. My wife and I both agree that we should spend money to solve the important societal problems. Especially if there is no ability to raise money. For example, universities in the US have external funding, but curing diseases in Africa may not have funding.

Money can buy many interesting experiences. I enjoy this game of investing. However, more stuff does not make me happier. Money cannot buy love. When people try to control their kids through money, it can also bring disasters. I believe taking care of family is very important.

Money is like manure. If you pile it up, it stinks. If you spread it around things grow.

这是个好问题，我们来谈谈金钱。金钱很有用，但它买不到两样东西：时间和爱。我有一样东西可以算作奢侈品——私人飞机，其他东西都和你们一样。在超过某个特定节点之后，金钱就失去它的效用了。慈善可以改变很多人的生活，我和我太太都认为我们应该把金钱用在解决社会问题上。比如美国的大学有很多资金，而非洲的疾病治疗资金却很短缺。

金钱可以带来很多有趣的体验，我享受投资。但是，拥有更多的东西不见得会更快乐。金钱无法买来爱，当人们试图通过金钱去控制自己的孩子时，可能会带来灾难性的结果。我认为照顾好家人是很重要的。

[Apart from his private jet, he owns the same car he's had all his life, still lives in the same house in Omaha, you can actually visit it and also appears to live with c.$100k per year. He also mentioned he somehow returns money to Berkshire Hathaway from his salary as he never uses it all. / 除了他的飞机,他二十多岁的车没有改变,他还住在他很多年前买的房子.他跟他十万美镜的工资能够活这得幸福.每年如果他不完全花他的工资,他会还给钱给他的公司.]

Q3：What is your best investment, favorite investment and learned-most investment in your life? 您最喜欢的投资是什么？

A：The best investment is in yourself. On my wall of the office, there is a certificate degree of Dale Carnegie Course, which I signed up for for giving public talking. This was one of the best investments in my life.

Also we should invest in the right friends. Associating with great friends will shape your life. The right friends or a spouse can make a huge difference in your life, such as my partner Charlie Munger.

GEICO was my best investment. When I was a student, I went to an insurance company, GEICO, in Washington DC on a Saturday afternoon. And I pounded on the door and the custodian let me in. He introduced me to the only person at the office at that time and he gave me a 4 hour brief about the insurance business, which changed my life. I did not know much about insurance before this.

When I want to know about coal industry, I will ask people in coal companies, which competitor’s stock would you buy and which would you short and why? That is very useful for research since people love to talk about their competitors.

有两笔投资是我认为最值得的。

首先是对自己的投资。任何可以提高你能力的投资都是值得的。年轻时我不擅公众演讲，于是我报了一个Dale Carnegie课程，提高自己的演讲能力。这让我受用一生。

另外就是对朋友的投资。一个人交往的朋友会塑造他的人生，如我的合伙人芒格。1951年我21岁，想投资保险公司。可那时我对保险行业一无所知。我在哥伦比亚大学的老师、本杰明·格拉罕当时在政府员工保险公司(GEICO)任职董事，所以我坐火车去华盛顿找他。可惜我忘记了那是周六，他不上班。公司的一个管理员为我开了门，把我介绍给Lorimer Davidson。他当时是公司的副总裁。他知道我是格拉罕的学生，于是与我聊了四个小时，为我讲解了整个保险行业，这改变了我的一生，他成为我一辈子的良师益友。

曾经我想投资煤矿行业，我会问煤矿公司的朋友，你会买你们公司哪个竞争对手的股票？如果你要沽空某竞争对手的股票，你会沽空谁？为什么？当问一圈后，你对这个行业就基本了解了。这个方法在做市场研究的时候非常有用，因为人们往往更愿意谈论竞争对手。

Q4: Bill Gates once said you are the most optimistic person he has ever known. Do you think you are optimistic, and why? Is it born with or learned later? 比尔盖茨曾说你是他认识的最乐观的人。您认为自己是乐观的人吗？乐观是与生俱来还是后天培养的？

A: Optimism is a very important quality for a good investor. The result of life getting better and stronger. Compared to the age of Jefferson (back to 1776), people did not make a lot of progress. Not much had changed in thousands of years.

But in less than 3 life times, significant changes and developments have happened. Why? Human are not smarter, nor are they working harder. The economic system and government policies have let people start to deliver unbelievable results. Compared to older times when people died and had fewer choices, everyone in this room lives a better life. Our children, younger generations will live even better. Optimism is realistic. It is from analysis.

乐观对于一个好投资者来说是至关重要的品质。现在与三个世纪前的杰斐逊时期相比，人口、交通、经济制度、政府、法治等各个方面都发生了巨大的变化和进步。人们并没有更聪明，或更努力，而是学会更好地利用自己的潜能。现在这个房间里的任何一个人都比过去最富有的人生活得好，享受着更好的医疗、更好的娱乐……变好的趋势还会延续下去，我们的孩子会生活得比我们更好。面对这种社会的进步，我怎能不乐观呢？乐观的就是现实的。

Q5：If you were president, how would you make the immigration policy? 如果您成为总统，会如何制定移民政策？

A：Welcoming immigrants is a grand American tradition. The country couldn’t be here without the contributions from immigrants.

In 1939, two Jewish immigrants, Albert Einstein and Leo Szillard, wrote a letter to President Roosevelt, alerting him about Germany’s undergoing research on "extremely powerful bombs of a new type" and recommending that the U.S. begin similar research. The letter saved the US.

Steve Jobs was son of immigrants. When people come, the market comes.

President Trump is reacting to a perceived danger. However, the U.S. will be a better country 50 years from now if it keeps its great tradition.

美国一直对移民抱有开放欢迎的态度，这也是美国能走到今天的重要原因。谷歌等美国企业的成功离不开移民的贡献。

1930年代，有两位犹太裔移民为了躲避德国纳粹来到美国，成为美国公民。他们就是阿尔伯特·爱因斯坦和利奥·西拉德。1939年，他们向时任美国总统的罗斯福写了一封信，提及德国正在研究核武器，建议美国尽早进行相应研究，这封信拯救了美国。如果往近了说，史蒂夫·乔布斯也是移民的儿子。要知道，人气愈旺，市场愈旺。

有些人担忧移民带来的潜在危险。特朗普总统的移民政策对当下这些潜在威胁做出了反应。然而，移民们是出于对美国的热爱而选择这个国家。如果美国保持对移民的开放态度，50年后的美国会更加美好。

Q6: What is your view of the newspaper industry? 您怎么看待报纸行业的发展？

A：In the old times, the advertisements in newspaper were a source of information and it spread everything. Nowadays, the industry is declining and the classified sections do not help anymore. They are losing print circulation, and thus their advertising revenue. The internet is accelerating the change in newspapers.

The New York Times and Wall Street Journal have viable digital businesses which allows them to keep some print circulation (joint cost synergy). The Washington Post has also increased its online activity a few years ago. But most newspapers have not found a feasible way of being paid online.

在过去，报纸上的广告是重要的信息来源。而今天，这个行业在走下坡路，分类广告不再那么重要，报纸的发行量在下降，广告收入不断流失。网络的发展加速了报纸的改变。报纸的发行量下降。纽约时报、华尔街日报的在线部分使得他们可以继续发展纸质发行（成本共享），华盛顿邮报也在几年前开始了线上部分。其它大部分报纸还没找到可行的电子收费模式。

Q7：What is the most important improvement you have made in investing? 哪些事情对您的投资产生了重要的影响？

A：I was focusing on technical analysis when I was young. The intelligent investor, the book written by Benjamin Graham [which he brought to the Q&A session], reset my whole investment thinking. It taught me how to think about the stock market.

From my perspective, there are two courses that should be taught in all business schools: how to think about the stock market and how to value companies. Margin of safety is always the main principle of investment.

The formula of investing never changes. First, how sure you are? Second, how soon it will to get you there? Third, what to do to achieve it?

Investing is buying a piece of a business. What will you invest in? Maybe a fast-food restaurant since people need to have food every day. You go through the ideas in your mind, look at things, and grab information. That is why investing is amazing: you only need to make decisions rather than do it (build the business) yourself. Since the market prices change every day, opportunities are always there. Mr. Market is there to serve you. You should utilize it when he goes crazy rather than let him put pressure on you.

本杰明·格拉罕（Benjamin Graham）的《聪明的投资者》(The intelligent investor)(他 那天对我的影响很大。我刚开始投资的时候一直侧重技术分析，而这本书彻底改变了我的投资思路，教会我如何理解股票市场。在我看来，商学院教投资只需要两门课：一是如何思考股票。二是如何对股票进行估值。投资策略的准则就在于安全边际(margin of safety)。

投资的秘诀从未改变。你可以问问自己，首先，你对这笔投资有多肯定？其次，你需要多久达到预想的目标？第三，具体要怎样做？

投资就是买一盘生意。一百万美金可以让你在奥马哈投资三个项目，你会投资什么？你可能会投资快餐店，因为奥马哈的人们每天都需要吃饭。如此种种，你会有一个思路。这也是投资的乐趣所在——你只需要做出决定，而不需要自己亲手去做生意。同时，由于市场价格每天都在改变，也就意味着每一天投资都有不同的机会。你要利用市场先生（Mr.Market）的疯狂或愚蠢，而不是被他所影响。

Q8：You have picked many successful companies previously. And the market will see your purchase of a stock as signals of confidence. How does this influence on your positions? 您过去发现了许多成功的公司。您的投资成为整个市场的风向标，这对您的投资带来怎样的影响？

A：I have signed some confidential treatments with the SEC, but not for my portfolio. We need to disclose our portfolio holdings 45 days after the end of the quarter. However, I think there is intellectual property in the ideas of what stocks we buy and these ideas should be protected.

Management likes these announcements but they cost us a lot of money and it is negative for our investment. We have to publish our intellectual property. I have made attempts to minimize disclosure in what I am buying. We keep in mind to minimize the effects on the market from our investment decisions.

我与证监会签署了一些保密合约，但公司的投资组合依然遵循证监会信息披露的标准。每一个季度我们都需要公开公司的投资组合。然而我认为，交易决定本身其实也是知识产权。这些公告会推高成本。我尽量不公开我们的交易，减少对市场的影响。