Warren Buffet's latest shareholder conference

Sandi and I just returned from Omaha and the annual Berkshire Hathaway meeting with Warren Buffett.

Although we have been shareholders for years, I never carved out the time to attend.... DUMB! We will be going back next year.

I have always thought that if you are going to listen to somebody, make sure they are eating their own cooking and have created truly sustainable success. Clearly, Warren Buffett falls into this category and his insights are crystal clear, simple and make sense..... here are a couple that I found particularly useful:

1. The key to getting rich is to create a structure or set of rules that minimizes the "Everyone else is doing it" syndrome. If everyone else is doing it, be wary!

2. The primary key to successful investing is not the size of your circle of competence, but rather knowing where the perimeter is. Too many people drift away from what they know and in the process move from investor to speculator.

3. The biggest single cause of the recent meltdown on Wall Street is the Business Schools and MBA Programs throughout the country. Teaching people to invest for the short term instead of owning a piece of the business will always produce gyrations and spikes in stock prices.

4. The most recent rise in the stock market is primarily a result of low interest rates.... people can't stand sitting on the sidelines making 2/10th of 1% on their money. Money has started flowing back into stocks because there are no alternatives and most investors can't sit and do nothing when there is nothing to do that makes sense.

5. Given the recent level of government intervention on top of the previously existing debt obligations in the United States, inflation is very likely. So are higher taxes. Inflation and higher taxes are the result of an the US inability to live within its means, so collecting and printing more money is the most likely answer.

6. The real culprit in the recent economic turmoil in the US is not the US Treasury department, it's Congress. Too much money has been spent in comparison to the amount being collected and this imbalance will result in even more pain.

7. The problem in Greece is that it doesn't have its own currency to print its way out of the problem.... Nor do any of the other members of the Euro. The Greece problem is likely to be repeated several times in the coming months.

8. Long term, Warren and his long time partner Charlie Munger are HUGE believers in the US economy, which is why they just spent $29 Billion buying a railroad. Railroads will be the primary mover of goods in the foreseeable future. The better the US economy, the more goods that need to be moved. This is a long term "all in" bet on the United States economy.

For those of you who are unfamiliar with the spectacular investing results of Warren Buffett, consider this: In 1979, you could have purchased his stock for $290/share. Today it costs $120,000/share. You can read more about this incredible man and his investing philosophy by reading his annual Chairman's Letter to Shareholders.... You should read all of them (1977-2009):

http://www.berkshirehathaway.com/letters/letters.html

For those of you addicted to speed, please remember that it took Warren 12 years (1950-1962) to make his first million.... The lesson: The goal is not to get rich.... The goal is to get rich and stay that way!

Best,

Keith Cunningham