Virtual Value Investing Q&A Speaker Series Event at Brown University with Wallace Weitz

Описание: July 21st, 2021: The twelfth guest speaker for the 2021 Virtual Value Investing Q&A Speaker Series Event at Brown University, Wallace Weitz, is interviewed by the host, Itai Parnes.

0:00 Introduction
0:50 Analyzing Management
2:43 Media Streaming Sector
5:57 Omaha, Nebreska
10:14 Transitioning to Investing in High Quality Businesses at a Reasonable Price
14:51 Oil and Natural Gas, Alphabet
20:17 Facebook, Alphabet, Amazon, Netflix, and Microsoft
28:51 US Investing Vs. Global Investing
31:31 Semiconductor Industry, Rich Templeton and Bill Gates
37:01 Valeant Pharmaceuticals
41:04 Henry Singleton and Teledyne, Mike Harper and ConAgra Foods
44:38 Cable One
46:46 Salesforce and SaaS Companies
49:25 Adelphia Communications
50:58 Liberal Arts
54:41 Starting a Fund, Raising Capital
1:00:51 Discount Rate
1:04:44 Interning at Weitz Investment Management

Additional Q&A:

Q1) The Net Present Value of the United States Social Security and Medicare Unfunded Liability for the next 75 years is about 50 trillion dollars. What do you foresee as a solution to this unfunded liability?

A1) The PV of unfunded promises has been mind boggling for as long as I can remember, and keeps growing. “Austerity” sufficient to get this down to a manageable number seems out of the question—the shock to the economy would be great, and it’s unlikely we’d ever have the political will. The ongoing money creation and deficit spending would seem to be inflationary and one could imagine bad inflation, stagflation, a deflationary debt crisis, a collapsing dollar—there are proponents of each case that make plausible arguments. I really have no idea. I would expect continued general “muddling” with the occasional crisis that sends markets to temporary extremes. My game plan is to try to have a portfolio of very resilient companies, to be very attentive to developing weak spots and be positioned to withstand whatever comes, without having to sell, and to have some available fire power. Some day we’ll get “the big one” but trying too hard to avoid trouble has too high an opportunity cost.

Q2) What are the most egregious examples of leverage today via non-bank lending and derivatives (credit risk and surprise linkages) and what new regulations should be introduced to reduce these risks?

A2) Leverage via derivatives is virtually unlimited. It is apparently huge in the speculations of the day—meme stocks, crypto currency, etc. I suspect there are all manner of “carry trades” that involve tame seeming assets, but with enough leverage to sink both the borrower and the lender. Regulation is really hard because as soon as the ink is dry on the “letter” of a rule/law, people reverse engineer a subversion of the “spirit.” True w regulation of all kinds, tax laws, etc. I like Buffett’s suggestion regarding officers/managers who take on risks on behalf of others—clients, shareholders, etc. If the risk taker’s own net worth was fully at risk, they would likely behave more prudently. As Munger says, “It’s all about the incentives.”

Disclaimer: This video is provided for informational purposes only. Nothing contained herein should be construed as an offer, solicitation, or recommendation to buy or sell any investment or security, or to provide you with an investment strategy. Nor is this intended to be relied upon as the basis for making any purchase, sale or investment decision regarding any security.