2019 Berkshire Hathaway Annual Shareholders’ Meeting

Doesn’t the year just fly… And don’t the years?! As I type this note, my baby girl is doing her final HSC exams, and I reflect on her amazing journey over the last nearly 18 years of living, and can’t help but also reflect on the near 16 years that Fortitude has been doing its stuff. I’ve loved every moment of both.

We feel truly privileged to have shared in your adventures and successes throughout 2024. It has been an extraordinary year for all of you, and we get huge enjoyment seeing you tick off all sorts of important achievements in your life at each of our catchups.

It’s been a big year on many fronts for Fortitude. In February, we farewelled Ollie as he branched out to start his own venture. We wish him all the best but are delighted he runs his new venture under Fortitude’s ASIC licence and remains in our offices. In May, we were honoured and humbled to celebrate our 15th anniversary with you, the amazing families that we serve and partner with. Alas, Warren Buffett was again a no-show.

STATE OF THE NATION

In the spirit of ‘Continuous Improvement’ (one of our core values), some of the wins for Fortitude over the last year include:

Huge thanks go to my business partner Huw. He continues to step up exponentially each year… so to speak. I think he remains 6’8”? Also, to the fabulous Fortitude Sydney team of Paul, Kylie, Brad, and Jamilah, as well as our Philippines team of Gelo and Clark. You are all amazing.

We are so looking forward to 2025 in our quest to provide you with the best personal private wealth experience in the country. With our increased capacity, we encourage you to put us in touch with any family and friends that need a hand with their affairs. We’re happy to chat with anyone that is important to you, to either work with them directly or refer them to the right people: eg our network of specialists in estate planning, insurance, financing, aged care, philanthropy and accounting services.

We’re really thrilled to continue our relationship with Fortitude’s chosen charity, The Man Cave which is linked to personal care provider Stuff That Matters. Check out their awesome achievements on the Man Cave website at themancave.life and enjoy a 20% discount on all their skin care products (use Fortitude20 when checking out). You can also support them and find their range at Woolies, in store and online.

Biggest thanks of course go to you. We are so privileged to be partnering with you and appreciate your support, feedback, and companionship over the last year. We can’t wait to share many more amazing experiences with you in 2025 and beyond. Merry Christmas, pens down, happiest of holidays to you with your loved ones and friends and see you next year. We love working with you and thank you so much for choosing to have us in your lives.

Best wishes,
Luke

The pilgrims lining up to get into the meeting, this photo taken at 6am, 1 hour before the open!!
Coinvesting with Greatness

I was impressed by the respect which Warren and Charlie have for Berkshire shareholders, or ‘partners’ as they call them. In the annual meeting’s Q&A they take the approach of educating their partners by not just providing answers, but giving insight into their manner of reasoning. We are extremely lucky to have the opportunity to coinvest with these great investors and learn from their combined 183 years of wisdom.

Repurchases of Stock

Berkshire has recently repurchased $1.7 billion worth of stock. Both Warren and Charlie said that they will likely be more aggressive in repurchasing in the future, and they have more than $110 billion of cash available to do so.

Looking back on the trip, one theme that remains front of mind is that investing is a marathon, not a sprint. Hoping that we’re fortunate enough to have Warren and Charlie’s longevity, we’re only just getting started!!!

For those with an appetite for more, the BKI management team have compiled a 7-pager with more in-depth detail. CLICK HERE to access their note.

Huw Smith, B. Econ, B. AppFin
Practice Manager, Fortitude Private Wealth Pty Ltd
AFSL No. 435732
T: +61 (02) 8215 1560
www.fortitudepw.com.au

Warren and Charlie still on the track at 88 and 95!
Luke here .. I can’t help myself. Yep, as mentioned by Huw, the Berkshire Shareholders’ Day and the trip overall was awesome. In addition to the big day, we had some really good investment meetings too, including with Senior Execs of Nebraska Furniture Mart and the 2 Co-CEO’s of Markel Corp.

Regarding Berkshire … they have $114b in cash (hence 2nd to none optionality wise in times of crisis), $525b market cap (now the 6th largest company in the world), earning $5-6b in operating earnings per quarter, so $20-$25b of new cash likely to be accumulated this year .. and 390,000 employees across their 90 odd businesses they own. An amazing 54 year ridiculously successful journey from a battling textile company bought by Warren in 1965, averaging 20% pa compound returns over that time.

Meeting with Nebraska Furniture Mart Team. From left: Andy Shefsky (Customer Engagement Analyst), Ron Blumkin (Chairman), Luke, Tony Boldt (President, COO, & future CEO), Huw
Quotes I loved:

CM (Charlie Munger): We know how to make money in a panic.  BRK is the safest way to make good money.

WB (Warren Buffett): We won’t destroy money, though will likely underperform if there are continued strong markets

CM: I finally figured out what Bitcoin investors do in their happy hour, they celebrate the life and work of Judas Iscariot

WB: When there’s bad behaviour internally, if you are in the top job, take action fast

WB: We will buy BRK stock aggressively if we like the price

CM: We paid a good price for Heinz and too much for Kraft .. that happens

WB: I’m an expert in delayed gratification .. although there’s a lot of sense in doing things that bring your family enjoyment .. don’t go overboard on delayed gratification

WB: If you’re not happy with $100K income, you’re not going to be happy with $50m of income.  Super rich are not happy coz they are super rich

CM: re Brexit ..  It sounds like a horrible problem .. I’m glad it’s theirs and not ours

WB: Amex – our share of the earnings this year equals the original cost of our Amex shares (BRK owns 18% and is the largest shareholder)

WB: See’s Candy, we paid $25m for the business (in 1971) and it has given back to BRK over $2b since (over 80 times the original investment)

WB on CM: We’ve never had an argument over the last 60 years.  I’m in sync with how he sees the world

WB: Having the right partners in life is tremendously important.. and makes life more fun.  It’s very important who you pick out as heroes and friends.  Look for someone better than you are and try and act better than them

CM: You should always expand your circle of competence .. if you can

CM: When you learn you are incompetent, that’s a plus…. you can then throw it away

For the select few that have made it this far, thanks for reading and we welcome your thoughts, calls or comments!

Luke Rathborne CA (FPS), CFP, BCom, F Fin, SSA, GAICD
Managing Director, Fortitude Private Wealth
AFSL No. 435732
T: +61 (02) 8215 1560
www.fortitudepw.com.au