🐐 Lessons from Warren Buffet
Blossom reporting live from Omaha!
🐐 Lessons from Buffett & Munger
This week Max, Brandon, and Marc flew down to Omaha to get the best of Buffett first-hand at the Berkshire Hathaway Annual Shareholders Festival. The grand event hosts over 40,000 attendees from all over the world and has been dubbed the “Woodstock of Capitalism”.
Throughout the day, Warren Buffet and Charlie Munger, Chairman and Vice Chairman of Berkshire Hathaway, answered shareholders’ questions for over five and a half hours. During the time Buffett answered the majority of the questions, with Munger occasionally chiming in when he wasn’t devouring heaps of peanut brittle.
Here’s the inside scoop from the event, plus some nuggets of wisdom from Buffett and Munger - known as two of the greatest investors of all time:
👴🏻 With Buffett now 92 and Munger now 99, a running question of the day was succession planning. The event poked fun at this with a short movie showing clips going back to 1994 with a similar question getting asked over and over again across the years.
🎤 Even so, the power duo welcomed their successors, Greg Abel and Ajit Jain, to share the stage. The two held their own during questioning, but while bright, it was clear the pair lacked the charisma of Buffett and Munger.
💵 On the topic of the US dollar as the global reserve currency, Buffett said he sees no option for any other reserve currency but caveats that “nobody knows how far you can go with a paper currency before it gets out of control” and says we should be careful.
🏦 On the topic of the debt ceiling, Buffett said he couldn’t imagine Washington allowing the U.S. to default on its debt by refusing to raise the country’s debt ceiling and risk disrupting the world’s financial system by letting the world “go into turmoil.”
⚙️ When questioned about his decision to offload his $5B stake in Taiwan Semiconductor ($TSM) mere months after taking the position, Buffett offered an un-compelling answer saying that it is a marvelous company but he had to re-evaluate the position in light of what’s going on (aka the risk of war with China).
💡 On general advice for value investors, Buffett said the most important thing is to know your limits saying “we know where the edge of our smartness is”. Buffett added that the best opportunities come from “other people doing dumb things”
📊 Munger’s key advice was to avoid “de-worseification” saying that it’s not easy to identify good opportunities and that it’s better to have 3 good ideas than a ton of bad ones
Team Blossom at the Berkshire Annual Shareholders Meeting
To read a more comprehensive recap, check out CNBC’s coverage - they have a few more resources than Max + an iPhone.
🚐 Blossom is going on tour!
🗓 First stop is Vancouver on May 29th! Here’s why you don’t want to miss it:
🙍♂️ Brandon Beavis, Marc Beavis, Adrian (Canadian in a T-Shirt), Tracy (Financial Nirvana Mama, Shay (Humbled Trader), and Max will be there to hang out and answer questions on a Q&A panel.
There are only 40 tickets left so make sure to lock one down if you plan to join!
🇨🇦 Calgary, Toronto, and Montreal are also coming this summer (either July or August) so stay tuned!
🚚 Shopify Sells its Logistics Arm to Flexport
This week Shopify is up over 32% after announcing strong earnings along with a decision to divest its logistics division.
Most significantly, Shopify is selling Deliverr, a company it purchased just under a year ago for $2.1 billion, to Flexport, a freight forwarding company. The sale was an all stock-transaction resulting in Shopify owning a 13% stake in Flexport.
Shopify had originally acquired Deliverr with the intention of providing fast, next-day delivery for it's merchants, in a move to compete directly with Amazon. With the sale of Deliverr to Flexport, Shopify is shifting its strategy to focus back on its core strengths.
Shopify’s earnings showed a strong 25% increase in revenue to $1.5B. Operating income deteriorated slightly from 8% of revenue to 13% of revenue (-$193M)
Shopify also announced a reduction in its workforce, intending to lay off 20% of its employees as part of a broader effort to streamline operations and concentrate on its key business areas.
❌ TD's First Horizon Acquisition Falls Through
As we all know, the banking industry is experiencing a challenging and uncertain time with the collapse of SVB and other small US banks. Amid these challenges, TD and First Horizon have mutually agreed to end the $13B deal for TD to purchase First Horizons, citing concerns over regulatory approvals.
As part of the termination agreement, TD has agreed to pay out $200 million to First Horizon on top of $25 million that First Horizon has incurred in fees.
The news caused First Horizon’s stock to drop nearly 40%, adding to an already poor year-to-date performance of over -55%. TD, which was recently the most-shorted financial institution in the world was up 1% this week amid the news.
🍎 Apple Earnings Report Shows Strength
Apple recently announced its Q2 2023 financial results, revealing steady earnings per share of $1.52 despite a slight 3% year-on-year dip in revenue to $94.8 billion.
The company set new records with its services and iPhone revenues, showing resilience in the face of a challenging economic climate. Apple’s stock was up nearly 5% after this earnings report.
As a strong vote of confidence in its future, Apple's Board of Directors has greenlit an additional $90 billion for share repurchases and declared an increased quarterly cash dividend of $0.24 per share.
Apple has also seen strong uptake in their new high-yield savings account - attracting $1B deposits in just 4 days with 240,000 accounts opened in the first week. This surge is likely driven by the account's impressive 4.15% APY.
⭐️ 500 on Blossom PRO!
I am so excited to share that we've already had 500 folks sign-up to Blossom PRO!
🤗 A huge thank you to everyone who signed up - in addition to getting all the awesome new features, you are also supporting Blossom and helping us continue to improve the app.
For those of you that have commented on ideas or improvement areas - thank you! Just like the rest of the app, Blossom PRO will continue to get better and better with frequent updates and new features added.
If you haven't checked it out already, go do it! We added a ton of new widgets like dividend contribution, performance indexes, sector analysis, and more that you can test out on a one-week free trial 😊
🗞️ What else you might’ve missed:
Warner Bros Discovery sees subscriber growth and turns a profits.
Enbridge reported a rise in Q1 profits.
Canadian employers created 41,000 jobs in April.
Air Canada jumped ⁓12% after raising their 2023 outlook.
Etsy falls ⁓6% despite beating revenue and earnings estimates.
Starbucks falls ⁓9% despite beating earnings.
AMD falls ⁓9% despite beating earnings and revenue expectations