Now we've got to talk about Warren Buffett's annual Shareholder letter and some very insightful comments that he made. Now we're not just going to talk about the only thing the mainstream media cared about which was Talk About Share BuyBacks We actually need to talk about some of the details in Warren Buffett's annual Shareholder Letter. If you haven't read it before, it's probably one of the best reads that you can use on an annual basis to make sure that your investing Theses and principles are aligned with a potential better reality. So let's go right into the Buffett annual Shareholder Letter and let's look at some of the most Salient points first.

Warren Buffett makes it very clear that our economy is designed for what's known as creative Disrupt destruction and creative destruction is really where you have winners and losers in an economy. This stands in complete contrast to Communism where everybody is a loser in capitalism. You end up having the best technology succeed. There's a reason Tesla has the market cap.

it does because it's growing EV production at a rate of 30 to 50 percent. whereas Ford and GM the Legacy automakers can't figure out how to be profitable in making AVS and are actually pausing. Both of them are pausing production because they have a glut of old school vehicles and aren't actually capable of sticking with producing EV vehicles. and certainly not profitable.

Ford's not expected to be profitable on EV production until 2026, and it was only just recently that Toyota actually realized. dang, maybe making electric vehicles is the future, not just sticking with hybrids at the same time. The company Nikola is a now warning of a going concern which is basically a fancy way of saying they might go bankrupt within the next 12 months because of why. well, their products sucking.

And when your products suck, you go bankrupt. That's the way America works. If you don't refine, you die. and if you don't pay attention to your weaknesses, you fail now.

Warren Buffett Here makes it very clear: the system that we live in creates a pile of losers while concurrently delivering a gusher of improved goods and services. That is the point of America The point of America is to make things more accessible and better to everyone, better quality and more available. For example, my real estate startup that I'm creating I'm trying to turn it into what I believe will be the Robin Hood of real estate. Think about commission free trading and easy investing into stocks that Robin Hood created.

Imagine that for real estate, low to no fee, easy and liquid real estate investing, that's the future that doesn't exist today. But it's something that I'm working towards and I'm betting my entire net worth on making sure that happens. But it's an example of of reiterating exactly what Warren Buffett says that creative disruption is actually a good thing. It's a very good thing because it gives the consumer the end user a better good and service.

And if you don't pay attention to the Austrian economic Economist you only pay attention to the key Keynesian Theory Then unfortunately you might end up with an oopsie-doopsy believing that corporate welfare will end up saving you. Well, the reality is if you don't, uh, adopt with providing future value, you'll go bankrupt. The same is true for you as a laborer. You work whether you provide goods or services.

Unless you're retired, you work, you put in time to create a result. Now your goal is to make as much money as possible with as little time as possible. But the reality is, we'll talk about this later is that artificial intelligence will replace the vast majority of jobs and if you're not getting what I call to a level three of competence in your industry, you'll end up getting placed if you're at level one two. Again, we'll talk about that later.

you get replaced. So you have to think about how could you be more efficient and provide more value to where you'll be Irreplaceable even the place in the face of AI. So uh, Warren Buffett here talks also sort of. So that's sort of a message to individuals and to businesses.

but Warren Buffett then talks about efficiency only existing in textbooks. This is a very common thesis and that is in theory that is told or taught in schools. and that is the efficient Market hypothesis. The efficient Market hypothesis says that at any given point the market is appropriately valuing stocks or businesses and what their actual value is.

and Warren Buffett Here says: efficient Markets quote unquote only exist in textbooks. In truth, marketable stocks and bonds are baffling. Their behavior is usually understandable only in retrospect. I'd Like to give my favorite example: Tesla Stock had absolutely no reason for selling off the way that it did in 2022.

other than what do we know. In retrospect, we know that Elon Musk sold 24 billion dollars of Tesla stock where retail holders holders of the stock only bought 15 billion. That created a negative 9 billion dollar pressure of the stock. and since that was spread over the years, since people don't buy it a lump sum January 1st Just like Elon doesn't sell at a lump sum at one period he sold three or four times last year, you create a very easy downtrend that then becomes shortable.

When that downtrend becomes shortable, it becomes very profitable. Short to short, which encourages more shorting. What comes out of that an inefficient Market The company is not actually being priced on fundamentals. it is being priced based off of inefficiencies.

and Trends So Warren Buffett here could not be more correct. The valuation of companies is not based on this. this myth of an efficient market. The market is extremely inefficient and you have to have faith in your fundamental analysis.

Fundamental analysis, by the way, is something we do almost a daily basis in our course member live stream which I encourage you to join. You can get lifetime access if you join any of those links down below and you can pop in whenever you want a lot of people. What they do is they wait a few days and then they watch them back on 2X And they get the fundamental analysis because the only thing that should give you confidence in markets is not charts. Even though there is a benefit to charting, the only thing that should give you confident in markets is fundamental analysis, because in the long term, fundamental analysis always wins.

Now, people will make fun of fundamental analysis analysts when we have short-term term trends that rotate to downsides. And that's okay. There's short-term minded individuals in the world that like to make fun of other people when they have the opportunity to do so, but history has a tendency of ending up making those losers disappear. The people who conduct real fundamental analysis end up being right in the long term over and over again.

And this is what Warren Buffett is warning up here. And so Warren Buffett argues that really, your goal is focused on making really good decisions and few really good decisions. That's what meaningfully helped Warren Buffett become the successful investor that he is. So, uh, what? He then further encourages and we'll jump around some of the specifics of Berkshire Hathaway.

He then and I'll briefly touch on this since this has been widely covered already. Warren Buffett briefly argues that when it comes to stock BuyBacks it's very beneficial for companies to conduct stock BuyBacks when stocks are trading for a below market value, but stock BuyBacks should not be conducted when the stocks are trading above a market value and that is a fundamental market value. The reason for that is Warren Buffett says if you conduct stock BuyBacks at below Market values, you're actually benefiting all of the owners of that company. It's kind of like giving them more kinetic energy for future gains.

but if you conduct BuyBacks at an over the market uh level, what you're really doing is you're cashing people out at an overvalued position, and you're unfairly transferring corporate assets to somebody who's taking advantage of a short-term premium. and that is very dangerous. So Warren Buffett makes a very important argument here that look: BuyBacks are great when they are done at a level that is fundamentally sound. Now, the mainstream media really only quoted the following, which was that when you are told that all repurchases are harmful to shareholders or the country or particularly beneficial to CEOs you are listening to either an economic illiterate or a silver-tongued demagogue characters that are not mutually exclusive.

Very interesting. So in other words, uh, that that second that parenthetical line there means that you can be a silver tongue demagogue and economically illiterate and that's a nice slam there for Warren Buffett Moving on. Uh, Warren Buffett Talks a little bit about do not bet against America Warren Buffett Believes that the worst thing you could do is bet against America and this is actually one of the things that I regularly talk about and it's don't bet against America Train America is very important now Charlie and I uh, this is Warren Buffett Make the argument that near-term economic forecasts can be worthless and this doubles down the reiteration that is so important to make sure you have longer and medium and longer term fundamental analysis as part of your sort of repertoire of understanding of what's going on in the world. It's one of the reasons that I like to fundamentally look through the short-term noise of what's going on on sort of day-to-day economic data and I try to look at longer term fundamental analysis for companies certainly within our course member live streams, but also on the channel when we're looking for longer term trends of are we going to get Paul Volckerd What is disinflation actually doing? What are the longer term Trends Let's keep going Warren Buffett in his letter, goes on to say that uh, the Uh will count on America don't bet against America However, you have to be careful because the world is full of foolish gamblers and they will never do as well as the patient investor.

And if you believe that you're somebody who could see the world through some distorted lens, the very likelihood is you're probably going to end up getting killed in investing. and the most important thing that you could do is make sure you actually ask yourself, are you being rational or not and you have to work on your ability to find logic and truth because if you don't then you'll end up staying irrational and you'll end up getting lousy results now. Warren Buffett Recommends that you learn a lot from both people you admire and you detest. Whether that's through reading or learning, you can learn a lot from people you like and from people that you don't like.

But the worst thing you could do is try to blind yourself by investing in sort of mediocre Trends or mediocre companies because of short-term thinking. Now there are some arguments to be made that Warren Buffett in general is a long-term investor and stubbornly holds his long-term Investments for a long time. Now it's In Fairness. We have to counter this a little bit, given that he pretty quickly quickly flip-flopped on Byd uh here more recently.

although that was a relatively long-term hold, so we'll give that back to him. uh, and TSM which he really only held for about four to six months relatively short long-term purchase there. Mr Buffett But hey, that's okay. everybody can make mistakes.

The goal is that in aggregate, you're making more correct decisions that you were making bad decisions. So Warren Buffett says if you want to become a great investor, you must keep learning that it's very, very important to keep learning and learn from perspective from somebody who might be slightly older than you or have slightly more experience than you. That doesn't mean they have to be the absolute best in everything that they do, it just means learn for people who know even just a little bit more than you do, and make sure you catch up as quickly as possible. To a long-term perspective of Building Wealth and making sure you're always trying to find the truth and operating under the basis of Reason Warren Buffett gives a really good analogy.

He suggests there are a lot of people who will believe so wholeheartedly in a in in a false truth that what they're really doing is getting off a ship of Truth to get onto a little Lifeboat of of not truth, a sinking life vote of not truth and they can't swim and they're trying to take that little Lifeboat to some other ship and they just don't make it so. in other words, that short-term gambling of ah, even though I can't swim, I'll just take this Lifeboat over there very, very, very dangerous so always seek truth. Probably one of my most favorite things that Warren Buffett one of my most favorite Uh letters here from Warren Buffett.