Find out what Buffett had to say to our questions
16-Dec-2022 •Karthik Anand Vijay
For those who didn't suspect clickbait, we apologise. The excitement got the better of us. Yes, we did not meet the man himself. But we sure did talk to him...in a way.
Through the wonders of AI, anyone can now directly seek the wisdom of the great Warren Buffett.
BuffettBot is a chatbot designed to answer any investing questions using the comprehensive database of Buffett's letters, shareholder meetings, and interviews. While the chatbot is still in its beta stages, we highly recommend all Buffett-heads (I am sure if we Buffett faithfuls try, we can get this term popular) to give it a go.
As a sample of how wondrous this bot is, here's a snippet of our interaction with the virtual Warren Buffett.
Value Research: What factors do you look for in a business?
BuffettBot: I look for businesses that throw up one easy decision after another, that have great management that knows their business, loves their business and shareholders, and is thinking about the shareholders' interests in terms of building the business. I also look for businesses that are not too risky, where there is a good chance of a positive return.
Value Research: How do you assess management quality?
BuffettBot: I assess management quality by looking at how they have been running the business, how they have allocated capital over time, and how they treat their owners. I also look at what they have accomplished considering the hand they were dealt when they took over, compared to what is going on in the industry. Reading of reports, proxy statements, and competitor reports can help inform my assessment.
Value Research: What approach should a retail investor take?
BuffettBot: I think retail investors should focus on finding great companies and, if the prices aren't too high, buying into them for the long term. As I have said before, you should look for companies that you'd be comfortable owning for 20 years. Don't worry too much about the market's day-to-day fluctuations, just focus on finding great companies that you can trust will remain strong over the long run.
Value Research: Are you looking at any Indian companies?
BuffettBot: We look at businesses all over the world, including those domiciled in India. While we have nothing against buying into companies that are domiciled outside the United States, we feel slightly less familiar with the tax laws and the corporate cultures in other countries. That would not be a huge factor in a great many countries, and so we will keep looking. We need to look everywhere with the kind of money that we have available for investment.
Value Research: What is your valuation approach?
BuffettBot: My valuation approach is to focus on the key variables of a business and evaluate how predictable they are. If something is not very predictable, I move on. I look for the "fat pitch" where I know I am focusing on the right variables and they are dominant. I then try to make an estimate of the value based on the variables I've identified.
As you can see, there is still some fine-tuning required to capture the wit of the man. But BuffettBot is a treat we couldn't just keep to ourselves.