Buffett and Munger's AMA: How do the masters view recent financial events and the latest advancements in AI?

Dubbed as the "Investment Industry Spring Festival Gala," the Berkshire Hathaway Shareholders Meeting unfolded grandly over the weekend, with two investment gurus in their 90s, Warren Buffett and Charlie Munger, sharing their pearls of wisdom. Munger continuously played the role of the best spokesperson for See's Candy during the event. When asked about recent issues with US banks, Buffett promptly used the hottest banking terms "Available For Sale" and "Hold to Maturity" to describe his good partner Munger.

Opinions on Recent U.S. Banking Events

When asked about the recent series of regional bank failures in the U.S., Buffett believes that panic has always been contagious. His father lost his job in 1931 due to a bank run.

The FDIC can return deposits to each depositor, but people still worry, which should not happen. He mentioned that the communication of information has been very poor, with politicians, institutions, and the media not properly conveying the changing situation.

Buffett believes that those who do wrong should be punished. If a bank fails, the CEO and directors should be penalized because directors have a supervisory responsibility.

Bank depositors should not suffer losses; shareholders, bondholders, and those responsible for the problems should bear the losses and be punished to change their behavior.

Buffett also mentioned that Berkshire Hathaway has always liked holding bank stocks but remains very cautious. American banks are still an important holding of Berkshire Hathaway, and Buffett appreciates and trusts their business and management. He personally also uses the services of regional banks.

Buffett and Munger's Views on AI

Munger stated that if you visit BYD's factory in China, you will find robots everywhere. The use of robots will become more widespread. However, Munger is confused by the hype, especially surrounding artificial intelligence, as he believes old-fashioned intelligence is more effective than AI.

Note: BYD is one of China's largest new energy vehicle manufacturers and mobile phone contract manufacturers, in which Berkshire Hathaway is also a shareholder.

Buffett, on the other hand, believes that while he expects AI to change everything in the world, it will not surpass human intelligence. He joked that there is no function in AI that can replace Berkshire's vice chairman Ajit Jain, who is highly regarded as Buffett's successor. He said that Bill Gates had shown him their latest technology, which progressed faster than he imagined, but he also pointed out:

AI can indeed do a lot of things. This makes me a little worried because we cannot fully control it. The intention behind inventing AI is good. In the future, we have no choice but to accept it. AI can change the global landscape, but it cannot change our thoughts and behaviors.

Buffett Not Concerned About the Status of the U.S. Dollar Reserve

Buffett believes that there is currently no candidate to replace the US dollar as the reserve currency. But no one knows how long a currency can be used before it gets out of control, especially when it is the global reserve currency.

Buffett believes that no one understands the situation better than the Chairman of the Federal Reserve, Powell, but he cannot control fiscal policy. It is easy for the U.S. to print a lot of money, but it must be very careful because once the inflation genie is let out of the bottle, it is difficult to restore trust in the currency. And now it is a very politicized decision.

Munger also agrees with this view, stating that sometimes, winning votes through printing money can backfire.

Buffett also added that the best defense for individuals is to increase their ability to earn money.

Arthur Hayes also has his views on the dollar reserve, see: Is the Era of Dollar Hegemony Coming to an End? Arthur Hayes Talks about the Future Mainstream Currency

Buffett and Munger's Advice for Young People

Buffett and Munger both advise young people to live within their means, avoid credit card debt as much as possible, and have no debts other than mortgages.

Buffett's life wisdom also includes:

Do not criticize others forever, and do not express your views in a derogatory way towards others.

Munger emphasizes learning to stay away from toxic environments and people, and insists on lifelong learning and gratitude.

Toxic people want to deceive you, drag you down, and hurt you. Kick them out of your life, learn how people manipulate others, and then avoid doing it yourself.