The Berkshire Hathaway Shareholders' Meeting, which global investors are concerned about, was held in Omaha, Nebraska. Sina Finance spoke with Matthew Peterson (Matthew Peterson), managing partner of Peterson Capital Management LLC at the shareholders' meeting.
In an interview, Matthew told Sina Finance: China has a lot of fertile ground for investment. As a true value investor, when looking for global opportunities, while focusing on the US, we should also look at the real investment opportunities that exist in China.
“In fact, 40% of our portfolio is invested in China.” Matthew said, “I really like Alibaba. Alibaba is definitely a great company with excellent cash flow.”
He believes that commercial real estate in China is currently facing challenges, and assets are shrinking. But “if you're a true value investor, when you discover these great companies, it's an opportunity to make your capital investment work.”
Guest quotes:
Thinking about value investing from a long-term perspective, buying low and selling high, all of these are completely true. But it can be a bit difficult in practice, and you have to really focus on how to achieve these goals.
Being a great person is challenging. Warren has been doing this for decades, and of course Charlie did too.
In fact, there are many fertile grounds for investment in China. I recommend that people, especially Chinese people, sometimes try to invest in the US; in fact, you can also invest in China, where there are real opportunities.
You have to buy when others are afraid. You don't buy when the stock price rises; you have to buy when the stock price falls, then you can use your stock to make money.
Here's a transcript of the interview:
Sina Finance: Hi, Mr. Matthew, thank you so much for being interviewed by Sina Finance today. How many Berkshire Hathaway shareholders' meetings have you attended?
Matthew Peterson: That's a good question because it's so broad. I've been here for 20 years. I've lived in London for two years, and I've been attending Berkshire Hathaway Shareholders' Meeting since 2000. I've been attending this conference for a long time, although some have been here for decades. This year, I brought my nine year old daughter and seven year old son because I want them to get started early on in this field of education.
Sina Finance: This is so cool. You taught very well.
Matthew Peterson: There is often this kind of question in the US. I don't know if this is also the case in China; many people complain that they didn't get enough financial education when they were kids. So for me, it's very important to bring my kids to this conference and at least encourage them to understand some finance-related matters, so they won't be left behind later in life.
Sina Finance: Yes, I think that's very wise. Can you tell us about your experience this year?
Matthew Peterson: You know, every year is amazing. It's amazing every year. Every year is special. But everything Warren said was consistent, so in reality, after so many years, many questions aren't new to me, and I can answer many of them myself.
But, you know, it was a very unique year because Charlie Munger passed away. When this happens, it will greatly increase the changing dynamics of the conference. We have new people like Greg Abell and Ajit Jain on stage, and we have new people to answer questions.
In fact, Greg Abell hosted the entire session after the question and answer session, so it was very unique. Warren and Charlie have been hosting meetings for a long time. They have done so much, and they have created so much value in the world. It's an experiential experience in itself. I think you'll agree.
What is Omaha? Because this city wasn't supposed to be this, so good, so big. But it's unbelievable that these donations come from the wealth this city has created.
Sina Finance: Yes, it does. Thanks for liking Omaha. You really agree with Warren Buffett's investment strategies or investment philosophies, don't you?
Matthew Peterson: I run several funds. They are operating based on Warren Buffett's practices in the 50s and 60s. I'll give you the details. Looking at value investing from a long-term perspective, these are the real core philosophies, buy low, sell high, all of which are completely true. But it can be a bit difficult in practice, and you have to really focus on how to achieve these goals.
But personally, when we launched the US fund, we actually had an Istanbul fund and a Turkish fund. When we launched these funds, we set up the same fee structure that Warren Buffett did at the beginning, because this fee structure is very correct; you charge zero fees, you actually have zero management capital, and you have a threshold tax rate. When people make a lot of money, you reap profits from it, and everything is consistent. Even today, few funds can operate like this, and many companies have changed their incentive mechanisms and only charge 2%-20% fees. As you can see, acting in the Warren Buffett way is very powerful.
Sina Finance: Thank you for sharing. So how does Warren Buffett's investment strategy or philosophy influence your investment career or investment decisions?
Matthew Peterson: That's a great question. It had an incredible impact on me and is hard to describe. Because you know, in fact, I printed out some of my original stocks myself, and Warren signed them for me. So I've basically combined my life with Warren's way of managing money and capital.
I've been learning from him because it's so hard for me to find teachers like Warren and Charlie. The experiences they were able to share were simply incredible. It's incredible that they're able to handle the right things that really have an impact so directly. Of course you can also say that this is acceptable to you. It's true, it came from Warren and Charlie, so it really affected me deeply. It affects our positions and affects how long we stand our ground. I mean, we've held a lot of stocks for decades, and that's normal. So was Warren. So, it's very, very impactful.
Sina Finance: Thanks for sharing. So, do you agree with Warren Buffett's views on today's economic markets and his investment decisions?
Matthew Peterson: Of course I agree. Warren is in another place. Berkshire Hathaway is in a different place, right? They have 180 billion dollars in cash. It's hard for me to understand what it's like to keep it all in cash.
Because as he mentioned it over and over again, someone asked me today, and this is one of my favorite questions. In fact, someone asked him, “Please clarify the online statement that you can guarantee a 50% return.” Because a few years ago, he said, “If you only give me 1 million to manage, I can guarantee a 50% return.”
Okay, you know, saying this is no exaggeration for Warren Buffett. He was sure he could fulfill such a promise. This has almost become an internet fad.
Then today someone asked, “Warren, how do you find these opportunities?” To be precise, as I expected, his answer was perfect. He said, “I study every company; really, every company does. I'll find one, maybe it'll be small.” It's definitely something you can do. But it's a tough job. He didn't say he could do it easily; he just said he could do it. So this is a very challenging task in many ways. Maybe it's easy to do, but it's very challenging to get it right. And being a great person is very challenging. Warren has been doing this for decades, and of course Charlie did too.
Sina Finance: Thank you for sharing. Mr. Matthew, you mentioned your place of residence in China before, right? So what do you think about investing in China?
Matthew Peterson: I think China is a very interesting place. In fact, there are many fertile grounds for investment in China. I recommend that people, especially Chinese people, sometimes try to invest in the US; in fact, you can also invest in China, where there are real opportunities. If you think like Warren Buffett, you can look at many great companies, especially small ones, and maybe you'll find one that has been completely underrated for unique reasons.
For example, currently, judging from the price evaluation, I really like Alibaba. Alibaba is definitely a great company with excellent cash flow. We've seen some challenges from many perspectives in the US, and there are even challenges in buying back shares, so stocks are very cheap.
And it's an incredible company, and I'm friends with many of the managers there. So, I've also heard of Lucky Coffee. Also, although this is a bigger game, and it's a bit indirect, we can own Naspers through the Johannesburg Exchange, and you can get more Tencent shares through Naspers, which is very interesting.
Sina Finance: Thank you for sharing your interesting investments in China.
Matthew Peterson: Yes, I'd say, in fact, 40% of our portfolio is invested in China.
Sina Finance: So you've already invested in China? That's really cool.
Matthew Peterson: Of course, we also owned JD shares a few years ago. We're always looking for global opportunities. I believe that commercial real estate in China is facing challenges now, and assets are shrinking. But if you're a true value investor, when you discover these great companies, this becomes an opportunity to put your capital investment to work. You know, you have to buy right when your contract expires; you have to buy in times of fear. You don't buy when the stock price rises; you have to buy when the stock price falls, then you can use your stock to make money.
Sina Finance: Thank you so much for sharing. Thank you very much, Mr. Matthew, for being interviewed by Sina Finance.
Matthew Peterson: Thanks so much for inviting me. I'm so grateful to be here.
Amanda Bai, special host of Sina Finance, and Monica Guo Yijie, a special correspondent in the US, sent from Omaha, USA