Ariel Investments CEO John Rogers calls Berkshire one of 'best investments of all time'
We did just discuss Buffett reducing his Apple stake. Joining us now to discuss is veteran Berkshire meeting attendee and value investor John Rogers. John of course Aerial Aerial Investments Chairman and Co CEO. John, great to see you this morning, great to be here. Just your quick first impression on the on the change in the Apple position, how it fits into what you’re, you know you’re expecting in general out of out of Buffett this this year. Well, we all know Warren’s are very much of A long term investors always thinking long term. But every once in a while he gets an idea that maybe the markets a little expensive and I think we’ve had a long time without a recession. You’re starting to see some consumer stocks having disappointing earnings. So maybe he’s getting out ahead of that a little bit. You do see this a little more of you know portfolio manicuring to a degree as well. I mean, he had over 40% of the of the public securities portfolios in one stock. I don’t know, he seems willing to sort of hold things forever even as they get big, but might have played into it well. Also I would think the concerns around China and what’s happening there, you know, Tim Cook is a terrific, terrific CEO, but he can’t control the geopolitical challenges that we’re facing. And I know Warren’s had some concerns about Chinese exposure. So that could be a part of it. Also you know, you mentioned you know once in a while the market gets expensive. I wonder what your view is of Berkshire shares themselves at this level. It’s like 1 1/2 times book value, sort of the upper end of a you know, 15 year range or something like that. They bought back some in the quarter, maybe not a ton. What’s your current take if you were talking about initiating or adding to a position of Berkshire, I tell people all the time just get started, you know, it’s like one of the best investors investments of all time. So there’s never a bad time to buy Berkshire, but I think also at this time maybe it is a little bit in the high end. So maybe you wouldn’t go all in, you just do dollar cost averaging and building your position. How, how long have you been a shareholder and how long have you been coming here, John? I’ve been coming here over 20 years and been a shareholder over 20 years. I really wished I had started 40 years ago and I keep kicking myself like how, how could I have missed that? When you look at what you’ve learned over time, I mean, Charlie Munger isn’t here this year. This is the first meeting. He’s not going to be part of that. But coming here every year, you tend to hear a lot of the same messages both from Charlie Munger and from Warren Buffett. But they both are people. Or, you know, Charlie was a person who would kind of question his own knowledge, question his own biases on a constant basis. And so if you’ve been coming for a long time, you tend to hear things that change over time, too. And I just wonder if there’s anything that’s kind of stood out to you or any lesson you’ve taken away that made you challenge your own implied biases in Europe. Don’t the only the things that you thought you knew were absolute truths. I think one of the things that we’ve just, it’s just been reinforced over and over again the importance of always just thinking long term that these you don’t have to worry about the headlines, what’s happening with interest rates today or inflation rates or what’s happened with the pandemic. Eventually, as he always says, a capitalist democracy is the best system ever invented and just realize we’re going to get back on track and things will be great. So I’ve had those values reinforced. Also, reinforcement of staying within your circle of confidence, invest in what you know and understand. Don’t stretch outside of what you really know really well. And then you could interpret whether the mode is strong enough to keep that company strong. OK. What do you think about Paramount shares with that as the perspective? Because there’s a bid that’s come in, they were in an exclusive bargaining period. Now you’ve got the second bid from Apollo and Sony that comes in. As a shareholder, which bid do you think is the better offer? Which one would you like to see them take? Oh, for sure. It’s not even a close call. The, the Sony Apollo deal is the best, you know, world class Internet, you know, international media company with the world class private equity firm, all kinds of great leadership there. So it’s not even the close call. We’re really rooting for them and hoping that the independent board members do the right thing. I have a lot of confidence in them and I I think they’re looking at this the right way now and if they don’t do the right thing, what will you do? We will continue to challenge it. We have, you know, been public with our perspective and concerns. We’ve written a letter to the shareholders. You know, of course we’ve been talking and look at all of our legal options because we’ve been told over and over again that the the B shareholders will be treated fairly and we’ve taken people at their word.