Investing and Life Lessons From Buffett

5-4-25

Opening Comments

My last note was about the fact that I am too old to play so many sports in a day and the consequences for my stupidity. The most opened links were the question to ask during job interviews and the red flag answer, as well as the video of the “Aunt Chippy” prank by Fallon.

Mike Cembalest (JPM) put out a piece on DOGE, the Spanish power situation and Trump.

Oil was crushed during April and is down over 18% over the past month ($58.5/gallon), yet I am paying 15% MORE for gasoline per gallon during the same period. Oil makes up over 50% of the price of gasoline, yet the price at the pump is climbing fast. What am I missing? A knowledgeable reader suggested seasonality, as summer grade gasoline is more expensive, which explains some of the differential.

• Video of the Day- Buffett on Dividend Investing

• Investing and Life Lessons from Buffett

• Quick Bites

  • Markets

  • US Reliance on Imports for Pharmaceutical Drugs

  • Consumer Softness (Credit Card and Student Loan Data)

  • Private Credit Sold at Discounts

  • NY Wealth Exodus in Numbers

• Tariffs

• Politics

• Middle East

• Other Headlines

• Health Related

• Real Estate

  • Starter Homes Over $1mm

  • Chicago Office Building Sold at a Big Discount

  • Another $75mm Miami Home Sale

  • Florida Home Prices Decline

  • Zuckerberg Spent $23mm on DC Home

Video of the Day-Buffett on Dividend Investing

In light of today’s theme piece and the Berkshire Hathaway annual meeting this weekend, I thought the video today should also be dedicated to Warren Buffett. This one-minute video is of Uncle Warren outlining the power of investing over time while reinvesting the dividends. Pretty powerful.

Investing and Life Lessons From Buffett

Given the news of Buffett’s retirement after a 60 year reign, I thought a note about his investing lessons made sense. Also, a reader sent me a Substack story from Compounding Quality about Warren Buffett’s Top 10 Lessons and thought they were insightful. I used some from his list and grabbed some additional nuggets from various sources. Also of note, as we are going through a volatile period and growing uncertainty of a recession, I thought these may come in handy for my readers. At the end, I share my favorite tidbit from Buffett about how to live your life successfully away from investing. Buffett knocked tariffs and protectionism at his annual meeting on Saturday and has asked the board to make Greg Able the CEO of Berkshire Hathaway at year-end. This link outlines key points form the annual meeting.

1. The Longer You Invest, the Better

   1. The power of compounding is real, and over 95% of Buffett’s net worth was created after his 65th birthday. “Think for the long term, and above all, don’t panic” was another of Buffett’s quotes.

      1. My personal investing mistake was not putting more in equities early in my career. I grew up with limited means and was so scared about losing money and felt I was overexposed to Wall Street given my job. My net worth would be far higher, taking a long-term view and investing in the S&P every month for the past 35 years.

         

2. Invest in Boring Companies

   1. If you don’t understand what you buy, you will not be able to make good and rational investment decisions.

      1. I agree with this 100%. I have lost money by investing in things I did not understand.

         

3. Invest in Companies with Great Management

   1. Insiders must own a large percentage of the stock.

4. Buy Quality Stocks

   

5. Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble.

   1. This is also advice from Stan Druckenmiller/George Soros. When you see an amazing opportunity, you need to size it appropriately. Far too often, we undersize great investments.

6. Be Disciplined

   1. This is very hard, even for experienced investors. Take a long-term view.

7. Volatility is Your Friend

   1. Again, I am 100% on board with this notion. If you have a long investment horizon, buy big pullbacks.

8. The most important quality for an investor is temperament, not intellect. You need a temperament that neither derives great pleasure from being with the crowd or against the crowd.

   1. It is so hard to take emotion out of investing. Buffett is the king here and takes a long-term view. He also suggests to not overtrade. He said, “You don’t get paid for activity, you only get paid for being right.”

9. Pricing Power is Crucial

   1. Invest in companies that have pricing power as they can pass increasing costs to their customers. They usually have high and stable gross margin.

      

10. We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.

    1. This is my favorite quote from Buffett and the most powerful.

11. Invest in Low-Cost Index Funds

    1. I think this is the easiest way for an investor to get into the game. The massive growth of index funds and ETFs makes investing much simpler than becoming a stock picker. Investing over time in up and down markets while re-investing dividends is the way to go.

12. Keep Cash Available

    1. I like to have cash and hate when I am fully invested as great opportunities show themselves. Be sure to plan accordingly and have some cash to make investments when the right ones come your way.

13. Think Value, Not Price. Price is what you pay; value is what you get.

    1. Another great tidbit from the investment master.

Concerning having a successful life, Buffett echoed advice from Munger: Think about how you would like your obituary to read, and begin building a life that will get you there. He also frequently discusses the importance of integrity. I love this advice, and if more people did this, people would behave differently.

Warren Buffett is an amazing investor and an incredible human being. He has so much wisdom, and we can all learn a lot from his body of work.

Quick Bites

• This week’s tech earnings have been mixed with Meta, MSFT and Redditt beating, while Apple, Amazon, Block and Snap missed or provided weak guidance. Apple CEO: “very difficult” to predict tariff costs beyond June. On Friday, payrolls exceeded expectations (177k vs 133k estimate) and major indices rallied 1.5-2.3% to finish off another positive week. The S&P has now erased the tariff related sell-off with Friday’s gains. The S&P is now on the longest winning streak in 20 years. On the week, the S&P was +2.9% and the Nasdaq +3.4%. The VIX hit 60.1 on April 7th and is now back to 22.5. I continue to believe that you should buy risk when VIX goes into the mid-40s or higher. However, Treasury yields climbed with the 10-Year +8bps to 4.31% due to the inflationary nature of the better-than-expected payroll data. Bitcoin has bounced back yet again and is at $97k.

  

  

  

• I am a fan of Torsten Slok, the Chief Economist at Apollo, and have known him for almost 15 years. Our kids went to school together in NYC, and I regularly cited his work when he was at Deutsche Bank. He puts out the “Daily Spark,” and this is from a recent piece. China Is a Key Source of Pharmaceutical Drugs in the US. Estimates show that 90% of the inputs in prescription drugs consumed in the US are imported, and the chart below shows the product groups where the US has a high dependency on China. I do not think it is realistic for the USA to ever be a powerhouse in manufacturing with human labor. However, critical components such as important pharmaceuticals should be manufactured in the US. If I am Xi Jinping or another leader and I want to play hardball with the US, I would sell all my US Treasuries and withhold key pharma products.

Sources: Skyrocketing Pharmaceutical Imports to the US Endanger National Security | Coalition For A Prosperous America, The geography of prescription pharmaceuticals supplied to the USA: levels, trends, and implications – PMC, Apollo Chief Economist

• I was early calling for the consumer to roll over, and more data is suggesting there is a problem now. The share of those making the minimum credit card payments has gone from 8% to 11 %+ since 2021. At the outset of the COVID-19 pandemic, federal student-loan borrowers won what appeared to be a reprieve. That five-year pause on payments and interest accumulation is now shaping up to be a curse in disguise. That’s because nonpayment ballooned after the pause functionally ended last October, meaning more than half of borrowers are not paying their loans on time. Today, 42.7 million borrowers owe more than $1.6 trillion in student debt. More than 5 million borrowers have not made a monthly payment in over 360 days and sit in default—many for more than 7 years—and 4 million borrowers are in late-stage delinquency (91-180 days). As a result, there could be almost 10 million borrowers in default in a few months. When this happens, almost 25% of the federal student loan portfolio will be in default.

• We are seeing cracks in the private market with institutions and individuals looking for liquidity on private equity, venture, and private credit portfolios. Recent articles about Harvard and Yale looking to unload PE at discounts made news. Oaktree came out with comments that private credit portfolios are selling between 50-90 cents on the dollar. My career was made in illiquid assets. When institutions are forced to sell assets at steep discounts, my eyes open wide, and I get excited. “To date, we haven’t seen forced selling, there haven’t been really dire liquidity situations that people need to address,” O’Leary (Oaktree) said. “I think we’re going to get into more sort of anxious points in time where LPs will want to trade, and I think those discounts will go out further.” In 2025, I will be allocating capital to folks who do this for a living. One reader reached out to me about a major bank offering 45 cents for his PE portfolio investments. I told him my bid is 25 cents. I will repeat what I have written in the past. These illiquid assets are generally marked at unrealistic levels (PE, Venture, Private Credit). When you’re forced to sell during times of stress, the actual price is typically much lower than the marked value.

• I have written constantly about the “Great Migration” of wealthy people moving to Florida. Two articles outline the lost income from NY residents who moved to Florida between 2017 and 2022. More people relocated in the past few years, but at a far slower pace. Tens of thousands of New York City residents have fled the Northeast for warmer climates in recent years — taking nearly $14 billion worth of income out of the Empire State, a new report found. Around 30,000 Big Apple dwellers moved to Florida between 2017 and 2022, many of them ending up in Miami-Dade and Palm Beach counties, according to the report by the nonpartisan Citizens Budget Commission. The city has seen a reduction in its adjusted gross income of $9.2 billion from relocations to those two counties alone, and a total of $13.8 billion when accounting for thousands more who moved to other parts of the Sunshine State. A net of nearly 138,000 city residents relocated to New York’s Long Island during those years, reducing the Big Apple’s adjusted gross income by a combined $11.1 billion, according to the CBC data. Westchester County, just north of the city, gained almost 60,000 net new residents, cutting the city’s adjusted gross income by $5 billion. When you look at the housing, high-end restaurants, private social clubs, the cost of golf courses, and the lack of availability of seats in top private schools, you know Florida has gained wealthy residents.

Tariffs

My soon to be 18-year-old daughter came to me apoplectic that the website where she buys her bathing suits raised prices dramatically due to tariffs. The $99 bathing suit has $175 “duties” added to the cost now. I let her know that if she tries to buy this bathing suit she will be disowned and kicked out of my house.

• China Folding; Beijing Now Eying Talks with Trump Administration

• The CEO Who Says an Asteroid Is Coming to Destroy America’s Businesses

  • A logistics expert warns of many small companies filing for bankruptcy due to high tariffs, espeically on Chinese imports. “If they don’t change the tariffs, it’s going to be an extinction-level, asteroid-wiping-out-the-dinosaurs kind of event,” he told me. “Only these aren’t dinosaurs. These are dynamic, healthy businesses.”

• Earnings show one tech segment starting to feel the tariff pinch fastest

  • Ad spending holding up, but consumer spend is weaker.

• GM cuts outlook, expects up to $5 bln hit from tariffs

• Trump Loses First Round of Trade War as US Economy Shrinks, China's Grows

• Chamber of Commerce asks Trump for tariff exclusions to ‘stave off recession’

• Mercedes-Benz to add new vehicle to Alabama plant amid Trump tariffs

• Footwear giants Nike, Adidas and others ask Trump for tariff exemption

• Temu halts shipping direct from China as de minimis tariff loophole is cut off

Politics

• Ukraine, US sign minerals deal sought by Trump

  • Russia blasts Trump over mineral deal, says Ukraine will soon ‘disappear’

  • Russia’s war in Ukraine ‘not going to end any time soon,’ JD Vance says

• The Deep Budget Cuts Trump Seeks as His Second Term Takes Shape

  

  

• Trump national security advisor Mike Waltz expected to leave post after Signal scandal

  • Waltz was nominated as the ambassador to the UN by Trump.

• White House Launches Its Own Drudge Report, Prompting Slap Back From Drudge

  • Headlines and links to various news outlets, including Breitbart, Fox News, the Daily Caller, the New York Post, the Washington Times, the Washington Examiner, Newsweek, Axios, The Guardian, and The Hill.

• After Canada, the anti-Trump backlash moves to Australia

• Trump terminates NPR, PBS federal funding with sweeping executive order

• Trump says he’ll revoke Harvard’s tax-exempt status

  • Harvard has a $53bn endowment, so excuse me for not crying. How much of that was donated by Jews? I will bet anyone in the world that Jewish donations to Harvard far outstrip Jewish representation of the global population of .2%.

    

Middle East

• Israel vows revenge after Iran’s Houthi rebels hit Ben Gurion Airport with ballistic missile in chilling escalation

• Suspected Arson Attacks Result In Massive Fires Threatening Jerusalem

• Trump threatens to slap sanctions, cut off business with countries that buy Iranian oil

  • I love this. We need to be far tougher on Iran, the funder of major terrorist organizations in the Middle East.

• San Francisco State slammed for hosting Palestinian terrorists, named ‘most antisemitic’ university

• Freed Columbia University student Mohsen Mahdawi accused of telling gun shop owner that he used to ‘kill Jews’ in Palestine

  • Get him out of our country.

Other Headlines

• McDonald’s reports largest U.S. same-store sales decline since 2020

  • McDonald’s U.S. same-store sales shrank 3.6% as the chain faced bad weather and a more cautious consumer. That drop is the worst in McDonald’s home market since the 8.7% plunge during the second quarter of 2020.

• Microsoft pops 9% after earnings beat, on pace for best day in 5 years

• CoreWeave surges after top customer Microsoft reaffirms spending plans

• Netflix stock is trading at all-time-high levels in unprecedented win streak

• Berkshire Hathaway reports worst decline in quarterly operating earnings since Q3 2020

  

• Tesla Board Opened Search for a CEO to Succeed Elon Musk

  • With profits and stock price sinking, board members told Musk he needed to spend more time at company. I appreciate Musk for all that he has contributed to society but I feel he’s spread too thin, which is hurting his shareholders

• Sam Altman’s eye-scanning ID project launches in U.S. with six locations

  • The Orb, a spherical biometric device, scans your face and iris, then creates and stores a unique “IrisCode” for you verifying that you’re a human.

• The All-In Podcast on X: "David Sacks Explains How AI Will Go 1,000,000x in Four Years

  • Think of the ramifications and disintermediation that will happen in coming years if Sacks is even anywhere near right.

    

• 110-Hour Workweeks Drove Young Bankers at a Boutique Firm to the Brink

  • I speak with many young analysts on Wall Street who work up to 20 hours for days in a row and are completely miserable.

• Youngest Billionaires in the World

• Jeff Bezos discloses plan to sell up to $4.8 billion in Amazon stock

  • Jeff, you made a bad investment in the ridiculously biased WAPO. What about putting $500mm into the Rosen Report with your proceeds?

• Uber CEO: I've gotten 'unbelievably lucky in my career' because of this 1 character trait—it ‘opens you up to opportunity’

  • "I have gotten unbelievably lucky in my career, but I've gotten lucky because I'm very, very open to anything," said Khosrowshahi, 55, who's helmed Uber since 2017. "Be curious about meeting new people, be curious about interests that are outside of your immediate field of education ... and that curiosity will open you up to the world and open you up to opportunity." I LOVE THIS ADVICE.

• Self-made millionaire: I grew my income from $40,000 to $400,000 in 10 years—here’s my best career advice

• Sicko charged with raping corpse on NYC subway is illegal immigrant who crossed the border at least five times

• MS-13 gangbangers in US illegally allegedly stabbed three Va. correction officers in heinous attack

• Your iPhone is a target for thieves. Do this to help protect your data.

  • Very detailed ideas on what to do to protect your phone and data. Also what to do after it has been stolen.

• Teens threatened with kidnapping charges over lacrosse team hazing

  • I hope these kids serve jail time. No one should ever hire them.

• Transgender swimmer Ana Caldas wins 5 races at national championship event: ‘Real-life South Park episode’

• Haunting moment robot attacks handlers in angry rampage as it tries to break free from restraints in ‘dystopian scenes’

• ‘Luigi the Musical,’ about accused UnitedHealthcare CEO killer, to debut in SF

  • What is wrong with people?

• Best hotel in the world for 2025 revealed by TripAdvisor — and it’s on the beach of a wild turtle sanctuary

I am a bit surprised by some of the locations on this list.

• Secret CIA files claim to expose locations of three alien bases... and two of them are on Earth

  • I want proof.

• Babylonian Map of the World: The oldest known map of the ancient world

• NYC dominates North America’s 50 Best Bars 2025 list — and this East Village cocktail den landed at No. 2

  • I need to try a bunch of these this summer.

Health Related

• Colon cancer patients are 24 times more likely to die within 5 years if they had this habit before their diagnosis

• You should call 911 immediately if you have these subtle stroke symptoms

• GLP-1s can help employers lower medical costs in 2 years, new study finds

• RFK Jr.'s politically explosive search for autism’s ‘root cause’

• 5 foods that can damage your brain and increase your dementia risk — and what to swap them for

Real Estate

• Starter homes now cost $1 million or more in 233 U.S. cities — nearly triple the number from five years ago. That’s according to a new Zillow analysis, which shows just how out of reach the housing market has become, especially for first-time buyers. With higher interest rates, sharply higher housing prices, rising maintenance and taxes, and skyrocketing insurance costs, no wonder why people are struggling to own a home.

  

• Canadian pension fund Caisse de Dépôt et Placement du Québec is seeking to sell a Chicago office tower in a deal that’s expected to generate bids 59% lower than its last purchase price about eight years ago. Bids are expected to come in around $60 million, one of the people said. That would be a steep discount from the roughly $145 million Ivanhoé and its partner Callahan Capital Properties paid for the property in 2017.

• Hedge fund manager Nick Maounis is the buyer who recently paid $75 million for a waterfront estate in Miami Beach, The Real Deal has learned.

  Maounis and his wife, Susan, acquired the 21,700-square-foot, nine-bedroom mansion at 88 La Gorce Circle, sources told TRD. Records show Okto, owned by the Kollmans, a wealthy German family, sold the 1-acre property. As I have written repeatedly, the prime properties from Miami to Jupiter are in high demand. Newer, large, waterfront, good location… sells at high prices. A lot of the other product is softer. This article outlines why New Yorkers moved to Florida.

• Despite the strength of the high-end in South Florida, the overall market is weaker. Most notably, the condo market is softening, especially older product. The median price for all types of homes fell 1.7% in March from a year earlier, according to Redfin data going back to 2012. For a condo or co-op in Florida, the median price fell about 7% in March to $307,500. The price for a single-family home was down about 2%. Prices are up massively since COVID, which has driven up R/E taxes. Interest rates are sharply higher driving the affordability down, while insurance and maintenance costs have spiked.

  

• Meta's Mark Zuckerberg is buyer behind secretive $23 million home sale in DC

© 2025 The Rosen Report LLC. All rights reserved. Does not constitute investment, financial, legal, or tax advice. Consult with your lawyers and professional financial advisers. Rosen Report™ #782 ©Copyright 2025 Written By Eric Rosen.