Warren Buffett’s opinions on gambling and insurance – Berkshire Hathaway AGM – Omaha – Nebraska

Warren Buffett’s opinions on gambling and insurance – Berkshire Hathaway AGM – Omaha – Nebraska

So the May bank holiday in the UK is
Guinea’s weekend as you may know. But it’s
also the AGM of Berkshire Hathaway,
the company run by Warren Buffett, one of the world’s
most famous investors and the trip to
Omaha Nebraska was a regular feature for
me for a number of years before I start
to trading full-time on Betfair and
because of the amount of money that it
was possible for me to make during the Guineas
weekend it didn’t make any sense to go to the Berkshire Hathaway AGM
which is a bit of a shame, but when there is an opportunity there, you have to take it.
however there was a period of
crossover where I still wanted to go to
the Berkshire Hathaway AGM and I hadn’t progressed to a higher level, to the much higher
I reached in terms of trading
where I would still go and I took the
opportunity one of those weekends to ask
question which basically tried to
reconcile his views on gambling and
insurance which is basically a
derivative risk as his gambling and I
thought it would be interesting to get a
response from him on his views on the
parallels between the insurance and the
gambling industry
Hi, it’s Peter Webb here from London UK
Your views on the gambling are well known
and I think most people would agree that gambling is for the fiscally challenged
But when I Iook at the insurance industry
I see an industry that is based upon probabilities and people not knowing those true probabilities
and money being made for the house in the same way as you see in gambling market
So the question I have for you, is how to do reconcile your views with gambling
versus the insurance industry
and is the insurance industry for the fiscally challenged?

Well gambling I think is
The distinction is usually indicated that
Gambling involves creating risk that doesn’t need to be created
I mean if the… you want to go out and Gamble on where a little ball is going to fall on a wheel that’s revoling
This is not something… that is created risk
whereas, if you have a home or business
you know.. in a coastal area
The risk is there
It wasn’t….. created intentionally, I mean save you build in that place
And then the question is, who bears it
There’s a transfer of
In the case of cat coverage large existing risk
As opposed to the creation of a risk
That does not require it
I mean you can watch a football game without betting on it
but you can’t live in a house
on..on a Florida coast without having a risk
that your entire investment
disappears, so that…..
So that’s the distinction basically
I hope you are right that the house wins in both cases

well I don’t think I can add to that either
The whole concept of err….
House advantage
Is a very interesting one and
in, in modern commerce all of the investment management
where not ordinarily spoken off in the past in croupier terms
but the terms of a lot of private equity investment equity now
i think the
I think the proprietors of the
partnership are take a
house edge that looks a lot like the rake of the croupier in monte-carlo, except its bigger
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10 thoughts on “Warren Buffett’s opinions on gambling and insurance – Berkshire Hathaway AGM – Omaha – Nebraska”

  1. Hi Peter . i want to learn more about sports training and tips about this. Do you have any courses or help you can teach me.
    regards atle

  2. The Betting Industry at a certain level is no different to many other similar industries but the key difference is STIGMA.

  3. So the old adage 'If you want to make money from gambling, open a casino' should have 'or an insurance company' added for safe house weighted returns. The calculation and management of risk follows similar principles. There is more of a crossover than he acknowledges. Investment banks or stockbrokers are worse. Buffet uses the home insurance analogy. US banks manufactured risk by selling bond default insurance to all comers without the need to hold the underlying bonds to such an extent that there was more insurance than issued bonds. It's like selling insurance on your house to everybody in town who wants to speculate on your subsidence and house value.

  4. Players in the sports handicapping division of wagering investment realize that when your competing your up against a 30 yr veteran that WILL NOT! accept my win %
    taking a tenth of a % decrease!

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