Alex Morris on what you can learn in his new book: "Buffett and Munger Unscripted"

Summary

• Alex Morris’s book “Buffett and Munger Unscripted” reorganizes three decades of Berkshire annual-meeting transcripts (released back to 1994 in 2018) by topic, and Berkshire replied that “Warren’s okay with you doing this.” Morris modeled it on Cunningham’s Essays of Warren Buffett, and says the payoff of reading 30 years in sequence is seeing a thought process that is “very well thought out, very rational, very consistent” — simplicity that people mistake for a ruse but is “combined with deep knowledge.”
• The GEICO telematics chapter is Morris’s favorite because sequential reading exposes a snowballing error: first discussed around 2012–2013, “they were effectively wrong” on competing with Progressive. His structural worry is conditional: if Warren’s public views tie managers’ hands, that may have contributed to a sustained problem Berkshire was still trying to address.
• Both agree Berkshire’s send-cash-back-to-headquarters incentive design can skew toward underinvestment: “the risk is in the Berkshire approach… to underinvest as opposed to overinvest, especially in situations that have iffy futures.” Walker’s exhibits are Dairy Queen — a possible counterexample among national QSRs, though he says it may not have failed but could be on the verge — and See’s, which might have been “2x as big” with more aggressive expansion.
• Buffett’s page-439 call that the internet would raise productivity but reduce profitability and “make American businesses worth less” is, per Walker, both deeply insightful (newsprint, retail, media) and arguably wrong — “American businesses are worth way more than they have ever been.” Morris calls it “a bit of a mixed bag,” and pairs it with the IBM/Apple reversal: around 2012–13 Charlie said they would not have comparable confidence in Apple’s 10- or 15-year future, yet Apple later became roughly a $175B position — showing they are willing to change their minds.
• On Nike, Morris says the company got “caught offsides” on high-teens-margin guidance, leaned on promotion-driven D2C, and skimped on demand-creation spend — down a couple hundred bips over years: “that’s not where you want margin expansion to come from.” He backs new CEO Elliott Hill — “he might be the anti-John Donahoe” — and highlights Hill’s point that 20 years ago athletes needed Nike, whereas “today they effectively don’t need Nike.”
• Morris reads Buffett’s current market view as “not particularly great,” with Apple selling partly tax-driven and possibly blank-slate cleanup for successors — but he’d expect Coca-Cola and AXP to “just stay there in perpetuity.” On Markel, his other insurer alongside Berkshire: Ventures (started 2005 with AMF Bakery) puts Markel roughly where Berkshire was in the mid-’90s. Walker adds that Markel likely will not scale as well as Berkshire.
• On banks, Morris’s hard-won lesson from Ally: decision-making “doesn’t need to be good 90% of the time. It needs to be good like 100% of the time” — and rereading Countrywide’s last annual report, he couldn’t find what foretold the blowup. Walker’s counter-synthesis of Buffett’s playbook: buy a good bank below tangible book value during a crisis and let it compound — but banking is uniquely vulnerable because a panic can become self-fulfilling.
• In the closing retail exchange, Morris is less interested in Academy after the legendary CEO’s exit and COVID boom — “maybe this is really low-moaty” — while Walker prefers Dick’s House of Sport, quoting Ed Stack: build “the store that if they put it next to a Dick’s Sporting Goods would kill the Dick’s Sporting Goods.” Academy went public at a $1.1B valuation and, Walker notes, earned roughly $700M the next year; Dick’s EPS later rose from roughly $3 to about $13 through the pandemic tailwind.

Deep dive

1. The book exists because Berkshire said yes

• Morris’s origin story: the publisher approached him while he was stuck on a different book about RIA relationships (“I had kind of run into a wall”), and he pitched the transcript-compilation project he was already doing for his own education at TSOH Investment Research. The template was Lawrence Cunningham’s The Essays of Warren Buffett — “the book that’s been kind of most important to me, especially as a young investor” — applied to the meeting transcripts Berkshire released back to 1994 in 2018.
• The permission step came in 2023, as Morris recalls: he wrote Berkshire asking “is this okay to do or am I going to publish this and then you guys are going to be very upset” — and got back, “Warren’s okay with you doing this.”
• Walker’s read of the format: ~450 pages, of which ~435 are direct quotes organized by topic — so you can pull every Buffett comment on, say, EBITDA into one place and watch the evolution. “It’s pretty impressive when he uses those keywords in 2015 and it sounds just like it did in 1992.”

2. What 30 years read back-to-back reveals

• Walker’s framing of why sequence matters: reading transcripts in a row surfaces what standalone reading can’t — his example is a company whose 2021 and 2024 investor days each said the digital app needed to take payments. “Standalone I wouldn’t notice anything. Three years apart, that’s a screaming red flag.”
• Morris’s answer on Buffett and Munger: base-level understanding across an amazing breadth of topics produces commentary that is “very well thought out, very rational, very consistent” — plus a recurring Munger posture of “this is the way that makes the most sense to us… and if that’s not the way you think about it, fine, go figure out your own answer then.” The “aw-shucks” simplicity people suspect is a ruse “is very real. It’s just combined with deep knowledge.”
• On how the meeting itself changed: questions drifted toward life advice, taxes, politics and macro (which Morris deliberately left out of a business-and-investing book); Andrew Ross Sorkin’s and Becky Quick’s questions skewed topics based on what audiences were asking; Warren added long introductions, one running “close to an hour”; and once the meetings went online, Warren became more reticent to name specific people or businesses. Walker’s gloss: in the ’90s attendees wanted “what are you buying right now?”; by the 2010s he was Uncle Warren.

3. GEICO telematics as the case study in Warren’s words tying managers’ hands

• Walker’s provocation: is Berkshire still eating its own cooking on incentives? His two exhibits are Ted and Todd, whose investments he says have not done that well but have “almost certainly dramatically outperformed the S&P 500,” and GEICO, which he thinks has been losing share to Progressive and which many people think is poorly managed.
• Morris’s roundabout answer via his favorite chapter: telematics first came up at the meetings around 2012 or 2013, and read in sequence “you really see how it, in some way, snowballed and how they were effectively wrong.” The deeper issue is conditional: “if Warren goes out and talks about something publicly in a certain way, I’m not sure how much it ties the hands of the managers running a given business” — and, if that happened with telematics, given what Ajit has said in recent years, it could have created “a sustained and really significant problem.”
• On compensation broadly, Morris hedges: outsiders don’t see much beyond the general structures, which look “pretty reasonably structured,” but the old cost-of-capital hits on reinvestment “maybe should be rethought” given headquarters’ opportunity set today versus 25 years ago; he thinks Berkshire has probably rethought them to some extent.

4. The underinvestment bias: Dairy Queen and See’s as tells

• Walker’s Dairy Queen thesis: he can’t find a national scaled QSR burger/chicken/pizza chain that has failed since the ’70s — and Dairy Queen may be a counterexample, though he says it might not have failed but could be on the verge. His gut is that Berkshire’s all-cash-comes-home incentive “might have encouraged short-term cash flow” at the expense of the brand’s potential.
• Morris concedes the structural point: the default is that unless a manager has high confidence in a reasonable incremental return, capital returns to headquarters — which “can show up, especially over a period of years or decades, as underinvestment.” His verdict: “the risk is in the Berkshire approach to underinvest as opposed to overinvest, especially in situations that have iffy futures. And Dairy Queen’s one.” Though he offers the pushback that DQ’s menu may be inherently poorly positioned versus where QSR and fast-casual growth has gone.
• Walker extends it to See’s: fantastic returns, endlessly quoted — but “if they had been a little bit more aggressive in opening shops… if the business was 2x as big” the story changes. Not Facebook or Google, but a tell.

5. Casinos and tobacco: ethics, or unpriceable tail risk?

• Walker’s puzzle: casinos are a “borderline license to print money, protected monopolies,” yet Warren and Charlie never invested — is that genuine ethics from a man critics say “would have shanked his mom for a nickel” in his younger days, or implicit underwriting of an ethical terminal-zero tail risk?
• Morris lands on sincerity, with a timing hedge: the tobacco story — a private deal they thought was “a cinch,” walked out of the meeting, and declined — sits alongside owning distributors and retailers that sell cigarettes. Warren’s own answer: “I’m not totally sure, but I do see a distinction between the two,” and they decided to draw a line for themselves. Morris says “maybe I’ve been a little more believing of the aw-shucks nature of it all,” while allowing the line may have moved between the mid-’50s and mid-2010s. Alex also recalled that Berkshire owned Guinness at one point.

6. Page 439: the internet call that was insightful and maybe wrong

• The quote Walker calls the most interesting in the book: the internet “is more likely to reduce the profitability of American business than improve it” — improving productivity while making American businesses worth less. Walker credits the foresight on newsprint, retail and media; he thinks Buffett bought an Amazon high-yield bond two years later and notes that Buffett did not appear to return to media until Paramount. But from Walker’s 2025 perspective, “American businesses are worth way more than they have ever been. We’ve got the best series of companies ever.”
• Morris, who tweeted the quote to “vigorous” reactions, calls it “a bit of a mixed bag”: at the micro level competition clearly intensified — a brand like On “basically coming out of nowhere” selling largely D2C — but a select group of very large companies turned the internet into a very attractive business and “driven the market quite a ways in the last decade-plus.”
• The example Morris pairs with it: around 2012–13 Warren discussed IBM and Apple in a way that indicated greater confidence in IBM, and Charlie said “we would never have the confidence of where Apple’s going to be in 10 or 15 years” — comparable, he claimed, to their BNSF confidence. Not many years later Apple was at one point roughly a $175B position. Morris’s lesson: “they are willing to change their minds… and they’re okay with other people getting rich around them doing things that they don’t necessarily understand.”

7. Nike: guidance hubris, promo-driven D2C, and the anti-Donahoe

• Morris has written Nike up multiple times at TSOH. His diagnosis is that the company was “consistently caught offsides” on guidance — at one point promising high-teens EBIT margins it never approached outside a COVID blip “which basically wasn’t a real number” — and leaned on Nike Direct e-commerce as “a promotions-driven way to get the flywheel to spin.” Returning premium destinations to full price after a period in which promotion and list price were roughly 50/50 “is going to be quite a challenge.”
• His red flag on spend: demand-creation expense, including endorsements, shrank by a couple hundred basis points over years. “That’s not where you want margin expansion to come from.” The idea that Tiger Woods- or Roger Federer-class relationships could go away is something Nike does not want to happen, and Elliott Hill’s interview comment stuck with him: 20 years ago even the biggest athletes needed Nike; “today they effectively don’t need Nike.” Morris’s early-read verdict on the CEO change: “he might be the anti-John Donahoe.”
• Walker’s market check: 20 years ago Nike traded at roughly 15x earnings, today at roughly 25x — “the stock market’s saying it is a better business” — even as Tiger’s Instagram can now launch a brand the Tiger Slam-era Tiger could not. Morris’s counterweight for Nike: the industry’s inventory and cash-flow cycle makes going mainstream fast genuinely risky for challengers, “one of the competitive advantages that Nike has at their scale.”

8. What Berkshire never bought: Paramount is the puzzle, retail the near-miss

• Morris’s most perplexing position is Paramount: given the Capital Cities history, the Disney sale, and subsequent comments making clear they likely would not touch that business, “the idea that they bought Paramount for me was kind of perplexing and honestly still is.” Walker wonders aloud whether it was Ted or Todd rather than Buffett.
• Walker’s surprise is mineral rights — Buffett bought TPL early, and the joke is “what’s the oil man say to his kids on his deathbed? Don’t sell the oil rights” — but concedes it is too niche at Berkshire’s size. Morris’s surprise is retail: they owned Walmart in size and sold, Charlie was on Costco’s board, yet they never found the retailer to hold long-term.
• On whether they misjudged the moats, Morris cites Charlie’s line that “Amazon has more to worry about from Costco than Costco has to worry about from Amazon,” and the Innovel acquisition’s white-glove big-ticket e-commerce as an intelligent application of e-commerce to Costco. His favorite meeting bit: Warren announcing “now Charlie will do his 5-minute talk about Costco… as he’s done 10 times before” — and the Ensemble Capital framing that Costco “allows well-off people who are frugal to go spend money without worrying about it.” Walker estimates Walmart at roughly 40x earnings and Costco at roughly 50x as they speak.

9. Lumpy 15% vs. cyclical distrust — and the current cash pile

• Walker’s tension: page 36 says they hate investments “where you can’t make predictions on key variables,” yet pages later they buy what he thinks was the Alabama brick company nobody else would touch because “bricks are going to be here forever.” Add Buffett’s 2007 ConocoPhillips loss and later Occidental buying. Not hypocrisy, he says, but worth bridging — alongside Charlie’s line about hating businesses that report “a profit and there’s no cash flow.”
• Morris’s bridge is control. Wholly owned cyclicals let Berkshire directly govern capital aggressiveness through the cycle — see manufactured housing, bought “at a time when things were very, very ugly” — whereas the public oil experiences made them wary of relying on others’ capital-allocation discipline. The default of cash returning to Omaha gives Warren “tons of flexibility… and I think that’s just the way he probably likes it” — but there are also downsides to that.
• On today’s positioning — Walker thinks Buffett has been a net seller for three or four years, deployed little during COVID, and sold Apple down — Morris’s sense is that Buffett’s view is “not particularly great,” though he is unsure how much that drove the actions. He speculates that Apple was enormous relative to long or intermediate-term bonds and that Buffett may have been willing to take the tax hit; he believes Buffett touched on taxes at the meeting and says that may have been a component. Some of the selling, particularly Apple, may be blank-slate cleanup for successors. Coca-Cola and AXP, he thinks, may “just stay there in perpetuity,” though he could be wrong.

10. Markel and banks: mini-Berkshire hopes, 100%-right businesses

• On Markel, a Morris holding according to Walker, the honest split is that parts of the insurance operation look very high quality, but the reinsurance track record “has been less good for sure” and the ILS situation is messy — with the Gen Re decade as Berkshire’s own precedent. His timeline defense: Ventures started in 2005 with AMF Bakery, putting Markel roughly two decades in — go read Berkshire’s 1995 annual report and see what its wholly owned collection looked like then. The edge is a trustworthy, able allocator unhamstrung by “blanket statements” like promising 80% of five-year FCF to buybacks. Walker adds that Markel likely will not scale as well as Berkshire.
• On banks, Morris’s scar tissue from Ally — sized below some of his other holdings — includes Bank of America, which worked through “really fortuitous timing” in March or April 2020. His lesson is that bank decision-making “doesn’t need to be good 90% of the time. It needs to be good like 100% of the time or they’re putting the business potentially at risk.” He reread Countrywide’s last annual report and “really don’t think I can even identify now what here would have foretold the problems” — versus Moody’s, where the structured-products mix shift was at least visible.
• Walker’s synthesis of the Buffett bank playbook — savings-and-loan investments in that crisis, BofA and Goldman Sachs in the GFC: “if you can buy a good bank below tangible book value during a crisis, it’s probably worth more than tangible book value and then you can just let that compound.” His caveat is that banking is the rare industry where panic is self-fulfilling — “you and I go create a panic in Nike stock, it’s not like customers stop buying Nikes.” His NYCB example: the bank had never had a loss in 30 years on rent-regulated loans, yet, in his view, 10% expense growth with no revenue growth made the math unravel.

11. Sporting goods coda: Morris cools on Academy, Walker prefers Dick’s

• Walker asks Morris about Academy and Dick’s after writing up both. Morris says the space is less interesting to him: he initially bought Academy for box white space and buy-online-pickup-in-store logic, then watched same-store sales miss badly after a legendary CEO left. “I kind of came to view it as low-moaty, but not no-moaty. And I kind of started thinking, maybe this is really low-moaty” — a sideways decade, a great CEO plus COVID boom, then reversion. “That story seems tough.”
• Andrew cites the number that says it all: Academy went public at a $1.1B valuation and the next year earned north of $700M of net income — a striking COVID boom. On Dick’s, Walker sees a Home Depot-post-GFC playbook — unit growth stopped, capital went into House of Sport — anchored by Ed Stack’s directive: “go and create the store that if they put it next to a Dick’s Sporting Goods would kill the Dick’s Sporting Goods.” The touch-feel-try, need-it-by-the-11am-game component resists e-commerce.
• Morris reports that Dick’s EPS chart went from roughly $3 for a five-year stretch to about $13 today. Walker’s analogy is Bass Pro Shops’ pyramid: experiential time-in-store “is your moat against e-commerce.” He would probably prefer Dick’s to Academy, but says there is no need to own either.