At Berkshire Hathaway meeting, Warren Buffett aims to reassure shareholders
OMAHA, Neb. – Early Berkshire Hathaway BRK.B,
annual meeting on Saturday, Chairman and CEO Warren Buffett wasted no time in addressing the issue of the company’s aging leadership. He noted, in fact, that his combined age and that of Vice Chairman Charlie Munger was around 190 – and that it was only fitting for shareholders to “see them in person”.
The obvious implication: Buffett understood that Berkshire worshipers might need reasons to feel reassured in their faith.
For many shareholders, Buffett, 91, and Munger, 98, have proven they are more than capable of not only retaining control of the company, but continuing to steer it in a profitable direction. Shareholders noted how the two men held court with their usual humour, answering questions for several hours and offering their opinions on a range of topics.
And, of course, they pointed to Berkshire’s recent record: in a year when the S&P 500 SPX,
fell more than 13%, Berkshire is up more than 7%.
“I love these guys,” said Jack Berdan, a shareholder from San Clemente, Calif., who was attending the meeting for the first time.
Mitchell Hockenbury, a finance professional and stockholder from Kansas City, Mo., who has been a regular at meetings over the years, pointed to Buffett’s mastery of a range of topics during the one-day affair. . “Warren didn’t miss a step,” he said.
Others were slightly more skeptical, pointing out that Buffett, always known for talking at length, lasted longer than usual.
“He’s not as lively. There were several responses that were disjointed,” said Ron White, a stockholder from Oklahoma City, Okla., and another previous attendee.
Buffett has made it clear he believes Berkshire, a company that owns and invests in a wide range of businesses from insurance entities to a candy company, is well positioned to embrace a future without him. He pointed to the company’s disciplined approach as one that will stay in place.
“You have a board that understands our culture,” he says.
Buffett noted, however, that some things may change when Berkshire Vice Chairman Greg Abel, his successor-in-waiting, takes over. Specifically, he said the board might not give him the same degree of carte blanche in decision-making.
“They’re going to put more restrictions on him,” Buffett said.
The meeting, long celebrated as a kind of “Woodstock for Capitalists” with a range of social activities and shopping opportunities beyond the large shareholder gathering in the CHI Health Center arena, was the first held in person since 2019. For the past two years, the meeting has been held virtually, due to the pandemic.
“It feels really good to be back,” Buffett said at the start.
As always, shareholders gave Buffett and Munger a platform to ring in on just about anything. A main topic was Berkshire’s buying spree in recent months, including its acquisition of Alleghany Corp. and its purchase of more shares of Activision Blizzard Inc. ATVI,
Buffett said Berkshire “will always have plenty of cash” on hand, particularly so it can be nimble when opportunities arise.
Buffett and Munger also expressed their skepticism about cryptocurrency several times throughout the event. Responding to a question from a young investor, Munger said, “When you have your own retirement account and your retirement advisor suggests that you put all your money in bitcoin, just say no.” He doubled down on his comments later, simply calling digital assets “dumb” and “evil.”
Munger, who is known for his fun and curt remarks, also had a few choice things to say about the financial industry. “People who don’t know anything about stocks (are) being advised by stockbrokers who know less,” he remarked at one point.
A contentious point of the meeting involved a proposal for Berkshire to have an independent chairman, stripping Buffett of one of his dual roles. As chairman and CEO, Buffett is essentially his own boss, leading some to wonder if this poses an inherent conflict.
Munger called such an idea “the most ridiculous criticism I have ever heard”. He added that it’s as if the ancient Greek hero Odysseus had gone home to be told by someone he didn’t like ‘the way you held that spear when you won that battle’.
The proposal was rejected by shareholders, along with other measures, including one that would require Berkshire to publish an annual assessment of how it is handling climate change issues.
Those looking for investment advice from Buffett and Munger may have taken note of a question from a shareholder, who asked if there was a stock worth buying right now as a hedge. against inflation.
Buffett didn’t answer the question directly and instead said the best way to hedge against inflation is to simply “be exceptionally good at something” so your talents and services are always in demand. no matter which direction the financial wind is blowing.
David Applegarth, an attendee at the Boston meeting, said Buffett missed an opportunity and could have offered a much more appropriate response.
“We were surprised he didn’t say buy Berkshire Hathaway stock,” Applegarth said.
MarketWatch reporters William Watts and Christine Idzelis contributed to this story.