Warren Buffett takes the floor and meets with Berkshire Hathaway shareholders before their annual meeting on May 3, 2024 in Omaha, Nebraska.
David A Grogan
When Warren Buffett gets started Berkshire HathawayAt Saturday’s annual shareholder meeting, Charlie Munger’s absence will be on everyone’s lips.
Some 30,000 enthusiastic shareholders flock to Omaha for what is being called “Woodstock for Capitalists.” Aside from the pandemic lockdown, it will be the first time without Munger, Buffett’s longtime partner who died in November about a month shy of his 100th birthday.
“There will only be one comedian at the meeting this year,” said David Kass, a finance professor at the University of Maryland and a Berkshire shareholder who has attended more than 20 annual meetings. “There will be, let’s say, a more serious, less humorous background.”
The annual meeting will be broadcast exclusively on CNBC and streamed live on CNBC.com. Our special coverage begins Saturday at 9:30 a.m. ET. For the first time, Berkshire will broadcast the film of its annual meeting, which was previously only available to those in attendance in Omaha. Many speculate that this year’s anniversary will be a tearful tribute to Munger.
Greg Abel, vice chairman of non-insurance operations, Buffett’s designated successor, will take Munger’s place in the afternoon meeting and help answer questions from shareholders. Ajit Jain, vice chairman of insurance operations, will join Buffett, the CEO, and Abel in the morning meeting. Buffett has said they expect to answer about 40 to 60 questions on Saturday.
“The tone of the meeting will certainly be very different without Charlie,” said Steve Check, CEO of Check Capital Management and a longtime Berkshire shareholder. “He was the one who made it really fun. The transition is getting closer and closer, so it’s nice to see Ajit and Greg on stage.”
Warren Buffett and Charlie Munger at a press conference during Berkshire Hathaway’s shareholder meeting on April 30, 2022.
CNBC
Munger’s investment philosophy influenced Buffett early on and led to the creation of the massive $860 billion conglomerate that Berkshire is today. Generations of investors also valued Munger’s blunt candor and humor, which is rarely found on Wall Street.
If anything, the sea of Buffett admirers will appreciate his folksy wisdom even more as the “Oracle of Omaha” turns 94 in less than four months.
Here are some of the big topics shareholders want Buffett to discuss:
- Inflation: Price pressure has proven stubborn recently. What impact does inflation have on Berkshire’s business? Which companies will be hurt the most (and helped the most)?
- Apple: Why did Berkshire reduce its Apple stake in the fourth quarter? Given challenges in China and recent news of a huge $110 billion share buyback, investors will be paying attention to Buffett’s outlook on the tech stock.
- Secret stock selection: Berkshire has been buying a financial stock for two quarters in a row. What is it?
- Record cash: Does Buffett plan to use his record level of cash?
- A slowdown in buybacks: Given the outperformance of Berkshire shares this year, will Buffett continue to slow his own buyback program?
- Life after Buffett: Further details on Berkshire’s succession plan.
Macro comment
The annual meeting comes at a difficult time for markets as a rise in inflation is putting the brakes on the Federal Reserve’s plan to cut interest rates this year. Even though Berkshire’s CEO doesn’t make his investment decisions based on daily headlines, investors are still eager to hear market commentary and advice from the father of value investing’s protégé, Ben Graham.
“They don’t time their investments,” Kass said of Berkshire. “The economy goes through cycles. They completely ignore cycles. They invest for the long term and essentially ignore what the Federal Reserve is doing. I think that will be his answer.”
Apple
Shareholders may be looking for an explanation as to why Berkshire sold about 10 million shares of Apple (1% of its massive stake) in the fourth quarter. At the end of 2023, Berkshire owned 905,560,000 shares of the iPhone maker worth more than $174 billion and accounted for more than 40% of the portfolio.
The move came as a surprise to many as Apple has been Buffett’s favorite stock for years and he even described the tech giant as his second most important company after Berkshire’s insurer group. The last time Buffett reduced this bet, he also admitted that it was “probably a mistake.”
Enlarge symbolArrows point outwards
Shares of the iPhone maker got a big boost on Friday after the company announced that its board had approved $110 billion in stock buybacks, the largest in the company’s history. However, Apple saw a decline in overall revenue and iPhone sales.
confidentiality
There’s a slim chance that Buffett will reveal the identity of the mystery bank stock that Berkshire has been buying for two quarters in a row.
In the third and fourth quarters of 2023, Berkshire asked the Securities and Exchange Commission to keep the details of one or more of its stock holdings confidential. Many speculated that the secret purchase could be a bank stock, as the conglomerate’s cost base for “banking, insurance and finance” equity holdings increased by around $2.37 billion.
“He’ll comment as late as possible… Charlie would be the only one who would give it away every now and then. That’s not going to happen with Warren,” Check said.
Succession
After Munger’s death, Berkshire’s succession could be the focus at this meeting. Abel became known as Buffett’s heir to the throne in 2021 after Munger accidentally made the revelation.
Abel has overseen much of Berkshire’s sprawling empire, including energy, railways and retail. Buffett previously announced that Abel has taken over most of Berkshire’s duties.
Still, some questions remain about who will help allocate capital at Berkshire and what roles will be played by Buffett’s investment managers Ted Weschler and Todd Combs, who is also CEO of Geico.
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2024-05-03 17:49:04
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