Warren Buffett visits Berkshire Hathaway’s annual shareholder meeting in Omaha, Nebraska.
David A. Grogan | David A. Grogan CNBC
When Warren Buffett started Berkshire HathawayCharlie Munger’s absence will be a concern for everyone at Saturday’s annual shareholder meeting.
Some 30,000 rapt shareholders gathered in Omaha for the so-called “capitalist Woodstock.” Aside from pandemic lockdowns, this will be the first absence of Buffett’s longtime partner Munger, who died in November, a month short of his 100th birthday.
“There will only be one comedian at the meeting” this year, said David Kass, a University of Maryland finance professor and Berkshire shareholder who has attended more than 20 annual meetings. “For example, there will be a more serious and less humorous background.”
The annual meeting will be broadcast exclusively by CNBC and streamed live on CNBC.com. Our special coverage will begin Saturday at 9:30 a.m. ET. For the first time, Berkshire Hathaway will show its annual meeting film, which was previously reserved only for Omaha attendees. Many are speculating that this year’s film will be a tear-jerking tribute to Mongeau.
Buffett’s designated successor, Vice Chairman of Non-Insurance Business Greg Abell, will fill Munger’s seat at the afternoon meeting to help answer shareholder questions. Vice Chairman of Insurance Ajit Jain will join CEO Buffett and Abel in the morning meeting. Buffett said they expect to answer about 40 to 60 questions on Saturday.
“Without Charlie, the tone of the meeting would certainly have been much different,” said Steve Check, chief executive of Check Capital Management and a long-time Berkshire Hathaway shareholder. “He’s the one who really makes it fun. The transition is getting closer, so it’s great to see Ajit and Greg on stage.”
Warren Buffett and Charlie Monger during a press conference during the Berkshire Hathaway shareholder meeting on April 30, 2022.
CNBC
Munger’s investment philosophy influenced Buffett early on, creating Berkshire’s massive conglomerate worth $860 billion today. Generations of investors also appreciated Munger’s signature bluntness and humor, which are rare on Wall Street.
If anything, as the “Oracle of Omaha” turns 94 in less than four months, Buffett’s many admirers will cherish his approachable wisdom even more.
Here are some of the big topics shareholders want Buffett to discuss:
- inflation: Price pressure has proven tricky of late. What impact does inflation have on Berkshire’s business? Which businesses are hurt (and helped) the most?
- apple: Why did Berkshire reduce its holdings of Apple shares in the fourth quarter? Investors will be watching Buffett’s outlook for technology stocks given the challenges they face in China and recent news of a massive $110 billion share buyback.
- Secret stock picking: Berkshire Hathaway has been buying financial stocks for two consecutive quarters. what is it?
- Record cash: Does Buffett plan to put his record level of cash to work?
- Buybacks slow down: Given the stellar performance of Berkshire shares this year, will Buffett continue to slow down his buyback program?
- Life after Buffett: More details on Berkshire’s succession plan.
macro review
The annual meeting comes at a tricky time for markets, as rising inflation hampers the Fed’s plans to cut interest rates this year. Even though the Berkshire CEO doesn’t base his investment decisions on daily headlines, investors are still eager to hear any market commentary and guidance from the protégé of the father of value investing. Ben Graham.
“They don’t time their investments,” Kass said of Berkshire Hathaway. “The economy goes through cycles. They completely ignore cycles. They invest for the long term, and they actually ignore what the Fed is doing. I believe that will be his answer.”
apple
Shareholders may be looking for an explanation as to why Berkshire Hathaway sold about 10 million Apple shares (1% of its massive stake) in the fourth quarter. As of the end of 2023, Berkshire Hathaway held 90,556 shares of the iPhone maker, worth more than $174 billion, accounting for more than 40% of the investment portfolio.
The move surprised many, as Apple has been Buffett’s favorite stock for years, and he even called the tech giant his second most important business, behind Berkshire’s insurance cluster. What’s more, the last time Buffett cut back on this bet, he admitted it “might have been a mistake.”
The iPhone maker’s shares jumped on Friday after it announced its board had authorized a $110 billion stock buyback, the largest in the company’s history. However, Apple’s overall sales and iPhone sales declined.
secretly held
It is highly unlikely that Buffett revealed the identity of the mysterious bank stock Berkshire Hathaway purchased for two consecutive quarters.
In the third and fourth quarters of 2023, Berkshire asked the SEC to keep details of one or more of its stock holdings confidential. Many have speculated that the secret purchases may have been bank shares, as the cost basis of the group’s “banking, insurance and finance” equity holdings jumped by about $2.37 billion.
“He would make comments as late as possible…Charlie was the only one who would occasionally let something slip. That didn’t happen with Warren,” Check said.
succession
After Munger’s death, the issue of Berkshire’s successor may become a focus of this meeting. Abel was named Buffett’s heir apparent in 2021 after Munger inadvertently revealed the news.
Abel has been responsible for managing much of Berkshire’s vast empire, including energy, railroads and retail. Buffett previously revealed that Abel assumed most of Berkshire’s responsibilities.
Still, questions remain about who will help Berkshire deploy capital and the roles of Buffett’s investment manager Ted Weschler and Geico CEO Todd Coombs.
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