Here are my takeaways from Warren Buffett Berkshire Annual Meetings

Source: https://www.docplay.com/shows/woodstock-for-capitalists

This is the 5th time I attend the Berkshire Hathaway shareholder’s meetings. These normally occur between the end of April and the beginning of May, and they take place in Omaha, Nebraska. These meetings are also known as the Woodstock of Capitalism as they attract some of the “heaviest weight” financiers in the world. There are normally about 40 thousand people attend the shareholder meeting, which takes place on Saturday and where Warren Buffet (91 years old) and Charlie Monger (98 years old), the two leaders of the Berkshire empire take questions from the participants from 9 am to 3 pm.

This was the first in person shareholder meetings since 2019 due to the Covid 19 Pandemic. Both Buffet and Monger have a personal net worth of approximately US$ 100 billion each. As of April 28th, Berkshire Hathaway had a market cap of $708.16 Billion. This makes Berkshire Hathaway the world’s 7th most valuable company in the world.

As we started bilateral meetings and private events on Thursday, the main question everybody was asking (this has been going on for a several years now), are Warren Buffet and Charlie Monger in good health? And when are they retiring? The good news is that both looked in terrific form, and as sharp as ever. Accompanying them on the podium were Vice Chairman Greg Abel who will succeed Warren Buffett as Berkshire Hathaway CEO, and Vice Chairman Ajit Jain, 70, would likely continue leading insurance operations.

Key Takeaways

Shareholder Partnership: What these annual meetings have done, is continued building a powerful partnership between Berkshire Hathaway and its shareholders. This is the impactful culture that will continue to cement Berkshire Hathaway as a leading investor for a long time well past Buffet and Monger’s time. This was one of the key messages reiterated by Warren Buffet through-out the 6-hour q/a on Saturday the 30th of April.

First Quarter Earnings: The company’s net earnings was $5.46 billion, down more than 53% from $11.71 billion in the first quarter of 2021. Berkshire’s operating earnings (the most meaningful indicator) were flat year over year at $7.04 billion. The results were strongly influenced by a significant drop in the company’s insurance underwriting business and by the slowing U.S. economy, which in Q 1 contracted for first time since the onset of the Covid-19 pandemic. Buffet stressed during the in-person meeting that “the gains and losses in any given quarter are meaningless to investors who have little or no knowledge of accounting rules”.

Market Trends and Risk: Warren Buffet repeatedly mentioned that nobody knows where the markets are going, and key to Berkshire Hathaway long term success will be value investments. On the specific question from a young attendee on investment timing Warren Buffet answered, “We haven’t the faintest idea what the stock market was going to do when it opens on Monday.” He further articulated, “We have not been good at timing, but we’ve been reasonably good at figuring out when we were getting enough for our money.”

Inflation: Warren Buffet stated that “inflation will raise the amount of capital that companies need and that raising prices to maintain inflation-adjusted profits is not as simple as it may seem”. He elaborated that one effective strategy to fight inflation, is investing in your own skills. He also explained that the main cause of the inflation was the large economic stimulus which was implemented since the beginning of the Pandemic. He also praised the Federal Reserve and its Chairman Jerome Powell for doing what had to be done to stimulate economic activity during this crisis.

Criticizing Investment gambling trends: Both Warren Buffet and Charlie Monger criticized the emerging investment gambling trends that include the online investment brokerage companies such as Robinhood (down by 88% from their high in August 2021) as it encourages reckless decision making and financial gambling. He also criticized Wall Street speculators explaining that these folks “make a lot more money when people are gambling than when they are investing.” Both Buffet and Monger at the end of the annual meetings expressed concerns over Bitcoin investing as they it does not produce any value and is unethical.

Final thoughts: The key message I took home from Omaha was “invest in yourself” as this is the quickest way to build excellence and long-term success. This was reiterated by Warren Buffet throughout the entire shareholder meeting and was also the answer to a question from a young participant that asked “what stock should I invest in?”….Buffet answer was “you are the best stock and you should invest in your future value”.

Sport, ESG, Technology, Impact Investment, Wellness and Empowerment

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Andrea Zanon

Andrea Zanon

Sport, ESG, Technology, Impact Investment, Wellness and Empowerment

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