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After a two-year pandemic-related haitus, the world’s only shareholder meeting of its kind is back and could set a staggering record of its own.
What began decades ago in a small cafeteria has now grown so massive that the arena where Taylor Swift and Paul McCartney perform has sold out. This weekend, tens of thousands from around the world will descend on Omaha, Nebraska – the birthplace of the “Oracle of Omaha,” aka Warren Buffett.
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The entrance fee? A single share of Berkshire Hathaway, the conglomerate he’s run for 57 years.
Not only is Buffett alive at the age of 91, the chairman and CEO of the $307 billion conglomerate — a behemoth with over 80 companies under its umbrella — will burst onto the scene Saturday and have the power to declare, that Berkshire’s stock performance is believed to have beaten the market…again.
Warren Buffett, CEO of Berkshire Hathaway (Fox Business Network)
Buffett himself forecast a record-breaking viewership of more than 40,000, though Berkshire later released a statement downplaying that number. But for a man who regularly trades odds thanks to his massive insurance business, he’s never been one to casually toss numbers predictions.
He might think that with so many Americans looking to travel post-COVID-19 lockdowns, why not join the capitalist circus, whose No. 1 attraction is an oddity more intriguing than any three-headed snake: two elderly self-made Billionaires — Buffett and his 98-year-old best friend and Berkshire vice chairman Charlie Munger, who has smashed stock market benchmarks and the performances of the world’s top fund managers decade after decade. They have done it simply by adhering to disciplined, simple investing rules that they willingly share, yet few, if any, manage to emulate them.
Warren Buffett (L), CEO of Berkshire Hathaway, and Vice Chairman Charlie Munger attend the 2019 Annual Meeting in Omaha, Nebraska May 3, 2019. (JOHANNES EISELE/AFP via Getty Images / Getty Images)
The two sit alone on the stage and spend hours answering questions from the crowd. This year, Buffett and Munger will share the spotlight with Buffett’s eventual successor, Vice Chairman Greg Abel, as well as Vice Chairman Ajit Jain, who heads Berkshire’s extensive insurance business.
WARREN BUFFETT’S CHARITY LUNCH RETURNS, BUT FOR THE LAST TIME
| ticker | security | Last | To change | To change % |
|---|---|---|---|---|
| BRK.A | BERKSHIRE HATHAWAY INC. | 499,000.00 | +2,200.00 | +0.44% |
All four will be armed with stock performance that shareholders are sure to cheer: Over the trailing 12 months, Berkshire’s stock is up 30% versus the S&P’s 8%.
HOW DID BUFFETT DO IT?
With a net worth today of $120 billion, Buffett is the sixth richest person in the world, but when he founded his investment company in 1965, he was just his neighbor from Nebraska, so shy he forced himself to take the Dale Carnegie course occupy. How to Win Friends and Influence People” to confront potential investors. He went door to door asking friends and family to take a chance on the Omaha boy, who said he could augment his hard-earned cash by investing in and buying outright cash-producing companies, the churningly unique ones Made quality products that were best in class: Think Geico Insurance, American Express, Coca-Cola, See’s Candies. In fact, See made so much money that after buying the entire company, he used its cash flow to fund the purchase of other companies, including an entire railroad.
Berkshire Hathaway Chairman and CEO Warren Buffett (AP Photo/Nati Harnik)
He is also adept at accumulating huge blocks of shares in companies that fit his needs. Berkshire’s $340 billion stock portfolio is a green whale — chock-full of Apple, Bank of America, Kroger, and more recently HP Inc. and Occidental Petroleum.
BUFFETT’S BERKSHIRE HATHAWAY EXPANDS SHAREHOLDING IN HP; STOCK JUMP
Buffett’s shareholders won’t arrive entirely happy, however. He’s sitting on a $144 billion cash pile, most of it parked in low-yielding government bonds. The soppy returns haven’t wowed investors, who have already questioned why he didn’t invest the money. Yes, he’s done stock buybacks, $27 billion in the last year alone, but it makes little difference. Buffett refuses to pay a dividend, preferring instead to reinvest earnings into new companies, and yet he also complains that there’s not much that ticks its boxes *and* isn’t overpriced.
THE 800-LB. BULL IN THE ROOM
Perhaps the most important question for the audience: will this be the last face-to-face encounter with the Warren & Charlie show? Both have declining physical abilities. Buffett is hard of hearing, and at 98, Munger’s mind is as sharp as ever (his new hobby is architecture), but he’s mostly wheelchair bound and has limited vision. (At the 2017 meeting, the two took the stage and Buffett joked, “This is Charlie and I’m Warren. You can tell us apart because he can hear and I can see.”)
Greg Abel and Ajit Jain (Getty Images/Reuters)
While he has named his Abel and Jain as his successors, he said in a recent interview that Abel, who will head all non-insurance operations, “hasn’t started to warm up yet,” which may be a hint that Buffett is far is far from loosening his grip on the Berkshire scepter, let alone handing it over to Abel.
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Could that be because Buffett fears Berkshire stock will sell off if he does? He’s said many times that Jain and Abel, along with his stock investing bosses Ted Wechsler and Todd Combs, are smarter than he is, but don’t believe it. While each is brilliant in their field, the mere fact that Buffett positioned four people to do the job he single-handedly did for years speaks volumes. No wonder shareholders come from countries as far away as China and Australia to hang on his every word.
Liz Claman will be reporting live from the Berkshire Hathaway Shareholders’ Weekend starting Friday.