OMAHA, Neb., April 30 – Warren Buffett took advantage of Berkshire Hathaway Inc’s (BRKa.N) annual meeting on Saturday to rail against Wall Street excesses and tout the virtue of cash after quickly raising tens of billions in shares and corporations while addressing the risk to his conglomerate from the threat of nuclear war.
The meeting in downtown Omaha, Nebraska, was Berkshire’s first welcoming of shareholders since 2019, before COVID-19 derailed America’s largest corporate gathering for two years. It allowed shareholders to ask questions directly to Buffett and Berkshire Vice Chairmen Charlie Munger, Greg Abel and Ajit Jain.
Buffett’s comments came after Berkshire, long criticized for holding too much idle cash, revealed it acquired more than $51 billion worth of stock in the first quarter, including a much larger stake in Chevron Corp ( CVX.N).
Berkshire also said operating profit was little changed in the first quarter as many of its dozens of companies weathered supply chain disruptions from COVID-19 variants and the invasion of Ukraine. Continue reading
Buffett, 91, said it “feels really good” to be able to speak to shareholders in person after holding the last two meetings without them. Attendees included Jamie Dimon, Chief Executive of JPMorgan Chase & Co (JPM.N) and actor Bill Murray, who is a shareholder.
Buffett lamented the lack of investment opportunities in his annual shareholder letter in February.
That prompted one shareholder to ask what had changed in March, when Berkshire bought 14.6% of Occidental Petroleum Corp (OXY.N) and agreed to pledge $11.6 billion for insurer Alleghany Corp (YN). to pay.
Buffett said it’s easy: He became interested in Occidental after reading an analyst report, and in Alleghany after its chief executive Joseph Brandon, who once ran Berkshire’s General Re, wrote to him.
“Markets do crazy things, and occasionally Berkshire gets a chance to do something,” he said. “It’s not because we’re smart… I think we’re sane.”
Berkshire’s cash portion fell more than $40 billion to about $106 billion in the quarter, but Buffett assured shareholders not to worry.
“We will always have a lot of money,” he said. “It’s like oxygen, it’s there all the time, but if it goes away for a few minutes, it’s all over.”
Buffett and Jain stumbled upon answers when asked if the Ukraine conflict could degenerate into a nuclear war.
Jain, who has praised Buffett for decades, said he has “a lack of skill” in assessing Berkshire’s insurance risk.
Buffett also seemed stunned, but said there was a “very, very, very small” risk of nuclear attack even though the world was “close” during the 1962 Cuban Missile Crisis.
“The world tosses a coin every day,” Buffett said. “Berkshire has no answer. There are certain things that we don’t write guidelines on because we couldn’t do them well anyway.”
Buffett also chose a favorite target, Wall Street, saying the stock market sometimes resembles a casino or gambling affiliate.
“It’s been on an extraordinary scale in recent years, sponsored by Wall Street,” he said.
For his part, Munger, 98, echoed Nancy Reagan’s criticism of Bitcoin, saying that if an advisor suggested you put your retirement account there, “just say no.”
Abel, who would succeed Buffett as chief executive if Buffett was unable to serve, defended Berkshire’s BNSF railroad, saying there was “more work to be done” to improve operations and customer service and against rival Union Pacific Corp ( UNP.N) to compete.
Shareholders will later vote on whether to replace Berkshire Buffett with an independent chairman — he would remain chief executive — and disclose how its dozens of companies promote diversity and address climate risk and mitigation.
Hours before doors opened at 7 a.m. CDT (1200 GMT), thousands of people began to gather outside the downtown arena where the gathering was taking place.
Berkshire had a lower attendance than forecast for 2019, and about 10% to 15% of the seats in the normally packed arena were empty.
As with other Berkshire-sponsored events this weekend, almost everyone in attendance did not wear masks, although all required proof of COVID-19 vaccination. CNBC.com also webcast the meeting.
“I bought a chair from Walmart so I could sit down,” said Tom Spain, founder of Henry Spain Investment Services in Market Harborough, England, who arrived at 3:15 am to attend his third meeting. “Everyone used it. Next year I might bring a giant can of coffee and give it out.”
Lauritz Fenselau, a 23-year-old software startup owner from Frankfurt, Germany, showed up for his first meeting at 4am.
“Warren and Charlie are the priests,” he said. “It’s like a pilgrimage.”
Andres Avila from Boston, a big Buffett fan, arrived in Omaha just five hours before his 4:45 a.m. line, holding an umbrella to ward off the rain.
“I have some of my idols here,” he said.
Reporting by Jonathan Stempel and Carolina Mandl in Omaha, Nebraska; Editing by Megan Davies, Ros Russell and Diane Craft