OMAHA, Neb. – At the start of the Berkshire Hathaway BRK.B,
At Saturday’s annual meeting, President and CEO Warren Buffett wasted no time in discussing the issue of the company’s aging leadership. He noted, in fact, that the joint age of his and Vice President Charlie Munger’s was approximately 190, and that it was only appropriate for shareholders to “see them in person.”
The obvious implication: Buffett understood that the Berkshire faithful might need reasons to feel confident in their faith.
For many shareholders, Buffett, 91, and Munger, 98, proved that they were more than capable of not only maintaining control of the business, but also of continuing to run it in a profitable direction. Shareholders pointed out how the two men made court with their usual humor, answering questions for several hours and offering their opinions on different topics.
And of course, they pointed to Berkshire’s recent trajectory: in a year when the S&P 500 SPX,
has fallen more than 13%, Berkshire has risen more than 7%.
“I love these guys,” said Jack Berdan, a shareholder in San Clemente, California, who was attending the meeting for the first time.
Mitchell Hockenbury, a financial professional and shareholder in Kansas City, Missouri, who has been a regular at meetings over the years, highlighted Buffett’s mastery of a number of topics throughout the day. “Warren hasn’t missed a single step,” he said.
Others were a little more skeptical and noted that Buffett, always known for his long talk, spent more time than usual.
“It’s not that sharp. There have been several responses that have been rambling,” said Ron White, a shareholder in Oklahoma City, Oklahoma, and another former aide.
Buffett made it clear that he believes Berkshire, a company that owns and invests in a wide range of businesses, from insurance companies to a candy company, is positioned to take on a future without it. He noted that the disciplined approach of the company will remain in place.
“You have a board that understands our culture,” he said.
Buffett noted, however, that some things could change when Berkshire Vice President Greg Abel, his successor on hold, takes over. Specifically, he said the board may not give him the same degree of carte blanche when making decisions.
“They’ll put more restrictions on him,” Buffett said.
The meeting, long held as a sort of “Woodstock for the Capitalists” with a range of social activities and shopping opportunities beyond the large shareholder meeting in the arena of the CHI Health Center, was the first to be held in person since 2019. The last two years The meeting was held as a virtual affair, due to the pandemic.
“It feels great to be back,” Buffett said at first.
As always, shareholders gave Buffett and Munger a platform to sound on almost anything. One of the main issues was the explosion of Berkshire purchases in recent months, including its acquisition of Alleghany Corp. and its purchase of more shares of Activision Blizzard Inc. ATVI,
Buffett said Berkshire “will always have a lot of cash” on hand, especially so it can be agile when opportunities arise.
Buffett and Munger also expressed their skepticism about cryptocurrency repeatedly during the event. In response to a question from a young investor, Munger said, “When you have your own retirement account and your retirement advisor suggests you put all your money into bitcoins, just say no.” He later duplicated comments, simply calling digital assets “stupid” and “evil.”
Munger, who is known for his funny and short comments, also had a few things to say about the financial sector. “People who know nothing about stocks (are) being advised by stockbrokers who know less about them,” he remarked at one point.
A controversial point of the meeting involved a proposal for Berkshire to have an independent president, stripping Buffett of one of his dual roles. As chairman and CEO, Buffett is essentially his own boss, which makes some wonder if this is an inherent conflict.
Munger called the idea “the most ridiculous criticism I’ve ever heard.” He added that it’s as if the ancient Greek hero Odysseus is coming home just because someone told him that “they didn’t like the way you grabbed that spear when you won that battle.”
Shareholders voted against the proposal, along with other measures, including one that would require Berkshire to issue an annual assessment of how it handles climate change issues.
Those seeking investment advice from Buffett and Munger may have taken special note of a question from a shareholder, who asked if there was a stock worth buying now as a hedge against inflation.
Buffett did not answer the question directly, but instead said that the best way to protect yourself from inflation is simply to “be exceptionally good at something,” so your talents and services are always in demand, regardless of the way the financial wind blows.
David Applegarth, an attendee at the Boston meeting, said Buffett missed an opportunity and could have offered a much better answer.
“We were surprised he didn’t say buy shares of Berkshire Hathaway,” Applegarth said.
MarketWatch journalists William Watts and Christine Idzelis contributed to this story.