Berkshire Hathaway’s annual meeting is here: What to expect from Warren Buffett and Charlie Munger 2022-04-29 11:29:26


Warren Buffett at Berkshire Hathaway’s annual meeting in Los Angeles, California. May 1, 2021.

Gerard Miller | CNBC

Warren Buffett About to launch Berkshire HathawaySaturday’s annual shareholder meeting was on a high, as Oracle of Omaha finally got back into the deal-making game and the group’s outperforming stock surpassed a major milestone.

With tens of thousands of shareholders in attendance, this year Woodstock Capitalists will return in person in Omaha, Nebraska for the first time since 2019 after the Covid-19 disruptions. (CNBC will host files Exclusive live broadcast Saturday starting at 9:45 a.m. ET)

Investors from around the world are waiting to hear from the 91-year-old Chairman and CEO, along with his right-hand man Charlie Munger at age 98, after a string of investing activities – stakes in Occidental Petroleum And HP As well as the acquisition of the rich. The popular event will not only include hours of commentary from the legendary duo, but also exhibits from a wide range of Berkshire holding companies – from ice cream maker Dairy Queen to insurance company Geico and battery maker Duracell.

“This meeting is for people who are high value investors who are huge fans of Buffett and Munger like me,” said Whitney Tilson, CEO of Empire Financial Research who has been going to the Berkshire shareholder meeting for 25 consecutive years. “It’s an opportunity to learn from the professors. It’s just intellectually, psychologically and emotionally satisfying.”

Here are some important topics that contributors will want to hear from Buffett:

  • Market Outlook: The stock market suffered a correction amid fears of inflation and rising rates. How should investors deal with the volatility and difficult economic landscape?
  • Post more coins: Buffett has been putting capital to work recently. Will the buying spree continue? Will he carry out an “elephant-sized” deal?
  • A slowdown in buybacks: With Berkshire shares significantly outperforming, will Buffett stop or slow his aggressive buyback program?
  • Life After Buffett and Munger: Berkshire succession plan
  • China, cryptocurrency, Russia’s invasion of Ukraine and more

Looking for market guide

Berkshire shares are jumping high in a volatile market. Class A shares It hit a major milestone last month, crossing half a million dollars for the first time as investors embraced the safety of the diversified conglomerate during geopolitical turmoil and rising inflation. The stock is up more than 10% this year, compared to a 10% loss for the S&P 500.

At the 2020 annual meeting during the depth of the pandemic, Buffett gave investors much-needed reassurance, saying that the US economy will withstand this emergency as it has with all previous battles and crises.

Fundamentally nothing can stop America,” Buffett said. “The American miracle, American magic has always prevailed, and will do so again. … In World War II, I was convinced of this … I was convinced of this during the Cuban Missile Crisis, 9/11, the financial crisis.”

The macro environment for investors has only gotten tougher this year as the Federal Reserve rushes to tame 40-year-old inflation with severe tightening. Meanwhile, fears of a recession crept in after a so-called yield curve inversion and weak fingerprints in economic data. Not to mention that the United States has yet to run out of the dangers of a pandemic.

“A lot of people have had successes in their portfolio outside of Berkshire Hathaway, which has been an amazing success,” Tilson said. “I think there’s probably more tension there.” “People are looking for wisdom and guidance in a very strange market with war and high inflation.”

Prior to the recent buying spree, Buffett had been a net seller of stocks for the past five quarters as he saw few trades among the higher stocks.

slow down repurchase

The main driver behind Berkshire’s outperformance over the past year has been aggressive buybacks. The company repurchased $27 billion of its own stock last year.

“One might expect buybacks to slow just because the price of Berkshire has gone up,” said David Cass, a professor of finance at the University of Maryland and a Berkshire shareholder. “Buffett will not buy back the shares unless he considers them at a sufficient discount from the intrinsic value.”

There was evidence that the reduction had already begun. Berkshire used $6.9 billion to buy back stock in the fourth quarter, slower than the $7.6 billion repurchased in the third quarter. Buffett’s annual letter revealed that the giant group had repurchased $1.2 billion of its own stock through February 23.

big investment?

Berkshire’s recent investments made a slight impact on his $140 billion war fund, leaving Buffett-watchers to wonder if a major investment might be on the horizon.

“The recent declines in the stock market resulting from the expected tightening of monetary policy by the Federal Reserve may provide additional attractive opportunities for Buffett in the near future,” Cass said.

in March , Berkshire agreed to buy Ghanaian insurance company for $11.6 billion cash Money. The deal would mark Berkshire’s largest acquisition in six years when it bought industrial company Precision Castparts for $37 billion, including debt.

However, Buffett has yet to make the “elephant-sized acquisition” he has been promoting for years. The investor had previously blamed an expensive market for its inaction.