Buffett slams Wall Street, praises money, tackles nuclear risks at Berkshire meeting 2022-04-30 13:35:00

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OMAHA, Nabil, April 30 (Reuters) – Warren Buffett on Saturday took advantage of Berkshire Hathaway’s annual meeting. (BRKa.N) To stand against Wall Street’s surplus and glorify the advantages of cash after quickly spending tens of billions on stocks and companies, while also addressing the risks to his conglomerate from the threat of nuclear war.

The meeting in downtown Omaha, Nebraska, was the first welcome Berkshire shareholders since 2019, before COVID-19 derailed the largest gathering of US companies derailed for two years. Shareholders were allowed to ask questions directly to Buffett and Berkshire deputies Charlie Munger, Greg Abel and Ajit Jane.

Buffett’s comments came after Berkshire, which has long been criticized for holding so much idle cash, revealed that it raised more than $51 billion in stock in the first quarter, including a much larger stake in Chevron Corp. (CVX.N).

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Berkshire also said first-quarter operating profit did not change much, as many of its subsidiaries withstood the supply chain disruptions caused by COVID-19 variables and the invasion of Ukraine. Read more

Buffett, 91, said it “feels really good” to address shareholders in person, after having had the last two meetings without them. Among the attendees was JPMorgan Chase & Co (JPM.N) CEO Jamie Dimon and actor Bill Murray, a shareholder, among others.

In his annual letter to shareholders in February, Buffett lamented the lack of investment opportunities.

That prompted one shareholder to wonder what had changed in March, when Berkshire bought 14.6% of Occidental Petroleum Corp. (OXY.N) It agreed to pay $11.6 billion to insurance company Alleghany Corp (YN).

It’s simple, Buffett said: He became interested in Occidental after reading an analyst report, and in Alleghany after its chief executive, Joseph Brandon, who was leading General Re in Berkshire, wrote to him.

“Markets do crazy things,” he said, “and sometimes Berkshires get a chance to do something.” “It’s not because we’re smart…. I think we’re sane.”

Berkshire’s cash share fell by more than $40 billion to about $106 billion in the quarter, but Buffett assured shareholders they shouldn’t worry.

“We will always have a lot of money,” he said. “It’s like oxygen, it’s there all the time, but if it’s gone for a few minutes, it’s all over.”

Buffett and Jane stumbled for answers when asked if the conflict in Ukraine could turn into a nuclear war.

Jain, who has won Buffett’s praise for decades, said he had a “lack of ability” to estimate Berkshire’s exposure.

Buffett also sounded alarmed, while saying there was a “very, very, very low” risk of a nuclear attack, even though the world came “closer” during the 1962 Cuban missile crisis.

“The world is flipping a coin every day,” Buffett said. “Berkshire doesn’t have an answer. There are certain things that we don’t write policies on because we won’t be able to improve them anyway.”

Buffett also chose a favorite target, Wall Street, saying that the stock market is sometimes like a casino or gambling partner.

“This has been around to an extraordinary degree in the past two years, with Wall Street encouragement,” he said.

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 will succeed Buffett as CEO if Buffett is unable to serve, defended Berkshire’s BNSF Rail, saying there was “more that needs to be done” to improve operations and customer service, and to compete against rival Union Pacific Corp. (UNP.N).

Shareholders will later vote on whether Berkshire should replace Buffett with an independent chairman – who will remain CEO – and reveal how dozens of companies are promoting diversity and tackling and mitigating climate risks.

Hours before doors opened at 7 a.m. CST (1200 GMT), thousands of people began gathering outside the downtown plaza that housed the meeting.

Berkshire had projected a decline in attendance compared to 2019, and about 10% to 15% of seats in a normally full arena were empty.

As at other Berkshire-sponsored events this weekend, nearly all attendees did not wear masks, although all attendees require proof of COVID-19 vaccination. CNBC.com Also webcast of the meeting.

“I bought a chair from Walmart so I could sit,” said Tom Spain, founder of Henry Spain Investment Services in Market Harborough, England, who arrived at 3:15 a.m. for his third meeting. “Everyone uses it. Next year I might bring a huge container of coffee and give it to her.”

Lauritz Fenselau, a 23-year-old software startup owner from Frankfurt, Germany, showed up at 4 a.m. for his first meeting.

“Warren and Charlie are the priests,” he said. “It’s like a pilgrimage.”

Andres Avila of Boston, a huge Buffett fan, arrived in Omaha just five hours before queuing at 4:45 a.m., carrying an umbrella to fend off the rain.

“I have a bunch of my idols here,” he said.

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Additional reporting by Jonathan Stemple and Carolina Mandel in Omaha, Nebraska; Editing by Megan Davis, Russell and Diane Craft

Our criteria: Thomson Reuters Trust Principles.

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