Berky Meeting Nuggets 2024

The first Saturday in May brought with it another Berkshire Hathaway annual shareholders meeting.  I was only able to attend the morning session this year, but I was able to pick up the afternoon session from the national video and audio feed.

Among the things I felt were noteworthy:

For the first time since this meeting became what it is, Vice-Chair Charlie Munger wasn't sitting next to Warren Buffett.  Charlie died just short of his 100th birthday last year, and he was missed.  A main reason for me to attend the meeting was to see him make funny, smart-ass comments about the state of certain national and international affairs.

This year the company movie that's always shown before the meeting was all about Charlie, with clips of prior meetings and skits.  At the end Buffett eulogized Munger, saying while Buffett may have been Berkshire's general contractor, Charlie was its architect. 

Buffett was again joined on stage by the current co-CEOs, Greg Abel and Ajit Jain.  Abel, who is the Chairman and CEO in-waiting, basically took on Munger's old role of answering questions after Buffett had given his responses.  Buffett even accidentally referred to Abel as "Charlie" at the start of the meeting.

Buffett reported that Berky is likely to exceed holding $200 billion in cash(!) this quarter, money they'd rather invest in company acquisitions, if they could find reasonably priced ones.

Another huge crowd attended.  At the beginning of the meeting, even the seats behind the stage were nearly full, which I've never seen before.  You can't see anything but a video board from there.

As has become the norm, most shareholder questions came from people attending from other countries, notably Europe and Southeast Asia.  That they would travel this far for what is not a televised meeting is a little bit cultish, even to me who travels about 150 miles.

Given the opportunity to be heard more, I thought Abel did very well with his responses, and it left me with confidence he's going to handle the CEO job just fine.

Berky Meeting Nuggets 2023

This year's Berkshire Hathaway annual shareholders meeting in Omaha, was very similar in structure to last year, when the event returned in-person post-pandemic.  A crowd said to approach 40,000, including corporate celebrities like Bill Gates and Tim Cook, gathered to listen to Warren Buffett (age 92) and Charlie Munger (age 99) answer questions again for about five hours.  Vice-Chairs Greg Abel (future CEO) and Ajit Jain were also on stage to answer questions in the morning session.

A summary of some items that stuck with me:

• While the 2022 crowd seemed smaller, perhaps due to people getting used to streaming the meeting post-pandemic, the 2023 was as large as I've ever seen it.

• Early on, when discussing the quarterly results that had been released that morning, Buffett showed a chart showing that over the past 5-10 years, Berky has held about $125 billion in short-term U.S. Treasury bills (cash).  Until last year paid at little as 0.04% interest, generating about $50 million a year.  Due to last year's interest rate increases, that same amount of cash this year is projected to generate about $5 billion a year!

• Buffett noted the recent regional bank failures, and said that while the law says the FDIC insurance limit is $250,000 for accounts, that isn’t how America is going to behave in a banking crisis.  If the contagion would be too great, the federal government would bail them out.  So as a practical matter, there is no FDIC insurance limit for depositors, especially in larger banks.

• Jain took a few insurance operations questions, and mentioned how GEICO is doing better, but still has a long way to go to catch up to Progressive in telematics technology.  Abel took a few utility and railroad questions, and is clearly ready to become the next CEO.  In fact, the company movie included videos from prior meetings where the question about succession was asked -- a question no longer asked.

• Both Buffett and Munger saw the enormous potential in artificial intelligence, but didn’t see it ultimately replacing human intelligence.

• Buffett quote of the day:  "What gives you opportunities is other people doing dumb things."

• Just before the lunch break, some too-smart-by-half dude quoted Munger from prior meetings / interviews to question whether he still believed it was 'stupid' and 'ignorant' for people to not get the "untested mRNA" COVID vaccine.  He simply replied, "Yeah, sure."

• Munger had lots of other memorable quotes as usual, but it was his term 'diworsification' that most won't remember.  He used it to refer to those who preach investing 'diversification' at all costs.  Munger and Buffett have long stated that if you only have a few good ideas, you should concentrate on those instead of hedging your bets on a bunch of other things that aren't as good.

As usual, there was so much more.  Here's a link to this meeting and others.

Berky Meeting Nuggets 2022

After a three-year, Covid-19-related hiatus from in-person shareholder meetings, we die-hard Berkshire Hathaway meeting attendees met in Omaha for Woodstock For Capitalists.

There were few changes from the last gathering in 2019.  Most importantly, the great Warren Buffett (age 91) and Charlie Munger (age 98) were again sitting on a stage answering questions for about five hours.  Vice-Chairs Greg Abel (future CEO) and Ajit Jain were also on stage to answer questions in the morning session.

Buffett seemed particularly in a mood to talk, as there were far fewer questions than in past years -- he even joked about it after the lunch break, noting they'd only answered seven questions in the morning session, apparently because someone (him) talked a lot.

My summary of the environment and some of what was said:

• A smaller crowd than in the past, probably due to the pandemic and people getting used to watching the live stream of the meeting.  Also, there was more room to roam in the convention area, things were more spread out.

• These guys hate the way so many approach stock market investing.  They treat it like a 'gambling parlor' now that securities prices frequently are unattached to fundamentals. Munger in particular brought up Robinhood (investment platform) and how people are now paying dearly for leveraging their money and on their misplaced faith in it.

• As much as these guys hate the stock market casino action, they REALLY hate cryptocurrency, which they believe is bad for stable currency economies and will be worthless one day.  Buffett made the same comment about it that he used for gold investors years ago, which is why invest in a non-producing asset that's only value is what another is willing to pay for it.

• On cryptocurrency, here's Munger's exact quote: "Well, in my life I try and avoid things that are stupid and evil and make me look bad in comparison with somebody else. And bitcoin does all three. In the first place, it’s stupid because it’s very likely to go to zero.  In the second place, it’s evil because it undermines the Federal Reserve system and the national currency system, which we desperately need to maintain its integrity and government control and company on.  And third, it makes us look foolish compared to the communist leader in China. He was smart enough to ban bitcoin in China, and with all of our presumed advantages of civilization -- we are a lot dumber than the communist leader in China."

• Upon answering a question about investing during inflation like we have now, Buffett said the best investment anyone can make is to invest in themselves.  Make yourself an expert at what you like to do -- if you're one of the best, people will pay you regardless, and you will do well.

• Also on inflation.....Buffett mentioned there was about $800 billion of Federal Reserve cash in circulation 10 or 15 years ago, and now there’s something like $2.2 trillion of currency in circulation.  That’s about $7,000 per person, every man, woman, and child in the U.S., a lot of which has come from the stimulus programs due to the pandemic.  He said it's no wonder we have inflation now -- but we probably had to do what we did.

Of  course, there was so much more.  Below is a link to this meeting and others.

https://buffett.cnbc.com/annual-meetings/

Berky Meeting Nuggets 2021

Unfortunately again this year, only virtual attendance was allowed at the Berkshire Hathaway annual shareholders meeting.  It was still quite different than last year, when the meeting was held in an empty arena in Omaha.

This year, the meeting was held in a studio / ballroom in Los Angeles, to make it easier for Charlie Munger to attend and participate.  Everybody missed having him around to make his smart aleck comments last year, including Warren Buffett.

I watched the entire stream again, almost five hours of Buffett and Munger answering questions submitted by email.  Buffett first kicked off the meeting by noting that not one of the 20 top companies by market capitalization 30 years ago are still among the top 20 today.  The point being, no one knows how things are going to change in the coming years.

This year, more questions were directed or re-directed toward the co-COOs, Ajit Jain and Greg Abel, so we got to hear more from them.  Which leads to the biggest reveal from the meeting.....

Munger inadvertently mentioned that Greg, (not "Greg or Ajit") would maintain the Berky culture, implicitly admitting Abel would become the CEO.  Buffett confirmed this after the meeting, and while it was highly expected, it was the first public confirmation of something that has been a closely guarded secret for many years.

Aside from that slip of the tongue, the 97-year-old Munger didn't disappoint, sharing his disgust for things like cryptocurrencies, which he described as "contrary to the interests of civilization."  Both Buffett and Munger also held noted disdain for special purpose acquisition companies (SPACs), due to the self-interest of the participants over shareholders.  Same for new investing apps like Robinhood, which Buffett described as a "casino group that's joined the stock market."

Near the end, one of the best quotes came from Munger when he said about the past year, ""If you're not a little confused by what's going on, you don't understand it."

Buffett signed off by saying he hoped we could all get back together in person next year in Omaha.  I plan to be there.