Warren Buffett takes the stage and meets with Berkshire Hathaway shareholders before their annual meeting in Omaha, Nebraska on May 3, 2024.
David A. Grogan
When does Warren Buffett start his career? Berkshire HathawayAt the AGM on Saturday, Charlie Munger’s absence will be on everyone’s mind.
Some 30,000 enthusiastic shareholders gathered in Omaha for what became known as “Woodstock for capitalists.” Barring a pandemic shutdown, this will be the first shutdown without Munger, Buffett’s longtime partner who died in November about a month before his 100th birthday.
“There will only be one comedian at the meeting this year,” said David Kass, a finance professor at the University of Maryland and a Berkshire shareholder who has attended more than 20 annual meetings. “There will be, let’s say, a more serious, less humorous background.”
The annual meeting will be broadcast exclusively on CNBC and livestreamed on CNBC.com. Our special coverage begins Saturday at 9:30 a.m. ET. For the first time, Berkshire will broadcast a film of its annual meeting, which has previously always been limited to those attending it in Omaha. Many are suggesting that this year will be a moving tribute to Munger.
Vice Chairman of Noninsurance Greg Abel, named as Buffett’s successor, will take Munger’s place at the afternoon meeting to help answer questions from shareholders. Vice President of Insurance Operations Ajit Jain will join Buffett, the CEO, and Abel for the morning session. Buffett said they plan to ask 40 to 60 questions on Saturday.
“The tone of the meeting will certainly be very different without Charlie,” said Steve Check, CEO of Check Capital Management and a longtime Berkshire shareholder. “He was the one who really made it fun. The transition is getting closer and closer, so it’s great to see Ajith and Greg on stage.”
Warren Buffett and Charlie Munger at a press conference during the Berkshire Hathaway shareholder meeting, April 30, 2022.
CNBC
Munger’s investment philosophy was passed on to Buffett early on, giving birth to the sprawling $860 billion conglomerate that is Berkshire today. Generations of investors also valued Munger’s signature candor and humor, which is rarely found on Wall Street.
If anything, Buffett’s sea of fans will appreciate his folk wisdom even more as the Oracle of Omaha turns 94 in less than four months.
Here are some of the important topics that shareholders want to discuss with Buffett:
- Inflation: Price pressures have been severe recently. How does inflation impact Berkshire’s business? Which businesses were hit (and helped) the most?
- Apple: Why did Berkshire reduce its stake in Apple in the fourth quarter? Investors will be keeping an eye on Buffett’s views on tech stocks given the woes in China and recent news of a giant $110 billion stock buyback.
- Secret stock selection: Berkshire has been buying financial stocks for two quarters in a row. What it is?
- Cash entry: Does Buffett plan to put his record levels of money to work?
- Redemption slowdown: With Berkshire shares outperforming this year, will Buffett continue to slow down his own buyback program?
- Life after Buffett: More information about Berkshire’s succession plan.
Macro commentary
The annual meeting comes at a challenging time for markets as rising inflation puts a damper on the Federal Reserve’s plan to cut interest rates this year. While the Berkshire CEO doesn’t make investment decisions based on daily news headlines, investors still want to hear any market commentary and advice from the protégé of the father of value investing. Ben Graham.
“They don’t time their investments,” Kass said of Berkshire. “The economy goes through cycles. They completely ignore cycles. They invest for the long term and actually ignore what the Federal Reserve is doing to a large extent. I believe that will be his answer.”
Apple
Shareholders may struggle to explain why Berkshire sold about 10 million Apple shares (1% of its massive stake) in the fourth quarter. As of the end of 2023, Berkshire owned 905,560,000 shares of the iPhone maker, worth more than $174 billion, and held more than 40% of the portfolio.
The move came as a surprise to many as Apple has been Buffett’s favorite stock for years and he even named the tech giant as his second most important business behind Berkshire’s insurer group. In fact, the last time Buffett cut this bet, he admitted it was “probably a mistake.”
Shares of the iPhone maker rose sharply on Friday after the company announced its board of directors had authorized a $110 billion share buyback, the largest in the company’s history. However, Apple reported a decline in overall and iPhone sales.
Secret holding
There is a small chance that Buffett will reveal the identity of the mysterious bank that Berkshire has been buying for two quarters in a row.
In the third and fourth quarters of 2023, Berkshire required the Securities and Exchange Commission to keep information about one or more of its stock holdings confidential. Many speculated that the mystery purchase could have been bank shares, as the conglomerate’s underlying asset value for “banking, insurance and finance” jumped by about $2.37 billion.
“He will comment on it as late as possible…Charlie will be the only one who lets it slip from time to time. That’s not going to happen with Warren,” Check said.
Continuity
Continuity at Berkshire may be a focus at this meeting following Munger’s passing. Abel became known as Buffett’s heir apparent in 2021 after Munger accidentally made the discovery.
Abel oversaw much of Berkshire’s vast empire, including energy, railroads and retail. Buffett previously said that Abel has taken over most of the responsibilities at Berkshire.
However, some questions remain about who will help allocate capital at Berkshire, as well as the role of Buffett’s investment managers Ted Weschler and Todd Combs, who is also Geico’s CEO.