Warren Buffett Pays Tribute to Charlie Munger and Outlines Berkshire’s Goal to Grow Earnings
Warren Buffett, the legendary investor and CEO of Berkshire Hathaway, recently took the stage at the company’s annual meeting to honor his business partner Charlie Munger, who passed away last year. The meeting marked Buffett’s 60th since he assumed control of Berkshire in 1965, and he used the occasion to outline the company’s objective of increasing earnings.
Buffett, now 93, has become more reclusive in recent years and rarely appears publicly to discuss Berkshire’s operations. However, he expressed his optimism regarding the company’s future during the meeting, acknowledging that he was aware of his advancing age but still committed to the pursuit of financial success.
The event served as a poignant reminder of Munger’s significant role in Buffett’s life and the evolution of Berkshire Hathaway. In a touching tribute video, the company showcased historical photos of Omaha from 1924, illustrating the enduring legacy of Munger’s influence on the company’s development. Munger, known for his wit and sharp retorts, played a crucial role in shaping Berkshire Hathaway into what it is today.
Looking at Berkshire’s first-quarter earnings report, the company’s cash pile has swelled to a staggering $189 billion as of March 31. However, there was a noticeable decrease in the size of Berkshire’s stake in Apple, with indications that the company has sold approximately 13% of its Apple shares during the quarter. This shift in holdings sparks speculation regarding Berkshire’s investment strategy and the implications for its portfolio diversification.
Apple’s CEO, Tim Cook, was present at the meeting, which further emphasizes the significance of Berkshire’s relationship with the tech giant. Buffett has long extolled Apple’s leadership and market dominance, but concerns have been raised regarding the company’s growing influence within Berkshire’s investment portfolio.
Buffett’s key message during the meeting revolved around the company’s focus on increasing operating earnings. This declaration underlines Berkshire’s commitment to sustainable growth and shareholder value.
In downtown Omaha, hundreds of eager shareholders eagerly lined up overnight to secure a prime spot at the highly anticipated meeting. Many attendees traveled from afar, such as Serena Lam, an investment portfolio manager from Hong Kong, who flew over 25 hours to attend and gain Buffett’s perspective on various investment prospects.
At the meeting venue, Warren Buffett was joined by Vice Chairman Greg Abel and Vice Chairman Ajit Jain. Abel, designated as Buffett’s successor, will assume the role of chief executive in 2021, causing stakeholders to closely examine the company’s future. Berkshire, a conglomerate with diverse business interests spanning industries such as insurance, railroads, and food, faces numerous challenges. These challenges include the delicate balance of growth via acquisitions without overpaying, considerations for paying dividends, and efficiently deploying the significant cash reserves at its disposal.
The succession plan for Buffett’s role remains a central concern for shareholders. Berkshire, valued at $862 billion, boasts an extensive portfolio of stocks, with Apple holdings alone amounting to nearly $150 billion. The market performance of the company’s stock has seen a respectable 23% rise over the past year, although it slightly lags behind the 25% gain of the S&P 500 index. Over the last decade, Berkshire has experienced an impressive 218% increase, surpassing the S&P’s gain of 172% over the same period.
As the meeting progressed, Buffett fielded inquiries covering a range of topics, from major investments such as Apple and Occidental Petroleum to the impact of elevated interest rates on Berkshire’s operations. The event also involved shareholders voting on proposals related to climate, diversity, and China, with Buffett openly opposing all six. Finally, attendees had the opportunity to explore exhibits featuring products from Berkshire-owned companies, offering a chance to indulge in a variety of Berkshire-affiliated merchandise.
Ruth Gearhart, a long-time shareholder attending the meeting, filled her bags with delectable treats from See’s Candies and culinary tools from Pampered Chef. Gearhart’s primary focus, however, was on Buffett’s succession plans. Her trust in Buffett’s leadership was evident as she expressed confidence in the company’s preparedness for the future, despite her reluctance to see Buffett step down.
