Berkshire Hathaway’s annual shareholder meeting, often referred to as the “Woodstock for Capitalists,” took place on Saturday, May 4th. This year’s event saw a larger attendance, likely due to the passing of long-time friend and Vice Chairman, Charlie Munger. Warren Buffett, CEO and Chairman, along with Greg Abel and Ajit Jain, Vice Chairmen of Non-Insurance and Insurance respectively, answered questions from shareholders for over five hours. The meeting began with a tribute to Charlie Munger, who died last year at the age of 99, highlighting his enduring legacy and wisdom.
Buffett kicked off the meeting by reviewing the first-quarter earnings, which were 39% higher than the same quarter last year. He emphasized that operating earnings are a more accurate representation of Berkshire’s performance, as it eliminates the short-term market fluctuations. Buffett predicted that with higher yields and cash levels, investment income should increase in 2024. However, he warned investors against automatically assuming that insurance earnings would quadruple, as unexpected storms and losses can still impact the business.
A major highlight of the meeting was Berkshire Hathaway’s decision to sell a portion of its stake in Apple in the first quarter, despite it being the largest publicly traded holding. Buffett praised Apple as a superior investment compared to other notable holdings like American Express and Coca-Cola. The sale of Apple shares raised questions about the company’s future portfolio, particularly in the absence of Buffett’s leadership. However, Buffett hinted that Greg Abel, currently Vice Chairman of Non-Insurance, could potentially take over stock picking and other capital allocation decisions.
Buffett outlined a simple yet crucial blueprint for Berkshire’s future management strategy. The primary goals include increasing operating earnings, reducing shares outstanding to boost earnings per share, and seizing big investment opportunities when they arise. This strategic approach provides insight into how Berkshire will navigate the post-Buffett era and maintain its financial success. With Abel possibly taking on a more prominent leadership role, the company’s future direction remains a topic of interest among shareholders and investors.
Overall, the meeting reflected Berkshire Hathaway’s continued success under Buffett’s leadership, with strong earnings and strategic decision-making. The tribute to Charlie Munger served as a reminder of his significant contributions to the company and the investment community at large. As Berkshire prepares for a future without Buffett at the helm, shareholders and investors can take solace in the company’s well-defined strategy and capable leadership team. Buffett expressed optimism for the future of Berkshire Hathaway, with hopes for continued growth and success in the years to come.
