Berkshire Hathaway CEO Warren Buffett (L) and Vice Chairman Charlie Munger will attend the 2019 Annual General Meeting of Shareholders in Omaha, Nebraska on May 3, 2019.
Johannes Eisele | AFP | Getty Images
Warren Buffett Kick off Berkshire HathawayThis Saturday’s annual shareholders’ meeting is at record highs, with a myriad of businesses and equity investments prepared to benefit from the US economy resuming from a pandemic.
The event will be held virtually without a second attendee, thanks to Covid-19. But this year, 90-year-old Buffett is having a meeting in Los Angeles, so he can be back on the side of 97-year-old Berkshire Vice Chairman Charlie Munger. Manger lives in Los Angeles and missed the last annual meeting due to travel restrictions. This is the first time that the annual meeting has been held outside Omaha, Nebraska.
“Woodstock for capitalists” loses capitalists again, but the tone of the meeting is likely to resemble an old meeting with shareholders demanding Buffett’s worldview after an unprecedented year.
Cathy Seifert, Berkshire Analyst at CFRA Research, said: “Last year there was some caution just because it was a very difficult event to price. It was like it was written on his entire face. At this annual meeting, basic operations The tone from the point of view needs to be more relaxed.
(Last year’s annual meeting, etc. Warren Buffett Archive.. )
Other Berkshire Vice-Presidents, Ajit Jain and Greg Abel, will also be waiting to answer questions during the three-and-a-half-hour event. Berkshire B Share It rose more than 1% a week and profits for 12 months were more than 47%.
Here are some of the big topics that shareholders are asking for answers:
- Airlines: His thoughts on the industry after he revealed at last year’s meeting that he had sold all his shares (then the shares soared)
- Deploy a $ 138 billion cash pile: Why is he buying back a record amount of Berkshire shares instead of making one major acquisition, and what’s his plan?
- Market outlook: His thoughts on the overall valuation of the stock market after the pandemic revival
- foam? : Cryptocurrency and other market enthusiasts emerged as retail investors surged into the market
- Life after Buffett and Manger: Berkshire successor plan
Buffett unveiled Berkshire at last annual meeting Sold the entire equity position In the US aviation industry.This is included United shares, American, Southwest And Delta Air Lines, Worth a total of over $ 4 billion.
“For airlines, the world has changed, and I don’t know how it has changed. I hope it fixes itself in a reasonably quick way,” Buffett said at the time. “I don’t know if Americans have changed their habits now or for long periods of time.”
The sale conveys a pessimistic view of the industry from legendary buy-and-hold investors. However, many Buffett watchers remained disappointed. The share of these carriers quickly embarked on a spectacular rebound, up three digits from the 2020 lows. At the time, even former President Donald Trump took part in the trade, saying Buffett was right in “his life.” I made a mistake in selling the airline.
“He may admit that this rate of recovery was faster than expected,” said CFRA’s Seifert. “The airline’s disposition may have been a function of their belief that what’s happening in the aviation industry is mundane and may not be cyclical. It may be what investors want him to do. It’s one great distinction that may not be. “
Airline stocks have recovered significantly over the past year, but many argue that the recession may have radically changed the industry and the road to a full recovery remains steep. .. United Airlines this month Despite the continued economic recovery, the recovery of business and international travel is still far away.
“He may still be right about the aviation industry, where travel is slowly returning and there are too many planes,” said James Shanahan, an analyst at Edward Jones. “Maybe he’s still right about it, but he’s certainly wrong about stocks.”
Apple As of the end of 2020, it was still the largest conglomerate investment in common stock. Buffett’s conglomerate also appeared to be dialing back its financial exposure.Berkshire JP Morgan Chase And PNC Financial While reducing positions at the end of last year Wells Fargo Equities have been reduced by nearly 60%.
“Given Berkshire Hathaway’s legacy and all its businesses, including railroads, manufacturing, retail and utilities, it’s all an old economic company,” Shanahan said. “The way airline stocks are sold and how the portfolio is constructed after the financial stocks are sold now looks like a much newer economy, along with great performance at Apple.”
Shanahan estimated that Berkshire repurchased another $ 5 billion of its shares in the first quarter, based on an agent’s submission.
As of the end of 2020, the conglomerate was still sitting in a huge cash war treasure chest of over $ 138 billion. Buffett has not yet made the “elephant-sized acquisition” he has advertised for many years. At last year’s meeting, a legendary investor gave a simple reason for his negligence.
“We are not doing anything. I’ve never seen anything so attractive. “ Buffett said. “Obviously we’re not doing anything big. We want to do something very big. On Monday morning, something of $ 30 billion, $ 40 billion, $ 50 billion It means you can come to me with it. Look, we will do it. “
The trading environment has become increasingly competitive over the past year due to the proliferation of SPACs or special purpose companies. According to SPAC Research, more than 500 blank-check deals with over $ 138 billion funds are currently looking for target companies.
“This is an important company with a significant cash position. Investors have the right to know if they intend to roll out cash,” Seifert said. “They have the right to have more than just an excuse. If it’s the same old story, investors are likely to start getting a little tired. But stocks have recovered well, so they complain less. It won’t happen. “
Regarding specific successor development plans, Buffett and Manger are now non-elderly, but shareholders may not benefit further.
Abel, Vice Chairman of Berkshire’s non-insurance business, is considered a top candidate for Buffett’s successor.
“I don’t expect him to talk about inheritance in more detail than ever before,” Shanahan said. “Promoting the positions of Abel and Jain to the role of Vice-Chair and making them available and attending the Annual Meeting speaks for itself. I don’t think he needs to say more. . “
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Buffett and Manger will be together again on Saturday at Berkshire’s annual meeting
Source link Buffett and Manger will be together again on Saturday at Berkshire’s annual meeting