The annual Berkshire Hathaway meeting, also known as the “Woodstock for Capitalists,” took place on May 4th with a packed audience in attendance. The passing of Charlie Munger, Buffett’s long-time friend and Vice Chairman, led to an increase in attendees. Warren Buffett, CEO and Chairman, along with Greg Abel and Ajit Jain, answered questions for over five hours. The meeting began with a tribute to the late Charlie Munger, highlighting his enduring legacy and wisdom.
Buffett started the meeting by reviewing the first-quarter earnings, which showed a 39% increase from the same quarter last year. He emphasized the importance of operating earnings as the most descriptive way to view Berkshire’s performance, as it removes the short-term volatility of market fluctuations. Buffett also predicted higher investment income in 2024 due to higher yields and cash levels. However, he cautioned against automatically assuming that insurance earnings would quadruple due to potential storms and losses.
A major development at the meeting was Berkshire Hathaway’s sale of a portion of its stake in Apple in the first quarter. Despite selling about thirteen percent of its stake, Apple remains the largest common stock holding in Berkshire’s portfolio, second only to index funds. Buffett praised Apple as a superior business compared to other notable holdings such as American Express and Coca-Cola.
With the passing of Charlie Munger, questions regarding succession planning were raised. While it was known that Greg Abel was in line to take over as chairman and CEO, Buffett expressed his preference for Abel to also take on the responsibility of all capital allocation decisions, including stock picking. However, ultimate decisions regarding succession will be made by the board after Buffett is no longer in charge.
Buffett outlined a simple blueprint for Berkshire’s management going forward, emphasizing goals such as increasing operating earnings, decreasing shares outstanding, and seeking occasional big investment opportunities. This framework provides insight into how Berkshire will perform in the future, both in the short-term and once Buffett steps down. Buffett’s vision for the company’s future and his confidence in the leadership team’s ability to carry on his legacy were evident throughout the meeting.
Overall, the Berkshire Hathaway meeting served as a platform to honor the memory of Charlie Munger while also showcasing the company’s financial performance and strategic direction under Buffett’s leadership. As Berkshire continues to navigate the changing economic landscape, investors can look to Buffett’s guidance and the company’s proven track record for stability and growth. The future succession planning and investment strategies outlined at the meeting signal a confident and steady course for Berkshire Hathaway moving forward.
