Written by Jonathan Stempel and Ko Gui Chin
OMAHA, Neb. (Reuters) – Warren Buffett assured Berkshire Hathaway shareholders on Saturday that the executives who will replace him are ready for the job, and Berkshire’s iPhone He praised Apple, although he downsized its position as a manufacturer.
Speaking at Berkshire’s annual meeting, the legendary investor paid tribute to his late business partner Charlie Munger and said the conglomerate’s cash pile, currently at a record $189 billion, will continue to grow. He said he expected it to continue.
The meeting was Buffett’s 60th since 1965, when he led Berkshire from an ailing textile company to an $862 billion behemoth that owns BNSF Railway, Geico Auto Insurance, Dairy Queen and dozens of other businesses. Transformed.
Buffett, 93, told shareholders that vice chairman Greg Abel and Ajit Jain have proven they are the right people to lead Berkshire after he retires.
Mr. Abel and Mr. Jain, who was named CEO to succeed Mr. Buffett in 2021, have directly overseen Berkshire’s operating subsidiaries since 2018.
“Why would you be happy with me when you have people like Greg and Ajit?” Buffett said. “It went very well.”
“I don’t really know how[Abel]is doing it, but I can tell you that we have the right people,” he added.
Mr. Buffett said that when Mr. Abel, 61, becomes CEO, he wants him to have final say on capital allocation decisions for Berkshire’s public equity portfolio.
Investors have long considered Todd Combs and Ted Weschler, who manage part of Berkshire’s $335.9 billion stock portfolio, and the candidates are likely to manage some or all of the portfolio. I was watching.
The gathering, part of a weekend that Buffett dubbed “Woodstock for Capitalists,” was the first since Munger died in November at age 99. Mr. Buffett described Mr. Munger, his longtime friend and mentor, as “the architect of today’s Berkshire.”
Buffett has shown no intention of resigning, telling shareholders he “feels fine” but joking that he shouldn’t have signed a four-year contract.
Reduce Apple stock and increase cash
Before the meeting, Berkshire announced first-quarter results that included a 39% increase in operating profit to a record $11.2 billion.
Surprisingly, Berkshire sold about 13% of its Apple shares, reporting that the value of its stock decreased from $174.3 billion to $135.4 billion. Apple stock fell 11% in the quarter.
This sale was the main reason Berkshire’s cash holdings skyrocketed. Buffett said cash could rise to $200 billion this quarter, reflecting high stock market valuations and risks from geopolitical conflicts.
Despite reducing his stake in Apple, Buffett praised the company as an “even better business” than American Express and Coca-Cola, two of Berkshire’s oldest and largest investments.
Buffett, along with Apple CEO Tim Cook in the audience, said the iPhone was “one of the best products of all time, probably the best product of all time.”
Berkshire invested in Apple in 2016, and Mr. Buffett, usually a tech-phobe, came to see Apple as a consumer goods company with strong pricing power and loyal customers.
Although some investors have expressed concern that Apple is too large a part of Berkshire’s stock portfolio, Buffett says that, barring any unforeseen events, Apple will remain the company’s largest stock investment. Stated.
Meanwhile, Mr. Abel has vowed to fight a lawsuit seeking tens of billions of dollars from Berkshire’s utility arm PacifiCorp over the 2020 Oregon wildfires. He said this was a considerable challenge and said many of the claims were unfounded.
Shareholders re-elected all 14 Berkshire board members and rejected six shareholder proposals opposed by Buffett.
At the beginning of the meeting, shareholders watched a video tribute to Munger, including scenes of Omaha from 1924, when Munger was born, and clips of Buffett and Munger over the years.
Mr. Munger was a regular on stage with Mr. Buffett at meetings and was known for succinctly and harshly rebutting Mr. Buffett’s musings about Berkshire, the economy, Wall Street and life.
Berkshire’s stock price has increased 23% since last year. That’s less than the Standard & Poor’s 500’s 25% rise, but Berkshire is up 218% over the past decade, compared to the S&P’s 172% rise.
Lines formed several hours before the meeting.
Before the rally, thousands of people lined up in the rainy weather, sometimes hours in advance, to enter the arena. When the doors opened at 7am, many people ran for good seats.
The weekend also included an exhibit hall where shareholders could purchase merchandise such as Berkshire T-shirts and Squishmallows toys at the Berkshire-owned company’s trade show.
Investment manager Selina Lam, 32, who traveled from Hong Kong with 40 others, said she arrived at 2:30 a.m.
“I want to meet Warren Buffett,” she said. She said, “He wanted to know his views on Japanese stocks, so he was on a plane for more than 25 hours.”
As usual, Buffett interjected his comments about Berkshire’s portfolio with musings about wealth and life, including his own.
“I enjoy managing money for people who trust me.” “I like the feeling of being trusted. If I’m lucky, I might be able to do it for six or seven years, and it’ll be over tomorrow.” Maybe,” he said.
(Reporting by Gui Qing Koh and Jonathan Stempel in Omaha; Additional reporting by Scott Morgan in Omaha and Davide Barbuscia in New York; Editing by Ira Iosebashvili, Megan Davies, Cynthia Osterman, Jason Neely and Diane Craft)