Warren Buffett will kick off Berkshire Hathaway’s annual shareholder meeting this Saturday riding high, with shares of the conglomerate at a record and its myriad of operating businesses and equity investments primed to benefit from the U.S. economy reopening from the pandemic.
The event will be held virtually without attendees for a second time because of Covid-19. This year, however, the 90-year-old Buffett is taking the meeting to Los Angeles so he can be by 97-year-old Berkshire Vice Chairman Charlie Munger’s side once again. Munger resides in Los Angeles and missed the last annual meeting due to travel restrictions. It will be the first time that the annual meeting will take place outside of Omaha, Nebraska.
While “Woodstock for Capitalists” will be missing the capitalists once again, the tone of the meeting may more likely resemble the meetings of old with shareholders clamoring for Buffett’s outlook on the world following an unprecedented year and the Oracle more likely to oblige after holding back last year with the country just starting its fight through the deadly and uncertain pandemic.
“I hope there would be a pretty sharp contrast in the overall demeanor of the folks at Berkshire,” said Cathy Seifert, a Berkshire analyst at CFRA Research. “Last year, there was a degree of an alarm just because this was an event that was very difficult to price. It was kind of written all over his face. This annual meeting, the tone from an underlying operational perspective should be more relaxed.”
(You can view last year’s annual meeting and the others at the Warren Buffett Archive.)
Berkshire’s other vice chairmen, Ajit Jain and Greg Abel, will be on hand to answer the three-and-a-half hours of questions as well. Berkshire’s B shares were up more than 1% on the week, bringing their return in the last 12 months to more than 47%.
Among the big topics shareholders will want answers on:
Airlines: His thoughts on the industry after revealing at last year’s meeting he sold his entire stake (with the shares then subsequently roaring back).
Deploying the $138 billion cash pile: Why he’s been buying back a record amount of Berkshire’s stock instead of making one large acquisition and what his plan is going forward.
Market outlook: His thought’s on the stock market’s overall valuation following the pandemic comeback
Bubbles?: Cryptocurrencies and the other possible market manias that have popped up amid the huge rush of retail investors into markets
Life after Buffett and Munger: Berkshire’s succession plan
Dumped airlines
At the last annual meeting, Buffett revealed that Berkshire sold the entirety of its equity position in the U.S. airline industry, including stakes in United, American, Southwest and Delta Air Lines, worth north of $4 billion.
“The world has changed for the airlines. And I don’t know how it’s changed and I hope it corrects itself in a reasonably prompt way,” Buffett said at the time. “I don’t know if Americans have now changed their habits or will change their habits because of the extended period.”
The sale conveyed a pessimistic view on the industry from the legendary buy-and-hold investor. Many Buffett watchers were left disappointed, however, as shares of those carriers soon embarked on an epic rebound, rallying triple digits from 2020 lows. Even president Donald Trump weighed in on the trade back then, saying that Buffett has been right “his whole life,” but made a mistake selling airlines.
