First Berkshire Hathaway annual meeting without Charlie Munger: What to expect from Warren Buffett

When Warren Buffett kicks off Berkshire Hathaway‘s annual shareholder assembly on Saturday, the absence of Charlie Munger might be on everybody’s thoughts.

Some 30,000 rapt shareholders are descending on Omaha for what’s been referred to as “Woodstock for Capitalists.” Pandemic lockdown aside, will probably be the primary with out Munger, Buffett’s longtime companion who handed away in November a couple of month shy of his a hundredth birthday.

“The assembly will solely have one comic up there” this 12 months, stated David Kass, a finance professor on the College of Maryland and a Berkshire shareholder, who has attended greater than 20 annual conferences. “There will be, for instance, a extra critical, much less humorous background.”

The annual assembly might be completely broadcast on CNBC and livestreamed on CNBC.com. Our particular protection will start Saturday at 9:30 a.m. ET. For the primary time, Berkshire will broadcast its annual assembly film that had beforehand all the time been reserved just for these in attendance in Omaha. Many speculate this 12 months’s might be a tear-jerker tribute to Munger.

Vice Chairman of Non-Insurance coverage Operations Greg Abel, Buffett’s designated successor, will fill Munger’s seat within the afternoon session, serving to reply shareholder questions. Vice Chairman of Insurance coverage Operations Ajit Jain will be part of Buffett, the CEO, and Abel within the morning session. Buffett has stated they count on to discipline about 40 to 60 questions Saturday.

“The tone of the assembly is actually going to be rather a lot totally different with out Charlie,” stated Steve Examine, CEO of Examine Capital Administration and a longtime Berkshire shareholder. “He was the one that actually made it humorous. It is getting nearer and nearer to the transition, so it is good to see Ajit and Greg on the stage.”

Munger’s funding philosophy rubbed off on Buffett early on, giving rise to the sprawling conglomerate value $860 billion that Berkshire is at present. Generations of buyers additionally appreciated Munger’s trademark bluntness and humor, uncommon to come back by on Wall Road.

If something, the ocean of Buffett admirers will cherish his folksy knowledge much more because the “Oracle of Omaha” turns 94 in lower than 4 months.

Listed below are a few of the large matters shareholders need Buffett to debate:

Inflation: Value pressures have proved sticky currently. What influence is inflation having on Berkshire’s companies? Which companies are being harm (and helped) probably the most?Apple: Why did Berkshire trim its Apple stake within the fourth quarter? Buyers will search for Buffett’s outlook on the tech inventory given its challenges in China and up to date information of a large, $110-billion inventory buyback.Secret inventory decide: Berkshire has been shopping for a monetary inventory for 2 quarters straight. What’s it?Document money: Does Buffett plan to place his file degree of money to work?A slowdown in buybacks: With Berkshire shares outperforming this 12 months, will Buffett proceed to decelerate his personal buyback program?Life after Buffett: Extra particulars on Berkshire’s succession plan.

Macro commentary

The annual assembly comes at a difficult time for markets as a pickup in inflation places the brakes on the Federal Reserve’s plan to chop rates of interest this 12 months. Whereas the Berkshire CEO would not make funding selections primarily based on day by day headlines, buyers nonetheless are keen to listen to any market commentary and steerage from the protege of the daddy of worth investing, Ben Graham.

“They do not time their investments,” Kass stated of Berkshire. “The financial system goes by means of cycles. They completely ignore cycles. They make investments for a long term, and so they actually ignore what just about what the Federal Reserve is doing. I imagine that might be his reply.”

Apple

Shareholders could search an evidence as to why Berkshire bought about 10 million Apple shares (1% of its huge stake) within the fourth quarter. On the finish of 2023, Berkshire owned 905,560,000 shares of the iPhone maker, value greater than $174 billion and taking on greater than 40% of the portfolio.

The transfer got here as a shock to many as a result of Apple has been Buffett’s favourite inventory for years, and he even referred to as the tech large his second-most necessary enterprise after Berkshire’s cluster of insurers. What’s extra, the final time Buffett trimmed this guess, he admitted it was “in all probability a mistake.’

Shares of the iPhone maker received a giant increase Friday after the agency introduced that its board had licensed $110 billion in share repurchases, the most important in firm historical past. Nonetheless, Apple posted a decline in total gross sales and in iPhone gross sales.

Secret holding

There is a small likelihood that Buffett will reveal the id of the thriller financial institution inventory that Berkshire has been shopping for for 2 quarters straight.

Within the third and fourth quarters of 2023, Berkshire requested that the Securities and Alternate Fee maintain the small print of a number of of its inventory holdings confidential. Many speculated that the key buy might be a financial institution inventory because the conglomerate’s price foundation for “banks, insurance coverage, and finance” fairness holdings jumped by round $2.37 billion.

“He’ll remark as late as doable…. Charlie can be the one one that might let it slip every so often. It is not going to occur with Warren,” Examine stated.

Succession

Berkshire’s succession might be entrance and middle at this assembly after Munger’s passing. Abel, turned referred to as Buffett’s inheritor obvious in 2021 after Munger inadvertently made the revelation.

Abel has been overseeing a significant portion of Berkshire’s sprawling empire, together with vitality, railroad and retail. Buffett revealed beforehand that Abel’s taken on a lot of the obligations at Berkshire.

Nonetheless, some questions stay as to who might be serving to allocate capital at Berkshire, and the roles of Buffett’s investing managers Ted Weschler and Todd Combs, who can also be the CEO of Geico.