The Limited Times

Now you can see non-English news...

The pilgrims of capitalism return to Omaha

2022-04-30T19:05:55.123Z


Warren Buffet meets with shareholders again after the pandemic and denounces that the markets look like a casino


The president of Berkshire Hathaway, Warren Buffett, this Friday in Omaha, Nebraska. SCOTT MORGAN (REUTERS)

To attend the meeting of Berkshire Hathaway, Warren Buffet's company, it is necessary to be a shareholder and be vaccinated against covid.

After two years in which the meeting has been held electronically due to the pandemic, thousands of investors have come this weekend as pilgrims to Omaha, a city of 475,000 inhabitants in the state of Nebraska, not far from the geographic center of the United States. United States, to hear Buffet's comments live this Saturday, who has not disappointed his believers.

Received with a thunderous ovation as if he were a rock star, with an ice bucket full of cokes at his side and some boxes of chocolates in front of him, Buffett jokingly reviewed the figures for the first quarter.

Although first-quarter net profit has fallen by half due to derivative adjustments, according to figures released yesterday, Berkshire Hathaway shareholders have reason this year to be happy.

The company's shares are up 8.5% year-to-date, while the S&P 500 index is down 13%.

Buffett has been criticized for not having taken advantage of the pandemic to be more aggressive with his investments when prices were rock bottom, missing one of the rare opportunities.

This Saturday he justified himself by showing his most conservative side: "We have an extreme aversion to incurring permanent losses with your funds," he explained.

“Psychologically, we would die if we lost a lot of his money.

We don't know what the economy will do, but we do know that we wake up every morning and want to have safe investments."

Queues to access the Berkshire Hathaway shareholders' meeting in Omaha, Nebraska. SCOTT MORGAN (REUTERS)

Buffett has now taken advantage of the bad market moment to return to the fray with purchases for some 51,856 million dollars (about 49,400 million euros).

At the end of the first quarter, Berkshire Hathaway had its portfolio investments in Apple ($159.1 billion), Bank of America ($42.6 billion), American Express ($28.4 billion), Chevron ($25.9 billion), Coca-Cola, Kraft Heinz, HP and many other companies, in addition to the unlisted businesses it controls.

Bet on the oil companies

The company still has more than 100,000 million in cash in case opportunities arise.

Its great recent bet has been oil, with strong investments in Chevron and Occidental, which are rising like foam on the stock market with the war in Ukraine and the energy crisis.

"We have invested more than 40,000 million in a hurry, in three weeks, and now we are more lethargic," said Buffet, who has defended maintaining a ten-high cash position: "It's like oxygen."

General view of the CHI Health Center Arena, the multipurpose pavilion where the Berkshire Hathaway shareholders' meeting was held, in Omaha, Nebraska. SCOTT MORGAN (REUTERS)

The Oracle of Omaha, as it is known, has been answering questions for hours.

Those who have taken the floor had been chosen by lottery.

Almost any topic is brought up to Buffet, but two were off limits: politics and his future investments, the event's courtesy rules made clear.

The stock market as a casino

Buffett has exposed his philosophy of investing for the long term, of looking for companies with solid and profitable businesses at a good price.

And he has not spared criticism of the most speculative movements.

"The market is often almost entirely a casino, a gambling hall," he has said, taking aim at Wall Street banks for incentivizing him to charge commissions: "They make a lot of money when people gamble."

But Berkshire also takes advantage of it: “The market does crazy things and sometimes that gives us opportunities.

It's not because we're smart, it's because we're sane," Buffett said.

The vice president of Berkshire Hathaway, Charlie Munger, who was at his side, has reaffirmed the idea: “We have computers with algorithms that operate against other computers.

We have people who know nothing about the stock market, advised by stockbrokers who know even less”, he added.

The multipurpose pavilion with capacity for some 18,000 attendees where the meeting was held opened its doors at 7 in the morning, local time, although there were already queues to access since dawn.

Rarely has the basketball and hockey games that it normally hosts been as crowded as this Saturday.

At 9.15 the great moment has come when Buffett has appeared to start answering his shareholders.

Such is the interest in what Buffett says that this year for the first time CNBC has broadcast the event live.

In reality, the so-called

Woodstock of capitalism

is much more than a meeting.

It is quite a festival that includes a large fair of products manufactured or related to the group, called the Berkshire Bargain Bazaar, a massive picnic for shareholders and parallel meetings, with a program that runs from Friday to Sunday.


Investors and shareholders, shopping at the fair organized by Berkshire Hathaway on the occasion of its shareholders' meeting in Omaha (Nebraska). SCOTT MORGAN (REUTERS)

Along with the thousands of ordinary shareholders there were also numerous personalities from the business world such as the head of Apple, Tim Cook;

from philanthropy, like Microsoft founder Bill Gates, or celebrities like actor Bill Murray.

Shareholders are aware that for biological reasons it is not very likely that the duo of Buffet, 91, and his right-hand man, Munger, 98, will be seen many times again at the meeting. This Saturday the round of questions has been divided into two sessions, with a short break for lunch, and the executive vice-presidents responsible for the insurance areas, Ajit Jain, 70, and the rest of the businesses, Gregory Abel, also participated in the first session, although both rather like stone guests.

In the center, in the foreground, Gregory Abel, head of the energy division of Berkshire Hathaway and designated as Warren Buffett's successor as chief executive of the group. SCOTT MORGAN (REUTERS)

Abel, 59, was tapped last year by Munger, seemingly accidentally, to succeed Buffet as the group's chief executive, albeit with Buffet's son Howard, 67, as non-executive chairman.

Warren Buffet has a salary of $100,000, plus security expenses paid by the company.

His partner Charlie Munger earns the same, far behind both Jain and Abel, who earned $19 million each.

Some shareholders, including Calpers, the largest pension fund in the United States, have already proposed at the board this year to separate the presidency from the executive functions, as is customary in the corporate world, which in practice would imply stripping Buffett from his powers.

There are not many who support the idea and Munger disqualifies it by resorting to the Odyssey: “It is the most ridiculous criticism I have ever heard.

It's like Ulysses came back from winning the Battle of Troy and some guy said, 'I don't like the way you held the spear when you won that battle.'

In Berkshire Hathaway there is no discussion.

As long as he lives and wants, Buffet will monopolize the presidential and executive power.

Like an old Homeric hero.

Source: elparis

All business articles on 2022-04-30

You may like

Trends 24h

Latest

© Communities 2019 - Privacy

The information on this site is from external sources that are not under our control.
The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.