Proving that age is just a number, Berkshire Hathaway chief executive, Warren Buffett, 88, and vice-chairman, Charlie Munger, 95, answered questions for seven hours at the company’s AGM this weekend.
Held, as always, in Mr Buffett’s home town of Omaha, Nebraska, before an audience of thousands, this legendary event, labelled ‘Woodstock for Capitalists’, saw the elderly chairman again demonstrate his folksy charm and financial insights to loyal investors.
Having famously declared, years ago, that he avoided tech stocks, because he “didn’t understand them,” Mr Buffett bought his first stake in Amazon last week, and joked that he would take a blood transfusion from Jeff Bezos.
“What Jeff has done with Amazon has been an absolute miracle, unlike anything else in the corporate world.
“He kept looking at what was coming in and saw what was possible; he’s unbelievable,” Mr Buffett said.
Munger also weighed in on Berkshire Hathaway’s long reluctance to invest in the IT and e-commerce sectors: “I feel like a horse’s ass for not identifying Google earlier. We just sat there sucking our thumbs. We screwed up.”
Berkshire already owns $50bn (€44.59bn) of Apple stock, and will continuebuying in the sector into the future.
Mr Buffett’s and Mr Munger’s careful approach to investing has been a feature of Berkshire Hathaway for decades.
“If you gave me the 100 top graduates of Stanford or Harvard business school, I wouldn’t know how to pick out the ones that would become corporate masterminds,” Mr Buffett said.
“But if you show me somebody that’s run a business for 30 years and has been knocking it out of the park, I can figure that one out.”
Inevitably, Brexit came up for discussion,and Mr Buffett showed no hesitation.
“I am not an Englishman, but I have a feeling it was a mistake to vote to leave, but it doesn’t destroy my appetite, in the least, for making a very large acquisition in the UK,” he said.
Mr Munger added that “Brexit strikes me as a horrible problem, but those are my kind of people; I understand them”.
The question of who will succeed Mr Buffett and Mr Munger was raised, as it has been at the AGM in recent years.
In early 2018, two longtime Berkshire executives, Ajit Jain and Greg Abel, were promoted to the board, and were again referenced as likely successors. Mr Buffett said that the two could one day join him and Mr Munger to answer shareholder questions. “This format is not set in stone,” Mr Buffett said, adding that “Charlie and I won’t be around forever.”
Mr Munger is famous for not mincing his words, as demonstrated when asked about US-China relations.
Think how stupid it would be if the two countries didn’t get along. Stupid on both sides, I might add. It’s a big market, and we like big markets.
Given Mr Munger is a Republican, some observers took this as an oblique criticism of US president, Donald Trump’s current trade policies.
Mr Buffett, a committed Democrat, said: “I’ll just say it: I’m a card-carrying capitalist. You don’t have to worry about me changing in that matter.
“But I also think capitalism does involve regulation. It involves taking care of people who are left behind.”
Berkshire bought back $1.7bn of its own stock during the first quarter, with Mr Buffett indicating further purchases in the future: “We will buy stock when it is trading below a conservative estimate of its intrinsic value — we want to be sure, when we repurchase stock, that those that have not sold are better-off than they were before.”
One shareholder suggested that Berkshire could invest a large proportion of its huge cash pile in a stock market index fund.
Mr Buffett agreed that it might make sense in the future, but added that having $100bn available will allow Berkshire to take advantage of large investment opportunities, when they come up.
“They’ll come in clumps and when other people don’t want to allocate capital,” Mr Buffett said.