Berkshire Hathaway 2022 Annual Meeting
Last Saturday was the Berkshire Hathaway annual meeting in Omaha, Nebraska. This is the first time since before the pandemic that Warren Buffett and Charlies Munger held the meeting in person. Tens of thousands of shareholders made the trip from all over the world to attend the meeting and hear Buffett’s thoughts. Warren Buffett at the age of 91 and Charlie Munger at the age of 98 talked and answered questions for around 5 hours. The annual meeting is referred to as “Woodstock for Capitalist” and had some of the most powerful people in business in attendance such as: Jamie Dimon CEO of J.P. Morgan Chase, Tim Cook CEO of Apple, Bill Gates and Dan Gilbert. What are some of the key takeaways from the meeting this year? Here are some of the highlights:
Berkshire Goes On Buying Spree
Berkshire Hathaway has been buying big! In the first quarter of this year Berkshire has purchased $51,856,000,000 worth of stock and sold $9.7B for a net $41.4B. Some of the major purchases in companies include Apple and Chevron. Berkshire bought 121M shares worth $17B and now have a $25.9B stake in Chevron and it now is the 4th largest holding in Berkshire’s portfolio. This plus the Occidental Petroleum purchase means they have around $40B allocated toward oil companies. Another one of their favorite stocks that they continued to purchase is Apple, which now makes up 40% of the Berkshire portfolio. Warren Buffett said he would have continued to buy Apple but the stock price got too high and he had to stop. Berkshire also bought back shares of its own stock during this period. Below is a picture of one of the slides Buffett showed towards the beginning of the meeting to display those numbers.
Berkshire Will Always Hold a lot of Cash
Even after these purchases as of March 31, 2022 Berkshire still had $35.542 billion in cash and cash equivalents. He explained that with the nature of their business they will always have cash on hand, and explained “we believe in having cash, there will be more times in history where if you don’t have it you don’t get to play the next day.” Buffett continued “its like oxygen, it is there all the time, but if it disappears for a few minutes it’s all over.” That balance as of March 31st is low according to Buffett because of the purchases they have made. Previous quarters their cash positions got as high as $140B.
Very interesting to see how Buffett and his team at Berkshire think about these drops in the market and their long term time horizon. Their purchases also ring true to their strategy of buying companies that are easy to understand and fall within their circle of competence.
Very Negative View on Bitcoin, Frequent Trading & Robinhood
Not surprisingly enough both Warren Buffett and Charlie Munger both railed on owning any bitcoin. Buffett even went as far as to say that if you offered him all of the bitcoin in the world for $25 he would not take that deal. Buffett’s major reason for not owning bitcoin is that it is purely speculation and holds no real value because “it doesn’t produce anything.” Charlie Munger went even farther by saying Munger went further on criticizing the asset. “In my life, I try and avoid things that are stupid, evil and make me look bad in comparison to somebody else…and bitcoin does all three,” he said. Munger said bitcoin was stupid because it was likely to go to zero, evil because it undermines the role of the Federal Reserve and the financial system, and makes the U.S. look foolish “relative to the communist leader of China” who effectively moved to ban bitcoin.
Buffett and Munger both spoke out against the financial industry for turing Wall Street into a “gambling parlour.” He states that they have been able to make a fortune by buying mispriced businesses because other people have been mispricing them.
You can read their most recent quarterly 10Q by clicking the link below.
To schedule a call to review your investments Click Here