On May 3, local time, Berkshire Hathaway's annual shareholders' meeting, known as the "Spring Festival Gala of the investment community", kicked off in the small town of Omaha, USA. Unlike previous years, the scene of the two Bamang on the same stage has become a swan song, and at this year's shareholders' meeting, it will be Warren Buffett and the company's vice chairman GregAbel and AjitJain takes the stage. The conference lasted for three days, and the most talked about was the Q&A session.
What else should we keep an eye on at this year's 59th Annual General Meeting?
|Two "successors"
In this letter to shareholders, Buffett clearly mentioned the two successors, Greg Abel and Ajit Jain. The two will also join Warren Buffett at Berkshire's annual shareholder meeting on May 4.
As we all know, Berkshire's business model is to use the platform of insurance companies, obtain a lot of cheap money, and then invest in excellent assets around the world, so the division of labor between the two successors is also different. Among them AjitJain is the one in charge of "financing", and as the CEO of Berkshire's insurance business, he is in charge of the foundation business of this business empire.
Jain is in charge of financing, so Greg Abel is in charge of "stock trading". In his 2024 letter to shareholders, Warren Buffett made it clear that GregAbel is responsible for all of Berkshire's non-insurance businesses and is in every sense ready to become Berkshire's CEO.
Of course, Buffett also said that with the current large size of Berkshire's conglomerate, it is almost "impossible to achieve jaw-dropping results" in the next few years.
Reduced holdings in Apple and increased holdings in energy stocks
While Apple remains Berkshire Hathaway's largest holding, it reduced its holdings in the fourth quarter of last year to include an increase in energy stocks such as Chevron. Apple stocks have underperformed in recent months this year after Warren Buffett reduced his stake in Apple.
According to the 2023 annual report, approximately 79% of the total fair value of Berkshire Hathaway's equity investments is concentrated in five companies. Among them, American Express is $28.4 billion, Apple is $174.3 billion, Bank of America is $34.8 billion, Coca-Cola is $23.6 billion, and Chevron is $18.8 billion.
Berkshire Hathaway achieved revenue of $364.482 billion in 2023, compared to $302.089 billion in the same period last year, and Berkshire Hathaway achieved a net profit of $37.574 billion in the fourth quarter of 2023, compared with a profit of $18.080 billion in the same period last year.
Berkshire Hathaway's cash reserves rose to a record $167.6 billion in the fourth quarter of last year. Berkshire Hathaway said about $9.2 billion was used to buy back shares in 2023.
Betting on the Japanese stock market and issuing yen bonds
In April this year, Warren Buffett's Berkshire Hathaway priced a number of yen bond transactions, raising a total of 263.3 billion yen. Berkshire Hathaway has become one of the largest overseas issuers of yen bonds, issuing yen bonds eight times since 2019. As of September last year, Berkshire Hathaway had issued about $7.6 billion in yen bonds.
Berkshire Hathaway has been increasing its investment in the Japanese stock market since August 2020, when Berkshire Hathaway first announced that it would take a 5% stake in Japan's "Big Five" trading companies (Itochu Corporation, Marubeni, Mitsubishi, Mitsui and Sumitomo). In February this year, Warren Buffett mentioned in a letter to shareholders that he would maintain long-term investment in five Japanese trading companies, Itochu, Marubeni, Mitsubishi, Mitsui & Co., and Sumitomo Corporation, as well as Occidental Petroleum.
In his letter to shareholders, Buffett said: "Each of these five companies spends only 1/3 of their earnings on dividends. The large sums of money kept by these five companies were used both to build many of their businesses and, to a lesser extent, to buy back shares. Like Berkshire Hathaway, these five companies are reluctant to issue shares. ”
Buffett said that when the economy is in turmoil, Berkshire Hathaway's goal will be to be an asset to the nation and help extinguish the financial fires rather than be one of the many companies that inadvertently or intentionally ignite the fires. Buffett said that while the stock market is much larger than in early years, today's active participants are neither emotionally stable nor better educated. The market is more like a casino now than it was when it was younger.
Concerns about AI
The AI craze is in full swing, and at last year's shareholder meeting, Buffett voiced his concerns about AI, contrary to the global surge. Given Berkshire's huge stakes in Apple, Amazon, and Snowflake, all of which are aggressively deploying AI, it will be interesting for investors to see if Buffett has a new perspective on AI and tech stocks.
In addition, digital currencies have always been a hot topic at shareholders' meetings. Since the beginning of this year, the price of cryptocurrencies, including Bitcoin, has reached a record high. Although Warren Buffett is one of the staunch opponents of Bitcoin, whether he will have new insights into the digital currency will also be something that investors are looking forward to.
