Warren Buffett, the legendary investor and chairman of Berkshire Hathaway (BRK.A), assured shareholders at the company's annual meeting that his successors are well-prepared to lead the conglomerate forward. In Omaha, Nebraska, Buffett lauded Vice Chairmen Greg Abel and Ajit Jain, emphasizing their readiness to assume greater responsibilities once he steps down. Abel, who was named Buffett's successor as CEO in 2021, will have the final say on capital allocation decisions for Berkshire's portfolio of public stocks. "When you've got somebody like Greg and Ajit, why settle for me?" Buffett remarked, underscoring their pivotal roles in the company's future.
Despite reducing Berkshire's (BRK.B) stake in Apple (AAPL) by 13%—a move that cut its holdings to $135.4 billion from $174.3 billion—Buffett was effusive in his praise for the iPhone maker. He referred to Apple as "an even better business" than two of Berkshire's oldest and largest investments, American Express (AXP) and Coca-Cola (KO). With Apple CEO Tim Cook in attendance, Buffett hailed the iPhone as "one of the greatest products, and it may be the greatest product, of all time," reinforcing Apple's status as Berkshire's largest stock investment.
Market Overview:
-Berkshire Hathaway's annual meeting highlights leadership succession plans and record cash pile.
-Despite trimming its Apple stake, the company remains bullish on the iPhone maker.
-Berkshire's stock price trails the S&P 500 year-to-date but outperforms over the past decade.
Key Points:
-Warren Buffett expresses confidence in designated successors Greg Abel and Ajit Jain.
Berkshire's first-quarter operating profit jumps 39% to a record $11.2 billion.
-The company's cash hoard surges to $189 billion due partly to Apple stake reduction (13%).
-Buffett praises Apple as "an even better business" than Berkshire's legacy investments (Amex, Coca-Cola).
-Berkshire shareholders re-elect directors and reject shareholder proposals opposed by Buffett.
Looking Ahead:
-Abel pledges to fight lawsuits against Berkshire's PacifiCorp utility unit.
-Berkshire's cash pile could reach $200 billion this quarter, reflecting market valuation concerns.
-Apple is likely to remain Berkshire's largest stock holding despite the recent sale.
The annual meeting, often dubbed the "Woodstock for Capitalists," was the first since the passing of Buffett's longtime business partner, Charlie Munger. Buffett paid tribute to Munger, crediting him as the "architect of today's Berkshire," and shared a touching video montage that chronicled their partnership through the years. Despite the somber absence of Munger, the event remained upbeat, with thousands of shareholders lining up in the rain to hear Buffett share his insights on Berkshire's portfolio and broader musings on life.
Berkshire Hathaway posted a 39% jump in operating profit to a record $11.2 billion in the first quarter, while its cash pile reached an all-time high of $189 billion. Buffett expects this to grow to $200 billion this quarter, citing high stock market valuations and geopolitical risks. Despite these concerns, shareholders re-elected all 14 directors and rejected six shareholder proposals opposed by Buffett. The 93-year-old investor concluded his remarks with optimism, stating, "I enjoy managing money for the people who trust me. If I'm lucky, I can go on for six or seven years, or it might end tomorrow."
