Once again, the Berkshire Hathaway shareholders' meeting was held in the city of Omaha, Nebraska, USA.
This past Saturday was no ordinary Saturday for their thousands of fans. No, I'm not talking about any rock band, but about two stars of the investment world: Warren Buffett and Charlie Munger. After two years in which it could not be done in person due to the pandemic, the shareholders' meeting of Berkshire Hathaway in person in the city of Omaha, Nebraska, USA.
Although Warren Buffett, the company's chairman, is 91 and his vice-chairman, Charlie, is 98, there was no talk of retirement. The veterans still have plenty of life ahead of them, and not only that: they have a wealth of wisdom to share with us, even with a touch of mischief.
The meeting
The shareholders' meeting lasted more than five hours, allowing them to ask questions, revealing the company's key measures and plans for the future. Warren Buffett said that Berkshire was always criticized for accumulating too much cash, however, on this occasion they invested 41 billion dollars, increasing stakes in the North American oil company Chevron and the video game manufacturer Activision Blizzard, among others.
One participant asked him about the purchase of Occidental Petroleum Corp., as it seemed to contradict the letter he sent to shareholders in February, in which he wrote about the difficulty in finding new investments. He stated that it was simple: he read about the company in an analyst article and then one of its executives recommended it to him. He added: “Markets do crazy things, and occasionally Berkshire has a chance to do something.” “It’s not because we’re smart… I think we’re sane.”
Given Berkshire Hathaway's high exposure to the insurance business, the question arose about how the company was preparing for a nuclear attack or massive cyberattacks. In this regard, Warren Buffett stated that there is an "everyday risk, a very small risk," and that "every day, the world flips a coin to see if those who can cause harm in the world will do so." Meanwhile, Charlie Munger said that “There is no way to protect against a nuclear attack.”
Ajit Jain, Berkshire's vice president of insurance operations, said he was concerned about the difficulty of calculating true exposure to such events and that most of his contracts try to exclude nuclear risk. Buffett closed the discussion by mentioning that people tend to worry about things that are unlikely to happen: “Someday the sun will burn out too, but there really isn't room for two countries with large intercontinental ballistic missiles (…). Some people do terrible things, and we just have to hope they're not in a position to act alone.”
Cryptocurrencies
Finally, we couldn't forget to mention something that is well known to be disliked by both Warren Buffett and Charles Munger: cryptocurrencies. The latter warned about the dangers of investing all of his assets in Bitcoin, stating: "When you have your own retirement account and your friendly advisor tells you that you should put all your savings in Bitcoin, just say no." He also stated: "In my life, I try to avoid things that are stupid, evil, and that make me look bad compared to someone else, and Bitcoin does all three."
Warren Buffett then added: “First, it’s stupid because it’s still likely to go to zero. It’s evil because it undermines the Federal Reserve System… and third, it makes us look like fools compared to the communist leader in China. He was smart enough to ban Bitcoin in China.”
Is the Buffett Coin coming?
Warren Buffett wasn't far behind in criticizing the most popular cryptocurrency. He previously claimed it was "rat poison squared," and this time he didn't back down. He stated that if he were offered all the Bitcoins in the world for $25, he wouldn't be willing to buy them because, unlike buying fields or property, "Bitcoin doesn't produce anything."
Something Warren Buffett mentioned, which I personally found quite funny, is that "there are assets that are considered magical but have no value," claiming that someone could even launch their own cryptocurrency, like "BuffettCoin," which would also be useless. I found this comment amusing because in my book "The Three Pocket Investor," released in March of this year, I made a very similar joke, in my case talking about "InverCoin." Of course, I can't claim that he got it from there, far from it.
Finally, Warren Buffett praised Jerome Powell's work as head of the US Federal Reserve. He stated that if the Federal Reserve hadn't done what it did in a very short period of time, things would have gotten difficult. "If you print a lot of money, it's going to be worth less," he said, although he spared the Fed chairman from his criticism: "Jay Powell is a hero. He's very straightforward. He did what he had to do."
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