Preview: 6 things you must know before Berkshire Shareholder Meeting
The 2021 Berkshire Hathaway Annual Shareholder Meeting is a big event for many value investors and fans of Warren Buffett, and his business partner Charlie Munger.
This year, Moomoo is the Exclusive Title Sponsor and will broadcast the live-streaming event at 1:30 pm ET on May 1, 2021.
The Berkshire annual meeting itself isn't enough - it's just a 30-minute corporate event - the real highlight is Buffett and Munger taking questions and answering for more than 3 hours.
1. A broader group: Warren Buffett and Charlie Munger
Charlie Munger, who is Buffett's right-hand man in his role as the vice chairman of Berkshire Hathaway, missed last year's meeting. This year, he will be back to attend the meeting.
The outspoken Munger is popular with the Berkshire faithful. At the preview meeting of the 2021 Berkshire Annual Shareholder Meeting, Munger's comments were selected by most of the audience as the best part of the Q&A session.
In February, Charlie Munger spoke at the Daily Journal Corporation's annual shareholder meeting, of which Munger is chairman of the board.
He spoke on everything from GameStop's share price surge, to Bitcoin's value.
So, what can we expect from him this time?
He spoke on everything from GameStop's share price surge, to Bitcoin's value.
So, what can we expect from him this time?
2. Berkshire outpaces stock market gains. How about Q1 earnings?
On May1st (same day of the meeting), Berkshire will release its FY2021 Q1 earnings.
Berkshire shareholders will likely be in a good mood with the stock on a roll this year. The class A stock is up 18% this year, ahead of the S&P 500’s 12% total return, though it badly lagged behind the index in the past 2 years.
Over the 1965-2020 the return of Berkshire’s assets has been 20% a year. The compounded rate of growth has led to incredible investment returns clearly outpacing a benchmark such as the S&P 500.
3. Aggressive stock repurchase program
Berkshire’s aggressive stock repurchase program will probably be a major topic at the meeting. In Q4 2020, the company bought back about $9 billion of Berkshire shares, bringing the total 2020 repurchase to a record $24.7 billion.
However, Berkshire still has a sizable cash reserve of $138 billion even after its 2020 buyback.
Now the question is raised: How many more shares will be repurchased in 2021 as its stock price rallies?
According to Barron’s, Berkshire was estimated to have bought back about $5 billion of stock from year-end through early March. Barron’s guess is that Berkshire probably didn’t match the fourth-quarter total of $9 billion in the first quarter.
“In no way do we think that Berkshire shares should be repurchased at simply any price. I emphasize that point because American CEOs have an embarrassing record of devoting more company funds to repurchases when prices have risen than when they have tanked. Our approach is exactly the reverse.”
--Buffett said in the annual letter
4. Buffett’s view about the current investment landscape
Warren Buffett once advised investors to be “fearful when others are greedy, and greedy when others are fearful.”
However, Buffett’s investment moves last year disappointed many value investors who expected he would make big purchases after the sell-off. Also, it’s noteworthy that Berkshire has a sizable cash reserve of $138 billion as of the end of 2020.
Last year, Berkshire bought stocks of $Verizon(VZ.US$ and $Chevron(CVX.US$, but also sold a net $8 billion of stocks, including a group of airlines, and stakes in $JPMorgan(JPM.US$ and $Goldman Sachs(GS.US$.
At the Berkshire annual meeting, investors may ask about the overall market and future acquisition plans.
5. Bitcoin: Will Buffett insist on staying away from cryptos?
Bitcoin and other cryptocurrencies have been going through the roof.
Warren Buffett has never been a fan of Bitcoin, and even called it “rat poison squared” and not a legitimate asset class. In 2019, Buffett had called bitcoin a ‘gambling device’.
“There’s been a lot of frauds connected with it. There’s been disappearances, so there’s a lot lost on it. Bitcoin hasn’t produced anything.”
--Buffett
Now that Bitcoin has soared, investors must be curious about Buffett’s opinion.
6. Who will be Buffett's “successor”?
There’s been lots of speculation about who is going to take over Buffett’s leadership of Berkshire. As Buffett will turn 91 in August, the topic of his successor grabs investors’ attention.
The top 2 candidates identified by the market are Ajit Jain and Greg Abel.
- Ajit Jain, Vice Chairman of Insurance Operations for Berkshire Hathaway, was described by Buffett as the one who made more money for Berkshire shareholders than anybody else.
- Greg Abel is the chairman and CEO of Berkshire Hathaway Energy, and vice-chairman of non-insurance operations of Berkshire Hathaway.
“The most likely successor in our view, who Warren Buffett regularly praises, is Greg Abel.”
--In September 2017, JP Morgan analyst Sarah DeWitt wrote in a note.
Dear moomooers, which topic is of most interest to you?
We'd love to hear your thoughts!
Source: Barron's, CNBC, Yahoo Finance
We'd love to hear your thoughts!
Source: Barron's, CNBC, Yahoo Finance
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
Read more
Comment
Sign in to post a comment
Moomoo Official Account
Let’s learn how to trade with moomoo!
Check out my tutorial.
46KFollowers
140Following
18KVisitors
Follow
102861656 : Invest in things you understands and stay away from those you do not
BK Super : Utmost interest - current investment landscape : risks and opportunities. Would love to hear his comments on ARK's investment thesis.
Investing with moomooOP 102861656: True!
Investing with moomooOP BK Super: Hope you've found good enough answers after meeting~