Insights from Warren Buffett and Berkshire Hathaway's Annual Meeting: Q1 Earnings, Investment Strategies, and Occidental Petroleum Stake
Berkshire Hathaway's $Berkshire Hathaway-A(BRK.A.US$ $Berkshire Hathaway-B(BRK.B.US$ annual meeting, or "Woodstock for Capitalists," was held on May 6th, with shareholders in attendance and the event lasting over five hours. The CEO and Vice Chairman of Berkshire Hathaway, Warren Buffett and Charlie Munger, respectively, were present and answered questions. Two other executives, Greg Abel and Ajit Jain, also joined in answering questions for the first part of the meeting.
During the meeting, Buffett provided insight into Berkshire Hathaway's Q1 earnings, stating that the majority of the company's businesses are likely to have lower earnings in 2023 than the previous year due to the current climate. However, he did note that higher yields should lead to higher investment income in 2023, and insurance underwriting does not "correlate with economic activity."
Buffett took the opportunity to contrast banking with Berkshire Hathaway's insurance business, highlighting the advantages of the latter. The company's float, created by the premiums paid by those purchasing insurance, is now approximately $165 billion, an increase of roughly $1 billion year-to-date.
Berkshire Hathaway's investment in Occidental Petroleum was also discussed during the meeting. Buffett expressed his liking for Occidental Petroleum's position in the Permian basin and management. According to Bloomberg, Berkshire Hathaway is the largest shareholder in the company with a 23.6% stake.
Finally, Buffett noted that Berkshire Hathaway could distribute cash via stock buybacks if the stock became undervalued, but he would prefer to have the money on hand to make substantial acquisitions if any attractive targets became available. This aligns with the company's strategy of investing in businesses with strong long-term growth potential.
Overall, Buffett's comments during the meeting reflected a cautious outlook on the general market sentiment, citing the uncertain climate and lower earnings projections for Berkshire Hathaway's businesses in 2023. However, the company's strong position in the insurance business and ongoing investment in promising businesses like Occidental Petroleum suggest a long-term growth strategy.
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