Buffett strikes Wall St, praises cash, takes up nuclear risk at meeting in Berkshire

OMAHA, Neb., April 30 (Reuters) – Warren Buffett on Saturday used the annual meeting of Berkshire Hathaway Inc (BRKa.N) to wallow in Wall Street profits and highlight the benefits of cash after spending tens of billions on stocks and companies quickly, while addressing the risk to his conglomerate from the threat of nuclear war.

The meeting in downtown Omaha, Nebraska, was Berkshire’s first inviting shareholders since 2019, before COVID-19 derailed at the United States’ largest corporate rally in two years. It allowed shareholders to ask questions directly to Buffett and Berkshire’s deputies Charlie Munger, Greg Abel and Ajit Jain.

Buffett’s comments came after Berkshire, long criticized for having too much free cash, revealed that they had acquired more than $ 51 billion in shares in the first quarter, including a much larger stake in Chevron Corp (CVX.N).

Berkshire also said that operating profit in the first quarter had changed little, as many of its dozens of businesses resisted supply chain disruptions caused by COVID-19 variants and the Ukraine invasion. read more

Buffett, 91, said it “feels really good” to address shareholders in person, after holding the last two meetings without them. Participants included JPMorgan Chase & Co (JPM.N) CEO Jamie Dimon and shareholder actor Bill Murray, among others.

Buffett had in his annual shareholder letter in February lamented the lack of investment opportunities.

That prompted a shareholder to ask what changed in March, when Berkshire bought 14.6% of Occidental Petroleum Corp (OXY.N) and agreed to pay $ 11.6 billion for insurance company Alleghany Corp (YN).

Buffett said it was simple: he became interested in Occidental after reading an analyst report, and in Alleghany after CEO Joseph Brandon, who once ran Berkshire’s General Re business, wrote to him.

“Markets do wrong things, and sometimes Berkshire gets a chance to do something,” he said. “It’s not because we’re smart … I think we make sense.”

Berkshire’s cash share fell more than $ 40 billion to around $ 106 billion in the quarter, but Buffett assured shareholders that they should not worry.

“We always want a lot of money,” he said. “It’s like oxygen, it’s there all the time, but if it disappears in a few minutes, it’s over.”

Buffett and Jain stumbled upon answers when asked if the Ukraine conflict could degenerate into nuclear war.

Jain, who has garnered Buffett’s praise for decades, said he had a “lack of ability” to estimate Berkshire’s insurance exposure.

Buffett also seemed dissatisfied, saying there was a “very, very, very low” risk of a nuclear attack, even though the world had “come close” during the 1962 Cuba crisis.

“The world strikes a coin every day,” Buffett said. “Berkshire has no answer. There are certain things we do not write guidelines on because we would not be able to do anything good with them anyway.”

Buffett also chose a favorite destination, Wall Street, and said that the stock market sometimes resembled a casino or a gambling partner.

“It has existed to an extraordinary degree over the last couple of years, encouraged by Wall Street,” he said.

Munger, 98, for his part, repeated Nancy Reagan when he criticized bitcoin, saying that if an adviser suggested you put your retirement account there, “just say no.”

Abel, who would succeed Buffett as CEO if Buffett could not serve, defended Berkshire’s BNSF railroad, saying there was “more to do” to improve operations and customer service, and compete against rival Union Pacific Corp (UNP.N).

Shareholders will later vote on whether Berkshire should replace Buffett with an independent chairman – he will remain CEO – and reveal how dozens of companies are promoting diversity and addressing climate risk and reduction.

Hours before the doors opened at 07.00 CDT (1200 GMT), thousands of people began to gather outside the arena in the center that housed the meeting.

Berkshire had estimated lower attendance than in 2019, and around 10% to 15% of the seats in the normally full arena were empty.

As with other Berkshire-sponsored events this weekend, almost all of those present did not wear masks, although all needed proof of covid-19 vaccination. CNBC.com webcaster also the meeting.

“I bought a chair from Walmart so I could sit down,” said Tom Spain, founder of Henry Spain Investment Services in Market Harborough, England, who arrived at 3:15 a.m. to attend his third meeting. “Everyone has used it. Next year I might take a big container of coffee with me and give it out.”

Lauritz Fenselau, a 23-year-old owner of a software startup from Frankfurt, Germany, showed up at 4 a.m. for his first meeting.

“Warren and Charlie are the priests,” he said. “It’s like a pilgrimage.”

Andres Avila from Boston, a big fan of Buffett, arrived in Omaha just five hours before queuing at 4:45 a.m. with an umbrella to ward off the rain.

“I have a bunch of my idols here,” he said.

Reporting by Jonathan Stempel and Carolina Mandl in Omaha, Nebraska; editing by Megan Davies, Ros Russell and Diane Craft

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