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Home / Business / Tough questions are mixed with requests for life advice that Warren Buffett answers to his shareholders | Money

Tough questions are mixed with requests for life advice that Warren Buffett answers to his shareholders | Money



As Warren Buffett seems to put Berkshire Hathaway's growing pile of cash to work, his next big investment may well be in his own company.

The possibility that Berkshire would buy back his own stock was a common topic for the discussion. Saturday as Buffett appeared before more than 40,000 shareholders at the center's CHI Health Center arena for Berkshire's annual meeting. The event was also livestreamed internationally both English and Mandarin.

Buffett had recently signed an interest in buying up as much as $ 1

00 billion in Berkshires over $ 500 billion in outstanding stock if he believed the stock was undervalued enough, and he repeated that raised top figure several times on Saturday.

"There is no master plan on anything but buying aggressively when we like the price," Buffett said at some point. "If it's underpriced, we'll take advantage of it."

Buffett spent more than five hours on Saturday, providing insights into Berkshire, finance, and financial markets, and handing out life councils. And while chairman Buffett is now 88, and vice president Munger checks in at 95, it didn't seem to have missed a blow in the past year.

Buffett seemed sharp as always, and filled his answers with his trademark and wisdom. And the right man Munger was often his usual dull self.

The meeting also remained largely Warren and Charlie Show. Although Buffett has nominated several top runners in recent years, and one of them will probably succeed him as Berkshire's next CEO and chairman – he and Munger took the stage alone, Buffett regularly slips off a Coke, Munger munching on See's Candies peanutbrittle.

When asked at some point why shareholders do not hear more from other Berkshire leaders, Munger said that it is largely a function of Berkshire's streamlined, unbureaucratic way of making decisions.

"You just have to endure us, Sa Munger.

When Buffett again gathered shareholders in his hometown for the annual Berkshire celebration of capitalism, it was not surprising that the first question he fell on Saturday was in stock purchases. To Buffet's recent comments, Berkshire sent a first quarter revenue report early on Saturday morning, showing that Buffett had bought back $ 1.7 billion over the first three months of this year.

Exceeded $ 1.3 billion in Stocks Buffett bought back in the whole of last year. In the previous five years, Berkshire did not buy anything back.

Share purchases are in some way a function of Buffett having had problems deploying Berkshire's growing pile of cash, which at the end of 2018 stood At $ 112 billion, while Buffett has been looking for an "elephant-size" corporate purchase for years, he has complained about the high prices of larger companies ls that can move the needle in Berkshire.

While there are many ways to spend Berkshire money, Buffett said Saturday, "using it intelligently is the problem."

Buffett said there was no magic in the $ 100 billion he threw out for repurchase, even though it is close to Berkshire's current cash account. He also did not say what price he would be willing to pay for the Berkshire stock, a secret he had to keep to avoid signaling future buybacks or affecting the price of the stock.

A questionnaire noted that the latest Berkshire repurchases came higher prices than the stock traded so recently as last December. Buffett acknowledged that he had previously suggested that he was marshaling cash at the time of an acquisition that fell, but he said he believes the shareholders still benefit from the latest buybacks, if not dramatically.

"We have no ambition … to spend a dime, unless shareholders are better off doing it," Buffett said.

A buyback obstacle is likely to be the loyalty of many Berkshire shareholders to the shares and Buffett, as evidenced by the thousands flocking to Omaha each year.

Buffett acknowledged that the company's "A" shares, like many of Berkshire's long-time investors like themselves, don't act often. But the creation of "B" shares many years ago makes stocks available on the market.

"There is no doubt we can spend $ 100 billion to repurchase shares, more of the money will surely be spent on B than the A," he said.

Buffett said that when Berkshire buys back shares, it must Ensure that all sellers, as Buffett considers business partners, have all the information needed to make informed decisions. [19659021] Berkshire Hathaway Q&A: Buffets on Success Plans, Bitcoin, Amazon, and Young Investor Advice "class =" img -responsive lazyload full "width =" 1763 "height =" 1175 "data-sizes =" auto "data-srcset =" https://bloximages.newyork1.vip.townnews.com/omaha.com/content/tncms/assets /v3/editorial/4/e3/4e3af5d3-83f6-5850-abfa-11e24e94a9da/5ccdb0731804c.image.jpg?resize=200%2C133 200w, https://bloximages.newyork1.vip.townnews.com/omaha.com/ content / tncms / assets / v3 / editorial / 4 / e3 / 4e3af5d3-83f6-5850-abfa-11e24e94a9da / 5ccdb0731804c.image.jpg? resize = 300% 2C200 300w, https://bloximages.newyork1.vip.townnews.com /omaha.com/content/tncm s / assets / v3 / editorial / 4 / e3 / 4e3af5d3-83f6-5850-abfa-11e24e94a9da / 5ccdb0731804c.image.jpg? resize = 400% 2C267 400w, https://bloximages.newyork1.vip.townnews.com/omaha .com / content / tncms / assets / v3 / editorial / 4 / e3 / 4e3f5d3-83f6-5850-abfa-11e24e94a9da / 5ccdb0731804c.image.jpg? resize = 540% 2C360 540w, https://bloximages.newyork1.vip. townnews.com/omaha.com/content/tncms/assets/v3/editorial/4/e3/4e3af5d3-83f6-5850-abfa-11e24e94a9da/5ccdb0731804c.image.jpg?resize=750%2C500 750w, https: // bloximages .newyork1.vip.townnews.com / omaha.com / content / tncms / assets / v3 / editorial / 4 / e3 / 4e3af5d3-83f6-5850-abfa-11e24e94a9da / 5ccdb0731804c.image.jpg? resize = 1200% 2C800 1200w, https://bloximages.newyork1.vip.townnews.com/omaha.com/content/tncms/assets/v3/editorial/4/e3/4e3af5d3-83f6-5850-abfa-11e24e94a9da/5ccdb0731804c.image.jpg?resize= 1700% 2C1133 1700w "/>

James Shanahan, an analyst who oversees Berkshire for Edward Jones in St. Louis, said the buybacks revealed early on Saturday were unexpectedly given the price A Berkshire was trading earlier this year. That fact means there will be more in the future.

"It's a big number and a big surprise because the warehouse was not weak," Shanahan said. "I think we need to revise our thinking about what is possible in buybacks."

Several shareholders interviewed Saturday said they were OK with the buy-back of Berkshire, especially given Buffett's inability to find other ways to distribute the capital.

"If you were to repurchase $ 10 billion, I wouldn't be against it," said Bijan Dastmalchian from Scottsdale, Ariz.

Not that the 24-year-old would consider selling his own shares. "kind of in the board forever." And he was not the only one who expressed such thoughts.

"Hell, no," Chris Tesari in Los Angeles said at the thought of selling his shares, he has come to Omaha for Berkshire meetings For 23 years.

Despite all the love shown to Buffett on Saturday, he sometimes faced difficult questions.

A shareholder asked Buffetts lovely incredible support for democratic candidates, Berkshire said would face higher taxes and more regulation if "socialist" policies were put in place.

Buffett said he separates his personal policies from Berkshire, noting that he voted for many Republicans over the years, and also explained that he is not socialist.

"I is a card-carrying capitalist, "he said.

A member of a San Francisco investment club consisting of police officers also asked why Buffett has been so silent about the series of scandals at the Wells Fargo Bank involving fake accounts, unauthorized fees, and mortgage and car insurance abuse.

Buffett acknowledged that Wells Fargo made "mistakes in judgment", "incentivized some crazy things" and said the leaders did not do it quickly. And he said the shareholders like Berkshire paid a price for it.

But both he and Munger refused to criticize Sloan, Buffett, saying, "We have no evidence that he was doing anything." Munger said he wanted Sloan to continue running the bank.

Buffett added that he wished CEOs would not go away "so rich" after doing stupid things, drawing applause.

Analyst Shanahan said he was disappointed with the answers, which certainly will not be popular with many.

"I cringed a little when I heard them defending Tim Sloan," Shanahan said. "It felt like much more than wrong in the judgment."

A questioner asked why the shareholders did not hear more from Berkshire directors Ajit Jain and Greg Abel, who can help prepare shareholders for the day when Buffett is no longer around. Jain monitors Berkshire's insurance business; Abel looks over Berkshire's other wholly owned companies. It is believed that one – many analysts speculate Abel – will even succeed with Buffett.

Buffett replied that the hearing from Jain and Abel was probably a good idea, saying that the format of the Q and A session was "not set in stone at all." He then invited the shareholders to ask the management questions.

A shareholder later took Buffett up on it and asked Jain about how he priced insurance risk. Buffett later told Abel, who heads Berkshire's energy units, to answer a few energy-related questions.

Buffett said shareholders will never hear from Todd Combs and Ted Weschler, who several years ago were given the authority to invest part of Berkshire's equity portfolio. Any information on why they make the investment decision they make is proprietary. "We're not an investment advisory organization," Buffett said.

More children called for questions, and often ask Buffett about how to lead their lives.

A boy asked Buffett if there is a way to learn to delay satisfaction.

Buffett, known for his scanty ways, joked that he was trying to "spend two or three cents of every dollar I earn." But he told the boy that it is important to live your life and do what pleases you and your family.

"Don't go overboard on delayed satisfaction," he said.