Buffett, 90, also spent part of Berkshire’s annual meeting Saturday addressing the recent boom in retail and day trading. A lot of people have entered the stock market “casino” over the past year, he said.
Tax:
Buffett said President Joe Biden’s proposals for a corporate tax hike would hurt Berkshire shareholders. He added that antitrust laws and tax policy could change things for the company but new tax laws wouldn’t alter its no-dividend policy.
Succession:
Buffett and Munger, 97, fielded the majority of questions at Saturday’s meeting, but their two top deputies Abel and Ajit Jain, who runs the insurers, also shared the stage. Investors were able to get a closer look at the pair who are considered the top candidates for the job.
Munger dropped a little mention of the post-Buffett years that drew speculation on social media about the most likely candidate to succeed Buffett. The CEO was pointing out that decentralization doesn’t work everywhere because it requires a certain type of culture that businesses need to have.
“Yeah, but we do,” Munger insisted. “And Greg will keep the culture.”
Abel has long been considered the top candidate to replace Buffett, especially when he was promoted to a vice chairman role overseeing all non-insurance operations, which gives him a wide array of responsibilities, including oversight of the railroad BNSF and the energy business.
Errors:
Buffett offered a few mea culpas during Saturday’s meeting. He noted that selling some Apple Inc. stock last year was a mistake and even said that Haven, the health care venture with JPMorgan Chase & Co. and Amazon.com Inc., thought it could fight the “tape worm” of American health care costs but the worm won.
“That was probably a mistake,” Buffett said of those Apple stock sales last year. Berkshire still owned a roughly $110 billion stake in the iPhone maker at the end of March. “In fact, Charlie, in his usual low-key way, let me know that you thought it was a mistake too,” he said to Munger, who shared the stage with him.
Cash Pile:
Before the annual meeting started, the company released its first-quarter earnings, giving investors a dive into the 19.5% operating profit gain during the period.
Berkshire ended the quarter with a near-record $145.4 billion of cash on hand as it continued to generate funds faster than Buffett could deploy them. But Buffett also ended pulling back on some capital deployment levers during the period. He bought back just $6.6 billion of Berkshire’s own stock, short of the record $9 billion set in prior quarters, and ended up with the second-highest level of net stock sales in the first quarter in almost five years.
This article was provided by Bloomberg News.