The general meeting of Berkshire Hathaway has always been a shareholder mystical side, a sort of high mass of the investment to glory of his Pope: Warren Buffett. This cult was even more significant side again, Saturday, May 2, since the investment company is celebrating its half century. “Fifty years of a successful partnership” , promised the poster of the show.
On this point, Berkshire Hathaway is not oversold his performance, which was on the period of 2,850,000%. A result, which is now Berkshire Hathaway one of the largest companies in the world with interests in a variety of groups, ranging from Coca-Cola to American Express through IBM, present in insurance as in the rail transport or energy, for a capitalization exceeding $ 354 billion (316 billion euros). The first quarter results were published yesterday confirms that the recipe still works with an operating profit up 20% and revenue up 7%.
40 000 shareholders gathered
But as they say in the imprint of the stock documents: ” Past performance is no guarantee of future performance. “ And this is the future that was at the center of all concerns of the 40 000 shareholders gathered in the home of Berkshire Hathaway: the city of Omaha (Nebraska), which thus sees its population each year increase by 10% temporarily.
But the cult at Berkshire Hathaway does not take itself seriously. After making his entrance on stage on the song Joe Cocker With a Little Help From My Friends M.Buffett, 84, launched: “Hi, I’m Warren and Charlie here . He hears me and I see. We work together, “ when his old sidekick, Charlie Munger, 91, vice president of the company sat at his side. Before this survey well established curtain, a humorous film was screened in which we saw M.Buffett cause heavyweight boxer, Floyd Mayweather, who was to play a few hours later the “fight of the century” in Las Vegas against Manny Pacquiao. “Mayweather you will go to the mat! “, gives him the octogenarian. “You’re a dead man! “, retorted the boxer before the billionaire absorbs a sip of Coke which it holds 9.3% of the capital and gave sweets made by See’s Candy, another of his companies.
But it is not clear that this adolescent diet is sufficient to reassure shareholders on the looming succession at the head of Berkshire Hathaway. M.Buffett has not designated who will lead the company, but in his letter to shareholders on February 28, Charlie Munger had partially spilled the beans, releasing two names: Ajit Jain, who pilot the insurance business within the group, and Greg Abel, head of the energy game.
Business “going well” in the United States
AG n ‘ has not brought back on this plan. Mr. Buffett simply reminded the ideal profile of his successor: “I will not put at the head of Berkshire someone who has an experience in investment and no operational experience,” has he said.
In the future it was nevertheless question, when a shareholder asked what would happen if an activist investor attacked Berkshire. Buffett replied that there would be interest in separating the different entities of the company in the hope of creating more value for shareholders. “I think it is unlikely in the long or medium term the value of the parts is greater than the whole” , said Buffett, ensuring that the company’s value will continue to grow in the coming years. “Even if all the activists got together, they would not be able to do much better” , he was boastful.
The genius investor also felt the levels currently achieved by the stock indices were not particularly worrying. These levels reflect the fact that business in the United States will “beautifully” . An assessment which is closely related to the level of interest rates in the US, which are close to zero since 2008. “If we continue with these interest rates, equities look very cheap” says he.
Stay open
When asked Mr. Buffett if he could now enjoy the same success s it set off again from scratch, he said that on several occasions over the last fifty years it has been very lucky. “All in the business is to stay open to new ideas with you” . He added that if his best shots were made in the insurance sector, in the case of a fresh start should now certainly invest in something else.
After six hours a barrage of questions, barely interrupted by a lunch break, the 40 000 shareholders came away again delighted. Only the last question was left unanswered. “What would be the smartest question I could ask you? “, asked a man. “I do not think that’s a very good question,” , responded M.Munger. The two investment gurus have beautiful to be a cult, they do not both answers and questions.
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