Berkshire owns more than 60 businesses. Women are chief executives at six of those businesses, and the Berkshire-owned Ben Bridge Jeweler named Lisa Bridge as president late last year to run the jeweler’s day-to-day operations.
“I feel very good about the decisions we’ve made about our C.E.O.s,” he added.
He did not answer whether Berkshire would push for gender equality on the boards of the companies that Berkshire is invested in.
Mr. Buffett also said it was clear that women had been treated unfairly in the past.
“I have two sisters who are absolutely as smart as I am, and they have better personalities,” he said. “They didn’t remotely have the same opportunities as I had.”
Mr. Buffett said there was still a “pipeline problem” in corporate America, making it hard to find as many qualified women to lead companies.
But, he added, “you can’t use that excuse forever.”
— Emily Flitter
Buffett approves of Apple’s buyback plan.
Berkshire is quickly building its stake in Apple.
Since Berkshire first invested in the iPhone maker about two years ago, the stake has grown into Berkshire’s largest holding. At the end of the first quarter, Berkshire owned $40.7 billion of Apple’s shares, up from $28.2 billion at the end of 2017.
So what does Warren Buffett think about Apple’s announcement that it plans to buy back $100 billion of its shares?
“I’m delighted to see them repurchasing shares,” Mr. Buffett said. “We own 5 percent of it. With the passage of a little time, we may own 6 or 7 percent because they repurchase shares.”
Charles Munger added that he and Mr. Buffett don’t approve of every buyback plan, but he doubted Apple would find an acquisition target at a good price.
“The reason companies are buying their stocks is that they are smart enough to know it’s better for them than anything else,” Mr. Munger said.
What about Microsoft?
Given Berkshire’s investment in Apple, one shareholder wanted to know why Berkshire never invested in Microsoft. The question came with Bill Gates, Microsoft’s co-founder and a director at Berkshire, sitting in the audience.
“In the earlier years, the answer is stupidity,” Mr. Buffett replied. But then Mr. Buffett added that his friendship with Mr. Gates has grown over the years, and he has stayed away from investing “because of the inference” that could be drawn.
And Amazon and Alphabet…
Mr. Buffett has famously avoided investing in tech companies because he didn’t understand them. But one investor wanted to know if Mr. Buffett’s stance is evolving. Beyond Apple, the questioner pointed out that Amazon and Google parent Alphabet have the characteristics of companies Mr. Buffett typically likes to invest in: strong brand names and little competition.
Here’s the reason Mr. Buffett gave for not investing in Amazon:
“The truth is that I’ve watched Amazon from the start, and I think what Jeff Bezos has done is something close to a miracle. The problem is if I think something will be a miracle, I tend not to bet on it.”
As for Alphabet, Mr. Buffett said that he had “made a mistake.” He said he was unable to conclude that at Alphabet’s present prices, its “prospects were far better than the prices indicated.”
He then explained that he didn’t invest in Apple because it was a tech stock. “I went into Apple because I came to certain conclusions about the value with which the capital was being deployed and about the ecosystem,” he said.
The discussion did lead to one of the more humorous exchanges of the meeting:
Mr. Munger: “I’ve been to Google headquarters. It looks to me like a kindergarten.”
Mr. Buffett: “A very rich kindergarten.”
One thing Mr. Buffett and Mr. Munger aren’t fans of? Cryptocurrencies.
Warren Buffett and Charles Munger saved their harshest words for cryptocurrencies.
“Cryptocurrencies will come to bad endings.” Mr. Buffett said, responding to an attendee from Ukraine.
Mr. Buffett’s main argument against cryptocurrencies is the same one he has made about gold: They are not a “productive asset.” That means the value of cryptocurrencies is determined solely by what someone is willing to pay for it.
“If you had bought gold at the time of Christ and you figure the compound rate on it, it’s a couple tenths of a percent,” Mr. Buffett said.
But his criticism didn’t stop there. He said cryptocurrencies attract a lot of “charlatans” and “people of less than stellar character.”
Mr. Munger was perhaps harsher. “It’s just disgusting,” he said.
Mr. Buffett isn’t backing off his comments about guns
In February, Warren Buffett was asked on CNBC about some chief executives distancing their businesses from the National Rifle Association. Mr. Buffett responded: “I don’t think that Berkshire should say we’re not going to do business with people who own guns. I think that would be ridiculous.”
That comment came up at Saturday’s meeting, and one shareholder wanted to know if Mr. Buffett had misspoken.
Mr. Buffett answered by largely repeating what he had said earlier this year:
“I do not believe on imposing my political opinions on the activities of our businesses.
“If you get into which of our companies are pure and which ones aren’t pure, I think it will be very difficult. I don’t think that we should question on the Geico policy form: Are you an N.R.A. member? And if you are, you just aren’t good enough for us.”
Mr. Munger then added:
”Certainly we’re not going to ban all guns surrounded by wild turkeys in Omaha.”
Warren Buffett is sticking by Wells Fargo
Over the past two years, regulators and whistle-blowers have revealed Wells Fargo employees were creating fake accounts using customers’ identities, forcing borrowers to buy unnecessary auto insurance, and overcharging on mortgage fees.
The Federal Reserve earlier this year restricted its growth until it demonstrates it is complying with bank regulations.
Berkshire first invested in Wells Fargo nearly three decades ago and is currently the bank’s biggest holder with a nearly 10 percent stake.
In response to a question about whether it was time to abandon the bank, which has already seen turnover in its executive suite and boardroom, Mr. Buffett said he thought Wells Fargo’s problems would only make it stronger in the long run.
“All the big banks have had troubles of one sort or another and I see no reason why Wells Fargo as a company, from both an investment standpoint and a moral standpoint going forward, is in any way inferior to the other big banks with which it competes,” he said.
He specifically praised the bank’s chief executive, Tim Sloan, a longtime Wells Fargo executive who took over when his predecessor John Stumpf resigned at the height of the fake account scandal. Criticism from Mr. Buffett could have increased pressure on Mr. Sloan. But the 87-year-old praised him.
“I like Tim Sloan as a manager,” Mr. Buffett said. “He is correcting mistakes made by other people.”
Mr. Buffett went further: What happened at Wells Fargo could’ve happened anywhere, he said.
“We know people are doing something wrong as we sit here at Berkshire. You can’t have 370,000 employees and expect that everyone is behaving like Ben Franklin.” On the fake account scandal specifically, which the bank has said resulted from intense pressure on its branch managers to increase sales, Buffett said: “Wells Fargo is a company that proved the efficacy of incentives and it’s just that they had the wrong incentives.”
— Emily Flitter
Is Mr. Buffett semiretired?
The question of who will succeed Warren Buffett has been a thread through many of the exchanges with shareholders.
Carol Loomis, a former Fortune writer, kicked off the question and answer session by reading a question from an investor, asking if Mr. Buffett is semiretired now. In recent years, Mr. Buffett has handed off some of his investing duties to Ted Weschler and Todd Combs, Berkshire’s two portfolios managers, and in January, Mr. Buffett promoted longtime Berkshire executives, Gregory E. Abel and Ajit Jain, to oversee Berkshire’s businesses.
“I’ve been semiretired for decades,” Mr. Buffett replied with a chuckle, but then he got serious.
“Ted and Todd each manage about 12 or 13 billion,” he said. “Together that’s $25 billion. They’re managing $25 billion and doing a very good job.”
He then quickly reminded the questioner of the size of the company’s assets: “I still have the responsibility for the other $300 billion.”
Charles T. Munger, Berkshire’s vice chairman, added: “I watch Warren. He spends most of his time reading and thinking and occasionally he’ll make a phone call or talk to somebody. Not much has changed.”
Another shareholder asked whether Berkshire will have trouble doing deals once Mr. Buffett is no longer with the company. Companies have regularly approached Berkshire over the years about being bought. That has allowed Berkshire to avoid bidding wars and to make acquisitions at lower prices.
The shareholder wanted to know if Mr. Buffett’s successor would continue to have access to those deals and whether Mr. Buffett and Mr. Munger should aggressively publicize the work of their successors to help pass on thei “hometown advantage.”
“I think the reputation of Berkshire as being a very good home for companies, particularly a very good private home for a company, I don’t think that reputation is dependent on me or Charlie,” Mr. Buffett said. “It may take a little — there may be a little testing period for whoever takes over.”
”The truth is that I think some of the other executives are getting better known,” he added.
— Emily Flitter and Stephen Grocer
Where does Berkshire’s health care venture with JPMorgan and Amazon stand?
A lot remains unknown about Berkshire’s health care partnership with Amazon and JPMorgan Chase more than three months after the companies announced the venture.
The three firms said in January that they were teaming up to try to find a better, cheaper way to provide health care to their own workers, a combined one million people. And they said if their idea worked, they would seek to share it with other companies.
Warren Buffett on Saturday again called the cost of health care “a tapeworm in terms of American business.” He lamented the success other countries — he did not name any — have had keeping their own health care costs at a lower proportion of their gross domestic product.
But just how Berkshire’s partnership will address the problem remains a big question.
Mr. Buffett had no more details to offer on Saturday. He said the people leading the effort are still searching for a chief executive. They could announce a hire “within a couple of months,” he added.
“Whether we can bring the resources, bring the person, that C.E.O., is terribly important. Bring the person, support that person and somehow figure out a better way for people to continue to receive better medical care in the United States,” he mused “We’ll see if that will happen.”
But Mr. Buffett seemed uncertain, though hopeful, about the effort as a whole.
“We are attacking an industry moat,” Mr. Buffett said. “That’s a huge moat. We’ll do our best. If we fail, I hope somebody else succeeds.”
Charles Munger, Berkshire’s vice chairman, weighed in: “I suspect that eventually when the Democrats control both houses of Congress and the White House, I suspect that we will get a single payer system, and I suspect it won’t be very friendly to the existing” pharmacy benefit managers.
— Emily Flitter
Trade ‘is a win-win situation’
The Trump administration has taken a more combative stance on trade, particularly with China.
So it comes as little surprise then that one of the first questions put to Warren Buffett and Charles Munger was about trade. Here’s Mr. Buffett’s response:
“The United States and China are going to be the two superpowers of the world, economically and in other ways, for a long, long, long, long time. We have a lot of common interests, and like any two big economic entities, there are times when there will be tensions. But it is a win-win situation when the world trades, and China and the United States are the two big factors in that.”
“It is a win-win situation. The only problem is when one side or the other wants to win a little bit too much.”
About those accounting changes…
Warren Buffett warned in his annual letter that a new accounting rule would “severely distort Berkshire’s net income figures and very often mislead commentators and investors.”
Saturday morning Berkshire reported a net loss for the first quarter because of those accounting changes. The new rules require Berkshire to include in its earnings the gains and losses on the stocks it holds but has not sold.
In the first quarter, Berkshire’s net loss was $1.14 billion, compared with net income of $4.06 billion a year earlier.
Given the new accounting rule, Mr. Buffett suggested Saturday that shareholders should look at Berkshire’s operating income, which excludes gains and losses for Berkshire’s investments, for a more accurate picture of the company’s performance.
Berkshire reported its operating income rose 49 percent to $5.29 billion from a year ago.
— Stephen Grocer
Questions for Mr. Buffett
The main event every year at Berkshire Hathaway’s annual meeting is the question and answer session. Elisa Mala, a reporter working for The New York Times asked those attending Berkshire events on Friday what they would ask Mr. Buffett. Here is a sampling:
• What is the single greatest important investment in your lifetime? Is it a company? Is it a relationship? — Conner Van Fossen, Hanscom Air Force Base in Bedford, Mass.
• What are your thoughts about the future/sustainability of health care and Medicare, and how is Berkshire Hathaway’s joint venture with JPMorgan Chase and Amazon going to address this?Timothy Liu, San Francisco Bay Area.
• What does he see in the cryptocurrency market? Is it going to be the future? Is it going to replace the way we exchange value? Is it worth the hype? — Jason Lu, Shanghai
• Where do you see the job market going, given the rise of Artificial Intelligence? — Ralph Humphrey, Hillside, N.J.
• He’s been technology averse in the past. What makes him so bullish on Apple? — Brian Hanks, Salt Lake City, Utah
• How long he plans on doing this. —Bill Skidmore, Omaha, Neb.
— Elisa Mala
Scenes from Omaha: shopping day
(As Berkshire’s annual meeting has grown over the years, it has become a three-day event. Friday is Berkshire Hathaway’s shopping day, where shareholders can buy products from many Berkshire-owned companies.)
Shareholders moseyed around CenturyLink Center, where the annual meeting takes place, perusing dozens of booths displaying goods — many created specifically for the event — from brands like Geico, NetJets and Coca-Cola.
What was really on sale? All things Warren Buffett.
Investors could snack on a Dilly Bar, the long-favored Popsicle of the Oracle of Omaha, for $1 or snag “Warren and Charlie” rubber ducks ($5 for the pair at the Oriental Trading Company booth). There were Justin cowboy boots embroidered with the words “Berkshire Hathaway Inc. Shareholders Meeting” and guests had the option to “Put yourself in Warren Buffett’s boots,” as the marketing materials suggest, and purchase a style that had been owned by the man himself.
Jim Van Fossen, a retired financial planner, bought matching Berkshire Hathaway boxers for himself and his son, Conner Van Fossen. In town from Missoula, Mont., he said he wanted a memento of their first trip to the shareholders’ meeting.
Of course, shoppers and vendors were hoping for a sighting and interaction with the man himself. Failing that, they settled for selfies with his many likenesses. See’s Candies displayed Scotch Kiss confections “made by Warren,” and one staff member’s uniform bore Mr. Buffett’s autograph.
The most photographed autograph was at the Benjamin Moore paint booth, where Mr. Buffett had signed his name in permanent marker next to a wall-size mural of his face. All day long, revelers followed suit, decorating the wall with their own signatures in dry-erase ink, and snapping selfies to preserve the memory.
— Elisa Mala
Berkshire’s Annual Meeting: Buffett Approves of Apple’s Buyback Plan – New York Times