Berkshire Hathaway's annual shareholders' meeting will be held online at 01:30 EDT on May 1st. This is a top feast and pilgrimage in the investment circle. Berkshire Hathaway Chairman and CEO Warren Buffett will join Vice Chairman Charlie Munger, who will share their views on the market, economy and corporate governance.
Longtime vice chairman Charlie Munger, 97, will join Buffett, 90, for a three-and-a-half-hour shareholder question starting at 01:30 EDT. At the shareholder meeting, Warren Buffett is likely to answer shareholder questions and express his views on the company's share buyback plans, investment activities, acquisition environment, key subsidiaries, succession, and bitcoin and SPAC fanaticism.
The reasons for the active stock buyback program?
Berkshire Hathaway has rewarded investors handsomely so far this year. As of April 26, Berkshire Hathaway had risen 17% this year, with its share price hitting an all-time high in April. Meanwhile, both the s & p 500 and the Dow Jones industrial average are up more than 10% year-to-date. Berkshire's aggressive share buyback plan is likely to be a major topic of discussion at this meeting. Given the stock's rebound this year, investors are interested in Buffett's current willingness to buy back. The company stepped up its repurchase efforts in the second half of 2020, buying back about $9 billion in each of the last two quarters of 2020, compared with a total of nearly $7 billion in the first half of this year.
Berkshire will report first-quarter earnings ahead of Saturday's meeting, and investors will focus on share buybacks. According to the data, the company's operating profit is expected to rise 6% to $2.55 per class B share. Based on the number of shares disclosed in a recent proxy, Wall Street estimates that Berkshire bought back about $5 billion of shares between the end of this year and early March. As Berkshire's share price rises, investors will wait and see how many shares Berkshire buys back in the rest of March.
Why didn't Buffett follow his famous maxim?
Buffett was not active in investing in 2020 because Berkshire sold a net $8 billion of shares, including shares in some airlines, as well as shares in JPMorgan Chase and Goldman Sachs. This disappointed many investors, who had hoped that Buffett would become a big buyer of stocks during the sell-off and follow his motto: "fear when others are greedy, greedy when others are afraid." But Berkshire does invest a lot of money and hold large stakes in Verizon Communications and Chevron. Buffett is likely to be asked about these purchases, as well as the prospects for banking stocks and the market as a whole. Bank stocks are now highly valued, with the S & P 500 trading at about 23 times forward 2021 earnings. Berkshire had only one high-profile deal in 2020, when Berkshire Hathaway Energy, Berkshire Hathaway's large utility unit, spent about $10 billion to acquire the natural gas pipeline business of Dominique Energy.
Buffett has complained in the past that aggressive private equity firms have made it difficult for Berkshire to close big deals. Today, the acquisition environment has become more difficult because share prices have hit record highs and there have been new big buyers for private-sector special-purpose buyout companies. This year alone, these companies have raised about $100 billion to seek deals. "large-scale acquisitions are unlikely in the short term," analysts said. " Berkshire hindered itself by refusing to participate in the company's auction. Buffett prefers old-fashioned handshake deals and tells potential sellers that Berkshire's usual non-interference with dozens of its subsidiaries makes it an ideal destination for their business.
Does Buffett continue to be bearish on Bitcoin?
Investors are concerned about whether Buffett's view of cryptocurrencies has changed. Buffett and Munger are both skeptics of Bitcoin, calling it "rat poison" rather than a legitimate asset class. But in the past two years, the bitcoin market has been a "dust-free" among all kinds of assets, soaring above $65000 this year.
Five stocks account for 72% of Berkshire's position, what is the investment strategy under the epidemic?
The "Omaha Prophet" (Oracle of Omaha) is likely to advise investors to keep some cash at a meeting on May 1st, similar to the advice made during the financial crisis more than a decade ago. From 1965 to 2020, Berkshire Hathaway shares rose by an average of 20% a year. By contrast, the s & p 500 has an annualised total return of 10.2%, including dividends. Buffett's investment strategy has always been to buy companies that have a sustained competitive advantage and hold these assets for a long time.
The prophet of Omaha is not keen to diversify. According to the closing price on April 26th, Berkshire Hathaway's stake has a market capitalization of $305.5 billion. Among them, the total market capitalization of shares in Apple, Bank of America, American Express, Coca-Cola and Kraft Heinz reached $122.3 billion, $40.7 billion, $22.8 billion, $21.5 billion and $13.1 billion, respectively, accounting for about 72% of the total positions.
Technology giant Apple accounts for a large proportion of Buffett's portfolio. As of April 26, the stock accounted for 40% of Berkshire Hathaway's investment assets, and Buffett has owned it for five years. Buffett affectionately called Apple Berkshire's "third business." Apple has grown into the largest public company in the United States through innovation and building connections with consumers.
Will Buffett's future heir be announced?
Every year at the shareholders' meeting, investors are very interested in Buffett's successor, and now Buffett is 90 years old. It is believed that there is a high probability that this year's shareholders' meeting will announce the news of who the next successor will be or reveal more relevant information.
There is a lot of speculation that it is two Berkshire deputies-Greg Abel and Ajit Jain. Greg Abel, 56, and Ajit Jain, 67, are in charge of Berkshire's energy and insurance businesses. The former is younger, has more experience in running the company, and is considered the number one successor to Berkshire's CEO. As early as last year, the two of them began to pick up Buffett and Munger at the annual meeting to answer some questions. It can be said that Buffett gave them both very high trust and expectations.
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