The tribute segment to Munger at the 2024 Buffett Shareholders’ Meeting was touching, but the mysterious investment target has not yet been revealed at the meeting.
On May 4, 2024, the annual meeting of Berkshire Hathaway, also known as the “Woodstock Music Festival in the Capital World,” was held again.
Undoubtedly, outside the venue at 5am local time on the 4th, there was already a crowded queue, just to get closer to the “stock god”. Although Omaha welcomed everyone with light rain and strong winds, no one cared about it. After a year of ups and downs in the financial market, shareholders and value investors of Berkshire Hathaway have returned to Omaha to exchange experiences and listen to Berkshire Hathaway Chairman and CEO Buffett’s Q&A, which is undoubtedly the best reward or comfort for their hard year.
In other words, Buffett and his former partner Charlie Munger have created a vast value investment ecosystem, bringing approximately 40000 global investors to an inconspicuous small city in the central United States every year as scheduled, which is undoubtedly a spectacle.
Salute to Munger throughout the entire shareholder meeting
This year’s shareholder meeting is different from previous years.
Although still at the CHI Health Center in Omaha, USA, there are still enthusiastic investors, including Buffett, Greg Abel, and Ajit Jain, and even the familiar faces of the on-site staff, Buffett is missing his most important partner, Munger, whom he calls Berkshire’s “architect”. Zhang Yun, partner and executive vice president of Alger Asset Management, told First Financial after attending the meeting, “To some extent, it was Munger who created Buffett’s legend. Although Munger’s departure may signify the end of an era, this Berkshire ship is still moving steadily because Buffett has done a lot of work in inheritance, which is his wisdom.”
Buffett’s successor, Berkshire’s non insurance business leader Abel, sits in the middle, insurance business leader Jain sits on Abel’s left, and Buffett sits on the right, although he is the focus of the audience.
(‘First Financial Special Photography (by Ma Xinhua)’,)
This year’s shareholders’ meeting has always been a tribute and commemoration to Munger. Whitney Tilson, a well-known investor and Berry research editor who attended the shareholder meeting for the 27th consecutive time, described his emotions to First Financial reporters as follows: “The first time there was no Munger at this meeting, it felt uncomfortable because Buffett and Munger had always attended together. The highlight of the meeting at the beginning was Buffett’s tribute to Munger and their lifelong partnership, which was tear jerking. Then, Buffett brought everyone a second unforgettable moment, which was both heartbreaking and slightly humorous. After answering questions, Buffett habitually turned to the left and shouted ‘Charlie’ because it had always been his habit. In the past 50 years, every time he answered, he would say ‘Charlie’.” After the question, they will all call Charlie, and then Mung will make some supplements. But this time Mung is not here. So Buffett said, “Oh my, I’ve done this many times already.” Tilson said that although one person is missing now, he sees it as a celebration of Munger’s life.
In addition to the conference venue, tribute to Munger is reflected in all aspects. During the shareholder shopping day event held during the shareholder meeting, in addition to the candy, clothes, and toys with Munger portraits visible everywhere, the display of books was also touching. As the only booth on site that is not a Berkshire subsidiary, Bookworm, which usually sells a series of books, has only sold one book, Poor Charlie’s Encyclopedia, this year. Although Buffett still recommended a reading list for this year, booth staff told First Financial that Buffett only designated this book for sale this year to commemorate Munger.
investment
Artificial intelligence is an unavoidable topic this year. During the Q&A session at the shareholder meeting, everyone asked Buffett several times about the topic of AI. Buffett admits that he knows nothing about AI, but that doesn’t mean it’s not important. He likened AI technology to “making elves jump out of the box”, which is thought-provoking. Tilson told First Financial that AI is not a fad or frenzy, it exists in reality and is efficiently utilized in different places. But Buffett’s warning is also correct, AI has its dark side.
However, compared to Buffett’s warning, his ignorance of AI has also resonated with investors present. Guy Spier, founder of Aquamarine Fund, told First Financial, “I won’t pretend to understand AI, nor will I pretend to my investors that I understand it.”
Investing, don’t pretend to understand without understanding, this is a philosophy that investment industry leaders firmly believe in.
Market view: Berkshire’s stock price is still undervalued
Berkshire Hathaway released its first quarter financial report on the day of its shareholder meeting, with operating income increasing by 39% year-on-year and cash reserves reaching a new high.
Tilson told First Financial that Berkshire’s current stock price is undervalued by 5% to 10%. He believes that when evaluating the value of Berkshire in the short term, one should not only look at financial report numbers. His estimate of the intrinsic value of the company is slightly above $650000 for A-shares. “Although it cannot be said that this stock is particularly cheap, I believe it is a substitute for the S&P 500 index. At today’s prices, Berkshire may receive an annual return of 1 to 2 percentage points more than the S&P 500 index over the next five years.”
He said that combining Berkshire stocks with the S&P 500 index should lay a solid foundation for any conservative investment portfolio.
As of the close on May 3rd, the stock price of Berkshire’s A-shares was $603000 per share, while B-shares closed at $400.87 per share.
There are still unresolved mysteries at the shareholders’ meeting
The 6-hour shareholder meeting clearly did not fully satisfy everyone’s curiosity. Since the third quarter of last year, the “mysterious” company that Buffett invested in has never appeared, and with the permission of the US Securities and Exchange Commission, Berkshire can still temporarily keep this stake confidential. There are various speculations in the market about this lucky company.
“We still don’t know what this mysterious financial stock Berkshire has recently purchased.” James Early, chief investment officer of BBAE, a new American Internet securities firm, said to CBI, “In fact, I think Buffett talked about the details of his portfolio at this meeting much less than before. In addition, his attitude towards Apple shares is also somewhat contradictory, and he would rather sell some Apple shares now and pay a 21% tax. Even so, Buffett still retains 87% of Berkshire’s Apple holdings.”
Buffett said that he hopes everyone will come to the conference again next year, and he also hopes that he can come again next year.
After the shareholders’ meeting, I walked out of the venue and found that the sky was already clear for thousands of miles. A writer once said that participating in a series of activities at Berkshire’s annual convention weekend can be addictive and could change your life.