The Berkshire Hathaway billionaire and chief executive, speaking in Omaha to thousands of shareholders gathered for the company’s annual general meeting, added that the “emergency” activity had been “encouraged by Wall Street because the money was flipping.” The comments follow a dramatic change in the way people around the world interact with their finances. Americans have opened millions of brokerage accounts since the beginning of the pandemic, with many turning to optional markets to bet on the rapid rise or fall of companies such as Apple and Tesla. Buffett and his adviser, Berkshire Vice President Charlie Munger, attributed the rapid pace of trading and the fact that many equity holders were not long-term investors to the company’s ability to make their own big bets this year. In the first quarter, the company spent $ 51.1 billion to buy shares of companies, including big bets on major oil companies Chevron and Occidental Petroleum. Buffett said it was “unbelievable” that Berkshire could buy more than 14 percent of Occidental in a matter of weeks. “But the vast companies in America became poker chips and people bought and sold like three-day, two-day calls,” he said, referring to the derivatives that became the means of choice for many new day traders in the market. “Wall Street makes money one way or another, catching the crumbs that fall from the table of capitalism.” There is evidence that much of the excitement that drove US stocks to a record last year has evaporated. Trading in pence shares has collapsed and the amount of borrowers making investors trade has fallen, according to US stockbroker Finra. Munger specifically targeted Robinhood, the online brokerage that drove many Americans into the financial markets, but its valuation fell from nearly $ 60 billion last August to $ 8.5 billion last week as business slowed. “Short-term gambling and big commissions. . . “It was disgusting,” he said. “It simply came to our notice then. “God becomes just.” Saturday marks the first time since 2019 that Berkshire shareholders have had the opportunity to hear directly from the billionaire investor and the company’s top management personally. There were questions that led to the annual meeting, often referred to as Woodstock for Capitalists, as to whether the pandemic would affect participation levels. Managers at several Berkshire subsidiaries said attendance at the Omaha convention center on Friday, a day when shareholders can buy Fruit of the Loom lingerie or receive discounted home products at The Pampered Chef, was lower than expected. , what in recent memory. But when Buffett opened the meeting, with his usual one-word line, “OK,” a packed audience at the CHI Health Center stood up. Investors have several hours to wait before learning the outcome of the day’s actual operations – if shareholders were able to come up with proposals that would require Berkshire to disclose the environmental impact of its dozens of subsidiaries or split its chairman and CEO . Analysts expect the proposals to fail given Buffett’s ownership of high-quality voting shares. The company said earlier on Saturday that its operating profit had changed little from the previous year, with power from BNSF’s rail and manufacturing units offsetting the sharp drop in profitability from its insurance business. Overall, net income fell more than half compared to the previous year to $ 5.5 billion. The decline was mainly due to changes in the value of its investments, which Buffett laments as a “generally pointless” measure, given that its stock portfolio has overshadowed the value of $ 390 billion. Buffett was questioned about the recent stock market boom after complaining about a lack of attractive investment in his annual letter to investors in February. He said that during the market sell-off this year, “a few stocks became very interesting for us and we also spent a lot of money”. However, he added that the mood at the company’s headquarters had become more “lethargic”, especially compared to the rate recorded from mid-February to mid-March, when he spent more than $ 40 billion in shares. Berkshire withdrew a significant portion of its cash flow to carry out these transactions, with the value of cash and government bonds falling to $ 106 billion, its lowest level since 2018. Buffett said the company would always keep a significant amount of cash in its hands, as its insurance business must be prepared for large damages in the event of a disaster. He added that he wanted Berkshire Hathaway to be “able to operate if the economy stops and that can always happen”. “We had a lot of money on March 20,” he said, referring to the days when the S&P 500 hit a record low. “But we were not very, very far from repeating something in 2008 or even worse.”
Wisdom words from Omaha
Buffett for inflation “Inflation also deceives the bond investor. He cheats the one who keeps his cash under the mattress. It deceives almost everyone. “ “You print a lot of money and the money will be worth less. Not useless. ” Buffett at the Fed “In my book, Jay Powell is the hero. . . if he had done nothing it would be, it would be very easy to do what you would call thumb sucking. “People would have fallen around him and no one would have blamed them.” Buffett for political partisanship “People are behaving a little more racially now than they did a long time ago. . . It can be very dangerous when a group of people say 2 + 2 = 5 and one says 2 +2 = 3. “ “Interest in me, partly because of my age, but I actually think from memory that the last time the country was considered this race was when I was a kid and Roosevelt was [president]. » Munger in a proposal to split the roles of Berkshire chairman and CEO “For me it is the most ridiculous criticism I have ever heard. It is as if Odysseus was returning from the victory of the battle of Troy and someone was saying: “I do not like the way you held this spear when you won”. Munger for investment in China “There is no doubt that the Chinese government has worried US investors. . . in recent months and years and has done so in previous periods. There was some tension. It affected Chinese stocks. “ Munger on bitcoin “In my life I try to avoid things that are stupid and bad and make me look bad compared to someone else. And bitcoin does all three. “ Ajit Jain, vice president of Berkshire, on the threat of nuclear attacks “The additional thing that concerns me about the nuclear situation is the lack of ability to really assess what our real exposure is in the event of a nuclear incident.” “When it comes to nuclear, I kind of give up.”
