Warren Buffett held Berkshire Hathaway’s first meeting without Charlie Munger

Warren Buffett held Berkshire Hathaway’s first meeting without Charlie Munger

Welcome to “Woodstock for capitalists.”

Tens of thousands of Berkshire Hathaway shareholders and Warren Buffett fans are flocking to Nebraska this weekend to pick up Berkshire’s ( BRKB ) See’s Candies and Dairy Queen Dilly Bars, compete in newspaper throwing contests and, perhaps most importantly, to see the Oracle of Omaha talk in person.

This year, however, the event took on a more serious tone. Buffett appeared for the first time without his longtime business partner and friend Charlie Munger, who died in November.

Greg Abel, the expected successor to Buffett who runs Berkshire’s non-insurance operations; and Ajit Jain, who runs the company’s insurance business, joined Buffett on stage. However, Munger’s kind words and wise (and often sarcastic) words were absent.

Buffett, 93, opened Berkshire’s 2023 annual report with a dedication to Munger, who died aged 99, just 33 days before the milestone birthday.

Buffett said Munger was the “architect” behind the conglomerate they built together. “In the physical world, great buildings are associated with their architects, while those who have poured concrete or installed windows are soon forgotten,” he wrote. “Berkshire has been a great company. Although I have been taking care of the construction crew for a long time; Charlie should forever be credited as the architect.

The couple first met in 1959 and three years later Munger began working in money management, the letter notes. In 1978, Munger joined Berkshire Hathaway as vice chairman and sat next to Buffett, quick with a quip or sage advice.

“Charlie never sought to take credit for his role as creator but rather let me take the credit and accept the credit. In a way, his relationship with me was part brother, part loving father. Even when he knew he was right, he gave me the reins, and when I made a mistake he never — never — reminded me of my mistake,” Buffett wrote.

Substitution question
Munger’s departure has raised questions of succession at Berkshire.

Abel, 61, is named heir in 2021 and Buffett has sought to assure investors that Berkshire ( BRK.A ) shares, which closed at $603,000 a share on Friday, have a solid succession plan.

“I don’t have a second choice. I mean it’s hard to find. But I’ve also seen Greg in action and I feel 100% comfortable,” Buffett said at last year’s shareholder meeting. “Greg inherited a good business and I think he will make it better.”

Here comes the income
Berkshire also reported first quarter 2024 earnings on Saturday morning. Buffett famously releases his quarterly report over the weekend so investors have time to fully digest its contents before trading reopens on Monday.

Berkshire’s operating profit rose to $8,825 per Class A share. Berkshire’s Class A shares have risen nearly 10% this year, outpacing the S&P 500’s total of 7.5%.

It closed the first quarter with a net profit of $12.7 billion, less than half of the $35.5 billion it reported for the same period last year.

Berkshire’s insurance underwriting business, one of its main holdings, earned $2.6 billion in the first quarter, a jump of $185% from $911 million in the first quarter of 2023. Last year, insurance underwriting generated $5.4 billion in revenue for the conglomerate, up from a loss of $30 million in 2022.

Berkshire also repurchased $2.6 billion in stock last quarter.

Saturday’s report indicated that Buffett is sitting on a record pile of cash. Berkshire has about $189 billion in cash and equivalents, breaking the 2023 record high of $167.6 billion.

The stock holdings have led some investors to speculate whether Buffett plans to acquire new companies to add to his portfolio.