The Berkshire Hathaway Shareholder’s Meeting garners a lot of attention as Buffett, and his vice-Chairman Charlie Munger, share their views in response to questions from investors. This year’s meeting, scheduled for May 2, is likely to be quite different for two reasons.
Cast Of Characters
The first is that, unfortunately, there is no guarantee that Munger will attend. While Buffett does most of the talking in response to questions, Munger’s terse zingers can provide considerable insight. In his update from March 13, stating the need to move the shareholder meeting online, Buffett stated only that Charlie Munger would “possibly” attend. It’s unclear if Buffett just didn’t want to speak for his 96 year-old partner in advance, or if other issues will actually prevent his attendance.
Secondly in his letter to shareholders, Buffett had indicated that key Berkshire operational leaders Ajit Jain and Greg Abel will play a key role in the meeting for the first time, in answering questions from journalists directly.
Again, the most recent update moving the meeting online downplayed that, suggesting Buffett alone may field questions. Like the potential absence of Munger, that too would be a disappointment because Buffett has stated that Berkshire is “100% prepared” for Buffett and Munger’s departure. Hearing more from the potential successors would provide investors with comfort. Of course, even Buffett alone will likely still bring his usual level of insight for investors.
Rapid Deals Less Likely
As he discussed in an interview with the Wall Street Journal last month, Charlie Munger thinks its unlikely Berkshire will rush to do big deals in this environment. “This thing is different. Everybody talks as if they know what’s going to happen, and nobody knows what’s going to happen.”
In addition, Berkshire likely has its hands full in the current crisis. Berkshire’s broad range of operating businesses are seeing similar challenges to others. There is likely a need for internal capital allocation at Berkshire as employees are furloughed and revenues are disrupted at operating businesses. Buffett likes to leave his managers to run their businesses independently, but this is likely an environment where they do need some assistance.
So far in this environment Berkshire’s actions have been limited. Airline exposure has been selectively reduced and certain bonds have been issued at low rates. However, Berkshire have not made a big move at this point, and may look to preserve liquidity until the broader implications of the virus become a little clearer.
As happens every year, it’s likely that Buffett and whoever else shares the stage with him at the shareholders’ meeting will provide useful insight to investors. However, this year will see a different format as the meeting is conducted entirely online. Plus it’s likely Buffett and Munger will be in wait and see mode for the foreseeable future, stabilizing their own operating businesses, rather than rushing to make any big deals.
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