Berkshire Hathaway marks its meeting with record liquidity of $189 billion | Companies

In his latest letter to Berkshire Hathaway shareholders, Warren Buffett lamented the lack of attractive investment opportunities in the market. Coinciding with its shareholders meeting in Omaha, Nebraska, the company released first-quarter results confirming that impression. The conglomerate, led by the world’s most famous investor, accumulated a record amount of liquidity of $188.993 million (about 175.500 million euros) as of March 31, according to the company’s quarterly report.

This record amount of cash in the company’s coffers, more than $167.6 billion at the end of the year, comes at a time when interest rates are high and the stock market has reached lofty valuations. Omaha-based Oracle used its first-quarter results to sell $19.972 million in shares and buy $2.691 million.

The insurance division ended the first quarter with $28.891 million in cash and cash equivalents, which was supplemented by $6.658 million from the industrial division (railroads, services and energy). Added to this are short-term Treasury securities worth an additional $153.444 million.

This Saturday’s shareholder meeting is the first since the death of Charlie Munger, Warren Buffett’s partner, friend and staunchest ally. In the foreword to his last letter to shareholders, Buffett paid tribute: “In reality, Charlie was the “architect” of today’s Berkshire, and I acted as the “general contractor” to implement his vision on a daily basis. . “Charlie never tried to take credit for being the creator, but instead allowed me to receive laurels and accolades,” he said.

This Saturday’s meeting will also be a tribute to Munger, where his jokes will be missed. As every year, thousands of people flocked to Omaha, a city of 485,000 people in Nebraska near the geographic center of the United States. He will answer questions from shareholders selected by lottery for several hours in the multi-use pavilion, which seats about 18,000 people, and has been lined up since Saturday morning. You can bring up almost any topic with Buffett, but there are two that are off-limits: politics and his future investments.

Call Woodstock of capitalism This is much more than a meeting. This is a real festival that includes a large fair of products produced or associated with the group, a mass picnic for shareholders and parallel meetings with a program that runs from Friday to Sunday. Buffett was seen and photographed riding a golf cart at the fair this Friday.

As in recent years, the question session will include executive vice presidents in charge of insurance, Ajit Jain, 70, and the rest of the business, Gregory Abel, 61. Abel is tapped to succeed Buffett as group CEO when the time comes, although Buffett’s 67-year-old son Howard will serve as non-executive chairman.

Selling apples

Before the meeting, the company presented its financial statements for the first quarter. They saw net income fall 64% to $12.702 million, but due to changes during the quarter in the value of some investments held in its investment portfolio. Roughly 75% of the value of its stock portfolio was concentrated at the end of the quarter in five companies, led by Apple ($135.4 billion). The other four are American Express (34.5 billion), Bank of America (39.2 billion), Coca-Cola (24.5 billion) and Chevron (19.4 billion).

The position in Apple decreased in one quarter from 174.3 billion to 135.4 billion, 22%. While shares of the Tim Cook-run company fell 11% on the stock market this quarter, that only partially explains the difference. Second, Buffett decided to sell a significant portion of his stake, about 115 million shares. In the last quarter of 2024, about 10 million titles were already sold. Tim Cook is back at the forefront of the Berkshire Hathaway shareholder meeting.

The company insists that accounting standards require these changes in value to be reflected in the income statement, even if it is a stable investment, and detract from its value: “The amount of gains/losses on an investment in a given quarter is generally irrelevant and gives numbers. net income (loss) per share, which can mislead investors with little or no knowledge of accounting standards,” he notes.

For this reason, Berkshire Hathaway prefers to focus on the operational development of its business. On this front the news is good. Operating profit increased by 30.4% to $11,222 million, primarily due to the development of the insurance business.

Company shareholders pay attention, first of all, to the value of their own shares. Although Buffett missed opportunities to invest more aggressively during the height of the pandemic (which he justified by his aversion to downside risk) and then the wave of artificial intelligence (which supported companies like Nvidia or Microsoft), his investments continue. To make good progress, Berkshire Hathaway’s price set an all-time high just over a month ago and is up 10.6% this year.

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