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Live From Buffett & Berkshire Hathaway Inc. (BRK.B)’s Annual Meeting

It’s that time of year again Buffett and Berkshire Hathaway Inc. (NYSE:BRK.B) enthusiasts, and Insider Monkey will bring you all of the updates from the ground in Omaha.

hedge fund research

A clip from our bio of the Oracle:

Warren Buffett. We could jot down the nearly endless list of descriptives that would just begin to protray his followers’ feelings towards him. But it’s time consuming, so let’s just put this as a constant: Warren Buffett is The Man. We know.

But let’s just explore this a bit further. Ordinary investors follow every step Warren Buffett makes. But so do the seasoned professional money managers. They even invest their clients’ funds in Berkshire Hathaway stock. Everybody knows that if they had invested $1000 with Warren Buffett back in the day, they would have been a zillionaire today. We can’t go back in time and invest in Warren Buffett’s investment vehicle, Berkshire Hathaway stock, but we can invest today. But does it make sense to invest in Berkshire Hathaway Inc. (NYSE:BRK.B) today? Can Warren Buffett generate alpha today, like other smaller hedge fund managers like David Einhorn, Bill Ackman, or Dan Loeb?

We may find some answers to these questions today.

9:20am: Stadium is 95% full, estimated crowd of about 15,000 people in attendance.

9:22am: There is a YMCA song parody playing changing the lyrics to talk about Berkshire companies.

9:24am: Nebraska cheerleaders are dancing in the aisles.

9:26am: Warren is discussing Berkshire Hathaway Inc. (NYSE:BRK.B) net earnings released yesterday; $3.8 billion

9:40am: Carol Loomis asks Buffett about trying to beat the S&P 500 over a five-year period.

9:42am: Buffett says that sometimes Berkshire will beat S&P, sometimes they won’t; they have an obligation to beat an index fund over time, or they aren’t doing their job.

10:00am: Buffett on American International Group Inc. (NYSE:AIG) poach: “I think you will see Berkshire Hathaway Inc. (NYSE:BRK.B) become a significant factor in the commercial insurance business worldwide.”

10:12am: Munger on Twitter: “It’s hard for me to know anything about (it) when I avoid it like the plague.”

10:20am: Buffett to Doug Kass: “You haven’t convinced me to sell the stock yet, Doug, but keep trying.”

10:29am: Buffett on Fed: “Liquidity hasn’t hit the market, it’s sitting on the banks’ sheets,” adding that he has “faith” in Bernanke. (Well of course.)

10:39am: Berkshire Hathaway Inc. (NYSE:BRK.B)’s Buffett on Bitcoin: “of our $49 billion, I haven’t moved any to (it).”

10:47am: Buffett says his successor will have more capital to work with, and will therefore have a competitive advantage.

10:54am: Munger: “We’ve always tried to stay sane when others have gone crazy. That’s a competitive advantage.”

11:03am: Buffett says natural gas prices impact coal shipping rails of the company, see who he’s holding here, in Berkshire Hathaway Inc. (NYSE:BRK.B)’s last 13F.

11:07am: Buffett on Harley Davidson “Any company that convinces its customers to tattoo its logo on their chest can’t be too bad.”

11:11am: Buffett on heavy sugar/caffeine diet: “When we write our book on nutrition, it will be a huge seller.

11:15am: Buffett says he expects earnings in papers to decline, but that’s built into the business plan. He’s focused on the value that’s there regardless.

11:20am: About whether or not Berkshire Hathaway Inc. (NYSE:BRK.B) should break up, saying that there might be slightly more centralization, but that it would not break up.

11:28am: Munger finds derivative trading “revolting.”

11:30am: Munger says he’s unsure about solar power in cloudy areas like Germany, but mentions that Berkshire Hathaway Inc. (NYSE:BRK.B) projects are in the desert.


11:32am: Buffett on favorable U.S. business environment: “No question that being born in the United States was a huge advantage to me in terms of business advantages.”

11:33am: Munger tells Buffett he was “drowning in opportunities when I first met you.”

11:38am: Buffett says that “Berkshire is an unusually rational place” when talking about the insurance business at large.

11:55am: Buffett on hedge fund desire to enter reinsurance business: it allows them to have a “beard” in tax havens.

12:05pm: One hour lunch break; garlic parmesean fries and arena food galore! Yum.

1:10pm: Buffett to bear Doug Kass: “There is nothing more fun for me than finding something new to add to Berkshire.”

1:11pm: Munger talking about the fact that Berkshire Hathaway Inc. (NYSE:BRK.B) looks at how a company functions first, more so than focusing on metrics like P/E ratios or book valuations.

1:12pm: There’s a need to understand a company’s competitive advantage.

1:13pm: A look at what the conference atmosphere, from our very own Joshua Reider:

1:25pm: Buffett on what the market environment may look like in the future: “Charlie and I don’t pay attention to macro predictions” (when analyzing businesses).

1:31pm: Buffett on which books have influenced him the most: “The Intelligent Investor changed my life,” adding that it’s provided him with a “bedrock philosophy” for the market.

1:33pm: On whether Berkshire Hathaway Inc. (NYSE:BRK.B) would buy a domestic airline in the face of U.S. industry consolidation, Buffett said they’d never buy a domestic airline to partner with NetJets.

1:34pm: Airlines are labor and capital intensive business; a “death trap” for investors.

1:35pm: Buffett says airlines are “sexy for some reason.”

1:38pm: Buffett mentions that Berkshire would repurchase its shares at 120% of book value, mentioning the important of business intrinsic value, assuming cash needs could be met for its businesses.

1:46pm: On climate change, he mentions that it doesn’t make any difference in assessing insurance rates year to year. Munger adds: “U.S. should have higher taxes on motors fuel.”

1:50pm: Kass asks if Berkshire would consider giving Seabreeze money to engage in a short selling strategy; Buffett replies, “Charlie and I are no strangers to short selling.” Munger quips, “We both failed at it.”

1:51pm: Munger adds, “We don’t like trading agony for money.”

2:00pm: Buffett on anti-Obama question: “I find it completely unproductive to discuss politics with people.”

2:02pm: Buffett says U.S. needed fiscal stimulus to survive 2008; the issue now is how to get off of it.

2:08pm: Munger on current U.S. issues: “Our current problems are very confusing. If you aren’t confused, you don’t understand them very well.”

2:15pm: Buffett says that “equities will do well over time,” adding that non-pro investors shouldn’t get excited when their peers are; the key is to stay rational.”

2:25pm: Buffett also mentions that non-pro investors shouldn’t get excited when their peers are; the key is to stay rational.

2:28pm: Buffett not opposed to looking at international expansion, but most opportunities are in U.S.

2:30pm: Buffett’s advice to a young fund manager: have an audited track record of performance someone can understand.

2:31pm: More Buffett advice to aspiring fund managers: “to attract money, you should deserve money.”

2:35pm: Munger talking about hedge funds’ 2/20 cost structure, emphatically stating, “it attracts many types of the wrong people.”

2:45pm: Buffett: It’s “better to own businesses and productive assets than fixed income investments” right now.

2:48pm: Buffett on IBM, says he “can see possible problems with their has large pension obligations.”

2:52pm: Buffett to youngling: “Opportunities are out there and are extraordinary in some circumstances.”

3:00pm: Buffett: “Leverage is very tempting when things are going up,” but it’s best not to get caught up in what others are doing.

3:03pm: Buffett also adds that Euro Zone was a bad idea, will have to eventually find something else.

3:05pm: Munger: “Europe made terrible mistakes, they have politicians too.”

3:07pm: Convo turns to Internet, Buffett says that it and social media impact GEICO’s business plan. He adds that, “I have been amazed how the Internet has impacted buying habits across age ranges.”

3:20pm: Buffett: “Parents’ behavior impacts their kids more than the amount of inheritance they may receive from them.”

3:25pm: Buffett also says Berkshire Hathaway Inc. (NYSE:BRK.B) is “not considering a class share stock split,” adding, “B shares are helpful to deal with any issues due to high value of A class shares.”

3:30pm: End of Q&A Session.

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