Thousands pack Omaha arena to soak up guru investor Warren Buffett's wisdom
By JOSH FUNK
AP Business Writer
OMAHA, Neb. — Warren Buffett's Berkshire Hathaway reported a steep drop in earnings Saturday as the paper value of its investments plummeted and it pared its Apple holdings. Nevertheless, tens of thousands of shareholders looked forward to hearing from Buffett directly, buoyed by a jump in performance of the many companies Berkshire operates directly.
Berkshire reported a $12.7 billion profit, or $8.825 per Class A share, in first the quarter, down 64% from $35.5 billion, or $24,377 per A share a year ago.
Buffett encourages investors to pay more attention to the conglomerate's operating earnings that exclude the investment figures. Operating earnings jumped 39% to $11.222 billion, or $7,796.47 per Class A share, led by insurance companies’ strong performance.
By that measure, Berkshire beat expectations of the three analysts surveyed by FactSet Research, who had predicted operating earnings of $6,701.87 per Class A share.
As part of Buffett's stock sales, he trimmed about 13% of Berkshire's massive Apple stake. Holdings in the iPhone maker are still Berkshire's biggest stake, making up $135.4 billion of the company's $364 billion portfolio. Buffett said he expects Apple to remain the biggest investment for years, even when his successor Greg Abel eventually takes over.
As for Berkshire's core insurance businesses, the conglomerate reported a $2.6 billion underwriting profit at its insurers, up from $911 million a year ago.
BNSF railroad's profits dropped 8% to $1.143 billion, but most of Bershire's many other companies delivered solid results, including a 72% jump in operating profit at the utility unit that added $717 million to earnings.
Cash on hand rose to a record $188.993 billion in the quarter.
“We’d love to spend it but we won’t spend it unless we’re doing something with very little risk that will make us a lot of money,” Buffett said.
THOUSANDS ATTEND ‘WOODSTOCK FOR CAPITALISTS’
Tens of thousands filled the arena eager to vacuum up tidbits of wisdom from Buffett, who famously dubbed the meeting ‘Woodstock for Capitalists.’
But a key ingredient is missing this year: It’s the first meeting since Vice Chairman Charlie Munger died.
The meeting opened with a video tribute highlighting some of his best known quotes, including classic lines like “If people weren't so often wrong, we wouldn't be so rich.” The video also featured classic skits the investors made with Hollywood stars over the years, including a “Desperate Housewives” spoof where one of the women introduced Munger as her boyfriend and another in which actress Jaimie Lee Curtis swooned over him.
As the video ended, the arena erupted in a prolonged standing ovation honoring Munger, whom Buffett called “the architect of Berkshire Hathaway.”
Buffett said Munger remained curious about the world up until the end of his life at 99, attending dinner parties, meetings and regular Zoom calls.
“Like his hero Ben Franklin, Charlie wanted to understand everything,” Buffett said.
For decades, Munger and Buffett functioned as a classic comedy duo, with Buffett offering lengthy setups to Munger's witty one-liners. He once referred to unproven internet companies as “turds.”
Together, the pair transformed Berkshire from a floundering textile mill into a massive conglomerate made up of a variety of interests, from insurance companies such as Geico to BNSF railroad to several major utilities and an assortment of other companies.
Munger often summed up the key Berkshire’s success as “trying to be consistently not stupid, instead of trying to be very intelligent.” He and Buffett also were known for sticking to businesses they understood well.
“Warren always did at least 80% of the talking. But Charlie was a great foil,” said Stansberry Research analyst Whitney Tilson, who was looking forward to his 27th consecutive meeting.
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