The annual "Spring Festival Gala for the Investment World" Berkshire Hathaway annual shareholders' meeting will be held from May 5 to May 5 local time in Omaha, Nebraska, Nebraska, the hometown of "stock god" Warren Buffett.
At 5:6 a.m. on May 9 (15:5 p.m. Beijing time on May 6), the most talked about Q&A session of the shareholders' meeting will begin.
This year's Q&A session lasted about 5 and a half hours, divided into the first and second halves. In the morning session, Buffett will be present with his old partner, Berkshire Vice Chairman Charlie Munger, and Berkshire Vice President Greg Abel and Ajit Jain to answer questions, with Jean in charge of insurance and Abel in charge of all other questions; In the afternoon, only Buffett and Munger attended.
In addition, Buffett also said in the invitation letter that he made mistakes last year and spent too much time on some questions, resulting in too few answers. He won't repeat the same mistakes this year, probably answering about 60 questions in total.
What will be seen in this much-anticipated investment feast?
Point 1: Where is the US banking crisis?
In March this year, the sudden collapse of the Silicon Valley Bank in the United States, followed by the collapse of the Signature Bank and the First Republic Bank, and the acquisition of Credit Suisse on the other side of the ocean, caused concern among small and medium-sized banks in the United States and even the global banking industry.
Bank stocks have always been Buffett's favorite, but that seems to have changed recently. The 2022 annual report shows that Berkshire has begun to significantly reduce its holdings in the financial sector.
Berkshire's largest investments in banking and financial services at the end of 2022 included Bank of America, American Express, Citigroup, and Bank of New York Mellon. But only Bank of America remains in the top 7112 heavy stocks in Berkshire's portfolio, and the rest of the bank stocks have been dropped out of the heavy list. United Bank of America was significantly reduced by 91.3714 million shares, a month-on-month reduction of 60%; BNY Mellon Bank was reduced by <>.<> million shares in the fourth quarter of last year, a reduction of nearly <>% from the previous quarter.
In a recent interview, Buffett admitted that he no longer likes investing in bank stocks as much as he used to.
"We've sold some banks, some of which we've been taking for 25 years. I don't like people focusing too much on numbers and forgetting the most basic principles of banking. "At one point, I thought banks were going to be in trouble because of what they did in the past. I don't like banking as much as I used to. ”
Buffett explained that Berkshire's sale of bank shares is not criticizing the management of these banks, but rather a broader indication that his sentiment toward banking is cooling.
"Our bank failures are not over." Buffett said there may be more banks in the U.S. that will fail, but depositors don't have to worry about losing any money. He argued that the "foolish decision" of the bank manager should not "make the entire U.S. citizen panic about something they don't need to panic about."
Buffett further stated that Bank of America is one he still bullishes.
"I really like Brian Moynihan [CEO of Bank of America]. I don't want to sell shares in Bank of America. Buffett said.
At this shareholder meeting, I wonder if Buffett will elaborate on his views on the U.S. banking system?
Point 2: Review the major investments of the past year
In the past year, Berkshire's several changes in holdings are bound to be the focus of shareholder meetings.
The penchant for oil stocks has been on display over the past year, with Berkshire increasing its exposure to traditional energy companies such as Occidental and Chevron. According to Berkshire's most recent filing in 13F, Chevron is Berkshire's third-largest stake at the end of 2022, with a market capitalization of more than $290 billion at current share prices. Occidental also made the top 127, with Berkshire's stake worth $<>.<> billion.
How long will Buffett bet on oil stocks at this year's shareholder meeting? What is your view on the energy market as a whole? It is bound to become the focus of investors' attention.
In addition, Buffett's recent heavy investment in Japan has also aroused investors' curiosity.
In April, Buffett visited Japan for the first time in 4 years. During his visit, he visited the headquarters of five major trading companies (Mitsubishi Corporation, Mitsui & Co., ITOCHU Corporation, Marubeni Corporation, and Sumitomo Corporation). According to Buffett, he has increased his stake in the five major trading companies to 11.7%.
"We will not increase our holdings to more than 9.9% without the approval of the board. Of course, we didn't think about selling either. Berkshire's largest holdings outside the U.S. are very pleased with that. Buffett said.
Buffett said he was "very surprised" by the opportunity to buy shares in some Japanese companies, "excluding dividends, which also have the opportunity to achieve a 14 percent yield." ”
"I have a rough idea of what these Japanese companies do, and they're kind of similar to Berkshire and have a lot of different earnings businesses." Buffett added that Berkshire plans to maintain those holdings for 10 to 20 years.
Buffett also said that he was considering buying Japanese stocks other than the Big Five, saying that "although I currently only hold stocks in the Big Five, the next investment target is always in my mind, depending on the price," indicating that if the stock is further undervalued, the idea of additional investment will be initiated.
Buffett further said that if any of the five trading companies make suggestions, such as "we are planning some major business" or "we are looking for partners in the M&A plan," Berkshire would welcome suggestions.
Point 3: How to view China's investment opportunities
At previous shareholder meetings, the Chinese market has been a hot topic, and Buffett and Munger have expressed their optimism about China's economy more than once.
Buffett once said at the 2019 shareholders' meeting that he will increase investment in Chinese companies in the future, and there are two selection criteria, one is a company with a return on net assets of no less than 20%, and the other is a stable growth company.
Recently, for Chinese investors, the most concerned is Buffett's reduction of his holdings in BYD. Buffett and BYD have been together for 2008 years since September 9, when he spent HK$8.18 billion to subscribe for 2 million shares of BYD at HK$25 per share.
However, from August 2022 to March 8, Berkshire reduced its holdings in BYD a total of 2023 times, reducing its holdings of 3 million BYD Hong Kong shares in total, reducing its shareholding ratio from 10.1% to 05.19%, and making a cumulative profit of HK $92.10 billion.
On April 4, Buffett explained the reasons for the reduction in an interview with the media. He said the value of BYD has grown amazingly since 12, that BYD is a great company, and that Berkshire is in no hurry to reduce its holdings further, and that the recent reduction is to better allocate Berkshire's capital.
Munger has also publicly stated that BYD is his favorite stock so far, saying that in all his years at Berkshire, he has not carried out operations that can compete with investing in BYD.
"I've never helped Berkshire do anything as good as BYD, and I've only done it once," Munger said. Berkshire's initial investment is now worth about $80 billion or $90 billion. This is a pretty good rate of return. ”
"BYD's price-to-earnings ratio is now 50 times, which is quite high. Berkshire began selling its shares in BYD a year and a half ago, selling even higher than it does now. Speaking about selling BYD's shares, Munger said it was understandable why Berkshire sold BYD's shares.
Munger further pointed out: "At the current share price, BYD's market capitalization is higher than the entire Mercedes-Benz company, which is not a cheap stock, but on the other hand, it is a very good company. ”
When asked whether he would prefer to invest in Tesla or BYD, Munger said that Tesla cut prices twice in China last year, while BYD raised prices, and BYD dwarfs Tesla in the Chinese market, which is unbelievable.
Point 4, the latest views on technology stocks
Buffett has always been not "cold" to the technology industry, but Berkshire's investment in technology stocks has been rising in recent years.
In 2016, Buffett began to buy Apple shares under the influence of his investment deputy, and in terms of position portfolio, Apple is still Berkshire's largest stock by the end of 2022. In 2022, Berkshire also invested in TSMC in a rare fast-forward and fast-out way.
Since last November, ChatGPT has undoubtedly been one of the hottest topics in tech investing, and investors naturally want to hear what Warren Buffett has to say about it.
Buffett admitted that he did not understand artificial intelligence, and only after Gates' recommendation did he see the "incredible technological progress" of ChatGPT.
Buffett also said: "This is a very shocking invention, just like when we built the atomic bomb in 1945. I didn't know how the atomic bomb worked, but Einstein told us that it was going to change the world, and it did. I don't expect the world to be changed too many times without knowing the outcome, so I guess it's a remarkable and extraordinary invention, although I don't know if it's beneficial. ”
Munger bluntly said that there is a lot of "crazy hype and nonsense" in the field of artificial intelligence, which he is mixed about.
At this year's shareholders' meeting, will the two express new views on AI, and will the latest attitude of the stock god change? Will Berkshire increase the weight of artificial intelligence next and buy more tech companies? will become a topic of anticipation for investors.
Point five, when to step down
After finalizing the successor, investors are most concerned about the departure of Buffett and Munger, and the issue of corporate handover will continue to be a topic of concern for shareholders. After all, Buffett will turn 8 in August this year, and Munger will be 93 years old.
Last year, the California Public Sector Pension Fund (CalPERS) called for a change in Berkshire's chairman, but the proposal had few supporters, and the proposal was ultimately rejected at the shareholders' meeting.
Berkshire Hathaway senior director Ron Olson said May 5 that investors should not expect changes at the company's top management anytime soon.
Olson noted that after spending a lot of time with two legendary investors, he doesn't think the transition of Greg Abel as CEO is imminent.
"99-year-old Charlie? That brain is as good as it used to be," Olson said, "and so is Warren." His energy is amazing. So don't expect Abel to take over tomorrow. ”
Buffett has previously said that Abel will one day take over Berkshire, and Abel is already overseeing all of the group's non-insurance operations, but Buffett has no plans to retire.
Many wonder how the company will grow once these two are no longer at the helm.