It’s a rite of passage for Berkshire Hathaway shareholders, and business journalists, for that matter. Formerly called the “Woodstock for Capitalists”, it's one of the most impressive and unusual celebrations of investing and wealth in the world.
The Berkshire Hathaway annual shareholder meeting hasn't happened in person since 2019 due to the pandemic, and based on the enthusiasm of the attendees this year, they truly missed it. Some 40,000 shareholders descended on Omaha, Nebraska this weekend to hear pearls of wisdom from Warren Buffett and Berkshire Vice-Chairman Charlie Munger. But they're also here to celebrate the wealth they've generated by investing in the conglomerate, a lot of which has been passed down through generations.
History of the Berkshire Hathaway Shareholder Meeting
The first Berkshire shareholder meeting was held in 1973 in the employee cafeteria of National Indemnity Company, one of Berkshire Hathaway’s subsidiaries. In 1981 the meeting was moved to the Red Lion Hotel in Omaha. As Berkshire got bigger, and its shareholder base grew with it, the meeting moved to larger and larger arenas.
As of January 2022, there were 619,940 Class A shares and 1.3 billion Class B shares outstanding of Berkshire Hathaway. Class A shares have never undergone a stock split, resulting in the most expensive share price of any company. Today, Class A shares are worth over $484,000 each. According to various reports, at least seven individuals besides Buffett and Munger have become billionaires through their ownership of the stock. Thousands have become millionaires. Today, there are around three million shareholders of Berkshire, according to the latest count.
Beyond shareholders, celebrity CEOs like Apple's Tim Cook are in attendance, as well as hedge fund owners like Bill Ackman, and Bill Gates, who used to be on Berkshire's board.
Inside the Meeting
Inside the meeting, which is held in the 19,000 seat CHI Health Center Arena in downtown Omaha, is a massive exhibit hall for vendors, shareholders, their families, employees of Berkshire and its subsidiaries, as well as members of the press.
The meeting starts promptly at 8:30 am, with a 30-minute video featuring television commercials from Berkshire's subsidiaries and largest public holdings. American Express, Duracell, Apple, Berkshire Energy and Brooks are among those featured. Several short, comical videos featuring Buffett and Munger appearing in popular TV shows like The Office, Breaking Bad and All My Children, are also included. Buffett, always a showman who appreciates a good joke, has been including these videos at the shareholder meeting for years, although they are rarely released publicly. This year is no exception.
In addition, shareholders and members of the press are forbidden to take photos, videos or audio recordings inside the meeting. Berkshire selects one media company every year to live-stream the Q&A portion of the meeting, and this year it's CNBC's turn. CNBC anchor Becky Quick has been tasked with asking questions on behalf of shareholders, and occasionally, Buffett and Munger take questions from the crowd.
Questions from Shareholders
In the arena, Buffett, Munger, Greg Abel, who runs Berkshire's day-to-day operations, and Ajit Jain, who runs the company's massive insurance businesses, take questions from shareholders. The questions range from foreign investors who want to know why Berkshire hasn't bought many businesses outside to the U.S., to why Berkshire hasn't spent more of its cash on hand. To be sure, Berkshire did spend $51 billion on share buybacks in the first quarter across its various holdings, in addition to the company's $11.6 billion acquisition of insurer Allegheny.
Several of the questions from shareholders want to know how Buffett and Munger seem to have super-natural market timing abilities, or why they have been so successful picking companies to buy. Buffett answers every question, albeit slowly and deliberately, occasionally wandering down tangents to make his point, but always bringing it back to the answer. He asks Munger for his opinion or input, and the 98-year old usually has a short, smart, and often hilarious quip to add. In between questions and answers, Buffett drinks cherry Coke while Munger nibbles on See's Candies. This has been their routine for years.
Outside the meeting, it's not all cherry soda and ice cream. Protesters outside of the meeting wander up and down 10th street in downtown Omaha. They range from railroad union employees, who decry unfair treatment and working conditions, to anti-abortion protesters who oppose Buffett's past support of Planned Parenthood. These protests are not addressed in the meeting.
But inside, the money keeps flowing. Some 16,000 shareholders swarmed the convention center on Friday alone, spending hundreds of thousands of dollars on everything from See’s candies to Justin Boots, Fruit of the Loom underwear and NetJets subscriptions. Buffett said See's broke a sales record on Friday, as shareholders took advantage of discounts to buy boxes of assorted chocolates and mother's day gifts.
While shareholders have a lot of questions and praise for Buffett and Munger, one of the most important questions remains unanswered. When will the 91 year-old Buffett and 98 year-old Munger stop hosting this gathering? No one asks, and Berkshire Hathaway has already set a date for next year's meeting: May 6, 2023.
See you next year.