Berkshire Hathaway annual meeting 2022

Berkshire Hathaway Vice Chairman Ajit Jain, who runs all of the conglomerate’s insurance businesses, lamented about how Geico has fallen behind rival Progressive in the car insurance business.

“Each one have their plusses and minuses, but having said that, there’s no question that recently Progressive has done a much better job than Geico … both in terms of margins and in terms of growth,” Jain said.

“There are a number of causes for that, but I think the biggest culprit is as far as Geico is concerned … is telematics,” he added. Telematics refers to putting a device on a car that tracks driving patterns, in exchange for a lower insurance rate.

“Progressive has been on the telematics bandwagon for more than 10 years. Geico, until recently, wasn’t involved in telematics,” Jain said. “It’s a long journey, but the journey has started, and the initial results are promising. It will take a while, but my hope is that in the next year or two, Geico will be positioned to catch up with Progressive.”

Jain’s comments came after Berkshire reported earlier in the day a massive earnings drop in its insurance underwriting business for the first quarter.

— Fred Imbert

Berkshire Hathaway Vice Chairman Charlie Munger had some stern words in response to a proposal to oust CEO Warren Buffett as chairman.

“It’s the most ridiculous criticism I ever heard,” Munger said.

“It’s like Odysseus would come back from winning the battle of Troy and so forth and some guy would say, ‘I don’t like the way you were holding your spear when you won that battle,'” he added, referencing ancient Greek epic “The Odyssey.”

The California Public Employees’ Retirement System, or CalPERS, the biggest public pension fund in the U.S., earlier this month said it would vote in favor of a shareholder proposal to remove Buffett from his chairman role while remaining CEO. The proposal’s aim stems from concerns about corporate governance with one person holding dual roles.

“Some guy that’s never run any business, doesn’t know anything — I don’t think too much of this activity,” Munger said.

—Hannah Miao

Munger said today’s stock market has become “almost a mania of speculation.”

His comment alluded to both high frequency algorithmic trading and access new investors have that intensified during the pandemic.

“We have computers with algorithms trading against other computers,” Munger said. “We’ve got people who know nothing about stocks, being advised by stockbrokers who know even less.

“I understand the commission though,” Buffett joked.

After Munger likened the activity to a casino, where people play craps and roulette, Buffett expanded on the comparison.  

“People and traders’ poker chips are pulling the handle,” he said. “They’ve got the system set up so that if you want to buy a three-day call on the stock you can do it and they make more money selling you calls than if you buy stock, so they teach you calls. Nobody’s going around selling calls on farms. That’s why markets do crazy things. Occasionally Berkshire gets a chance to do something. It’s not because we’re smarter. … we’re sane, and that’s the main requirement in this business.”

— Tanaya Macheel

Warren Buffett said that much of the criticism of stock buybacks was misguided and that the practice can be good for investors in a company.

“You can read hundreds of thousands, and maybe millions, of words on stock repurchases, and what this is and what that is. It’s not very complicated,” Buffett said. “If you had a partner in a lemonade stand and they wanted to sell their interest, or two partners and one of them wanted to show their interest, and the business had the money to buy the lemonade stand and they were already at a price that was good for the two people who were going to remain, you’d buy it.”

Buffett pointed to Berkshire’s holding in American Express, which, over the course of 20 years, has gone from about 11% of the company to 20% because of buybacks.

“It happens to have worked out very well. … It’s a wonderful thing if you’ve got an asset you like and they take your ownership interest up,” Buffett said.

— Jesse Pound

Warren Buffett said Berkshire Hathaway is open to investing in businesses anywhere, not just in the U.S.

“We have so much trouble finding good ideas that we can’t afford to ignore any,” Buffett said. “But they do have to be sizable.”

Buffett said while he does seek out new investments, he prefers to be approached proactively.

“We’ll pay any price, climb any hills to find businesses, but we actually prefer when they fall into our lap,” Buffett said.

— Hannah Miao

Buffett said he wants Berkshire Hathaway to be in a “position to operate” should the economy stop.

“We want Berkshire Hathaway to be there and in a position to operate if the economy stops,” Buffett said. “And that can always happen, it can always happen.”

Buffett played a significant role during the Great Recession, providing capital during a pivotal moment to companies such as Bank of America and Goldman Sachs. The move drew criticism from those who disapproved of the support of big banks.

The billionaire investor made those remarks while also praising the Federal Reserve’s role during the 2008 financial crisis and the pandemic.

“The Federal Reserve has not gone,” Buffett said. He added the Fed will “do whatever is necessary. … That’s what happened in 2008 and 2009, and that’s what happened in 2020, and you’ll hope it happens again next time.”

— Sarah Min

Ahead of the shareholder meeting, the executives of several Berkshire portfolio companies told CNBC how inflation was hitting their businesses.

One of those executives was Jim Weber, CEO of Brooks Running.

Weber said it was tough to raise prices for Brooks’ products but that he thinks some of the cost pressures could cool soon.

“We don’t have unlimited pricing power, but we have taken selective price increases where we think we can. But our whole industry is so competitive. It’s a big market place. … I do believe in the supply chain that costs are going to mediate a bit,” Weber said.

Read more about the impact of inflation on companies such as Nebraska Furniture Mart and Dairy Queen.

— Jesse Pound

Buffett scooped up 14% of oil giant Occidental Petroleum, worth more than $7 billion, in two weeks during March.

He pointed out that the stake was even larger when accounting for the index fund providers who own a huge chunk of the company.

“That’s not investment. You’re not buying from [investors]. I find it just incredible. You couldn’t do that with Berkshire. … Overwhelmingly, large companies in America, they became poker chips,” Buffett said.

“That enabled us, in a two-week period, to buy 14% of a business that’s been around for decades,” Buffett said. “Imagine trying to [buy] 14% of the farms in this country. 14% of the apartment houses. 14% of the auto dealerships, or just anything, when already 40% were locked up some other place. It defies anything Charlie and I have seen, and we’ve seen a lot.”

The legendary investor said that the short-term volatility earlier this year fueled by “gambling mentality” allowed him to find good long-term opportunities.

— Yun Li, Jesse Pound

Warren Buffett warned shareholders about “new forms of money” as he recalled the financial crisis of 2008 and said Berkshire Hathaway will “always have a lot of cash on hand.”

Buffett did not explicitly identify bitcoin or other cryptocurrencies, though he has made headlines for calling bitcoin “rat poison” in the past and has said it has no unique value. Charlie Munger has also spoken with hostility about it.

“The United States government affects that this became exchangeable for lawful money in the United States,” Buffett said, displaying an image of an old $20 bill.

“That’s what money is,” he added. “It may turn out that it becomes worth dramatically less at purchasing power. It can become almost like paper money as it has in many countries. But that when people tell you that they’re reaching [for] new forms of money, this is the only thing that will pay bills.”

— Tanaya Macheel

Warren Buffett has a long history of teasing investment bankers and their institutions – saying that they encourage mergers and spinoffs to reap fees, rather than improve companies.

Today, he noted that Berkshire Hathaway would always be cash-rich, and in times of need, would be “better than the banks” at extending credit lines to companies in need. While Buffett was talking, someone was shouting from the crowd in the CHI Center. It was unclear what the audience member was said.

“Was that a banker screaming?” Buffett joked.

—Hugh Son

Berkshire bought more than $51 billion worth of stocks during the first quarter’s market turmoil, including sizable investments in Chevron, HP and Occidental. The buying at the start of the year marked a sharp reversal from 2021 that saw $7.4 billion of net sales in stocks.

The S&P 500 suffered a 5% sell-off in the first quarter, posting its worst quarter since the start of the pandemic. The rout continued in April with the equity benchmark down another 8.8% amid fears of surging inflation and rising rates.

— Yun Li

Warren Buffett appeared on stage at the CHI Health Center with his right hand man Charlie Munger by his side. They were welcomed by a round of applause from shareholders. Also on the stage were vice chairmen Greg Abel and Ajit Jain.

“It feels good to be back,” the chairman and CEO said. “The two of us are 190 years old, and I really think you’re entitled, if you’re the owner of a company and got two guys — 98 and 91 — running the company, you’re entitled to actually see them in person.”

— Yun Li, Fred Imbert

Berkshire Hathaway counts musician and business mogul Jimmy Buffett among its long-term shareholders. The “Margaritaville” restaurant chain owner told CNBC he first bought shares of Berkshire Hathaway about 25 years ago.

“Have you held onto them this entire time?” Becky Quick asked.

“Never sold anything,” Buffett said.

The singer-songwriter said he first came to know Berkshire chairman and CEO Warren Buffett when tracing his family lineage. While the Buffetts have no relation, the two have remained friends.

Jimmy Buffett designed a pontoon boat manufactured by Berkshire subsidiary Forest River that debuted Friday at the “Berkshire Bazaar of Bargains.”

Warren Buffett gave a sales pitch for the party boat in his annual shareholder letter in February, calling the musician “‘Cousin’ Jimmy Buffett.”

“Your bargain-hunting chairman will be buying a boat for his family’s use,” the chairman said.

—Hannah Miao

Warren Buffett’s career has been a testament to that the fact that, over the long-term, value investing can produce major gains.

From the start of 1965 through the end of 2021, the per-share market value of Berkshire Hathaway had an average compound annual gain of 20.1%, according to the firm’s annual letter. That is nearly double the S&P 500’s 10.5%, including dividends.

While Buffett has built a big lead over many decades, he has had continued success in recent years. Since 2010, Berkshire has outpaced the S&P 500 in eight calendar years. That is on track to happen again in 2022.

—Jesse Pound

Many investors might be surprised to learn that there are only seven analysts covering Berkshire Hathaway at Wall Street’s major equity research firms. Among these analysts, six of them have a hold-equivalent rating and only one has a buy rating, according to CNBC Research.

The primary reason for the lack of Berkshire bulls is the conglomerate’s stellar performance this year, leading many to believe the good news has been priced in to the stock. Secondly, some analysts were expecting a slowdown in buybacks following a record year of share repurchases.

— Yun Li

Berkshire Hathaway’s annual meeting draws tens of thousands of attendees to Omaha, Nebraska, but the event has humble beginnings.

Warren Buffet took control of the company in 1965, and the shareholder meetings continued to be held in Massachusetts through 1972, according to the Omaha World-Herald. When Buffet moved the meetings to Omaha, just about a dozen people attended the first several years, according to The Wall Street Journal.

In 1985, the meeting drew 250 attendees. In 1989, a thousand people came. In 1996, the event had 5,000 attendees. By the 2000s, the meeting rose to the prominence of tens of thousands of participants.

The legendary event is often referred to as a pilgrimage for those in the world of business and finance. In fact, the meeting is most commonly dubbed “Woodstock for Capitalists.”

It’s unclear exactly when the name first came about, but the earliest reference to Woodstock in Berkshire’s annual letters came in 1997, recapping the 1996 company’s performance.

Buffet referred to the event as “our capitalist’s version of Woodstock -the Berkshire Annual Meeting,” he wrote to shareholders.

Saturday’s “Woodstock for Capitalists” kicked off, with big shareholders, CEOs and other investors flooding the event center, including first-time attendee Jamie Dimon, chief executive of JPMorgan.

Activision CEO Bobby Kotick was also in attendance, as well as Apple CEO Tim Cook.

— Tanaya Macheel

Buffett has a long history of favoring banks. He helped rescue Salomon Brothers in the 1990s and swooped in again to help the industry by injecting $5 billion into Goldman Sachs in 2008 and another $5 billion into Bank of America in 2011.

So investors took note when he unloaded stakes in JPMorgan Chase, Goldman and Wells Fargo in 2020, trimming his portfolio to U.S.-centric retail lenders including Bank of America and U.S. Bancorp.

The fact that he has stayed away this year — despite loosening his purse strings for a string of recent deals and amid a pullback in bank stocks – could be a bad sign for the broader economy, some say.

“What this is telling you is, he thinks we need to batten down the hatches because we’re looking at a long cycle of inflation and probably stagnation,” said Phillip Phan, a professor at the Johns Hopkins Carey Business School.

—Hugh Son

Warren Buffett’s long-term track record is hard to argue against, but his investments are not immune to short-term volatility in the markets.

Here’s how Berkshire’s top holdings performed in a rough April for the broader stock market.

— Jesse Pound

Shareholders on Friday pregamed Berkshire Hathaway’s annual meeting with a shopping carnival featuring goods sold by the conglomerate’s holdings.

The event is a tradition each year known as the “Berkshire Bazaar of Bargains.” Only those with a shareholder credential can participate and shop at a discount in the CHI Health Center.

Exhibits included toy trains mimicking BNSF Railway rolling stock, Berkshire chocolate coins from See’s Candies and Buffett-branded Brooks athleisure.

—Yun Li and Hannah Miao

Before Berkshire’s recent buying spree, the Omaha-based conglomerate had been a net seller of stocks for the past five quarters as Buffett saw few bargains among surging equities.

In the second quarter of 2020, Buffett dumped his entirety of airline stakes, north of $4 billion then, as he believed the pandemic changed the industry fundamentally.

Shares of Berkshire Hathaway have been one of the stock market’s best bets in 2022.

The B-class shares of Warren Buffett’s conglomerate ended April up nearly 8% for the year. The S&P 500, meanwhile, has shed more than 13%.

The gain for Buffett has come despite a decline of roughly 11% for Apple, Berkshire’s top holding. The firm has benefited from big gains in energy stocks such Chevron and Occidental Petroleum. Berkshire also has large position in Coca-Cola, which has gained 9% in 2022 despite increasing concerns about a potential recession.

Despite the overall gains, Berkshire was not immune to the market downturn in April. The B-class shares dropped 8.5% over the past month.

—Jesse Pound

Berkshire Hathaway’s first-quarter earnings declined year over year, with the stock market turmoil and weaker insurance results hurting results.

The company reported $5.46 billion in earnings, down from $11.71 billion in the year-earlier period for a decline of about 53%.

Because of Berkshire’s large investment holdings, earnings can be volatile quarter to quarter. Buffett has long said investors should focus on Berkshire’s operating earnings, which were mostly flat year over year at $7.04 billion, as a better indicator of the firm’s performance.

The pace of stock buybacks also slowed, with Berkshire spending $3.2 billion on repurchases compared with $6.9 billion in the prior quarter. The company ended March with  $106.3 billion in cash.

—Jesse Pound

Shareholders lined up Saturday morning to enter CHI Health Center for Berkshire Hathaway’s annual meeting.

—Yun Li and Hannah Miao

Berkshire’s annual shareholder arrives at a time of heightened worry in the stock market.

The S&P 500 and Nasdaq Composite finished a rough April at their lows for the year. The broad S&P 500 suffered its worst month since March 2020, while the the tech-heavy Nasdaq had its worst month since 2008.

Berkshire also struggled in April, but its stock has been a relative safe-haven and is up nearly 8% for the year.

Buffett’s decades of experiences spans many recessions, bear markets and periods of high volatility, so his acolytes will likely be looking for his guidance on how to approach investing at this current moment.

—Jesse Pound

Berkshire Hathaway’s massive cash pile dipped to $106.3 billion at the end of the first quarter, the lowest level since the third quarter of 2018, as Warren Buffet ramped up his investment activity.

The “Oracle of Omaha” recently used $23 billion in different investments — $11.6 billion to acquire insurer Alleghany, more than $7 billion in additional investments in oil giant Occidental Petroleum and $4.2 billion for a stake in PC maker Hewlett-Packard.

Buffett is expected to kick off Berkshire‘s annual shareholder meeting on a high note, with the “Oracle of Omaha” finally back in the deal-making game and the conglomerate’s outperforming stock crossing a key milestone.

The 91-year-old chairman and CEO will be on stage with his right-hand man Charlie Munger at 98 to answer shareholder questions, following a flurry of investment activities — stakes in Occidental Petroleum and HP as well as an acquisition of Alleghany.

Here are some of the big topics shareholders will want to hear from Buffett:

• Market outlook: The stock market has suffered a correction on fears of inflation and rising rates. How should investors navigate the volatility and a tricky economic landscape?
• Deploying more cash: Buffett has been putting capital to work as of late. Will his buying spree continue? Is he going to pull off an “elephant-sized” deal?
• A slowdown in buybacks: With Berkshire shares significantly outperforming, will Buffett cease or continue to slow down his aggressive buyback program?
• Life after Buffett and Munger: Berkshire’s succession plan
• China, crypto, Russia’s invasion of Ukraine and more

— Yun Li

CNBC will be livestreaming Berkshire Hathaway’s annual shareholder meeting on Saturday, beginning at 9:45 a.m. ET. Viewers can expect a lively discussion regarding Warren Buffett’s view of the market, Berkshire’s plans to spend its cash and other key topics.

Here is a rundown of the day’s events:

9:45 a.m. – 10:15 a.m.: Pre-show anchored by Becky Quick and Mike Santoli

10:15 a.m. – 1 p.m.: Morning session of annual meeting

1 p.m. – 2 p.m.: Halftime show anchored by Becky Quick and Mike Santoli

2 p.m. – 4:30 p.m.: Afternoon session of annual meeting

4:30 p.m. – 4:45 p.m.: Post-show anchored by Becky Quick and Mike Santoli

4:45 p.m.: Formal Berkshire Hathaway Annual Meeting

Post-meeting coverage: Final thoughts live from Omaha, Nebraska, with Becky Quick and Mike Santoli

Note: Schedule reflects Eastern Time

—Christina Cheddar Berk