23 Highlights Of The 2021 Berkshire Hathaway Annual Meeting

These are the highlights of the 2021 Berkshire Hathaway (brk-b) annual meeting.

(1) Munger: “Greg will keep the culture”. (Therefore, Greg Abel will be the next CEO.)

(2) Buffett: “Interest rates are to asset prices, as gravity is to matter.”

(3) Buffett: Berkshire sold airline stocks at their lows since Buffett is chief risk officer and recovery was not certain. With Berkshire’s 10% stake in each of the four major airlines, the government may have expected Berkshire to bail them out. Berkshire’s sales of the airlines represented only 1% of its total assets of $700 billion. Berkshire also cut back its stakes in banks. It currently owns 19% of American Express. Cash on hand represents 15% of Berkshire’s value. Buffett could have deployed $50 -75 billion. Jay Powell acted decisively with speed on March 23. There was a run on money market funds in March 2020 similar to September 2008. Congress also acted quickly (unlike 2008) since there was no one to blame. Fiscal policy and monetary policy did the job. 85% of the economy is now running in high gear. Berkshire is not a bank and therefore could not borrow from the Fed. They could not depend on anyone. Banks drew down credit. The economy turned out better than expected. He is no longer interested in investing in the airline industry.

Munger: No one can time the market perfectly.

(4) Buffett: Since the average person cannot pick stocks, he recommends an S&P 500 index fund.  Munger: Prefers Berkshire over the S&P 500 (Berkshire’s 60-70 companies are better than the S&P 500 companies.)

(5) Buffett defended owning a stake in Chevron even though it is a fossil fuel company. Munger would rather have a Chevron executive as a son-in-law than an English professor.

(6) Buffett and Munger disagreed on Buffett’s sale of Costco and Wells Fargo.

(7) Buffett: Progressive Insurance is the best at charging appropriate rates (Telematics – matching rates to risk) and is growing faster than Geico. State Farm is the largest auto insurance company. Geico has a 13% share and Progressive about 12%. They will be the two largest 5 years from now. Geico is catching up to Progressive.

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