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Key Insights From the Berkshire Hathaway Annual Meeting

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Key Insights From the Berkshire Hathaway Annual Meeting

Joshua Aguilar: For Morningstar I'm Joshua Aguilar. With me is Gregg Warren, our analyst for Berkshire.

So Gregg, what'd you think about the meeting? Do you have any key take aways for us? Gregg Warren: I thought the meeting last year was a lot more informative. It seemed like they touched on a lot more subjects, but overall I thought it went well. I think probably the first key take away was a lot of interest in share repurchases, sort of where they're willing to buy back the stock.

Then one of the other things happened here at the end of the meeting when they sort of talked about the fact that they'd be willing to put $50 billion into a preferred stock if they could. Then the question I had on the longer-term ability for the next managers to be able to hold on to a ton of cash or have to migrate the firm over to a returning capital shareholder's vehicle--it kind of surprised me, because Warren sort of hinted at that might actually happen on his watch. So overall, some interesting take aways but not enough there to really move the needle. Aguilar: Do you think we learned anything on terms of succession? I mean we actually saw from both Ajit and Greg today, clearly they seem like the likely successors, at least one of the two, as you pointed out. You think we learned anything on that front?

Warren: Not a whole lot. I mean Greg is still sort of my front runner for the role. I think Warren wants a younger person in there that can run the business for 20, 30 years. Greg sort of fits that criteria. He did highlight both of them, have them both out there talking to shareholders, addressing questions, which is good. It's good for shareholders to hear from them.

I think the other more interesting thing on succession is I don't think we're going to know until Warren's gone. I think they're still holding that card close to their vest. Aguilar: You mentioned about the migrating investment vehicle. It's really been hard for them to beat returns. Your price to fair value, and I guess it's a 4-star stock right now. Why should anybody hold the stock in the future you think? Warren: I still think there's some good reasons to step into it. Right now it's in our best ideas list, and I think one of the main reasons is you've got the potential for a large amount of share repurchase. Eventually a dividend's going to come down. Buffett's gonna find some ways to put this capital to work. There's the potential if they change the holding requirements for banks, they can ramp up their holdings in that as well. So, the cash problem may not be as evident two, three years from now, relative to what we've seen historically. I think that that's one big indicator.

There are things--businesses themselves are operating very well. They're all firing all cylinders, and from a competitive advantage perspective, a lot of them operating under the Berkshire umbrella are far more competitivly advantaged than if they were public. Aguilar: Great, those are really great insights. Thank you so much. For Morningstar, I'm Josh Aguilar.

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About the Authors

Greggory Warren

Strategist
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Greggory Warren, CFA, is a strategist for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He covers the traditional U.S.-and Canadian-based asset managers, as well as Berkshire Hathaway.

Before assuming his current role in 2017, Warren covered the financial-services sector as a senior analyst since late 2008. Prior to that time, he covered non-alcoholic beverage manufacturers and distributors, packaged food firms, food service distributors, and tobacco companies. Before joining Morningstar in 2005, Warren worked as a buy-side equity analyst for more than seven years, covering consumer staples and consumer cyclicals.

Warren holds a bachelor's degree in accounting and English from Augustana College. He also holds the Chartered Financial Analyst® designation and is a member of the CFA Society of Chicago. During 2014-19, Warren was selected to participate on the analyst panel at Berkshire Hathaway’s annual meeting, asking questions directly of Warren Buffett and Charlie Munger. The analyst panel was disbanded ahead of Berkshire’s 2020 annual meeting. Warren also ranked second in the investment services industry in The Wall Street Journal’s annual “Best on the Street” analysts survey in 2013, the last year the survey was conducted.

Joshua Aguilar

Director of Equity Research, Resources
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Joshua Aguilar is the director of resources equity research for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc.

Aguilar joined Morningstar in 2016 as an associate on the financials team, and he was promoted to analyst on the industrials team in 2018 and to senior analyst in 2022. He has served as associates coordinator since 2021 and led Morningstar's diversity efforts as DEI co-chair since 2020. Aguilar has been a mentor to several associates on their paths to becoming analysts. He also has hosted a Morningstar earnings town hall, participated in analyzing Morningstar stock, and been a strong contributor through both client interactions and his General Electric stock call. Aguilar co-authored an Outstanding Research Achievement-winning piece with colleague Kris Inton on CEO compensation in 2021. He also has taught Morningstar's model to new hires for many years as part of the valuation committee.

Before joining Morningstar, Aguilar was a practicing business transactional attorney in Florida. He graduated magna cum laude with a bachelor's degree in political science and criminology from the University of Florida. He also has a Master of Business Administration from Rollins College and a Juris Doctor from Wake Forest University.

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