OMAHA, Neb.—The


Berkshire Hathaway

the annual shareholders’ meeting is back in person for 2022, after a two-year pandemic hiatus brought the so-called “Woodstock for Capitalists” online. Warren Buffett touched on the company’s massive first-quarter stock purchases, the performance of his overall business, and added his folk anecdotes and life advice.

Tens of thousands of Buffett loyalists return to Omaha, Nebraska, to hear the legendary investor and CEO of Berkshire Hathaway (ticker: BRK.A, BRK.B), get discounts on a shopping day reserved for shareholders and exchange stories of their experiences after Berkshire over the years.

The meeting began with a film featuring highlights and advertisements from Berkshire’s many subsidiaries and holdings, including Berkshire Hathaway Energy, Borsheims,


Apple

(AAPL), and


American Express

(AXP). It also included comedy sketches featuring Buffett and his longtime friend and adviser Charlie Munger, as well as Berkshire-themed parodies of “Uptown Funk” and “Empire State of Mind.”

Flanked by Berkshire’s three vice-presidents – Munger, Greg Abel and Ajit Jain – a jovial Buffett received a standing ovation and immediately started cracking jokes: ‘You don’t hear that kind of welcome for index funds’ , he joked. “We’re both 190,” added Buffett, referring to himself, 91, and Munger, 98.

Holding a box of See’s Candies Peanut Crisps, Buffett talked about Mary See, whose black-and-white image adorns See’s merchandise. She died in 1939. “A lot of people think that’s me flirting, but that’s not true,” Buffett said. “There is a resemblance, but these rumors are started by our competitors.”

Buffett followed with an overview of Berkshire’s first quarter financial results, which were released Saturday morning. After-tax operating profit rose less than 1% from the prior year period to about $7 billion. The company has reduced the pace of its share buybacks, but Berkshire has been active in buying shares of other companies.

Berkshire spent $3.2 billion on stock buybacks in the first quarter and bought $51.9 billion of other stocks. The company also sold $10.3 billion worth of non-Berkshire stock. Berkshire ended the period with $102.7 billion in cash and US Treasuries.

“We’ll always have a lot of cash on hand,” Buffett said.

Buffett and Munger discussed what they called “gambling” in the stock market, including high-frequency trading, options strategies and other speculative behavior. This can lead to short-term price fluctuations which constitute buying opportunities for Berkshire, the


Oracle

of Omaha said. “Sometimes markets do crazy things,” Buffett said. “It’s good for Berkshire, not because we’re smart… but because we’re sane.”

The first question from the meeting was about Berkshire quickly becoming more active in the stock market. In Buffett’s annual letter to shareholders for 2021, dated February 26, he wrote that there were few attractive opportunities. Since then, Berkshire has reached an agreement to acquire the insurer


Alleghenia

for $11.6 billion, and scooped billions of dollars worth of shares from


Chevron

(CLC),


western oil

(OXY), and


resume

(HPQ).

Asked what changed, Munger said, “We found some things we preferred to own to Treasuries.” Buffett added, “As usual, Charlie gave the full answer, but I’ll always talk more and say less.”

Buffett explained that Occidental’s capital return plans and rising oil prices following Russia’s invasion of Ukraine made the stock a buy, and Alleghany a pick natural for Berkshire’s insurance operations.

Buffett also said Berkshire bought


Apple

shares in the first quarter. The company held about 911 million shares of the iPhone maker at the end of March, up from 907.6 million at the end of 2021.

Buffett touted the virtues of stock buybacks for shareholders, pointing out that Berkshire’s stake in


American Express

had risen to around 20%, from 11%, over the years, without Berkshire buying any additional shares.

“Imagine you own a farm and you have 640 acres, you cultivate it every year, you make a little money on it, you love farming and 20 years later it has transformed in 1,100 or 1,200 acres,” Buffett said. “If you do it at the right price, nothing beats buying back some of your own business.”

Another question related to the performance of Berkshire’s Geico and BNSF Railway subsidiaries against competitors. Buffett handed it over to Jain, who oversees Berkshire’s insurance operations, and Abel, who oversees non-insurance operations.

Jain admitted that lately


progressive

(PGR) outperformed Geico in terms of profit margin and growth rate. He attributed this to the Berkshire subsidiary’s later entry into telematics, or usage-based insurance, which adjusts customers’ rates based on how they drive.


progressive

has years of additional data and experience in the business, but Jain said Geico is seeing promising early results from its telematics policies, branded as DriveEasy.

Abel defended the approach of the BNSF, which was unable to adopt the precisely planned railroad as much of the railroad industry did.

Berkshire’s stock has climbed around 7% so far this year, compared to a 13% drop for the


S&P500.

This is a developing story. Check back for updates.

Write to Nicholas Jasinski at [email protected]