Investors' Eyes on Buffett's Words... This Week's Berkshire Hathaway Annual Meeting

As Berkshire Hathaway's annual shareholders meeting is set to take place this week in Omaha, USA, investors' attention is focused on the words of Warren Buffett, the 'Oracle of Investment.' There is anticipation that investors will gain insights into the reasons behind Berkshire's surprising sale of Apple shares at the end of last year, as well as the identity of the confidentially requested purchase stocks. Buffett's economic outlook is also a key point of interest.

[Image source=AP Yonhap News]

According to economic media outlets CNBC and Quartz on the 2nd (local time), the highlight of the Berkshire shareholders meeting, often called the 'Woodstock for Capitalists,' will be the Q&A session with management on the 4th. Buffett, who is 93 years old this year, is expected to provide some explanations regarding recent movements in Berkshire's investment portfolio during this session.

Particular attention is being paid to whether Buffett will offer a detailed explanation for Berkshire's partial sale of Apple shares, which had long been considered Buffett's favorite investment. Berkshire sold 10 million Apple shares in the fourth quarter of last year. Based on the closing price at the time, this amounted to approximately $1.846 billion (about 2.5 trillion KRW). CNBC described this as "one of the surprising moves, although it represents only 1% of Berkshire's total holdings," and noted that "Apple has been Buffett's favorite stock for years."

The market analysis suggests that Apple's stock price was already at a high level and that growth was approaching its limit due to slowing iPhone sales. Therefore, the key question is whether Berkshire will increase its Apple stock holdings again. Some speculate that the sale was not reflective of Buffett's intentions but rather influenced by his two investment successors, Todd Combs or Ted Weschler.

Additionally, there is interest in whether the identity of the stocks Berkshire has purchased for two consecutive quarters will be revealed at this week's meeting. Investors have noted that Berkshire previously requested confidentiality for one or more transactions filed with the Securities and Exchange Commission (SEC). Berkshire also made confidentiality requests when purchasing shares of Chevron and Verizon at the end of 2020. CNBC described this as a "relatively rare and unusual situation," suggesting that Buffett might disclose the mystery stocks at this meeting. Many speculate that the confidential stocks could be bank shares, given the increased amount Berkshire has invested in 'banking, insurance, and financial' stocks.

Furthermore, a Q&A session is expected regarding Berkshire's aggressive purchase of shares in the satellite radio company Liberty SiriusXM. Local media report that Buffett will receive about 60 questions from attendees this year, covering not only investment portfolios but also economic outlooks, benchmark interest rates, artificial intelligence (AI), geopolitical crises, the November election, and climate change.

Quartz predicted, "Buffett is unlikely to specifically mention who he will vote for in this year's election, but some policy discussions are likely to be included in the Q&A session." They also noted that since Berkshire has invested in Amazon and Snowflake, AI-related questions are expected. Last year's meeting saw a flood of questions about the regional banking crisis triggered by the Silicon Valley Bank (SVB) collapse, US-China tensions, and Bitcoin.

Notably, this event marks the first Berkshire shareholders meeting without Charlie Munger, Buffett's 'right-hand man,' who passed away at the end of last year. One shareholder told the Wall Street Journal (WSJ), "Without Munger, it feels like the spirit is missing," expressing regret. Quartz explained that Berkshire shareholders had long looked forward to the anecdotes and humor shared by Buffett and Munger, which were highlights of the meeting. This year's Q&A session will include Buffett along with Greg Abel, Vice Chairman leading Berkshire's non-insurance business, and Ajit Jain, Vice Chairman in charge of the insurance business.