Tens of 1000’s of individuals will head to Omaha, Nebraska, this weekend to watch Warren Buffett sit on a stage and speak about shares, the financial system and no matter else strikes his fancy.
Berkshire Hathaway’s annual assembly — the so-called Woodstock of Capitalism — is at all times enjoyable for loyal shareholders to attend.
In addition to the folksy knowledge distributed by Buffett and Berkshire vice chairman Charlie Munger, Berkshire followers are handled to a film, typically that includes celeb cameos.
There’s extra: A buying pavilion options merchandise from Oriental Trading and different Berkshire subsidiaries. A sales space provides insurance coverage quotes from Berkshire’s Geico. A 5K race is sponsored by Brooks, the Berkshire-owned operating shoe firm.
And there are loads of Dilly bars from Dairy Queen. That, too, is a part of the Oracle of Omaha’s orbit.
If you are not going to Nebraska, concern not. Yahoo Finance will once again stream the festivities from the CenturyLink Center on Saturday — and CNNMoney will cowl the information because it occurs.
Here are six things to watch when Buffett and Munger hit the stage.
1. Life after Buffett
Buffett will flip 88 in August, and Munger celebrated his 94th birthday on New Year’s Day. That raises the query of who will at some point comply with the nation’s most celebrated investor.
Buffett wrote in Berkshire Hathaway’s 2015 annual shareholder letter that “we now have the right person to succeed me as CEO — a successor ready to assume the job the day after I die or step down.” But Buffett has not named that individual.
In January, Berkshire ( named two prime Buffett lieutenants to the )company’s board: Greg Abel, CEO of Berkshire Hathaway Energy Company, and Ajit Jain, government vice chairman of Berkshire Hathaway’s National Indemnity Company insurance coverage subsidiary.
Presumably, that signifies that the individual Buffett was referring to three years in the past is both Abel or Jain. Buffett or Munger might give extra hints on Saturday.
But Berkshire markets gurus Ted Weschler and Todd Combs will in all probability hold managing Berkshire’s investments. In different phrases, it might take multiple individual to exchange Buffett — regardless that most would argue that he is irreplaceable.
2. Will Buffett defend Wells Fargo?
Last 12 months, Buffett known as Wells Fargo’s dealing with of the fake-accounts scandal a “huge, huge, huge error.” The financial institution’s issues have solely gotten worse since then.
Some traders have argued that newish CEO Tim Sloan needs to step down. Buffett has stopped wanting calling for main administration modifications.
But shares of Wells Fargo are down 6% previously 12 months, and rivals JPMorgan Chase (, )Citi ( and )Morgan Stanley ( are all sporting double-digit proportion positive factors. )
Buffett cannot be too happy about that. Berkshire nonetheless owns greater than 458 million shares of the financial institution, a 9% stake.
three. US-China relations
Buffett was a vocal supporter of Hillary Clinton for president.
But Buffett acknowledged on this 12 months’s shareholder letter that $29 billion of the $65 billion achieve in Berkshire’s web price in 2017 was due to the Republican-backed company tax lower that President Trump signed into legislation late final 12 months.
But any elevate that Berkshire might get from decrease company tax charges could also be mitigated by commerce scuffles with China. The US-China considerations are one purpose the market has taken a success currently.
Berkshire’s inventory is down about three.three% this 12 months, a bit greater than the S&P 500. That is sensible. Berkshire has a giant funding within the Chinese automobile firm BYD.
And many Berkshire investments, akin to Apple (, )GM ( and )Coca-Cola (, have a serious presence there, too. A cartoon face of Buffett was even )featured on Cherry Coke cans in China final 12 months. So will Buffett blast Trump (or China) for the current tariffs?
four. How about them Apples?
Speaking of Apple, the iPhone maker is now the most important funding within the Berkshire portfolio. Berkshire’s three.three% stake in Apple is price greater than its positions in Wells Fargo, Bank of America (, )Kraft Heinz ( and Coke. )
Apple impressed traders this week with earnings that topped forecasts, serving to to allay fears about sluggish iPhone gross sales.
But it is price questioning whether or not Buffett is just too late to be backing Apple. After all, Berkshire had been a giant investor in IBM ( for years. It has lastly began to trim that stake as Big Blue’s revenue and gross sales development has slowed. )
Buffett is known for shunning loads of tech as a result of he likes to purchase what he is aware of and is cautious of paying too excessive a value for the inventory.
Still, some would argue that Berkshire could be higher off proudly owning Google ( proprietor Alphabet, )Amazon ( or )Facebook ( as well as to — or possibly even as a substitute of — Apple. )
5. Let’s make a deal!
Buffett famous on this 12 months’s shareholder letter that Berkshire Hathaway has $116 billion in money, up from $86.four billion on the finish of 2016.
Buffett has made it no secret that he desires to use a few of that cash to purchase extra corporations.
“This extraordinary liquidity earns only a pittance and is far beyond the level Charlie and I wish Berkshire to have,” Buffett wrote. “Our smiles will broaden when we have redeployed Berkshire’s excess funds into more productive assets.”
So what might Buffett purchase? He mentioned in an interview with CNBC in February that he “wouldn’t rule out owning an entire airline.”
Berkshire Hathaway already owns stakes in American (, )Delta (, )Southwest ( and )United (. )
Buffett is clearly itching to do one thing. The final massive deal Berkshire made was the $37 billion buy of plane elements producer Precision Castparts in 2015.
Kraft Heinz provided greater than $140 billion for client merchandise big Unilever ( final 12 months, however Unilever turned the bid down. Berkshire is usually rumored to be contemplating different giant meals and client merchandise giants, akin to )General Mills ( or )Kellogg (, or Oreo proprietor )Mondelez (. )
The chance of Buffett taking Coke personal even pops up from time to time too.
6. Paging Dr. Buffett?
Berkshire Hathaway, together with JPMorgan Chase and Amazon, shocked the enterprise world in January when the three giants introduced plans to type an organization that may assist manage rising health care costs for their employees.
Shares of the massive well being insurers, drug retailer chains and pharmacy advantages administration corporations all plunged on the information.
That’s as a result of regardless that particulars are nonetheless scarce, Berkshire, JPMorgan Chase and Amazon promised that the brand new firm could be freed from “profitmaking incentives and constraints.”
Buffett said on CNBC in February that different corporations have inundated him, JPMorgan and Amazon for particulars about how they might join for the yet-to-be-named insurer.
But Buffett is not promising miracles. He famous within the CNBC interview that well being care is “enormously complicated.” But he added that “we’re determined. We’ve got the money. We’re going to stick with it.”
So do not be shocked if Berkshire shareholders — and maybe an worker or two — asks Buffett for extra particulars about how he hopes to enhance the US well being care system.
CNNMoney (New York) First revealed May four, 2018: 12:04 AM ET