Berkshire Hathaway is our largest and most profitable investment. Consequently, I pay close attention to the business. I’ve had the pleasure of attending the Berkshire Hathaway annual meeting in-person over the last couple years. It is quite the event and by far the best way to learn about the business. 30,000+ people come from all over the world to attend, lining up outside the arena as early as midnight the morning of in hopes of getting a seat. Unfortunately I wasn’t able to attend in-person this year. Instead, I watched the CNBC webcast of the event.
With lines snaking miles along the river around the city from the doors of CHI Hills Center Arena, attendees begin lining up as early as midnight the morning of in hopes of securing a seat in the main room.
The meeting in general is a masterclass in business, investing and general advice to live a rich, abundant and happy life. Most importantly we get an update from Warren Buffett on how our company is performing. With all of this in mind, I brought my middle son Nicholas with me in years past. I’m so grateful that he tagged along and I know he learned a lot too.
My son Nicholas Robert Fisher, Jr. joining me at the 2023 Berkshire Annual Meeting. Our first year attending in 2022 had us seated in the second row, just one row behind Tim Cook, CEO of Apple. Experiences like this are invaluable.
This year felt a little different, Warren Buffett (93 years old) was without his business partner of 60 years, Charlie Munger, who passed away in November at 99.9 years old. Charlie was an absolute one-of-a-kind human. I highly recommend reading Poor Charlie’s Almanack to learn more about Charlie's full life underscored by an endless curiosity and continuous self-improvement. Mr. Buffett credits Charlie as the architect of Berkshire Hathaway. His contributions and teaching have made us all a lot of money, but more importantly I’m a better person as a result.
In Charlie’s stead, this year alongside Mr. Buffett was Greg Abel, the president of Berkshire Hathaway and Ajit Jain, the president of Berkshire’s Insurance Operations. Mr. Buffett emphasize and assured all of us that Greg Abel and Ajit Jain will do a fantastic job stewarding shareholder capital long after he is gone. He highlighted the fact that this is not without precedent, admiring the CEO of Apple Tim Cook, (who attended the meeting) exemplary role modeling of this in the wake of Steve Jobs passing.
As for the results Mr. Buffett showed us this slide:
In all of the important categories, Berkshire is doing well. Mr. Buffett stated that Berkshire has about $100 million dollars of operating cash flow every day, including weekends and holidays. Berkshire is in fact the most valuable company in the world in terms of its net worth. It has been an outstanding savings vehicle with the math of compounding and a long-runway. There is no reason to believe this won’t continue.
Mr. Buffett repeatedly called out the enduring nature of Berkshire Hathaway. He emphasizes that he wants to make sure that it’s a safe savings vehicle for his sister Bertie. As a result, in the face of any unimaginable circumstance, Berkshire needs to be there.
On the investment front, Mr. Buffett has emphasized that the scale of Berkshire Hathaway is limiting the investment options and therefore we should not expect the fantastic, market beating returns from the investment portfolio of the last 40 years.
As a side-note, I think Mr. Buffett is as bearish as I have seen him since 1999. I don’t think he is betting on a market crash, but surely the stock market returns going forward could be challenged, especially when factoring in inflation. I believe we need a market calamity to create the conditions for Berkshire to significantly deploy the cash savings essential to the persistent above average compounding that we all have been accustomed to.
Mr. Buffett concluded the morning session by highlighting the recent $1 Billion donation by Ruth Gottesman to the Albert Einstein School of Medicine. Her donation was made entirely with Berkshire Hathaway stock that she and her late husband had owned for some 40 years. Berkshire Hathaway was able to write a $1 Billion check to the school in buying back the stock the school received from Ruth. Her contribution effectively makes it a tuition free institution for all its graduates.
Berkshire's time-tested principles of value investing and responsible corporate stewardship should serve as a model for all of us. Berkshire continues to navigate the complexities of the modern market landscape with wisdom, integrity, and a steadfast focus on creating long-term shareholder wealth. The culture will live on long after Mr. Buffett is gone thanks to the enduring architecture of the late, great, Charlie Munger. Rest in Peace Charlie.