At 3:45 p.m. local time on May 2 (4:45 p.m. Beijing time on May 3, the time difference is 13 hours), Buffett's shareholders' meeting will be held in the form of online meeting. Buffett's shareholders' meeting, officially known as Berkshire Hathaway's annual shareholders' meeting, has been held for 56 times since 1964 (not included in 2020).
Before the shareholders' meeting, Berkshire announced its first quarter results. The financial report shows that Berkshire's net loss in the first quarter was $49.746 billion, a record. The portfolio suffered a "book loss" of more than $54.5 billion, while the book cash reached a record $1373 billion.
The following is a summary of the highlights of this Buffett General Meeting:
Buffett: Munger is not like the annual meeting without Munger. Munger is in good condition and will return in 2021
Buffett said in his opening remarks: "It doesn't look like an annual meeting, nor does it feel like an annual meeting. My partner of 60 years, Charlie Munger, didn't sit here, which makes it feel especially like an annual meeting. I think most of the people who attended our meeting came to listen to Charlie, but I want to assure you that Charlie is in good condition at 96."
Buffett said that he used to talk with Charlie Munger here. Charlie Munger is 96 years old now and he is still strong. But he thinks the best choice this year is to let Munger not come to the meeting. Charlie Munger is in good shape and will be back in 2021. Ajit Jain, the vice chairman, did not have to leave New York to attend the meeting.
Buffett: I know as much about the epidemic as you do, and the result may not be worse
Buffett said that accounting was good at school, but biology was in a mess, so I know as much about the COVID-19 epidemic as everyone, and the results can't be worse. At present, I cannot fully predict the future development of COVID-19. "What you do not know, I do not know."
The death rate of COVID-19 is not as high as that of the Spanish influenza pandemic in 1918, but it is highly infectious. The recent measures taken by various countries to block the virus are "quite a big experiment". It is believed that the US economy can overcome the difficulties brought by the new coronavirus.
Buffett: Don't make a wrong bet. Be careful when shorting the United States
Buffett also said that the momentum of the United States is unstoppable. Don't bet on the United States. The United States (economy) is quite strong. Buffett said that the United States has been tested, such as the Great Depression. Compared with 1789, we are now a better and richer country.
I don't think anyone knows what the market will be like tomorrow, next week, next month or next year. I believe in the United States. My past career is to seize the opportunity of success in the United States.
If you want to bet against the United States, you should be very careful. Because you should be very careful when you bet in this area, because anything may happen in the market, that is, in October 1987, the market fell by 21% on that day. After "911", the market was closed for 4 days and then opened again, but no one knew what would happen.
Buffett: This crisis has nothing in common with 2008
Buffett said: "In 2008 and 2009, our economic train deviated from the track, and some reasons led to the weak subgrade in the bank. This time, we just pulled the train track and put it on the siding. And I really don't know what similarities - in terms of the most important, productive and populous country in the world - actually marginalize its economy and labor force. "
But even in this situation, I also want to talk to you about the economic future of this country. Because I still firmly believe that I believed this in the Second World War. I believe that nothing can stop the United States basically during the Cuban missile crisis, the 9/11 and the financial crisis.
Buffett: People don't see the potential of the stock market when they lose confidence
Buffett said at the shareholders' meeting that people did not see the potential of the stock market when they lost confidence. The United States has been tested, such as the Great Depression. Buffett said, do not bet on the United States, the United States (economy) is quite strong. Compared with 1789, we are now a better and richer country.
Buffett: In the long run, stock returns will be higher than national debt. Don't treat it as a gamble
Buffett said that in the long run, stocks are still a better investment than government bonds. He said: "If you hold stocks for a long time, stocks will produce better returns than 30-year treasury bonds, which now yield 1.25%. It is taxable income."
"The performance of stocks will be better than that of government bonds. Their performance will exceed that of the money you hide under the mattress. I mean they are very stable investments. As long as they are used as investments, not gambling tools, or things you think you can safely buy with margin."
Buffett: Diversified investment is better
Buffett said that diversification is good, and I did the same and achieved good results. For many investors, the best thing to do is to hold the S&P 500 index.
Buffett: It's better for ordinary people to buy the S&P 500 index fund as a trust stock selection expert
Buffett believes that ordinary investors should buy a wide range of markets for a long time, rather than listen to other people's stock selection suggestions.
He said: "In my opinion, the best way for most people is to own the S&P 500 index fund. People spend a lot of money to buy these suggestions, but they really don't need them. If you bet in the United States and keep this position unchanged for decades, you will do much better than buying US Treasuries, or following people who tell you what to invest."
Buffett: Berkshire sold a net $6 billion of shares in April
Buffett said at the shareholders' meeting that Berkshire repurchased $426 million of shares in April, but sold $6.509 billion of shares in the same period, a net sale of $6 billion of shares.
Buffett said: anything can happen in the market. Don't borrow money to buy stocks
Buffett said, "Maybe I'm biased. I don't believe in the predictions about what the market will be like tomorrow, next week, next month or next year. I know that the United States will move forward over time, but I'm not sure. We learned this on September 10, 2001. A few months ago, the coronavirus epidemic gave us another lesson. As far as the market is concerned, anything can happen. You can bet in the United States, but you must choose your bet carefully. That's because anything can happen in the market. " Buffett once said that investors should not use borrowed money to buy stocks.
Buffett: Buy the whole enterprise directly if you want to buy it
Buffett said at the shareholders' meeting that I would now bet on the United States. Berkshire works in a different way from other enterprises. We buy the whole enterprise directly when we want to buy it. We often do this. Of course, we don't mind buying part of the equity of high-quality enterprises.
Buffett: We have always maintained relatively high cash
Buffett said at the shareholders' meeting that Berkshire's operating income in the first quarter was much lower than before. Our insurance business, our railway company, has also undergone some changes. Their business was originally ideal, but now it has been affected. It can be seen that Berkshire had 124 billion dollars in cash at the end of the first quarter, nearly 125 billion dollars. We have always maintained a relatively high cash level. Although we could not predict the epidemic in January, we have always maintained this position.
Buffett talks about the impact of the epidemic on the aviation industry: my investment has also suffered
In recent months, due to the spread of COVID-19 around the world, many industries are facing great pressure, and tourism has been one of the most affected industries. Specifically, airlines have suffered disproportionately in this crisis. Buffett said that the pandemic has made great changes in the aviation industry.
Buffett said: "I don't envy anyone who serves as the CEO of an airline company. The business of an airline company has undergone major changes. For me, the future is not so clear. The world has changed for an airline company. I wish them all the best, but this is one of the businesses we directly own that will be damaged."
Spoke highly of Powell: worthy of the same respect as former Federal Reserve Chairman Volcker
Buffett said: "For many years, I have always held special respect for Paul Volcker (the former chairman of the Federal Reserve). As far as the chairman of the Federal Reserve is concerned, he is a particularly perfect candidate... I think Jay Powell and the Board of Directors of the Federal Reserve deserve the same respect as Volcker because of their actions in mid March."
Buffett said: "Maybe what happened in 2008 and 2009 guided their work to some extent. They made an unprecedented response. Since then, virtually everything has gone as it was. In March, the financing market was almost frozen, and it didn't melt until March 23. March was also the largest month for corporate bond issuance in history. Everyone who issues corporate bonds at the end of March and April should write a thank-you letter to the Federal Reserve, because if they do not take action with unprecedented speed and determination, corporate bonds cannot be issued successfully. "
Buffett admits that he made a mistake by buying bottom airlines: he has withdrawn from investing in the four major American airlines
Buffett said that he made an "understandable mistake" when evaluating airline stocks. Their prices fell sharply due to the stop of travel around the world caused by the COVID-19 epidemic. He said: "It turns out that my view on this business is wrong, which is not the fault of the four excellent CEOs. Believe me, it is not fun to be the CEO of an airline company now." "I don't know whether the demand for air travel will return to the level of last year three to four years from now... There are too many planes."
Buffett said that he has withdrawn his investment in the four largest airlines in the United States. The four companies are American Airlines, Delta Airlines, Southwest Airlines and United Airlines. Buffett said: "When we sell a stock, it is often all the shares we hold, and we not only reduce our position."
Buffett: It's more risky to buy airline stocks now
Buffett said that the future is ambiguous, especially in the tourism, aviation, cruise and hotel industries, which will have a huge impact. Now it is more risky to buy airline stocks.
Buffett explains why he doesn't make big investments: the price is inappropriate
Buffett said that Berkshire Hathaway still has huge cash reserves because the enterprise group has not found a company with a price suitable for acquisition. Buffett said: "We haven't done anything because we can't see anything attractive. Now this situation may change soon, or may not change."
Abel: Now is a good time to borrow money, but Berkshire won't do it
Buffett said that now is a good time for all Americans to borrow money. Although many people are not willing to borrow money, they will not do that to Berkshire. We will not do that. We have withdrawn some cash, and our money should be used for cutting edge.
Buffett: Not optimistic about airlines and aircraft manufacturers
Buffett said he is not optimistic about airlines and aircraft manufacturers. The epidemic has an impact on many industries, and it is particularly doubtful whether the market needs so many planes after the epidemic, and I don't know what the future of Boeing and Airbus will be.
Buffett: The epidemic will change the lifestyle for a long time. Some small businesses may not open their doors again
At the shareholders' meeting, Buffett repeatedly stressed that the epidemic has changed the living habits of residents, which may completely change some business rules or affect some industries for a long time, Buffett could not help feeling that the epidemic has completely subverted life, and he also stressed that health and the economy complement each other.
Buffett: The epidemic will lead to further decline of newspapers, cars, etc
At the Berkshire Hathaway annual video conference, Chairman Buffett said that the epidemic has led to further recession in some industries; For example, in the newspaper industry, we have increased more investment in the newspaper industry and helped them repay their debts. But now the newspaper industry, before the epidemic, their advertising, sales, circulation has declined. After the epidemic, the situation worsened and became more serious. The same is true for the automobile industry. Now, the influence on the automobile industry will be reduced to the fact that these auto dealers will not advertise in newspapers. Therefore, this situation has occurred before, but now it is only intensified and serious.
Buffett: The future of oil producing enterprises is unpredictable
Buffett said at the shareholders' meeting that the crude oil production will decline significantly in the next few years because of the sharp decline in demand. The oil enterprises cannot continue with the oil price of $20 a barrel, and the drilling activities will decline. I wonder if the oil price will increase significantly in the future. The future of oil producing enterprises is unpredictable. If the oil price remains low, there will be a large number of non-performing energy loans, and it will be impossible to imagine what will happen to equity holders.
Buffett: There is no reason to stop investing in S&P 500 index funds
Some investors ask that the good time for passive investment has passed, and then it will be a good time for active investment. What's your opinion? Buffett said there was no reason to stop investing in S&P 500 index funds. I suggest you buy the S&P 500 index fund. (Top financial and stock colleges: http://58188.com )
Buffett: All Berkshire shares will be donated
In response to investors' questions, Buffett said at the shareholders' meeting that Berkshire's spin off might be a good result, but it would incur a lot of expenses, taxes or other expenses. At present, Berkshire's structure is also very favorable for the deployment of capital. All Berkshire shares he holds will be donated to charity in the future. This decision was made 14 years ago.
Buffett: Nothing has a higher credit than a country that can print money
Buffett said at the shareholders' meeting that there is nothing higher than the credit of countries that can print money. Although the national debt will become larger and larger, the economy is still growing, and the country borrows in its own currency, so the credit risk is not great.
Will Berkshire split?
Buffett responded that if Berkshire is split, it will generate huge taxes and expenses, which is not good for shareholders, and the current structure is also very favorable for the deployment of capital.
Buffett: None of our companies have received government assistance
Buffett: There are such (situations) in airlines. We have invested in airlines, but the questions I am talking about are that we do not have any fully owned companies. Greg, have any of our companies received government assistance? Abel: No. We don't have any of these businesses now. We all know what every Berkshire company looks like. Today, when it comes to government subsidy projects, we do not have them. The companies we fully own do not participate.
Whether Buffett or Charlie is in the company or not, there will be no change in the investment culture
Greg, Vice Chairman. Abel said that no matter whether Buffett or Charlie is in or out, there will be no change in the company's investment culture. The company's management team is working hard to find more investment opportunities to maintain the original strong momentum. "We have business acumen, can make economic deployment and make positive changes, and Berkshire managers have this ability."
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