Welcome to “Woodstock for capitalists.”
Tens of thousands of Berkshire Hathaway shareholders and Warren Buffett fans flocked to Nebraska this weekend to consume Berkshire (BRKB)-owned See’s Candies and Dairy Queen Dilly Bars, compete in newspaper-throwing contests and, perhaps most important, to see the Oracle of Omaha speak in person.
This year, however, the event will strike a more solemn tone. Buffett will appear for the first time without his longtime business partner and friend Charlie Munger, who died in November.
Greg Abel, the expected successor to Buffett who runs Berkshire’s noninsurance operations; and Ajit Jain, who runs the company’s insurance business, are expected to join Buffett on stage. However, the warm back-and-forth and Munger’s whip-smart (and often sarcastic) remarks will be missed.
Buffett, 93, opened Berkshire’s 2023 annual report with a dedication to Munger, who died at age 99, just 33 days before the milestone birthday.
Buffett said Munger was the “architect” behind the conglomerate they built together. “In the physical world, great buildings are linked to their architect, while those who had poured the concrete or installed the windows are soon forgotten,” he wrote. “Berkshire has become a great company. Though I have long been in charge of the construction crew; Charlie should forever be credited with being the architect.”
The pair first met in 1959 and three years later Munger began working in money management, the letter notes. In 1978, Munger joined Berkshire Hathaway as vice-chairman and sat by Buffett’s side, quick with a quip or a sage piece of advice.
“Charlie never sought to take credit for his role as creator but instead let me take the bows and receive the accolades. In a way, his relationship with me was part older brother, part loving father. Even when he knew he was right, he gave me the reins, and when I blundered he never — never — reminded me of my mistake,” wrote Buffett.
Munger’s passing has brought up the question of succession at Berkshire.
Abel, 61, was named heir apparent in 2021 and Buffett has worked to insure investors that Berkshire’s stock (BRK.A), which closed at $603,000 per share on Friday, has a strong succession plan in place.
“I don’t have a second choice. I mean it is that tough to find. But I have also seen Greg in action and I feel 100% comfortable,” Buffett said at the shareholder meeting last year. “Greg is inheriting a good business and I think he’ll make it better.”
Berkshire also reports its 2024 first quarter earnings on Saturday morning. Buffett famously releases his quarterly report over the weekend so that investors have time to fully digest its contents before trading opens again on Monday.
Berkshire’s operating profits are expected to increase by 21% to $6,702 per Class A share, according to the FactSet estimates. Berkshire’s Class A stock has risen nearly 10% this year, beating the total 7.5% of the S&P 500.
Berkshire Hathaway reported a significant uptick in fourth-quarter operating earnings, which totaled $8.5 billion, up from $6.6 billion, or a 28% increase from a year ago. For the year, operating earnings rose to $37.3 billion, after setting a record of $30.8 billion in 2022.
The Omaha, Nebraska-based conglomerate closed the year with a net profit of $96.2 billion, a sharp turnaround from 2022’s net loss of $22.8 billion.
This story is developing and will be updated.
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