Prior to Berkshire Hathaway's annual gathering, these inquiries from Warren Buffett's financial enthusiasts have arisen:
On the weekend, Warren Buffett - the legendary investor and CEO of Berkshire Hathaway - will engage in a nearly five-hour question-and-answer session during the annual shareholders' meeting. And boy, there are some pressing questions on everyone's minds!
From the inner circle and expert network of the 94-year-old billionaire, several burning queries have been shared with us. They can't wait to hear Buffett's take on a host of topics, including the impacts of tariffs, the future of Berkshire's cash pile, and whether he'll dish on his retirement plans.
Tariff Conundrum
The ongoing trade war has rekindled investors' fears about inflation and recession, causing a global exodus from US stocks, Treasury bonds, and the US dollar.
Adam Mead, author of "The Complete Financial History of Berkshire Hathaway" and wealth manager, is eager to learn how the tariff situation is affecting Berkshire's businesses and knows Buffett's views on tariffs from a world perspective.
Steven Check, CEO of Check Capital Management, wants to hear Buffett's thoughts on how tariffs could affect Berkshire's businesses in the future. He also questions whether Buffett sees the trade policy as a structural shift in the investment landscape and how one can safeguard their portfolio amidst such negative effects.
Several sector experts, such as John Longo, finance professor, investment chief, and author of "Buffett's Tips: A Guide to Financial Literacy and Life," have expressed interest in Buffett's thoughts on the US trade deficit, as he argued its importance in a 2003 Fortune article.
The Great Buffett Cushion
In 2024, Berkshire nearly doubled its cash pile, reaching a record $334 billion (around €294,000). With this war chest, investors are wondering if Buffett will use the funds to make a groundbreaking acquisition, buy stocks, resume stock purchases, or even pay a dividend.
"Why is he amassing this huge cash position, and where would the stock market have to fall for him to write 'Buy American. I Am.' again, as he did in the fall of 2008?" questions Bill Smead, founder and CIO of Smead Capital Management, referring to Buffett's famous statement urging others to invest in American companies during the height of the financial crisis.
Apple's Remaining Stake
Berkshire sold 67% of its largest stock position, Apple, in the first nine months of 2024. However, the remaining 300 million shares were retained in the fourth quarter, even though the iPhone maker's stock was trading higher than at the beginning of the year.
"That raises the question of why they didn't sell the entire position," Mead points out, asking for Buffett's reasoning behind this decision. Investors are curious to know his thoughts on the current state of Apple, as the stock has fallen 12.5% since the beginning of the year.
Berkshire's Subsidiaries
In his annual Q&As, Buffett often touches upon Berkshire's numerous subsidiaries. Analysts and investors are eager to hear more about the company's core businesses like Geico, BNSF Railway, Berkshire Hathaway Energy, and the manufacturing and retail segments.
Several investors have also expressed interest in comparing Geico to Progressive in terms of profitability and market share. In addition, they'd like to know why Berkshire valued the energy giant BHE at less than $50 billion (around €44 billion) in a recent deal, despite the valuation being closer to $90 billion (around €80 billion) when Berkshire acquired the non-insurance chief Greg Abel's stake in 2022.
Changing of the Guard
As Buffett has detailed his succession plans in his latest letters to shareholders, many are wondering if the 94-year-old CEO will step down in the near future and hand over the reins to his intended successor, Greg Abel.
Lawrence Cunningham, author of numerous books on Berkshire and director of the Weinberg Center on Corporate Governance at the University of Delaware, hopes to hear more about how Abel envisions the company's future direction and how he plans to maintain Berkshire's core values.
Investors are also curious about how Abel would approach the allocation of capital, including stock selection and acquisitions, and how his leadership style might differ from Buffett's.
As the annual meeting approaches, excitement and intrigue are building among investors as they eagerly anticipate Warren Buffett's responses to their questions. Will he address their concerns about tariffs, Berkshire's cash reserves, and other pressing matters? Only time will tell!
- Adam Mead, author and wealth manager, is keen to know Buffett's perspective on the impacts of tariffs on Berkshire's businesses from both a domestic and global perspective.
- Steven Check, CEO of Check Capital Management, wants to hear Buffett's thoughts on how tariffs could affect Berkshire's future business prospects and if he sees the trade policy as a structural shift in the investment landscape.
- John Longo, finance professor, investment chief, and author, wishes to gather Buffett's insights on the US trade deficit, following his argument about its importance in a 2003 Fortune article.
- Bill Smead, founder and CIO of Smead Capital Management, wonders about Buffett's reasons for amassing such a large cash position and what conditions would prompt him to invest in the stock market again, like he did during the 2008 financial crisis.
- Investors are curious to know why Berkshire did not sell its remaining 300 million shares of Apple in the fourth quarter of 2024, despite the iPhone maker's stock falling since the beginning of the year, a question Mead also poses in relation to Buffett's reasoning behind this decision.
