It’s that time of year again when tens of thousands of investors from around the globe descend on Omaha, Nebraska, to hear billionaire Warren Buffett dole out his investment wisdom.
Along with Buffett’s annual letter to shareholders, the annual shareholders’ meeting for Buffett’s investment group Berkshire Hathaway is one of the biggest events on the investment calendar, with the “Oracle of Omaha” always generous in his comments and advice.
Buffett is also not shy on speaking on issues that are important to him and in the lead up this year’s meeting caused a stir when he took aim at the Omaha hotel industry for “price gouging” his visiting shareholders. He even went one step further and suggested his fellow investors could save a few bucks by booking accommodation through online startup Airbnb.
This year, more than 30,000 shareholders were keen to hear Buffett speak about Berkshire’s first-quarter earnings, in which net income was down, and the investment guru’s decision to abstain from voting against Coca-Cola’s controversial executive compensation plan.
Here’s five pieces of wisdom from this year’s meeting.
1. On playing nice around the board table
Buffett said there is a need for board directors to be diplomatic, and that trying to force change amounts to rude corporate behaviour.
“I’ve voted for compensation plans in various places that are far from what I would have designed myself. That is the way boards work. You keep belching at the dinner table, you’ll be eating in the kitchen.”
2. On the nature of corporate boards
“The nature of boards is that they are part business and part social and people behave sometimes with their business brain and sometimes with their social brain”.
3. On climate change
“I don’t think in making a decision on Berkshire and other companies that climate change should be a factor in the decision-making. A lot of people are over-climbing that they know the impact. We are agnostic. It’s not there isn’t global warming because there is, but those that say they know its impact are talking out of their hats”.
4. On managing Berkshire’s culture
“Managers, when they work, are joining a business that is unlike anything else. It’s a huge corporate asset and we want to maintain that message well beyond my lifetime.”
5. On concerns about Berkshire Hathaway’s growing cash stockpiles
“We are finding things to do that tend to sop up the cash. We will always have around $20 billion around Berkshire; we will never be dependent on the kindness of strangers, which didn’t work well for Blanche DuBois. We cannot depend on anybody else to keep our own strength and maintain our operations.”