Berkshire Hathaway's Annual Meeting: Buffett's Strategy in Focus

Warren Buffett's Berkshire Hathaway is set to host its annual shareholder meeting in Omaha on Saturday, drawing tens of thousands of investors eager to gain insights into the legendary investor's business strategy. The meeting, often dubbed the "Woodstock for capitalists," will be the first without Buffett's long-time business partner, Charlie Munger, who passed away in November at the age of 99.

Buffett's investment success can be attributed to his portfolio concentration strategy. As of April 26, 2024, Berkshire's $372 billion portfolio is spread across 45 stocks and two index funds, but a small number of these holdings make up the lion's share of invested assets. Buffett and his top investment aides believe that their best ideas deserve added weighting.

Why this matters: Warren Buffett's investment strategy has significant implications for the broader financial industry, as his approach has consistently outperformed the market and influenced the way many investors think about portfolio management. As one of the most successful investors in history, Buffett's insights and strategies have the potential to shape the investment landscape for years to come.

Two businesses account for more than half of the invested assets Buffett oversees at Berkshire Hathaway: Apple and Bank of America. With a 41% stake, Apple is Buffett's largest holding. He praises Apple's branding, innovation, management, and capital returns. "a better business than any we own"Buffett saidof Apple at the 2023 annual shareholder meeting. Bank of America accounts for 11% of invested assets, with Buffett's love for financials due to their cyclical nature and ability to benefit from long periods of economic expansion.

During the shareholder meeting, Buffett will answer dozens of questions alongside Greg Abel, Berkshire's vice chairman and appointed successor as CEO, and Ajit Jain, vice chairman and mastermind behind the company's reinsurance operations. Shareholders are likely to focus on Abel's comments as Buffett's designated successor, while Jain's insights on Berkshire's reinsurance business will also be closely watched.

Berkshire Hathaway is expected to report strong first-quarter earnings on Saturday, with operating earnings per share predicted to rise 21% to $4.47 and revenue increasing 2% to $87 billion. However, the company faces challenges in its various businesses, including falling shipment volumes at BNSF railroad, forest fires affecting its utility operations, and lawsuits over inflated home-sales commissions at its real estate brokerage, HomeServices of America, which agreed to pay $250 million to settle the claims.

Despite these challenges, Berkshire's stock performance has outpaced that of Apple, Microsoft, Tesla, and the S&P 500 this year. By focusing on a concentrated portfolio of high-quality businesses, Warren Buffett has created a winning investment strategy that has made shareholders wealthy. As the 93-year-old investing legend takes the stage at the annual meeting, investors will be keenly listening for his insights on the economy, investment opportunities, and Berkshire Hathaway's future in the post-Buffett era.

Key Takeaways

• Warren Buffett's Berkshire Hathaway to host annual shareholder meeting in Omaha.
• Buffett's portfolio concentration strategy has contributed to his investment success.
• Apple and Bank of America account for over 50% of Berkshire's invested assets.
• Berkshire Hathaway expected to report strong Q1 earnings with 21% operating EPS growth.
• Investors will focus on Buffett's insights on economy, investments, and Berkshire's future.