Alex Brummer in Omaha, Nebraska
A record 15 000 shareholders in Berkshire Hathaway – the world’s most eclectic investment group – gathered in Omaha, United States, recently in the hope of catching the sage words of their chair and CEO Warren Buffett at the group’s annual meeting.
The crowds attending the meeting at the Ak- Sar-Ben (Nebraska spelt backwards) Coliseum have grown from fewer than 250 in 1985 to more than 10 000 last year to 15 000 this as interest has soared in Buffett’s stock market pronouncements and the highly priced shares in his company have consistently put on double-digit gains.
“This is the Woodstock for capitalists,” Buffett remarked jovially as he toured investor events, threw out the first baseball for the local Golden Spikes team (in which he holds a 25% interest) and personally served behind the counter of the Borsheim’s jewellery store – which he of course owns. It was in this vast glittering emporium that Buffett, the second richest person in the world, helped Bill Gates choose his wedding ring.
Followers of Buffett (68) saw a net gain in the worth of Berkshire Hathaway last year of $28,9-billion with the book value of the A and B shares climbing by 48,3%. In his annual report, Buffett pointed out that the book value of shares has climbed from $19 a share 34 years ago (when he took it over) to $37 801 – a compound growth rate per annum of 24,7%. The share price on the stock market stands at more than double that.
The annual meeting is Buffett’s favourite event for exchanging investment views with shareholders. He and his 75-year-old vice- chair and adviser Charles Munger, who operates from Berkshire Hathaway’s California office, will take shareholders’ questions until they run out, usually after around five hours.
This year much of the focus will be on how Berkshire Hathaway views Wall Street as the Dow powers towards 11 000. Buffett made it clear in London a month ago that he has set his sights on overseas markets, including FTSE companies, as he regards US markets as over-valued. He revealed he was close to building a discloseable 3% stake in a FTSE company and will face heavy questioning on this.
Companies thought to be in the frame include Marks & Spencer, Cadbury Schweppes, Legal and General and global banking group HSBC, all of whose shares have moved since the potential Buffett interest was revealed.
Buffett is thought to be holding up to $15-billion in cash ready for investment when the right opportunity comes along.
The company’s primary interests are now insurance, with Berkshire Hathaway’s ownership of the US direct insurance provider Geico and the reinsurance concern General Re.