Thoughts following Berkshire Hathaway's annual meeting | David Moon
Last weekend, more than 40,000 people gathered in an arena in Omaha, Nebraska, for the Berkshire Hathaway annual shareholders’ meeting, a unique meeting among public companies. The official business portion of the meeting lasted five minutes, followed by five hours of Berkshire CEO Warren Buffett fielding questions from shareholders from around the world.
Buffett addressed questions about some of the company’s investments. He sold 13% of the company’s Apple stock at a massive gain. He sold all of the company’s Paramount shares at a massive loss. At the end of its first quarter, Berkshire had uninvested cash on hand of $189 billion. For comparison, at the end of its first quarter, the U.S. Treasury had $177 billion of cash on hand.
The man who at times controls more cash than Treasury Secretary Janet Yellen receives an annual salary of $100,000 and still lives in the Omaha house he purchased in 1958 for $31,500.
If you think you are too old to achieve something big or fulfill a dream, consider what Buffett achieved after reaching retirement age. In 1995, when he was 65 years old, his net worth was $10.7 billion. Four years later, as the dot.com boom raged, financial publications speculated that the Oracle of Omaha, then almost 70, was too old and set in his ways to sustain his success.
Today, at age 93, after giving away more than $50 billion, Buffett is worth $132.7 billion. He accumulated more than 90% of his wealth after the age of 65. While Buffett has obviously benefited from the power of compounding for a longer period than most (fewer than 5% of Americans live to be 93 years old), he never used his age as a reason for changing his investment strategy or asset allocation. Your cash needs and the timing of those needs are much more important than your age when determining whether to own stocks or not.
Buffett amassed this wealth without ever making a forecast of where the overall stock market was headed next quarter or next year, acknowledging his inability to do that sort of thing. And if Warren Buffett can’t confidently predict the Dow Jones Industrial Average, neither can you.
This Berkshire meeting was bittersweet, as it marked the first gathering since the death of the company’s vice chairman, Charlie Munger, whom Buffett often describes as the “architect of Berkshire Hathaway.” The 93-year-old Buffett has no misconception about his own mortality, responding to a question about his health by remarking, “I feel fine, but I know a little about actuarial tables.” He concluded the meeting in his characteristically understated manner. “I not only hope you come next year; I hope I come next year.”So do I.
David Moon, president of Moon Capital Management, may be reached at david@mooncap.com.
This article originally appeared on Knoxville News Sentinel: David Moon: Thoughts following Berkshire Hathaway's annual meeting
