This yr, after a 7 yr break, I as soon as once more went to the US to attend the Berkshire AGM. Only for clarification: I don’t personal Berkshire shares and sadly by no means did as a result of I all the time thought that they had been too costly.
Attendance:
As talked about elsewhere, attendance was clearly decrease than up to now. The sector was solely half full, the overflow rooms nearly empty. On the optimistic aspect, with much less individuals it was far more relaxed. On the unfavourable aspect, costs in Omaha through the weekend are nonetheless sky excessive. Lodge rooms have been very costly and Steaks within the metropolis steakhouses value round 60-70 USD (plus sides, taxes and compulsory tip). Most eating places had been solely half full. It additionally appears that lodge costs for the weekend had been a lot decrease simply earlier than the weekend.
Paying 21 USD for a fairly depressing “Lunch field” through the AGM was not massive enjoyable both.
I ponder if Omaha resorts and eating places will nonetheless have the ability to cost these sky excessive costs subsequent yr.
AGM Content material:
Greg Abel is clearly not Warren Buffett. He’s far more a “regular”, extra operative CEO than Buffett. He additionally gave extra air time to the opposite Berkshire enterprise CEOs.
What I appreciated is that they clearly stated that BNSF and Geico nonetheless have a variety of work to do, with a purpose to turn out to be nearly as good as their opponents. One other plus was that the Q&A session was not too lengthy.
On the opposite aspect, Greg Abel clearly didn’t supply any philosophical insights on capital markets. This was completely different when Warren and Charlie had been working the present and attracted the plenty. And I feel it’s a good factor that he didn’t even attempt to do it.
Buffett himself appeared twice, as soon as in a video after which in a half time break interview with Betty Fast. This interview was truly just a little bit “cringe” particularly when he talked about that Greg Abel, a Canadian would turn out to be American quickly and the way particular an American Passport is. As a Canadian Berkshire investor, I might be fairly pissed off by these feedback because it form of implies that being a Canadian just isn’t ok to run Berkshire. In any case, I discovered it tremendous arduous to really perceive what Buffett was saying through the interview.
From an “actionable concept” perspective, the one inspiration I took away from the AGM is the Tokio Marine Insurance coverage funding. This was clearly Ajit’s concept and regardless of displaying his age, this man is aware of what he’s doing in insurance coverage. It was additionally fascinating that this was talked about very prominently regardless of being a moderately small place for Berkshire.
Total it will likely be fascinating to see how it will develop over the subsequent few years. Will Omoha nonetheless stay a gathering level for buyers from all over the world or will there be one other form of Omaha elsewhere ? We’ll discover out ultimately.
Berkshire Inventory
For Berkshire, I do suppose the largest danger is that the corporate can be seen as a “regular” HoldCo or a traditional Insurance coverage firm. Regular Holdco’s usually commerce at steep reductions to their “sum-of-the-part” worth. Berkshire up to now might all the time depend on the “Buffett issue”, however it will likely be fascinating if and for a way lengthy this lasts, particularly as it’s not straightforward to essentially perceive who owns what (Insurance coverage, Non-insurance) at Berkshire.
One other side is that Berkshire up to now was additionally seen as a very good proxy for the general US financial system on account of its important diversification. Today, that is not the case because the portfolio lacks publicity primarily to Massive Tech/Cloud/KI and Protection which have been the strongest performers over the earlier years.
Perhaps that can be a bonus going ahead however Berkshire is clearly not a very good proxy for the general US financial system anymore.
As I discussed, I used to be by no means a shareholder, however in the intervening time I might be actually cautious with the inventory. The market appears to suppose in comparable methods:
Essentially the most fascinating query is clearly, what Greg Abel will do with the money pile at Berkshire. The AGM supplied little or no perception into this sadly.
Normal observations:
As up to now, for me the explanation to go there may be principally the community of buyers and the pre-AGM occasions. I used to be once more in a position to attend a two day assembly of German Talking buyers in Omaha and earlier than that did some firm visits in Dallas with a bunch of German “investor mates”. As up to now, the precise Berkshire AGM was all the time solely the cherry on the highest.
I truly contemplated for a while if I ought to go to the US in any respect due to all of the political noise and scary tales concerning the immigration. Nonetheless, in my case, immigration was tremendous straightforward and even form of pleasant (Dallas airport).
As up to now, in all non-public encounters, Individuals are all the time tremendous pleasant. We had been usually requested by random individuals within the Grocery store or elsewhere the place we come from and after we stated “Germany” everybody was tremendous pleasant and talked about kin or earlier visits. So on a private stage, at the very least the Individuals that I met, had been as pleasant as they all the time had been.
Nonetheless, in most enterprise settings it was clear that Individuals are clearly avoiding to say something unfavourable concerning the present US Administration. We by no means pressed the subject however it’s actually fascinating that nobody appears to be prepared to say something crucial in any respect.
In Dallas, one might see numerous Waymos driving round plus a number of the autonomous Ubers.
Value ranges normally are clearly greater than in Europe. Eating places, aside from primary Quick meals locations, are at the very least 50% costlier than even in my very costly hometown Munich, particularly when you embrace taxes and the kind of compulsory 20% tip. Additionally it is fascinating how aggressively tipping is demanded even for primary non-service choices like in airports or espresso retailers. Sadly that is now far more widespread in Germany, too.
One other value issue is that there’s little or no within the type of public transportation. You both want a rental automobile or pay for an Uber. Over will be generally fairly costly. In Denver, the place I had a pressured in a single day stop-over, I paid nearly 60 USD for a 15 minute trip, with Uber charging nearly 50% of the entire price at 11 pm.
A last statement is that flying domestically within the US can be a fairly depressing expertise. Should you don’t pay additional, you will have to attend longer at Safety and can board final. Boarding is all the time a “excessive stress” occasion as many Individuals journey with the utmost allowed onboard baggage, so compartments refill in a short time.
My private spotlight was the go to to an actual Rodeo exterior of Omaha. I’ve by no means been to such an occasion but it surely was nice enjoyable and even good “worth for cash”.
Will I am going there once more ?
At present I’m not certain. Total, it’s fairly an costly journey and the primary attraction is to satisfy those who in principle, I might meet a lot simpler in Europe than in far-off Omaha. As well as, I had a fairly exhausting journey again.
From a pure monetary perspective, going to Omaha is clearly not “nice worth”. Nonetheless, on a private stage it was clearly a internet optimistic. expertise.