Thoughts on the Berkshire Hathaway 2024 Annual Meeting

What we can learn from Buffett's character

I just finished watching the 2024 Berkshire Hathaway Annual Meeting. You can find the 7-hour long event here. Lots of gems in there, like celebrating Charlie Munger who passed this year, and a long-time Berkshire shareholder’s $1 billion donation to a medical school to make it tuition-free.

But I want to share some thoughts unrelated to the business, since those can be found in many places such as here. Instead, I’d like to share what we can learn from Buffett’s character. Buffett has long mentioned How to Win Friends And Influence as a book that changed his life, and as usual, we can see how he tactfully manages conversation in line with the principles of that book.

Apple

Buffett sold 13% of his stake in Apple, something around $20 billion. When asked why, he attributed it the fact that tax rates may rise in the future (21% now vs 30%+ later), and emphasized that Apple is likely to remain one of their biggest positions even after his successor, Greg Abel, takes over, and praises Tim Cook and Apple.

Buffett is clearly being tight-lipped about the real reason. He is sitting on massive gains in other stocks like American Express and Coke that he could sell instead. But this goes to show how careful he is about not hurting other people’s feelings (Apple and Tim Cook’s in this case, who was at the meeting). If you observe him over the years, he is always complimenting others, and being careful not to criticize or imply negative things about anyone. He has always followed the dictum, “praise by name, criticize by category.”

Management

When asked how his managers may feel having to discuss most business with his lieutenants Greg Abel and Ajit Jain instead of him, he says that his managers actually find it more effective to speak to them, and that they rarely call him. To this, Ajit Jain clarifies that the managers do call Buffett, but what Buffett does is to be nice to them and make them feel good, without answering their question directly such that they have no choice but to go to Jain or Abel. Buffett is always self-deprecating, suggesting here that the managers would rather talk to the vice chairmen, when that’s not exactly the case. After all, who wouldn’t want the opportunity to speak directly to Buffett!

Energy and Insurance

Greg Abel and Ajit Jain answered pointed questions about some of Berkshire’s weaknesses. For example, the multibillion dollar lawsuits in their energy division and some state governments being unfriendly, or Geico insurance falling behind on data analytics.

While the two vice chairmen answered the current ongoings in detail and how they plan to remedy the situation, Buffett brought it back to the high level, reassuring shareholders that Geico has one of the best metrics in the insurance industry, and that this would continue. He also says the energy division does not seek to earn outsized profits, but that they always have the option to deploy capital elsewhere should governments not allow an acceptable rate of return. I thought that was classic Buffett, showing a care for society (not earning outsized returns with energy) while reassuring shareholders that they are constantly looking for good rates of return. Buffett has an amazing ability to not get lost in the weeds when explaining the business situation, and reassure shareholders.

Paramount

Buffett mentions Paramount as an investment they lost money on, and he makes it clear that it was 100% his decision and not Ted or Todd’s (his two investment managers). An example of proactively shielding others from blame.

Running Away Story

Buffett recounts a funny story about running away from home and getting caught by the police. He then says his younger sister Bertie also ran away from home, though only two miles away to their grandfather’s, saying she didn’t get as far as he got. Then he quickly adds, “I don’t want to denigrate her runaway abilities because she’s much more accomplished than I am at all kinds of things, but when it comes to running away, I definitely outclassed her.”

Another of Buffett’s classic conversational style, complimenting others while being self-deprecating and humorous.

Pilot Acquisition Dispute

A pointed question was asked regarding the acquisition of Pilot. The questioner says that Buffett talks about having an exceptional record in choosing the type of people to go into business with, however, in the case of Pilot, the final purchase price ended up in a dispute due to “smart accounting” to squeeze out more from the deal than was deserved by the seller, that was settled out of court. They ask what were some of the lessons learned.

Buffett withholds criticizing anyone and responds with humor. First, he gives credit to some of his directors who had doubts (an example of praising others). Then, he says Pilot is working out well. “As my friend Sam Butler one time said to me, all’s well that ends. And that’s where we are.” He then goes over a history of the family that founded Pilot, praising their achievements and character.

Question About Staying Sharp in Old Age

One attendee asks how he stays mentally and physically sharp to continue getting better at investing into his 90s. Instead of boasting about his investment abilities, Buffett highlights the role of luck. He says he was lucky to live to his 90s (that lets him compound longer), and he was lucky to be born a male at a time when women were not encouraged to pursue careers. Characteristically, Buffett shows extreme humility to a question where he can talk, and truthfully I would say, about his extreme intellect and ability, instead choosing to highlight the role that luck has played in his life.

One of the things so many people admire about Buffett is his down-to-earth relatability, humility, and way of making others feel good. While we may not be able to match his investment acumen, these other qualities are something we can all strive to follow.