Warren Buffett: We will survive

I'm in good shape, the firm is in good shape, the Sage of Omaha tells 30,000 fans at his yearly get-together. Stephen Foley was there

It is a hard message to deliver to a crowd of more than 30,000 people who have travelled from across the world to hear you speak, but Warren Buffett hammered it home loud and clear at his company's annual shareholder meeting this year: Berkshire Hathaway is not all about me.

The organisers of the meeting that they call "the Woodstock of Capitalism" made a concerted effort to push the focus on to the minutiae of Berkshire's many subsidiary companies, and away from Mr Buffett, even as shareholders demanded his views on investment topics ranging from the eurozone crisis to the best way to avoid making mistakes as a start-up entrepreneur in Silicon Valley.

Ever willing to live up to his nickname as the Sage of Omaha, Mr Buffett answered their questions thoroughly, but a change to the structure of the shareholder meeting, held here on Saturday, made for a different tone than in previous years.

For the first time he took one-third of the questions from a panel of Wall Street analysts who cover Berkshire shares, with only one-third from shareholders who queued at mic stands around the giant CenturyLink conference centre. The final third were asked by financial journalists, from thousands of questions sent in by email.

Jay Gelb of Barclays, Gary Ransom of Dowling & Partners and Cliff Gallant of KBW put their focus squarely on Berkshire's insurance operations, which accounted for 25 per cent of the conglomerate's $37bn (£23bn) of revenue in the first quarter. Berkshire owns General Re, one of the world's biggest reinsurers, providing insurance for smaller insurance companies, and Geico, a popular US car insurance firm advertised on TV by an animated gecko with an English accent.

Other major subsidiaries, including MidAmerican, a power company, and Burlington Northern, one of the biggest railways in the US, also featured prominently, along with the dozens of other subsidiaries, from homebuilders to clothing makers to chocolate shops, who peddled their wares outside the auditorium at a Berkshire trade show.

Mr Buffett has created one of the top 10 biggest companies in the US, equal in market capitalisation to that other famed conglomerate, General Electric, and the talk here over the weekend – as every year – was whether the company can continue in one piece after its architect is gone. The issue had added piquancy because this was the first meeting since Mr Buffett, 81, announced he will soon undergo treatment for minor prostate cancer.

A successor to Mr Buffett has already been identified by the Berkshire board, though the name remains a secret. A corporate philosophy that gives considerable autonomy to the managers of the subsidiary companies will endure, it was claimed from the podium.

"Our managers get to paint their own paintings," Mr Buffett said. "My successor will understand that as well as I do. In many ways he'll be better than I am. He will be totally imbued with the culture. The company is totally imbued with the culture. Berkshire stands for something different to most companies, and that's not going to change."

Mr Buffett broke new news on the subject of the succession. As well as confirming that the next chief executive will be a man, he also said it won't be someone with a liberal arts degree, since investment decisions will need to be mathematically based.

And he gave new details of two previously obscure hedge fund managers hired by Berkshire to manage some of its investment portfolio, both of whom are likely to have significant roles under the next chief executive. Todd Combs and Ted Weschler were given an additional $1bn apiece at the end of March, so they both now run $2.75bn. Mr Buffett also revealed the two men are paid $1m per year plus 10 per cent of their investment gains.

As in previous years, the Berkshire meeting opened with a video of comedy sketches and continued with a blizzard of one-liners from Mr Buffett and his sidekick and vice-chairman, Charlie Munger, as they answered questions for almost six hours. This year, they added cancer to the list of topics for their jokes.

"I rather resent all this attention that Warren is getting," said Mr Munger. "I probably have more prostate cancer than he does. I don't know because I don't go and get a test for it. But I want the sympathy."

Mr Buffett predicted he was more likely to "get shot by a jealous husband" than to die from a common and unthreatening early-stage prostate cancer, and that he was getting the best possible care from his four doctors, "at least two of whom own Berkshire shares". His two-month course of radiotherapy at a clinic two minutes from his office won't stop him coming to work even for a day, he added. "I may have a little less energy, but that may mean I do fewer dumb things."

There was a rare note of criticism from shareholders for Mr Buffett's increasingly vocal interventions in US politics, including a round of applause for a questioner who said his octogenarian father had refused to buy Berkshire shares because Mr Buffett is advocating higher taxes on the rich. "It sounds to me like his father should own Fox," Mr Buffett said, referring to the right-wing channel Fox News.

Unbowed, he added that he and Mr Munger had always refused to "put our citizenship in a blind trust" and would keep speaking out.

Questions on political and investing philosophy, though, were in a minority this year for the first time since the Berkshire meeting became an annual pilgrimage for the American share-owning class more than two decades ago. More time was spent on the share buyback programme launched by the company in 2011 after several years of disappointing share price performance relative to Berkshire's growing asset value, and on a corporate policy of keeping at least $20bn of cash on hand to withstand any financial shocks.

Mr Buffett said he expected to bequeath his successor a company committed to staying so conservatively funded that it would not go broke even "if the Federal Reserve were hit by a nuclear bomb".

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

SThree: Trainee Recruitment Consultant - LONDON

£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

Day In a Page

Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there