Also, his views on a trade war with China and why he loves Apple
Warren Buffett chaired Berkshire Hathaway’s annual meeting over the weekend, and 40,000-plus faithful shareholders gathered in Omaha to hear the Oracle’s pronouncements.
Buffett, 87, and his vice chair and sidekick of six decades, Charlie Munger, 94, followed up Saturday’s daylong meeting with an appearance on CNBC’s Squawk Box with host Becky Quick Monday morning — just in case you missed some of their thoughts from the Saturday marathon.
Buffett has built Berkshire Hathaway from a dying manufacturer of suit linings into a nearly $500 billion conglomerate — measured by market cap — that is one of the most formidable economic enterprises in the world.
Here are some of the big takeaways — in our humble view — of the weekend’s proceedings:
1. Stocks are the best long-term investment on the planet and are not in a bubble at this time.
In a change of pace, Buffett began his remarks at the annual meeting, held at the CenturyLink Center in downtown Omaha, by turning back the clock to March of 1942.
Buffett pulled out some old New York Times front page headlines from the depths of World War II top make a point: Even at one of the darkest hours in U. S. history, it was smart to buy stocks.
An 11-year-old Buffett made his first stock purchase (actually, his father did it for the youngster) at that time, buying $114 in an oil-and-gas utility called Cities Service Preferred.
Buffett put a show-and-tell on the giant screen in the auditorium to illustrate the price of the Cities Service shares, and how he made a few bucks after selling them a while later.
[ How rich is Apple? Its recent stock buyback is more valuable than 275 companies in the S&P 500]
He bemoaned his impatience at the time. If he held on to those shares, through their various iterations, the $114 would be worth many times that amount.
To drive home the point even further, if he — or anyone — had invested $10,000 in the Standard & Poor’s 500-stock index in 1942 and never did anything else, it would now be worth $51 million.
The eternal optimist said Americans knew at the time that they would win the war, but that those months following the attack on Pearl Harbor and the uncertainty that followed was scary nevertheless.
“All you had to do was figure that America was going to do well over time,” he said. “You basically had to make one investment decision.”
2. Buffett is not retiring.
“I’ve been semi-retired for decades,” said Buffett when asked whether he plans to give up the Berkshire Hathaway chairman’s position anytime soon.
Berkshire announced in January that the company was promoting its longtime insurance guru Ajit Jain and former Berkshire Hathaway Energy chief Greg Abel to share the day-to-day supervision of the conglomerate’s various businesses.
The appointments had Berkshire-watchers wagging their tongues about the long-awaited succession plan.
