Every company has to host an annual general meeting (AGM) every year for its shareholders. One of the most popular AGMs around the world is the one held by Berkshire Hathaway. This is THE chance for investors to get up close and personal with Warren Buffett and his partner Charlie Munger, i.e. the two greatest investors in the world.
In recent years, Berkshire Hathaway has started streaming its AGM live so that more investors around the world can “sit in” for the investment advice that Warren Buffett has to give.
But we know that not every investor has the time to stay up late in the night to watch it live. So, if you missed this year’s AGM, fret not. Here are 3 lessons from Warren Buffett’s AGM that every investor should know, even if you missed the AGM.
- Amazon: A Stock At Its Peak, Or A “Value Buy”?
Warren Buffett is recognised all over the world for his value investing style. Thus, it is interesting to know that Warren Buffett has entered into an investment in Amazon through Berkshire Hathaway. While some investors and analysts think that Amazon is close to its peak, Warren Buffett and his deputies (Todd Combs and Ted Weschler) definitely thinks that Amazon is a value play that still has more room to appreciate. Don’t forget that Warren Buffett does not enter into an investment that he thinks that it is not undervalued.
- Warren Buffett Makes Mistakes Too, But He’s Quick To Admit It
If you think that Warren Buffett is some no-nonsense-and-always-right kind of investor, think again. Like any investor in the world, even mistakes get to the greatest investor in the world. Berkshire Hathaway teamed up with 3G Capital to buy Heinz in 2013 and then merged it with Kraft under Kraft Heinz in 2015. But Kraft Heinz has been showing diminishing returns ever since.
Both Warren Buffett and Charlie Munger pointed out that Berkshire Hathaway made a mistake in paying too much for Kraft, leading to a dismal performance. While Warren Buffett also errs, he is quick to admit his mistakes.
- Is Share Buyback From Berkshire Hathaway A Sign Of An Overvalued Market?
As a business, Berkshire Hathaway has always had the “problem” of having too much cash on its hands. So what does Berkshire Hathaway do with its cash hoard?
So far, Warren Buffett and Charlie Munger have been spending its cash hoard on repurchasing shares of Berkshire Hathaway. According to Warren Buffett and Charlie Munger, Berkshire Hathaway is looking to make share buybacks only if Berkshire Hathaway’s market value falls below its intrinsic value.
Another reason why Berkshire Hathaway is spending its cash hoard on repurchasing shares is because of the lack of M&A opportunities. According to Warren Buffett, prices are sky-high for businesses possessing decent long-term prospects. Is it a sign that the market is overvalued?3