Media Moves

Coverage: Oracle of Omaha holds court

May 8, 2017

Posted by Chris Roush

Warren BuffettWarren Buffett’s Berkshire Hathaway Inc. held its annual shareholders meeting on Saturday in Omaha, Nebraska, which resulted in voluminous coverage about what Buffett said and about the companies he owns.

Michael de la Merced of the New York Times had the news:

Berkshire’s annual shareholder meeting has long been known as the “Woodstock of capitalism” for the fervor of the investors — some owning only a single share — who travel to Omaha just for the chance to listen to Mr. Buffett and his longtime business partner, Charles Munger.

Over the course of six and a half hours, Mr. Buffett, 86, and Mr. Munger, 93, touched upon a wide range of topics, as they sipped Coca-Cola and munched on See’s candies (from two of Berkshire’s holdings). The two executives spoke about the arcana of insurance, one of Berkshire’s biggest businesses. They criticized the work of private equity firms that load enormous piles of debt onto companies they acquire. And, responding to individual shareholder queries, they also spoke about their dreams and regrets.

Several questions homed in on politics, and Mr. Buffett, a Democrat with close ties to former President Barack Obama, offered measured criticism of President Trump’s policies. He argued that the American Health Care Act, which passed the House this past week, amounted to “a huge tax cut for guys like me.” He also said rising health care costs, rather than high taxes, were the biggest drag on American businesses.

“Medical costs are the tapeworm of American economic competitiveness,” he said.

Kristine Phillips of the Washington Post focused on Buffett’s comments about Wells Fargo:

Billionaire investor Warren E. Buffett rebuked Wells Fargo’s handling of widespread illegal sales practices that spanned at least 15 years and included targeting undocumented immigrants to open new bank accounts.

Buffett said the San Francisco banking giant’s executives failed to act immediately after finding out that employees were creating countless fake and fraudulent bank accounts to meet the company’s unrealistic sales goals. Wells Fargo “incentivized the wrong type of behavior,” Buffett said Saturday during Berkshire Hathaway’s annual meeting in Omaha. The 86-year-old tycoon is Berkshire’s chairman.

“If there’s a major problem, the CEO will get wind of it. At that moment, that’s the key to everything. The CEO has to act,” Buffett said, according to Reuters. “The main problem was they didn’t act when they learned about it.”

Berkshire is Wells Fargo’s largest shareholder.

Buffett’s comments come shortly after former Wells Fargo employees revealed that they were forced to resort to unethical and illegal sales tactics to meet daily sales quotes. Last month, a law firm handling a shareholder lawsuit against Wells Fargo obtained sworn statements from former bank managers, personal bankers and tellers who talked about questionable practices they either engaged in or witnessed.

Alex Crippen and Evelyn Cheng of CNBC reported that Buffett regretted not investing in Amazon or Google:

Buffett has often said he avoided tech stocks in the past because he didn’t really understand how they were making money and whether they would be able to do so over the long term. This week, the Oracle copped to getting it wrong on another tech company: IBM.

For years, Buffett was a true believer in Big Blue, but told CNBC in an interview he had cut his holdings in the stock by a third. “I don’t value IBM the same way that I did six years ago when I started buying,” he said, adding that the company as “run into some pretty tough competitors.”

In the case of Google, however, Buffett said he could have figured out the company had a great advertising business because he was, in effect, contributing to its profits.

After profusely praising Amazon chief Jeff Bezos, Buffett said he missed that opportunity as well.

“I was too dumb to realize. I did not think [Bezos] could succeed on the scale he has,” Buffett said, adding that he “really underestimated the brilliance of the execution.” The investor humbly admitted that he and Munger “miss a lot of things, and we’ll keep doing it.”

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