Most investor meetings organized by Fortune 500 companies are staid affairs that are about as exciting as a quarterly conference call, but this is not the case with Berkshire Hathaway, the holding company led by popular billionaire Warren Buffett, also known as the “Oracle of Omaha.”
According to a wire report distributed by international news bureau Reuters, Buffet and his executive partner Charlie Munger set aside five hours of the event to answer questions from the public as well as from journalists. As usual, the mood among attendees, particularly shareholders, was very cheerful and optimistic. Berkshire’s annual meetings are more like festivals than investor conferences, but they also serve as a barometer for the American economy.
One of the highlights of the conference was Buffett’s clarification on how his firm is currently handling accounting. Since Berkshire’s shares are now marked to market on a daily basis, the quarterly results may appear to be very different; in other words, shareholders can now get a snapshot of the company’s financial health at the end of every trading session on Wall Street. For day traders, this type of accounting is very valuable since it helps them to identify daily trends; even though Buffett himself is not fond of day traders and their speculative strategies, he realizes that shareholders like to watch Berkshire stock like hawks.
News stories about Buffett loading up on shares of Apple have been widely discussed prior to the shareholders meeting. Berkshire analysts saw a good opportunity to secure a good market positions after Apple shares lost ground based on a report that global demand for iPhones is slowing down at a gradual pace. Buffett purchased about $75 million worth of Apple shares before the conference.
Under the new accounting rule, Berkshire’s first quarter was overwhelmingly positive as it posted a gain of nearly 48 percent; however, there was also a loss greater than one billion on an annual basis, which resulted in a markdown of about $6.3 billion. It should be noted that the first quarter of 2018 was particularly challenging for Wall Street due to a couple of corrections.
Berkshire Hathaway shares are the most expensive on Wall Street, and they are widely considered to be a very good investment. One of the main reasons investors flock to Berkshire stock is because they trust Buffett’s vision of investing for growth. It also helps that Buffett is a very charismatic billionaire with a substantial track record of philanthropic endeavors.