LThe atmosphere was both euphoric and twilight. The last general meeting of shareholders of Berkshire Hathaway, this Saturday, May 4, was perhaps the last of its founder Warren Buffett. At 93, the wise man from Omaha, his beloved city in Nebraska, felt alone on the podium. His lifelong accomplice, Charlie Munger, was no longer there, having died on November 28, 2023 at the age of 99.
However, he was not so alone. Thousands of shareholder fans came to applaud him and, at his side, sat Greg Abel, the 61-year-old Canadian, inducted as his successor. Warren Buffett therefore planned everything and even warned that after his disappearance “ [il] could[t] try to come back and haunt his successors,” if they didn’t make the right decisions.
Shareholders are counting on the ghost of Mr. Buffett to continue the most formidable financial success in the history of the American Stock Exchange. Once again this year, the exceptional results of the group’s companies and holdings brought its cash flow to a record level of 189 billion dollars (176 billion euros). Berkshire Hathaway’s market capitalization now exceeds $860 billion, at the level of the best technology stocks.
Shareholder enthusiasm
We therefore understand the enthusiasm of its shareholders. Because Berkshire Hathaway is not an investment fund which is remunerated by commissions, but an ordinary company which only enriches its shareholders through its dividends, its share buybacks and by the progression of its stock price. THE Wall Street Journal recently calculated that an investment of $1,000 in the American Stock Exchange index in 1965, at the start of Warren Buffett’s adventure, the Standard & Poors 500, would represent 300,000 euros today. Nice gain due to the progression of the markets, but not much compared to the 42 million dollars that would have become of these thousand dollars invested in Berkshire Hathaway. The company did 142 times better than the stock market. A unique performance for a company which for a long time did not resell the companies it bought.
Greg Abel is therefore starting on such solid foundations that the company must return the money to its shareholders due to the lack of good opportunities in the American markets at their highest. But he inherits a major question. Much of the company’s recent performance comes from investing heavily since 2016 in Apple stock. They alone are worth $157 billion, or half of the entire portfolio. Isn’t this too big a risk at a time when Apple is struggling to find growth? The ghost of Warren Buffett is not yet here, but he is already haunting the nights of his successors.