Nearing the End of an Era: Warren Buffett, Charlie Munger, and Berkshire Hathaway

May 15, 2023

Sometimes in life – as in investing – one must strike quickly or miss out on an opportunity. That is how Benj felt this year when he decided to take his two lads to the Berkshire Hathaway

AGM. The rationale is that Warren Buffett is 92 – although he is a relative youngster compared with his partner Charlie Munger, who will celebrate his 100th birthday next year. Being Jan. 1, it coincides with the official birthday of all horses in the Northern Hemisphere. Meanwhile equines in the Southern Hemisphere have their birthdays on Aug. 1. That seems to give the northern nags a head start.

Is it mere coincidence that the Kentucky Derby, arguably the world’s greatest horse race, is run on the same day as the Berkshire AGM, likely the greatest AGM on the planet? A doubleheader, so to speak. This year it was like the Triple Crown, with the coronation of King Charles.

When the two of us went to Omaha, Neb., 15 years ago, our thinking was that if we wanted to make the Berkshire pilgrimage with Warren and Charlie in charge, there was no time like the present. Although they have defied odds to become two of the oldest – and best – investors of all time, we who deem few bets sure do not believe that either gent will defy Father Time and be heading this shindig much longer. Thus, Benj felt there was no time like the present to give his lads a taste of the men’s brilliance and experience firsthand.

Waiting in the wings to take over from the leaders are Canadian Greg Abel and Indian-born Ajit Jain, who have been with the company since 1999 and 1986, respectively. Greg is chairman and chief executive of Berkshire Hathaway Energy, along with being vice-chairman of non-insurance operations, while Ajit is vice-chairman of the insurance operations. Both men were answering questions alongside Warren and Charlie, a proceeding that gives shareholders fabulous insight into the minds of the cream of the crop of investors. It is truly an educational experience.

If you want to experience Berkshire in the flesh, so to speak, and join the upward of 40,000 people who make the annual trek, you have to own at least one share of the company to be offered four seats. While the “A” shares trade near historical highs at US$500,000 – not in the budget for the vast majority of investors – the “B” shares, which are also near their most expensive ever, are on offer for a “mere” US$320 or so. Benj bought his share for US$317 last November, a purchase not focused on making money, but for getting the Gallander guys into the meeting.

Would we invest in either share now? We are divided on this issue. Both valuations have cruised up to their rarefied levels over the past year and a half. Sustaining these heights or moving upward in the next few years seems like a tough go. Six years ago, both prices were about half of what they are now. Mr. Buffett himself took a cautious tone regarding the outlook for his business empire as pandemic-era stimulus subsides. But betting against this company has been folly in the past.

If the journey to Omaha is on your bucket list, look to book your hotel early. The city does fill up. A trip to the fabulous zoo and Gorat’s Steak House, Warren’s favourite, are also worth putting on the menu. Even when the next generation takes over as the leaders, this trip will almost assuredly remain a worthwhile investment.

Benj Gallander and Ben Stadelmann are co-editors of Contra the Heard Investment Letter