Corona Daily 460: The Warren Buffett Annual

Born in August 1930, Warren Buffett often jokes he is the result of his parents being locked down at home in the Great Crash of 1929. Known as the world’s wisest investor, he was the world’s richest man in 2006 (currently fourth). His position has declined only because of his philanthropy. Until 2006, he didn’t have a mobile or a computer. Before 2013, he had sent just a single email in his life. Buffett insisted his children travel in economy class. ‘I want to give my kids just enough so they would feel they could do anything, but not so much they would feel like doing nothing.’ He famously said.

The Oracle of Omaha (his nickname coming from his birthplace) has survived WWII, the Cuban missile crisis, 11 September, the 2008 financial crisis, and on a personal level, cancer. He is a master showman. His words and actions are capable of shaking the financial world.

Buffett is the chairman of Berkshire Hathaway. The AGM weekend is a busy affair in Omaha every summer. Downtown Hilton charges 700$ a night for the cheapest room. Last week, the Hilton room was 125$ with no takers. Around the AGM, the Omaha airport is packed with thousands of shareholders, super-rich all of them. (Before Corona, the share price had reached 347,000 $ per share, meaning you needed more than a million $ to buy just three shares of BRK-A. Now the prices have fallen by 20%. For a little over a million $, you can buy four shares). This year, the airport was empty. Every year, some 40,000 shareholders jostle to buy Berkshire Hathaway merchandise. This year there was no shopping, and no shoppers. Fearing some crazy shareholders would rush to Omaha anyway, the AGM venue was not disclosed.

The AGM on 2 May was supposed to be Bill Gates’ last meeting. He is leaving the board. But he didn’t attend. If you think Buffett, 89, is old, the deputy chairman, Charles Munger, is 96. They are partners for sixty years. (Munger didn’t attend because his age makes him vulnerable).

Buffett addressed shareholders online for over 4.5 hours. The American economic miracle will prevail, he said, as he says every year. But he admitted to selling all airline stocks. Since 2016, he had owned 10% of United, Delta, American and Southwest. Now he owns nothing. On Monday, promptly all airline stocks crashed.

America’s best days lie ahead, he said. But he admitted he had stopped investing currently. Despite his company sitting on 137 billion $ in cash. In 2008, a month after the crisis, he was buying big. Not this time.

He said this was the best time to be born in America. But his speech was atypically sober (or somber). The wisest investor said he doesn’t know what the market is going to do now.

*****

He admitted he hasn’t had a haircut for seven weeks. That was one line everyone understood and empathized with.

Buffett is known for always taking a long-term view. Short-term crises have never bothered him. His performance on 2 May, at the age of 89, suggested that perhaps his definition of long-term has changed.

Ravi