Warren Buffett calls his annual meeting a high point of the year. It’s a time when Berkshire Hathaway Inc. shareholders converge on Nebraska to eat Dairy Queen ice cream, sample See’s Candies and, most importantly, hear the wit and wisdom of one of the world’s most successful investors.

The booths offering sweet treats will be missing on Saturday, as will the tens of thousands of attendees. Even the location is being kept under wraps. But Buffett and a top deputy, Greg Abel, will be there, doing their best in a virtual meeting to make sense of an economy upended by the coronavirus pandemic.

Even without the event’s usual trappings, interest is, if anything, even more intense than usual. Buffett, Berkshire’s chairman and chief executive officer, has been relatively quiet over the past month as the global response to the pandemic escalated, drawing questions about his view of what might be in store for the markets, Berkshire’s businesses and the global economy.

“The tone will be different,” said Richard Cook, a shareholder who has missed just two meetings since attending his first in 1997. “I’ll certainly miss all these chances to see all those friends.”

Meyer Shields, an analyst at Keefe, Bruyette & Woods, said this year’s event will likely lack “the celebratory feel that it had in the past.”

There’s clearly very little to celebrate with the world in lockdown. In one of Buffett’s only public comments since the outbreak caused companies and communities to shut down across the U.S., the CEO in March called oil volatility and the panic hitting markets a “big one-two punch.”

His Berkshire Hathaway has likewise stayed in the shadows, a contrast to the financial crisis in 2008, when the Omaha-based company dipped into its vast cash reserves to gain lucrative preferred shares and rescue businesses teetering on the edge of collapse.

Buffett, now with roughly US$128 billion in cash, hasn’t announced any large public deals even as the S&P 500 tumbled 20 per cent in the first quarter.

Charlie Munger, a Berkshire vice chairman who in normal years fields questions at the meeting with Buffett, offered one explanation in an interview with the Wall Street Journal in early April. The conglomerate wants to come out of the coronavirus “typhoon” with lots of liquidity, Munger said, adding that many corporate executives are frozen in place as they try to figure out how to handle the crisis.

Berkshire’s phone isn’t ringing off the hook, he told the newspaper.

Cathy Seifert, an analyst at CFRA Research, said it’s possible Berkshire will still make a move. “But the other thing is, when you have the government becoming the lender of last resort, you don’t necessarily need Berkshire to be the lender of last resort,” she said.

Berkshire plans to start its event at 3:45 p.m. Omaha time on Saturday, with Buffett and Abel fielding questions shareholders sent to three hand-picked journalists. The company is set to release first-quarter results earlier that day.

What Bloomberg Intelligence Says

“The decline in Berkshire’s equity portfolio was about US$66 billion at quarter end, and a steep drop in Berkshire’s stock increases the potential for buybacks.”

-Analysts Matthew Palazola and Derek Han

The company warned that the pair would steer clear of political questions and discussions about specific holdings at the meeting, which has morphed from a small gathering in the lunchroom of one of Buffett’s insurers into a sprawling event the billionaire has called a “Woodstock for Capitalists.”

Here are some of the topics that might come up:


The company’s first-quarter earnings report will give investors a better sense of whether Buffett and his investing deputies, Todd Combs and Ted Weschler, found opportunities in the turmoil caused by the virus.

Berkshire’s quarterly filing usually discloses how much in stocks the company purchased during the quarter and the total size of the investment portfolio, including its largest holdings. Berkshire recently disclosed that it pared back stakes in Delta Air Lines Inc. and Southwest Airlines Co.


Buffett’s bet on Occidental Petroleum Corp., made just before his annual meeting last year, may draw questions. The oil producer slashed its common stock dividend in March for the first time in three decades as the plunge in oil prices weighed on the company.

As part of Buffett’s investment, Berkshire obtained preferred stock that helped finance Occidental’s US$37 billion acquisition of Anadarko Petroleum Corp. That investment pays a hefty eight per cent annual dividend. But Occidental recently opted to pay Berkshire’s quarterly dividend in shares rather than cash as the company looks for ways to conserve funds. In some ways, the Berkshire dividend that Occidental has to meet has ended up leaving others worse off, according to KBW’s Shields.

“I certainly don’t think that was the intention, but I think it may be a bit of a discouragement from some people looking at Berkshire capital and saying, ‘Hey, this is expensive, but it’s got this great ringing endorsement,’ because that’s not how it’s working out,” Shields said.

Berkshire’s also been building a common stock investment in Occidental, a stake that was valued at about US$780 million at the end of 2019.

Insurance Claims

Chubb Ltd. CEO Evan Greenberg had a stark warning about the effect of the pandemic and shutdowns: It will likely be the largest event in insurance-industry history because it affects both sides of the balance sheet.

Berkshire owns a collection of companies in the industry, with some that offer commercial-property insurance, workers’ compensation coverage and health-care liability policies. And some of its companies are reinsurers, which essentially write policies for other insurers.

Auto insurers, such as Berkshire’s Geico, have actually returned some funds or offered premium credits to consumers as driving decreases, which could translate into fewer accidents. The industry may also see potential claims from canceled events and workers’ compensation insurance.

“It’s so different based on the insurance product line,” Shields said. “There are some lines that have major questions,” especially with business-interruption coverage.

Succession Questions

Buffett, 89, and Munger, 96, routinely field questions about succession at the conglomerate. Berkshire’s decision in early 2018 to appoint Abel and Ajit Jain to the board was part of a movement to address succession, Buffett said at the time.

Still, both Abel and Jain have remained behind the scenes to some extent, tending to Berkshire’s collection of businesses. Buffett told investors in this year’s annual letter that the pair would field more questions at this year’s annual meeting. But now only Abel, who lives closer to Omaha, will join Buffett at the event.

“It’s really, really important,” Shields said. While there’s no indication that any change would happen now, “at some point in time, it’s not just that one of these guys takes over for Warren Buffett, it’s that maybe one of these guys takes over for Warren Buffett in a period of unprecedented change.”

Pandemic Fallout

Coronavirus fallout will hit Berkshire in varying ways. See’s Candies began furloughing workers in early April due to the shutdown of its stores. On the other hand, analysts at UBS Group AG expect an improvement in BNSF’s margins in the first quarter.

Munger told the Wall Street Journal that Berkshire will probably have to shut some small businesses, though the story didn’t name any specific units.

Still, Berkshire’s breadth -- with businesses in energy and retail and industrial operations -- gives the conglomerate a sense of the broader economy, especially through units such as the railroad, BNSF.

“Buffett has access to a set of data about the U.S. economy through all of his subsidiaries,” Cook said.