Warren Buffett Is About To Face Some Tough Questions About Lagging Berkshire Hathaway Stock

Ted

FYI: More than 30,000 shareholders of Berkshire Hathaway are expected to descend on Omaha, Neb., for its annual meeting on May 4. There, they will celebrate the company and savor insights from its leadership at what could be one of the last meetings when CEO Warren Buffett and Vice Chairman Charlie Munger share the stage. Buffett is 88, and Munger, 95.

Berkshire (ticker: BRK.A) holders, however, haven’t had a lot to cheer about lately as the stock has trailed the market this year amid frustration among some investors that Buffett continues to sit on more than $110 billion of cash in what may be a fruitless quest for what he has called an “elephant-size” acquisition.
Regards,
Ted
https://www.barrons.com/articles/warren-buffett-berkshire-hathaway-annual-meeting-51556318055?mod=hp_LEAD_1

Investor

It is very hard to deploy cash in a market that is grossly overvalued. It is not the age of Buffett or Munger that is the problem here. It is their knowledge of the markets that is preventing them putting money in stock with such high multiples. Berkshire investors should be patient but in this age we do not have too many prudent investors.

hank

Investor said:

It is very hard to deploy cash in a market that is grossly overvalued. It is not the age of Buffett or Munger that is the problem here. It is their knowledge of the markets that is preventing them putting money in stock with such high multiples. Berkshire investors should be patient but in this age we do not have too many prudent investors.

+1

Prudence would dictate ...

Mark

Prudent or Patient. Both seem lacking in this age of instant gratification. One need only look at lottery sales all around the US.

MJG

Hi Guys,

No real,secrets here. The current performance is a sample of and a simple regression-to-the-mean. It likely happens to all of us including the very talented and/or lucky at some point in our investing careers. Personally, I am neither, but I wait somewhat impatiently. Hope you are! My time will come, hopefully sooner rather than later.

Best Regards

Sven

I believe his time will come again when the valuation is more attractive. Key is to be patience.

Old_Joe

This just now from The Wall Street Journal:

Berkshire to Invest $10 Billion in Occidental Petroleum to Finance Anadarko Bid

Warren Buffett’s Berkshire Hathaway Inc. agreed to inject $10 billion into Occidental Petroleum Corp.’s bid to acquire Anadarko Petroleum Corp. and fight off Chevron Corp.

Last week, Houston-based Occidental offered to purchase Anadarko for $38 billion, topping the $33 billion that Chevron agreed to pay for the company. The two sides are battling over prized energy assets in the heart of the U.S. oil boom in West Texas and New Mexico.

The backing by Berkshire gives Occidental more ammunition to fight the much-larger Chevron, and it signals that Occidental is prepared to match or exceed any Chevron counteroffer. Occidental now appears to be in a leading position to complete the acquisition, analysts said.

Anadarko representatives were unavailable Tuesday, but the company said Monday that it was considering Occidental’s offer.

See the WSJ article for additional information.

Ted

@MFO Members: Kind of surprising, Buffett have veered away from using Berkshire’s vast cash resources to do hostile deals.
Regards,
Ted

Old_Joe

@Ted- According to additional info in the WSJ article, Occidental said that “We are thrilled to have Berkshire Hathaway’s financial support of this exciting opportunity”.

Anadarko doesn't seem to mind having two prospective buyers outbidding each other.

That leaves possible "hostility" over at Chevron, but that certainly doesn't directly impact Berkshire.