The investor responsible for Warren Buffett’s 25x gain on BYD just sold $320 million of the electric-vehicle maker’s stock

Warren Buffett
Warren Buffett.

  • Li Lu’s Himalaya fund sold 15% of its BYD stake in two days, netting about $320 million.
  • Li encouraged Warren Buffett and Charlie Munger to invest in the Chinese automaker in 2008.
  • BYD’s stock price is down about 5% this year after soaring 400% in 2020.
  • See more stories on Insider’s business page.

Li Lu introduced Warren Buffett and Charlie Munger to BYD, one of the pair’s best investments over the past decade. The fund manager seems less bullish on the Chinese electric-vehicle maker today, given he recently cashed out more than $300 million of its stock in the space of two days.

Li’s Himalaya Capital Management sold 7.1 million shares for around $29 each on July 8, and disposed of another 3.6 million shares at a similar price on July 9, Hong Kong stock-exchange filings show. The sales reduced its BYD stake by 15% to 62.9 million shares.

Himalaya raked in nearly $320 million from the sales, leaving it with a stake worth $1.7 billion at the last count. BYD’s Hong Kong-listed shares have slid by about 5% this year after surging roughly five-fold in 2020.

Himalaya didn’t immediately respond to a request for comment from Insider.

BYD counts Himalaya as its second-largest shareholder after Buffett and Munger’s Berkshire Hathaway conglomerate, according to the automaker’s latest annual report. Li originally told Munger about BYD, spurring Berkshire in 2008 to spend $232 million for 225 million shares of the company – a stake worth over $6 billion today.

Munger – Buffett’s business partner and Berkshire’s vice-chairman – has effusively praised the Himalaya boss in the past. He dubbed Li “the Chinese Warren Buffett” in 2019, revealed the fund manager was the only outsider he’s ever trusted to invest his money, and said in 2010 it was a “foregone conclusion” that Li would eventually hold a leading role at Berkshire.

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Days after Charlie Munger called Robinhood ‘a gambling parlor,’ the free-trading app revealed options trading as its largest source of revenue

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Warren Buffett, CEO of Berkshire Hathaway, and vice chairman Charlie Munger.


Just two days after Charlie Munger of Berkshire Hathaway called Robinhood “a gambling parlor,” the free-trading app said it derives a majority of its revenue from options trading.

The comments from Warren Buffett’s right-hand man came in an interview with CNBC on Tuesday night, in which the billionaire investor said, “it’s telling people they aren’t paying commissions when the commissions are simply disguised in the trading.”

On Thursday, Robinhood filed its S-1 with the SEC, a necessary step the company has to take prior to going public. The document revealed the underlying drivers of Robinhood’s business, from options, equities, and crypto trading, to securities lending and payment for order flow.

In 2020, Robinhood generated $720 million in revenue, of which 61%, or $440 million, was derived from options trading. Robinhood’s options trading revenue grew 298% in 2020, relative to 2019, as the pandemic and government stimulus checks led to a boom in stock market trading by retail investors.

Options trading is often viewed as a much riskier form of trading relative to stock trading, as it gives investors leverage to increase their exposure to short-term or long-term moves in the stock market.

While less risky option trading strategies exist, like selling covered calls on an underlying stock holding, a bulk of the options trading among Reddit “YOLO” investors tends to be buying directional put or call options with short-term expiration dates. Unless timed properly, these types of options trades can lead to a loss of nearly all invested capital.

“[Robinhood is] a gambling parlor masquerading as a respectable business,” Munger said.

Robinhood probably disagrees with Munger. In the company’s S-1 filing, it laid out how it’s democratized stock market investing for 18 million users through $0 trading commissions, an easy-to-use app, and education initiatives.

The company said more than 50% of its customers say they are first-time investors.

A customer named Angelina was quoted in Robinhood’s S-1 as saying, “The investor in my head was someone who wore a suit and a tie. Robinhood changed that for me.”

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Warren Buffett and Charlie Munger slam Robinhood, blast Archegos’ lenders, and reflect on their iconic friendship in a new interview. Here are the 15 best quotes

Warren Buffett and Charlie Munger sitting for a CNBC interview in May 2021.
Warren Buffett and Charlie Munger.

  • Warren Buffett and Charlie Munger blasted Robinhood and Archegos’ lenders in a recent interview.
  • The business partners also reflected on their six decades of friendship and biggest influences.
  • Buffett and Munger discussed remote working and the pandemic’s impact on Berkshire Hathaway as well.
  • See more stories on Insider’s business page.

Warren Buffett and Charlie Munger blasted Robinhood, slammed the banks that enabled the Archegos Capital meltdown, and reflected on their friendship of six decades in a CNBC interview that aired on Tuesday night.

The Berkshire Hathaway chairman and vice-chairman also shared their key lessons from the pandemic, discussed its impacts on their company, and clashed on the subject of Zoom meetings versus telephone calls.

Here are the 15 best quotes from “Buffett & Munger: A Wealth of Wisdom,” lightly edited and condensed for clarity:

Warren Buffett: “I knew when I met Charlie, after a few minutes in the restaurant, that this guy was gonna be in my life forever. We were gonna have fun together. We were gonna make money together. We were gonna get ideas from each other. We were gonna both behave better than if we didn’t know each other.”

Charlie Munger: “What I like about Warren is the irreverence. We don’t have automatic reverence for the pompous heads of all civilization.”

WB: “It goes well beyond buying a stock and selling it higher. He’s designed dormitories and helped build them. He’s worked at hospitals to understand how they can be made better, serve more people, and do it at less cost. Charlie’s worked on big problems, and he doesn’t need to. And Charlie has never shaded anything he’s told me since we met, in terms of presenting it to me in a different way than reality. He’s never done anything I’ve seen that’s self-serving. He makes me better than I would otherwise be. I don’t wanna disappoint him.” – describing what he admires about Munger.

WB: “I never heard my dad say to me in my life, ‘Be sure you pay all your debts.’ But I just watched how he lived, and you wanna have certain people in life that you don’t want to disappoint. You wanna have people that make you a better person than you otherwise would be. Charlie does that for me now, but my dad did it for me early on.”

WB: “What really is great is if you can do what you want to do in life, and associate with the people you want to associate with in life. We’ve had that luxury now for 60 years or close to it. That beats 25-room houses and six cars.”

CM: “If it’s clear that something is a mistake, fix it quickly. It doesn’t get better while you wait.”

CM: “Think of how massively stupid that was. It was the lure of the really easy money that the idiot was paying you, being the prime broker for the jerk. They were all foolish. But Credit Suisse has managed to be the biggest fool of all.” – commenting on the Archegos fiasco earlier this year.

CM: “Robinhood is beneath contempt. It’s a gambling parlor masquerading as a respectable business. It’s basically a sleazy, disreputable operation.” – on the popular trading platform.

CM: “The regulators need to change laws now. But if you’re running a gambling parlor, you want the big players to gamble more furiously. We don’t wanna suck people into gambling for way more than they can afford.” – criticizing lax rules in the securities business.

CM: “Our wonderful, free-enterprise economy is letting all these crazy people go to this gross excess. The communist Chinese are avoiding it. They step in preemptively to stop speculation. I don’t want all of the Chinese system, but I certainly would like to have the financial part of it in my own country.”

WB: “If you get enough people believing something won’t be there next week in banking, it won’t be there next week, absent the Federal Reserve.” – recalling companies’ mad rush to tap their credit lines when the pandemic struck.

WB: “The biggest thing you learn is that the pandemic was bound to occur, and this isn’t the worst one that’s imaginable at all. Society has a terrible time preparing for things that are remote but are possible, and will occur sooner or later.”

WB: “The economic impact has been extremely uneven. Millions of small businesses have been hurt in a terrible way, but most of the big companies have overwhelmingly done fine, unless they happen to be in cruise lines or hotels or something.” – Buffett added that the pandemic surprised his team in many ways, and cautioned there’s a lot they still don’t know about the fallout.

WB: “I don’t see any plus to it particularly. I’d rather have my feet on the desk, and I find the telephone a very satisfactory instrument.” – responding to Munger saying he’s “fallen in love with Zoom” and uses it three times a day.

WB: “I wouldn’t have wanted to work there. I’d resign or be fired. I’d rather be in a jail cell with a few people who are interesting, and plenty of reading material.” – commenting on how he would react to a centralized management system at Berkshire.

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Warren Buffett and Charlie Munger knocked Robinhood, discussed the Archegos fiasco, and reflected on their friendship in a new interview. Here are the highlights

Warren Buffett speaks in a CNBC interview
Warren Buffett.

  • Warren Buffett and Charlie Munger took part in a CNBC interview that aired on Tuesday night.
  • The billionaire investors criticized Robinhood and Archegos, and reflected on their friendship.
  • Buffett and Munger also discussed remote working and the lessons they took from the pandemic.
  • See more stories on Insider’s business page.

Warren Buffett and Charlie Munger discussed their iconic friendship, how they approach business, and how they built Berkshire Hathaway in “Buffett & Munger: A Wealth of Wisdom,” a CNBC program filmed shortly after the Berkshire annual meeting in May and aired on Tuesday night.

The Berkshire Hathaway chairman and vice-chairman also criticized Robinhood, called for tighter regulations after the Archegos Capital fiasco, discussed the remote-working trend, and shared what they learned from the pandemic.

Buffett, 90, and Munger, 97, met more than 60 years ago. The pair went on to build one of America’s biggest conglomerates, which owns companies such as Geico, See’s Candies, and the BNSF Railway, and holds multibillion-dollar stakes in Apple, American Express, Bank of America, Coca-Cola, Kraft Heinz, and other public companies.

Here are the highlights from the interview:

Archegos

The first clip from Buffett and Munger’s interview focused on the collapse of Archegos Capital earlier this year, and the loose lending standards among banks that allowed it to happen.

Munger singled out Credit Suisse as “the biggest fool of all,” and bemoaned that it took the financial crisis to spur regulators to tighten the rules and clamp down on risky practices last time around.

“Think of how massively stupid that was,” Munger said about Archegos taking on tens of billions of dollars in leverage and blowing itself up. “It was the lure of the really easy money that the idiot was paying you – being the prime broker for a jerk.”

Munger added that the banks should have known better than to lend to Bill Hwang, given the fund manager had pleaded guilty to insider trading in the past. “You can’t make a good deal with a bad person, just forget it,” Buffett said.

“The regulators need to change the laws,” Munger said. “But of course if you’re running a gambling parlor, you want the big players to gamble more furiously.”

“We don’t want to suck people into gambling more than they can afford,” he added.

Buffett chimed in that regulators have a very tough job, as cracking down on the biggest problems involves attacking the financial center of enormous institutions.

Robinhood

The pair also touched on Robinhood, the trading platform that they both slammed at Berkshire’s annual shareholder meeting in May.

Robinhood is a “gambling parlor masquerading as a respectable business,” Munger said. “It’s beneath contempt.”

Buffett added that Robinhood doesn’t push its users to invest in long-term, low-cost index funds. Instead, it encourages them to trade options and take leveraged positions.

“It’s basically a sleazy, disreputable operation,” Munger added.

Friendship

Buffett and Munger recalled meeting one another at a dinner in 1959. Buffett enjoyed the fact that Munger was “rolling on the floor, laughing at his own jokes” like him, while Munger said he loved Buffett’s irreverence and the fact he doesn’t automatically suck up to the “pompous heads of all civilization.”

They also discussed the start of their partnership. “We had fun in the early days because it was like hunting expeditions,” Munger said.

Berkshire

The next part of Buffett and Munger’s interview focused on how they built Berkshire. They reflected on the conglomerate’s earliest holdings, which included Blue Chip Stamps and Berkshire’s original textile mills, and how those businesses ultimately failed as society moved on.

Buffett said that Diversified Retailing, its department-store business, was eventually sold and the proceeds were plowed back into Berkshire. The investor estimated that decision generated about $25 billion in value, based on the increase in Berkshire’s stock price since then.

Buffett also commented on the mishmash of businesses that made up Berkshire in its early days. “It looked like a plate of spaghetti at one time, which was not good,” he said.

Munger said that a key lesson he learned from Berkshire’s early failures: “If it’s clear that something is a mistake, fix it quickly. It doesn’t get better while you wait.”

Role models

Next, the pair discussed their relationships with their fathers. “I never heard my dad say in my life, ‘Be sure you pay all your debts,’ but I just watched how he lived,” Buffett said.

“You want to have certain people in life that you don’t want to disappoint,” he continued. “You want to have people that make you a better person.”

“I was surrounded by high-grade people,” Munger said, highlighting his father, who was a lawyer like him. “I was just forced to imitate the right people.”

Buffett recalled how as a young boy, he often dropped in on four or five housewives on his way home from Sunday mass, as he always enjoyed speaking to people older than him.

The investor emphasized the power of being able to choose the people in his life. “We’ve had that luxury now for 60 years or close to it,” he said. “That beats 25-room houses, and six cars. What really is great is if you can do what you want to do in life, and associate with the people you want to associate with in life.”

Buffett also reflected on his first impression of Munger. “I knew when I met Charlie, after a few minutes in the restaurant, that this guy was gonna be in my life forever.”

“We were gonna have fun together, we were gonna make money together, we were gonna get ideas from each other, we were both gonna both behave better than if we didn’t know each other,” he added.

Remote work

Buffett and Munger also discussed how they adapted to the pandemic. “I’ve fallen in love with Zoom,” Munger said, adding that he uses the video-communication tool at least three times daily. “It just adds so much convenience.”

Meanwhile, Buffett said he’s “not a Zoom guy” and doesn’t see much value in using it. “I find the telephone a very satisfactory instrument,” he said.

Munger also discussed some of the pandemic’s fallout. “A lot of business travel will never come back,” he said, adding that companies will decide to have a couple of in-person meetings a year and use Zoom to conduct the rest of them. Highlighting the slump in office demand, he added that lots of aspects of work could change for good.

The pandemic

Buffett added that a lot remains unknown about the pandemic, and highlighted how uneven and unpredictable the economic impacts have been with smaller businesses struggling and many large corporations thriving.

The Berkshire chief also disclosed that some of his company’s car dealerships wanted to apply for government aid, but Buffett stopped them because they had a “rich parent.” He also underscored the immense danger when droves of people take out loans in a crisis because they’re worried they won’t have access to credit in a week’s time.

“You get enough people believing something won’t be there next week in banking, it won’t be there next week, absent the Federal Reserve,” Buffett said.

The investor added that his most important lesson from the pandemic was that it was bound to occur eventually, and that it wasn’t “the worst one that’s imaginable at all,” he said.

Decentralization

Buffett and Munger emphasized how much they enjoy Berkshire’s decentralized structure, which allows them to delegate responsibility to the managers of its scores of subsidiaries. Munger predicted that the strategy would catch on more widely.

“Just as we found we can eliminate some business travel, we’re gonna find we can get rid of some dumb bureaucracy in American corporations,” he said.

Buffett also balked at the idea of helming a centralized company. “I’d resign or would have been fired,” he said. “I’d rather be in a jail cell with a few people who are interesting, and plenty of reading material.”

Partners for life

The Berkshire chief reserved some heartfelt praise for his partner of six decades.

“It goes well beyond buying a stock and selling it higher,” Buffett said about Munger’s contributions to society. “He’s designed dormitories and helped build them. He’s worked at hospitals to understand how they can be made better and serve more people and do it at less cost.”

“Charlie’s worked on big problems, and he doesn’t need to,” the investor continued. “Charlie has never shaded anything he’s told me since we met, in terms of presenting it to me in a different way than reality, and he’s never done anything I’ve seen that’s self-serving.”

“He makes me better than I would otherwise be,” Buffett added. “I don’t wanna disappoint him.”

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Warren Buffett’s right-hand man called Al Gore an ‘idiot.’ The former vice-president’s firm bought the same 2 stocks as Buffett and Charlie Munger last quarter.

al gore
Al Gore.

  • Warren Buffett’s business partner, Charlie Munger, mocked Al Gore’s intelligence in 2017.
  • Gore’s Generation firm and Munger’s Daily Journal both invested in Alibaba last quarter.
  • Generation and Buffett’s Berkshire Hathaway both added Aon to their stock portfolios.
  • See more stories on Insider’s business page.

Warren Buffett’s right-hand man, Charlie Munger, once called Al Gore an “idiot” and “not very smart.” The former US vice-president’s investment firm bought the same two stocks that Buffett and Munger added to their portfolios last quarter.

Generation Investment Management, which Gore cofounded and chairs, boosted its stake in Alibaba by 94% to almost 3 million shares in the three months to March 31, regulatory filings show.

Daily Journal, a newspaper publisher that boasts Munger as its chairman and stock picker, established a stake in the Chinese e-commerce group last quarter as well. Alibaba was its only new position in the period.

Generation also invested in Aon in the first quarter. Buffett’s Berkshire Hathaway conglomerate, which counts Munger as its vice-chairman, bought into the professional-services firm too – the only new addition to its portfolio.

It’s also worth noting Gore sits on the board of Apple, Berkshire’s biggest holding and one of its most lucrative bets ever.

Munger disparaged Gore’s intelligence at Daily Journal’s annual meeting in 2017, according to GuruFocus. He wanted to underscore how surprising it was that Gore had made hundreds of millions of dollars from investing.

Gore, who starred in an “An Inconvenient Truth” and won a Nobel Peace Prize for raising awareness of the climate crisis, simply refused to invest in carbon-intensive companies, and partnered with a skilled value investor named David Blood. The upshot was that Generation invested in software and service companies such as Microsoft and delivered stellar returns, Munger said.

Generation’s long-term, sustainable investing approach has resulted in it owning billion-dollar stakes in Google-parent Alphabet, Cisco, Equifax, Charles Schwab, and Baxter International.

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Warren Buffett’s Berkshire Hathaway is nearing the maximum stock price of $429,496 allowed on the Nasdaq

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Warren Buffett, the CEO of Berkshire Hathaway, and Charlie Munger, the vice chairman.


Class A shares of Berkshire Hathaway are fast approaching the maximum stock price allowed on the Nasdaq exchange, The Wall Street Journal first reported on Tuesday.

The stock sat at $429,172 on Thursday morning, a few hundred dollars below the maximum of $429,496.7295.

On Tuesday, Nasdaq temporarily suspended broadcasting the price of Class A shares over several popular data feeds that provide real-time price updates for online brokerages and finance websites.

The issue stems from the way Nasdaq’s computers count and the compact digital format it uses.

“Nasdaq and some other market operators record stock prices in a compact computer format that uses 32 bits, or ones and zeros,” The Journal explained. “The biggest number possible is two to the 32nd power minus one, or 4,294,967,295. Stock prices are frequently stored using four decimal places, so the highest possible price is $429,496.7295.”

Nasdaq is rushing to issue an upgrade to fix the problem, expected by May 17, the report said.

Berkshire Hathaway is the only stock close to hitting this upside limit, in part because of CEO and Chairman Warren Buffett’s refusal to split the stock; rather than do that, Berkshire Hathaway in 1996 issued Class B shares, which are more accessible to investors, given their price on Thursday of $285.

“I know that if we had something that it was a lot easier for anybody with $500 to buy, that we would get an awful lot of people buying it who didn’t have the faintest idea what they were doing,” Buffett told investors at Berkshire’s annual meeting in 1995.

Outgoing Amazon CEO Jeff Bezos is said to have resisted splitting Amazon stock to attract long-term investors rather than speculative investors who like to focus on lower-priced stocks.

Shares of Berkshire Hathaway are up more than 20% year-to-date, as a reflation trade out of growth and into cyclicals unfolds in anticipation of a reopened economy.

Read more: Dave Bujnowski beat 99% of his peers to return 125% last year. The Baillie Gifford investor shares 5 stocks set to benefit from the end of the pandemic and a hyperconnected economy.

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Warren Buffett’s right-hand man blasted bitcoin, slammed SPACs, and shamed Robinhood at Berkshire Hathaway’s annual meeting. Here are the 16 best quotes.

warren buffett charlie munger
Warren Buffett and Charlie Munger.

  • Charlie Munger tore into bitcoin, Robinhood, and SPACs at Berkshire Hathaway’s annual meeting.
  • Warren Buffett’s business partner dismissed “big tech” competition concerns.
  • Munger warned that aggressive federal spending can’t go on forever.
  • See more stories on Insider’s business page.

Warren Buffett’s right-hand man blasted bitcoin, Robinhood, and SPACs at Berkshire Hathaway’s annual meeting on Saturday.

Charlie Munger – Berkshire’s 97-year-old vice-chairman – also defended “big tech” companies from claims they need to be broken up, and warned that unchecked federal spending will ultimately end in disaster.

Here are Munger’s 16 best quotes from the meeting, lightly edited and condensed for clarity:

1. “It’s crazy to think anybody is going to be smart enough to hug the money and then just come out on the bottom tick in some crazy crisis and spend it all. That’s too tough a standard. Anybody who expects that of Berkshire is out of his mind.” – dismissing the idea that Berkshire could have deployed a large chunk of its cash pile when markets tanked last spring.

2. “Warren and I don’t have to agree on every damn little thing we do.” – commenting on Berkshire exiting its position in Costco, Munger’s favorite company.

3. “I would not like to see our present giants brought down to some low level based on any competitive reasoning. I don’t think they’re doing a lot of harm to any competitor. I think they’re a credit to the market, credit to our civilization.” – arguing against breaking up the “big tech” companies.

4. “There’s a good chance that this extreme conduct is more feasible than everybody thought. But I do know if you keep just doing it without any limit, that it will end in disaster.” – suggesting that loose monetary and fiscal policy may be more sustainable than feared, but it can’t go on forever.

Read more: GOLDMAN SACHS: Buy these 24 high-growth stocks that are investing in cash cows for the future at the highest rates in the S&P 500

5. “It’s a moral failing to some extent. The easy money made by things like SPACs and derivatives and so on – you push that to excess, it causes horrible problems with civilization. It reflects no credit on the people who are doing it and no credit on the regulators and monitors that will allow it. It’s not just stupid, it’s shameful.”

6. “I don’t mind the poor fish that gamble. I don’t like the professionals that take the suckers.” – emphasizing that he’s far less concerned about amateur investors speculating than the trading apps taking advantage of them.

7. “We’re used to shooting fish in a barrel, but that’s gotten harder.” – bemoaning the lack of bargain stocks on the market.

8. “Bernie Sanders has basically won. With everything boomed off so high and interest rates so low, the millennial generation is going to have a hell of a time getting rich compared to our generation. The difference between the rich and the poor in the generation that’s rising is going to be a lot less. So Bernie has won. He did it by accident, but he won.”

9. “If you’re repurchasing stock just to pull it higher, it’s deeply immoral. But if you’re repurchasing stock because it’s a fair thing to do in the interest of your existing shareholders, it’s a highly moral act. And the people who are criticizing it are bonkers.”

10. “It’s probably a mistake to be anti-capitalist. Capitalism is what raises GDP for everybody. I’m a little wary of just constantly being mad at people because they have a little more money.”

11. “It is stupid for states to drive out their wealthiest citizens. The old people that don’t commit crimes, that donate to the local charity – who in the hell in the right mind would drive out the rich people? Florida and places like that are very shrewd, and places like California are being very stupid. It’s contrary to the interest of the state.”

12. “I hate the bitcoin success. I don’t welcome a currency that’s so useful to kidnappers and extortionists and so forth. Nor do I like just shuffling out a few extra billions and billions and billions of dollars to somebody who just invented a new financial product out of thin air. I should say modestly that I think the whole development is disgusting and contrary to the interest of civilization. I’ll leave the criticism to others.”

13. “Oh, Warren, even though you shot and missed, you were at least shooting at an elephant. The cost of health care in Singapore is 20% of what it is in the United States, and their medical system works better. So you were shooting at a huge elephant. But as you found out, it’s very hard to for people to get very enthusiastic about losing part of their income.” – commenting on Haven, Berkshire’s joint venture with Amazon and JPMorgan to lower employee-healthcare costs and improve care.

14. “It’s just godawful that something like that would draw investment from civilized men and decent citizens. It’s deeply wrong. We don’t want to make our money selling things that are bad for people.” – criticizing Robinhood and other trading apps for encouraging amateur investors to gamble on stocks and dabble with options trading.

15. “The states have replaced the Mafia as the proprietor in the numbers game. They pushed the Mafia aside and said, ‘That’s our business, not yours.’ It doesn’t make me proud of my government.” – comparing state lotteries to the “Italian lottery” run by the mob.

16. “If you’re not a little confused by what’s going on, you don’t understand it. We’re in uncharted territory.” – arguing that nobody knows the medium-term effects of stimulus checks, near-zero interest rates, and aggressive federal spending on the US stock market and economy.

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Meet Greg Abel, the 58-year-old Berkshire Hathaway vice chairman just tapped as Warren Buffett’s successor

greg abel berkshire hathaway

Berkshire Hathaway held its annual shareholder meeting on Saturday and Warren Buffett pointed to Greg Abel, the 58-year-old leader of Berkshire’s non-insurance businesses, as next in line if and when the Oracle of Omaha steps down.

“The directors are in agreement that if something were to happen to me tonight it would be Greg who’d take over tomorrow morning,” Buffett told CNBC on Monday.

Speculation about a successor to the famed billionaire investor began in 2006 when a then spry 75-year-old Buffett first discussed plans for his succession in an annual shareholder letter.

At the time, Buffet mentioned how he had hoped his long-time right-hand man, Charlie Munger, would take over the business, but noted that he needed someone younger to fill the role.

Buffet added that Berkshire needs “someone genetically programmed to recognize and avoid serious risks, including those never before encountered.”

Now, Greg Abel has been selected as that person-and in the annual shareholder meeting, his comments prove he may be exactly the “genetically programmed” risk manager that Buffett had envisioned in 2006.

“I’m trying to understand what our competitors are doing, what’s the fundamental risks around those businesses, how they’re going to get disrupted,” Abel said at this year’s shareholder meeting. “It always comes back to are we allocating our capital properly in those businesses relative to the risk?”

Background and Resume

Abel began his career working for PricewaterhouseCoopers before joining CalEnergy, a geothermal electricity producer, in 1992.

Then, in 1999, CalEnergy acquired MidAmerican Energy and adopted its name before Berkshire Hathaway picked up a controlling interest in the firm later that year.

Abel became the CEO of MidAmerican in 2008, which was renamed Berkshire Hathaway Energy in 2014.

The Canadian-born certified public accountant was the chief executive officer of Berkshire Hathaway Energy from 2008-2018 and the president from 1998-2018. Abel currently serves as Berkshire Hathaway Energy’s chairman and has served on the board of directors since 2000.

In January 2018, Abel was named vice chairman of non-insurance operations for all of Berkshire Hathaway and appointed to the conglomerate’s board of directors.

Abel also serves as a director and vice-chairman of Associated Electric & Gas Insurance Services Limited and serves on the board of directors for The Kraft Heinz Company as well as AEGIS Insurance Services.

Read more: Buy these 14 high-quality stocks poised to beat the market as the economy enters a new phase of rapid growth, Credit Suisse says

The Succession of the Oracle of Omaha

Greg Abel has been known as the likely successor to Warren Buffett by many on Wall Street for years now.

In 2017, Sarah DeWitt, an analyst with JP Morgan initiated coverage of Berkshire and said the energy executive was the “most likely” candidate to replace the “oracle of Omaha.”

That suspicion was never confirmed by the conglomerate, however-until Saturday. In Berkshire’s annual meeting, Abel was officially named as the successor to Buffett.

Warren Buffett’s long-time right-hand man and current Berkshire vice chairman Charlie Munger said that he believes “Greg will keep the culture” that has made Berkshire so successful for decades.

During his reign, Buffett, who is now 90-years-old, has turned Berkshire Hathaway into a more than $630 billion business.

The conglomerate owns a share in everything from Apple and Coca-Cola to Bank of America and the United Parcel Service.

Buffett has been an ardent supporter of the American economy, and the stocks that track it, ever since he began investing back in 1942.

Based on what Buffett and Munger have said about Greg Abel, investors can expect much the same from the long-time Berkshire loyalist if and when he takes the reins.

Thoughts from the Street

Analysts, market commentators, and professors are mostly positive about Abel’s prospects as the leader of Berkshire Hathaway. Here are a few reactions to the news of his selection.

1. “Abel, of course, does not have the charisma, personality, and reputation that Buffett built over decades, so he’s not going to have that magnetism that Buffett has, but he exudes extreme competence and success. He has a very successful track record at Berkshire and I don’t think shareholders can ask for anything more than that.” David Kass, a professor of finance at the University of Maryland’s Robert H. Smith School of Business, told Bloomberg.

2. “Greg is a natural successor to Warren Buffet and has been groomed for this post. Culturally it’s a smart pick and one that should sit well for investors. That said, filling the shoes of a global icon and investing genius is a tough task and will have its share of challenges ahead. It’s like filling in for Mantle or Gehrig in the Yankees lineup after they left,” Dan Ives, managing director of equity research at Wedbush Securities, told Insider via email.

3. “The good news with Greg was he had the answers on his tongue. There was no question or ambiguity in his responses. Let’s hope Charlie is right that the culture can be replicated.” Ed Walczak, portfolio manager at Vontobel told The Financial Times.

4. Jim Shanahan, an analyst at Edward Jones said he suspects “Buffett disclosed this reluctantly.” And said that “Abel’s coronation is not exactly a surprise,” but noted he has a “great deal of comfort” with Abel taking over the business, per Reuters.

Read more: Jefferies unveils 14 stocks with exposure to the booming NFT opportunity as digital collectibles continue to become more mainstream despite the recent price slump

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Robinhood says people are tired of Warren Buffett and Charlie Munger acting like they’re the only oracles of investing

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Robinhood co-founder Vlad Tenev, Warren Buffett, and Charlie Munger.

Robinhood on Monday hit back at statements made by Warren Buffett and Charlie Munger at Berkshire Hathaway’s annual general meet held on Saturday.

Both veteran investors had called out the trading app for conditioning retail traders to treat the stock market like a casino and enabling speculation among them.

The brokerage said two iconic investors have insulted a new generation.

“If the last year has taught us anything, it is that people are tired of the Warren Buffetts and Charlie Mungers of the world acting like they are the only oracles of investing,” Jacqueline Ortiz Ramsay, Robinhood’s head of public policy communications, wrote in a blog post. “And at Robinhood, we’re not going to sit back while they disparage everyday people for taking control of their financial lives.”

Robinhood

Millions of amateur traders downloaded the Robinhood app in the first quarter of 2021, dashing in to experience the “financial democratization” it promises.

But Buffett referred to Robinhood traders who entered the stock market over the last year and a half as “casino participants.” He criticized the trading app for taking advantage of gambling instincts, offering commission-free trades, and routing its orders to high-speed traders.

Meanwhile, Munger said it’s “godawful that something like that would draw investment from civilized man and decent citizens.”

The brokerage isn’t taking these statements lightly as it believes its platform opens up investing to a whole new class of investors that don’t need huge sums of money to make stock trades.

“It is clear that the elites benefited from a stock market that kept many families sidelined from participating while they amassed huge wealth from decades of investing – driving a deep wedge between the haves and have-nots,” Ortiz Ramsay wrote in the blog.

“Suddenly, Robinhood and other online trading platforms have opened the doors of financial markets to everyday people, deeply unsettling the old guard who will fight to keep things the same.”

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Berkshire Hathaway’s Charlie Munger has doubled down on his criticism of ‘disgusting’ bitcoin

BERKSHIRE BUFFETT MUNGER 2021
Warren Buffett and Charlie Munger.

  • Charlie Munger said bitcoin’s development and rise has been “contrary to the interests of civilization.”
  • He said the cryptocurrency is useful to “kidnappers and extortionists.”
  • The criticism comes in a year where more companies have started accepting bitcoin as payment.
  • See more stories on Insider’s business page.

Berkshire Hathaway’s Warren Buffett and his right-hand man, Charlie Munger, are no fans of cryptocurrency, but on Saturday Munger doubled down on his critique of bitcoin.

“Of course I hate the bitcoin success,” Munger said in response to a question during Berkshire’s annual shareholders’ event. “I don’t welcome a currency that’s so useful to kidnappers and extortionists, nor do I like just shoveling out a few extra billions and billions of dollars to somebody who just invented a new financial product out of thin air.”

“I think I should say modestly that I think the whole damned development is disgusting and contrary to the interests of civilization,” he added.

Buffett, who has previously called cryptocurrencies, “worthless,” and “risky” was more evasive.

“We’ve probably got hundreds of thousands of people watching this that own bitcoin, and we’ve got two people short,” Buffett said. “Angering the former group to make a couple of people happy wouldn’t be worth it,” he said.

The pointed remarks come during a headline-grabbing year for cryptocurrencies.

Bitcoin, the world’s largest cryptocurrency, broke consecutive records above the $63,000-level before tumbling below $50,000 last month. It has regained some of its value as it struggles to define its utility from being a potential currency to a store of value, among others.

Despite the volatility, a number of companies and investors jumped in on the action. In February, Elon Musk announced that Tesla would accept bitcoin as a form of payment for all models of its cars in the US.

Yum Brands, which operates KFC, Pizza Hut, Taco Bell, and The Habit Burger Grill, also began accepting cryptocurrencies. So too did Xbox and PayPal. Meanwhile, Twitter’s CEO and founder, Jack Dorsey, teamed up with Jay-Z for a bitcoin endowment in India and Africa.

Coinbase, the largest cryptocurrency exchange in the US, listed on the Nasdaq in April. After a volatile first trading day, it boasted a valuation on a fully diluted basis of about $86 billion by the end of the day.

But Munger and Buffett aren’t alone in their hesitation about crypto.

Peter Schiff, Euro Pacific Capital’s chief economist and global strategist, last week called bitcoin “worthless.”

“I don’t think these bitcoin collections are going to be worth anything when the music stops. People have told me that when the bubble burst in Beanie Babies, they were able to use them to insulate their homes,” he said.

He added: “They could shove them in between the walls, and they made good insulation. You can’t do anything with a bitcoin. Once nobody wants your bitcoin, it’s completely worthless.”

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