When asked what Berkshire Hathaway was doing to promote gender equality, Warren Buffett said Berkshire’s recent choices of chief executives to run its businesses reflected fairness.
“Before we made this management change, I probably named only six or seven C.E.O.s in the last five or six years. I would say that half of them that I’ve named have been women,” Mr. Buffett said.
Berkshire owns more than 60 businesses. Women are chief executives at six of those businesses, and the Berkshire-owned Ben Bridge Jeweler named Lisa Bridge as president late last year to run the jeweler’s day-to-day operations.
“I feel very good about the decisions we’ve made about our C.E.O.s,” he added.
He did not answer whether Berkshire would push for gender equality on the boards of the companies that Berkshire is invested in.
Mr. Buffett also said it was clear that women had been treated unfairly in the past.
“I have two sisters who are absolutely as smart as I am, and they have better personalities,” he said. “They didn’t remotely have the same opportunities as I had.”
Mr. Buffett said there was still a “pipeline problem” in corporate America, making it hard to find as many qualified women to lead companies.
But, he added, “you can’t use that excuse forever.”
Buffett approves of Apple’s buyback plan.
Berkshire is quickly building its stake in Apple.
Since Berkshire first invested in the iPhone maker about two years ago, the stake has grown into Berkshire’s largest holding. At the end of the first quarter, Berkshire owned $40.7 billion of Apple’s shares, up from $28.2 billion at the end of 2017.
So what does Warren Buffett think about Apple’s announcement that it plans to buy back $100 billion of its shares?
“I’m delighted to see them repurchasing shares,” Mr. Buffett said. “We own 5 percent of it. With the passage of a little time, we may own 6 or 7 percent because they repurchase shares.”
Charles Munger added that he and Mr. Buffett don’t approve of every buyback plan, but he doubted Apple would find an acquisition target at a good price.
“The reason companies are buying their stocks is that they are smart enough to know it’s better for them than anything else,” Mr. Munger said.
What about Microsoft?
Given Berkshire’s investment in Apple, one shareholder wanted to know why Berkshire never invested in Microsoft. The question came with Bill Gates, Microsoft’s co-founder and a director at Berkshire, sitting in the audience.
“In the earlier years, the answer is stupidity,” Mr. Buffett replied. But then Mr. Buffett added that his friendship with Mr. Gates has grown over the years, and he has stayed away from investing “because of the inference” that could be drawn.
And Amazon and Alphabet...
Mr. Buffett has famously avoided investing in tech companies because he didn’t understand them. But one investor wanted to know if Mr. Buffett’s stance is evolving. Beyond Apple, the questioner pointed out that Amazon and Google parent Alphabet have the characteristics of companies Mr. Buffett typically likes to invest in: strong brand names and little competition.
Here’s the reason Mr. Buffett gave for not investing in Amazon:
“The truth is that I’ve watched Amazon from the start, and I think what Jeff Bezos has done is something close to a miracle. The problem is if I think something will be a miracle, I tend not to bet on it.”
As for Alphabet, Mr. Buffett said that he had “made a mistake.” He said he was unable to conclude that at Alphabet’s present prices, its “prospects were far better than the prices indicated.”
He then explained that he didn’t invest in Apple because it was a tech stock. “I went into Apple because I came to certain conclusions about the value with which the capital was being deployed and about the ecosystem,” he said.
The discussion did lead to one of the more humorous exchanges of the meeting:
Mr. Munger: “I’ve been to Google headquarters. It looks to me like a kindergarten.”
Mr. Buffett: “A very rich kindergarten.”
One thing Mr. Buffett and Mr. Munger aren’t fans of? Cryptocurrencies.
Warren Buffett and Charles Munger saved their harshest words for cryptocurrencies.
“Cryptocurrencies will come to bad endings.” Mr. Buffett said, responding to an attendee from Ukraine.
Mr. Buffett’s main argument against cryptocurrencies is the same one he has made about gold: They are not a “productive asset.” That means the value of cryptocurrencies is determined solely by what someone is willing to pay for it.
“If you had bought gold at the time of Christ and you figure the compound rate on it, it’s a couple tenths of a percent,” Mr. Buffett said.
But his criticism didn’t stop there. He said cryptocurrencies attract a lot of “charlatans” and “people of less than stellar character.”
Mr. Munger was perhaps harsher. “It’s just disgusting,” he said.
Mr. Buffett isn’t backing off his comments about guns
In February, Warren Buffett was asked on CNBC about some chief executives distancing their businesses from the National Rifle Association. Mr. Buffett responded: “I don’t think that Berkshire should say we’re not going to do business with people who own guns. I think that would be ridiculous.”
That comment came up at Saturday’s meeting, and one shareholder wanted to know if Mr. Buffett had misspoken.
Mr. Buffett answered by largely repeating what he had said earlier this year:
“I do not believe on imposing my political opinions on the activities of our businesses.
“If you get into which of our companies are pure and which ones aren’t pure, I think it will be very difficult. I don’t think that we should question on the Geico policy form: Are you an N.R.A. member? And if you are, you just aren’t good enough for us.”
Mr. Munger then added:
”Certainly we’re not going to ban all guns surrounded by wild turkeys in Omaha.”
Warren Buffett is sticking by Wells Fargo
Over the past two years, regulators and whistle-blowers have revealed Wells Fargo employees were creating fake accounts using customers’ identities, forcing borrowers to buy unnecessary auto insurance, and overcharging on mortgage fees.
The Federal Reserve earlier this year restricted its growth until it demonstrates it is complying with bank regulations.
Berkshire first invested in Wells Fargo nearly three decades ago and is currently the bank’s biggest holder with a nearly 10 percent stake.
In response to a question about whether it was time to abandon the bank, which has already seen turnover in its executive suite and boardroom, Mr. Buffett said he thought Wells Fargo’s problems would only make it stronger in the long run.
“All the big banks have had troubles of one sort or another and I see no reason why Wells Fargo as a company, from both an investment standpoint and a moral standpoint going forward, is in any way inferior to the other big banks with which it competes,” he said.
He specifically praised the bank’s chief executive, Tim Sloan, a longtime Wells Fargo executive who took over when his predecessor John Stumpf resigned at the height of the fake account scandal. Criticism from Mr. Buffett could have increased pressure on Mr. Sloan. But the 87-year-old praised him.
“I like Tim Sloan as a manager,” Mr. Buffett said. “He is correcting mistakes made by other people.”
Mr. Buffett went further: What happened at Wells Fargo could’ve happened anywhere, he said.
“We know people are doing something wrong as we sit here at Berkshire. You can’t have 370,000 employees and expect that everyone is behaving like Ben Franklin.” On the fake account scandal specifically, which the bank has said resulted from intense pressure on its branch managers to increase sales, Buffett said: “Wells Fargo is a company that proved the efficacy of incentives and it’s just that they had the wrong incentives.”
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