Buffett & Berkshire Primer Ahead of Annual Meeting (BRK-A, BRK-B, BNI, USG, TIF, HOG)

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This weekend will mark the annual shareholder meeting for Berkshire Hathaway Inc. (NYSE: BRK-A) (NYSE: BRK-B).  In the past, this has been considered the Financial Woodstock.  But this is a much different year.  Berkshire Hathaway shares sit down more than one-third from their highs.  They had been down more than 50% at the major lows.  The day’s close ahead of Berkshire’s last annual meeting was $133,600.00 and those sit around $93,000.00 around noon today.

There is one notion we want to address front and center.  Some very aggressive reporting actually became over-reporting earlier this week.  There was a report from the AP that the earnings were not coming out, and then Reuters came out and said Berkshire had delayed its earnings.  The first report was technically accurate, but the second was a stretch above and beyond reality.  Berkshire Hathaway was not on the calendar to report earnings.  While the earnings had been given before the annual meeting for the last three years, this is not actually a break from history.

The good news is that the Berkshire Hathaway shareholders have always been much more loyal and feel like they are in much more of a club than many other company shareholders.  The bad news is that these investors have taken a beating elsewhere in the market.  But there is one other issue we expect that Buffett will have to address.  Do you recall the Moody’s downgrade of Berkshire?  No more Triple-A rating.  S&P also had its eyes on a downgrade, and Fitch was the first to cut Berskshire’s much-prized rating.

Our indications so far have the mood of shareholders much better than if this would have been just eight weeks ago.  A major rally in the market will do that.  But there are many that are hoping they get to find the next takeover gem.  We put out a sort of refuting news piece, because there are just many fallacies that were in the list of stocks that investors were hoping might be Buffett takeover names.

Our discussions with Berkshire holders and other contacts indicates that Buffett is actually going to be very optimistic at the meeting and that he will discuss or at least hint at some of the great values he has found.  Our guess is that he has used the weakness during Q1 to add to some positions, but we have been told (and have seen firsthand) that newer positions he has taken have been higher up the food chain than just in common stocks.

For starters, here is the FULL LIST OF BUFFETT HOLDINGS as of the last report, and we are looking for an update on that in two weeks or so.  There was a very timely report from CNBC that was give on March 9,  a couple days within the absolute lows of the market.  Buffett was much more somber and regretful, but he also defended many positions.

Buffett was ghastly negative on the outlook for what lies ahead back on the March 2, 2009 coverage of his annual letter sent to shareholders. While we have no confirmation of this, we have heard from traders and investors that they expect Buffett to be far less pessimistic.  We also suspect he will really try to play down the use of derivatives now that the risks do not appear so grave.

He recently took new stakes higher up the ladder which do not appear in his last full holdings.  He took down some debt in Tiffany & Co. (NYSE: TIF).  He is also now clearly the head honcho without such title at USG Corp. (NYSE: USG).   And for that matter, he’s ahead of shareholders with a very high 15% yield in at Harley-Davidson Inc. (NYSE: HOG).  He has also added to his stake in Burlington Northern Santa Fe Corp. (NYSE: BNI)

Here is the tentative shedule:

Friday, May 1 at Borsheims for the Shareholder Reception from 6:00 to 10:00 PM.

Saturday, May 2 is the formal Annual Meeting, Doors open at 7:00 AM
Company Movie 8:30am
Question & Answer 9:30am – 3:00pm
NetJets Display at the Airport 12:00 – 6:00pm
Lunch Break 12:00 – 12:45pm
Shareholder Business Meeting 3:15 – 3:30pm (times are approximate)
Exhibit Booths Close 4:30pm

International Meet & Greet at 4:00 – 5:30pm as a special reception for shareholders who come from outside of North America for the annual meeting.

Warren’s Western Cookout at Nebraska Furniture Mart from 5:30 to 8:00 PM

Sunday, May 3 at Borsheims
Exclusive Shareholder Shopping Day
Brunch begins 9:00am – 4:00pm

Gorat’s Steakhouse is Berkshire Shareholder Night from 4:00 – 10:00 PM; reservations required but you can’t make them any longer as April 1 was the cut-off.

Here is a link to the full visitor guide.

JON C. OGG