Photo courtesy of AP
Clients, the hallmark of our investment strategy is ownership of companies whose outlooks are favorable, in our view. A share of stock is a piece of the action: ownership of a fraction of an enterprise.
We have owned businesses in very old lines of work, like manufacturers of farm equipment. And we’ve owned companies in new lines of work, like cloud services. We’ve been in airlines and autos, software and chipmakers, miners and medicine.
Owners have rights. We elect directors. We receive our share of dividends paid. We get annual reports—and have the right to attend shareholder meetings.
Most of us pay little attention to the trappings of corporate governance, with one exception.
Held in Omaha where its long-time leader Warren Buffett was born, Berkshire Hathaway hosts one of the largest annual shareholder meetings on the planet, with tens of thousands of people descending on the city for the festivities.
Each spring, information about Berkshire subsidiaries and the products and services they offer is shared during this corporate tradition. You can buy everything from insurance to ice cream treats. Visitors learn about companies as diverse as railroads and homebuilders.
Did we mention? Shareholders also happen to get discounts at Nebraska Furniture Mart, Borsheims, and other retailers.
For many years, Buffett himself and key leaders would entertain questions from shareholders for hours, before conducting the business of the annual shareholder meeting itself. Some say that Buffett is among the most successful investors in the history of the world: when he stepped down as CEO of Berkshire at 95 years of age, his longevity also became cemented in his legacy. He’s not alone in that in Berkshire history, either: the late Charlie Munger, long-time vice chairman, passed at age 99.
Buffett, Munger, Buffett’s descendants, and other individuals and entities have owned a vast swath of the voting control of the company over the decades.
But here’s the thing: an owner is an owner. Even a single share of stock entitles the holder to certain rights. Shareholders may inspect select corporate documents, beyond those already published and available to the public. They can nominate and send in votes to elect members to the board of directors.
And they’re allowed to participate in the annual meetings.
This spectacle of Omaha is a powerful reminder of the meaning of ownership. It’s getting a piece of the action—and being part of something bigger.
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Clients, if you have an interest in attending or taking advantage of other opportunities, you’ll need shareholder credentials. A form to order those should be included in Berkshire’s Annual Report, or you can stay tuned for more details from us in the weeks ahead.
Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss. The payment of dividends is not guaranteed. Companies may reduce or eliminate the payment of dividends at any given time. Companies mentioned are for informational purposes only, and this communication should not be considered a solicitation for the purchase or sale of their securities.
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