Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Register

11 June 2025

Home / 356

Buffett's meeting takeaway: extreme caution

Morningstar's US strategist, Gregg Warren, specialises in researching Warren Buffett's Berkshire Hathaway (BRK). In this two-part article, he provides a brief review of his major highlights from the annual meeting of BRK, followed by a short video summarising Buffett's presentation last weekend.

While wide-moat-rated Berkshire Hathaway's (BRK.A/BRK.B) annual meeting has always been entertaining, it hasn't generally been a big source of meaningful insights into the firm's operations. This year's event, which was a significantly smaller affair with no shareholders in attendance in Omaha and just CEO Warren Buffett and Greg Abel (vice chairman of Berkshire's noninsurance business operations) taking questions from a remotely located Becky Quick (of CNBC), who was collating all of the questions for the three journalists on the journalist panel, was relatively subdued. The meeting not only started later in the day, but Buffett spent much of the first two hours of the five-hour event speaking about his thoughts about the COVID-19 pandemic and its potential economic impacts, touching on everything from monetary and fiscal policy to consumer and commercial behaviour.

The main thing we took away from Buffett's preamble, as well as the question-and-answer segment, was that Berkshire (much as we heard from Charlie Munger in a Wall Street Journal interview in mid-April) is being extremely cautious right now, given all of the uncertainties surrounding the COVID-19 pandemic and subsequent shutdown/recession. Unlike Buffett's famous maxim to "be fearful when others are greedy and greedy when others are fearful", Berkshire actually dumped some stocks, did not pursue any deals, and let its cash balances expand during the first quarter.

While it was no surprise to see Berkshire dump the airlines, we were shocked to see that Buffett stopped buying back Berkshire's shares on March 10 and didn't repurchase any of the company's common stock between then and the end of April. Our general feeling has been that with cash reserves being guarded, distressed opportunities few and far between, and many of Berkshire's stock holdings either struggling with the COVID-19 pandemic or subsequent shutdown/recession, the best option for the company's excess cash may be Berkshire's own common stock.

Greggory Warren, CFA, is a financial services sector strategist for Morningstar. This article is general information and does not consider the circumstances of any investor.

Surprises from Berkshire's Annual Meeting

Click on the image of Gregg Warren to hear his reactions to Buffett's presentation.

 

8 Comments
Jim Simpson
May 13, 2020

Interesting that Berkshire have dumped airline shares.
My memory is that one of Warren Buffet's rules of investing was " never invest in airlines". He backed this up by saying that occasionally, in the middle of the night, he woke up with an idea that he should invest in airlines but he had a 1800 number that he rang and was talked out of it by a counsellor.

Chris
May 06, 2020

Buffett doesn't need to do anything at this stage of his life, he literally will be the person that captures essence of the phrases "he who dies with the most toys, wins" and "When Alexander saw the breadth of his domain, he wept for there were no more worlds to conquer.". There's nothing else to do now, even he has said that when he dies it's all going in an S&P500 index fund.

Not buying anything is probably due to two reasons: (1) at his age, he's probably gone all risk-averse and not wanting to make a mistake right at the end that people will remember him for more than what he did before it and (2) there is nothing to buy at the current prices that is attractive enough.

Sure, there might be something out there but people always want something for even cheaper than is being offered to them, even if it is a good price.

Alfa123
May 09, 2020

Buffett thinks like a businessman first and investor later.

Chris
May 13, 2020

Why are the two concepts separate ?

Alan Moffett
May 20, 2020

A business man cares about health of business on a long term basis ahead of financial rewards. A modern day investor in reality is a speculator who is more interpreted in the price action of security. He is not interested in overall business health, wants to make make quick buck and move on to next security.

This is the main difference between Warren Buffett and an average investor.

david
May 06, 2020

Very surprised with the airline purchase due to the majority of airlines around the world not making profits in the good times. No moat businesses as well.

Thurston Howell, IV.
May 06, 2020

Pretty sure it wasn't Buffett's idea to ever own airlines, rather his upcoming guys Todd and Ted. These worked well, until they didn't. When things went as they did, and future prospects and costs unknown, it was time to bail out, in full, as they don't like minority holdings. As usual, he bares full responsibilty, so you won't hear him blaming his juniors if my theory is right.

CC
May 06, 2020

I was shocked that Buffett ever bought airline stocks in the first place !!
That's something in the past he said he'd never do.

 

Leave a Comment:

RELATED ARTICLES

Three key takeaways from Buffett's annual letter

10 quick lessons from Buffett’s 2019 Meeting

Warren Buffett changes his mind at age 93

Firstlinks is sponsored by:
banner

Most viewed in recent weeks

Australian house prices close in on world record

Sydney is set to become the world’s most expensive city for housing over the next 12 months, a new report shows. Our other major cities aren’t far behind unless there are major changes to improve housing affordability.

The case for the $3 million super tax

The Government's proposed tax has copped a lot of flack though I think it's a reasonable approach to improve the long-term sustainability of superannuation and the retirement income system. Here’s why.

Tariffs are a smokescreen to Trump's real endgame

Behind market volatility and tariff threats lies a deeper strategy. Trump’s real goal isn’t trade reform but managing America's massive debts, preserving bond market confidence, and preparing for potential QE.

The super tax and the defined benefits scandal

Australia's superannuation inequities date back to poor decisions made by Parliament two decades ago. If super for the wealthy needs resetting, so too does the defined benefits schemes for our public servants.

Meg on SMSFs: Withdrawing assets ahead of the $3m super tax

The super tax has caused an almighty scuffle, but for SMSFs impacted by the proposed tax, a big question remains: what should they do now? Here are ideas for those wanting to withdraw money from their SMSF.

Getting rich vs staying rich

Strategies to get rich versus stay rich are markedly different. Here is a look at the five main ways to get rich, including through work, business, investing and luck, as well as those that preserve wealth.

Latest Updates

SMSF strategies

Meg on SMSFs: Withdrawing assets ahead of the $3m super tax

The super tax has caused an almighty scuffle, but for SMSFs impacted by the proposed tax, a big question remains: what should they do now? Here are ideas for those wanting to withdraw money from their SMSF.

Superannuation

The huge cost of super tax concessions

The current net annual cost of superannuation tax subsidies is around $40 billion, growing to more than $110 billion by 2060. These subsidies have always been bad policy, representing a waste of taxpayers' money.

Planning

How to avoid inheritance fights

Inspired by the papal conclave, this explores how families can avoid post-death drama through honest conversations, better planning, and trial runs - so there are no surprises when it really matters.

Superannuation

Super contribution splitting

Super contribution splitting allows couples to divide before-tax contributions to super between spouses, maximizing savings. It’s not for everyone, but in the right circumstances, it can be a smart strategy worth exploring.

Economy

Trump vs Powell: Who will blink first?

The US economy faces an unprecedented clash in leadership styles, but the President and Fed Chair could both take a lesson from the other. Not least because the fiscal and monetary authorities need to work together.

Gold

Credit cuts, rising risks, and the case for gold

Shares trade at steep valuations despite higher risks of a recession. Amid doubts that a 60/40 portfolio can still provide enough protection through times of market stress, gold's record shines bright.

Investment strategies

Buffett acolyte warns passive investors of mediocre future returns

While Chris Bloomstan doesn't have the track record of his hero, it's impressive nonetheless. And he's recently warned that today has uncanny resemblances to the 1990s tech bubble and US returns are likely to be disappointing.

Sponsors

Alliances

Site Map

About Firstlinks

© 2025 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.