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Market Extra: 6 things to watch as Warren Buffett hosts ‘Woodstock for Capitalists’ on Saturday

Thousands of Berkshire Hathaway Inc. shareholders are off to Omaha this weekend for what’s known as “Woodstock for Capitalists,” where Warren Buffett will be meeting them in person for the first time since 2019. Berkshire’s annual meeting, held virtually for the past two years in the pandemic, will be streamed live Saturday.

Here are a few topics to watch out for.  

‘Sociopathic grandpa’?

Maybe Berkshire Hathaway chief executive officer Buffett will address billionaire entrepreneur Peter Thiel’s remarks earlier this month that the legendary, 91-year old investor is a top “enemy” of bitcoin and part of a “finance gerontocracy” holding back the cryptocurrency’s adoption. Thiel made those remarks at the Bitcoin 2022 conference in Miami, where he also called Buffett a “sociopathic grandpa from Omaha.” Crypto has soared in popularity, with Fidelity Investments announcing April 26 that it will allow investors to add a bitcoin account to their 401(k)s

Fed fighting inflation

In May 2020, Buffett praised Federal Reserve Chair Jerome Powell’s handling of the market tumult during the COVID-19 crisis. He compared Powell with the late Paul Volcker, who as Fed Chair in the early 1980s helped tame inflation that had spiked in the 1970s. “He and Jay Powell couldn’t seem more different in temperament…but Jay Powell, in my view, and the Fed board belong up there on the pedestal” with him, Buffett said in remarks at Berkshire’s 2020 meeting.

This year the U.S. stock market has sunk, with investors jittery over the Fed raising interest rates to fight the hottest inflation in about four decades. The cost of living has surged in the wake of massive monetary and fiscal stimulus during the pandemic, and now, investors fear Powell risks tipping the economy into recession as he aims to bring inflation under control.

What about all that cash?

At the start of 2022, Berkshire
BRK.A,
-0.23%

BRK.B,
-0.38%

had about $112 billion in “dry powder” that could be used for investments, acquisitions or stock buybacks, according to a note earlier this month from Morningstar senior stock analyst Greggory Warren. “Buffett’s recent buying spree—including Occidental Petroleum
OXY,
+0.11%
,
HP
HPQ,
+0.58%
,
and Alleghany
Y,
-0.09%

—has barely dented the conglomerate’s cash balance,” he wrote. “We believe the company has finally hit a nexus where it is far more focused on reducing its cash hoard through stock and bond investments and share repurchases.” 

Winding down?

Buffett, the “Oracle of Omaha” widely revered for his stock-picking prowess, will soon be auctioning off a private meal to raise money for the Glide Foundation for a final time. Glide, a California charity for the homeless, said Monday that bidding for a lunch with Buffett will open June 12. What Glide described as the “grand finale” lunch may raise questions about how much longer he intends on leading Berkshire Hathaway as CEO. He’s been auctioning private meals since 2000, taking a pause for two years during the pandemic. Greg Abel, Berkshire’s vice chairman in charge of non-insurance operations, is expected to be Buffett’s successor. 

Climate change

Berkshire shareholders are once again set to challenge Buffett to step up efforts to combat climate change by doing more to reduce greenhouse gas emissions, according to a New York Times report on Monday. Buffett, who has argued that subsidiaries such as Berkshire Hathaway Energy disclose plenty about their emissions, faces a shareholder proposal asking for an overhaul of how the conglomerate views climate risks, the New York Times reported.

Berkshire performance

Berkshire will release its first-quarter earnings report Saturday morning as it kicks off its annual meeting. 

Buffett’s Berkshire
BRK.B,
-0.38%

is outperforming the beaten-up stock market this year, with its shares putting up gains so far in 2022. Berkshire’s class B shares are up 10.8% this year through Thursday, while the S&P 500 index
SPX,
-0.74%

dropped 10% over the same period, FactSet data show.

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