Covid-19 makes investment mavens miss annual rite as Buffett goes online

Buffett believes this is a sign for caution amid unprecedented uncertainty in the markets. Others, too, picked up on the message of caution amid uncertainty.
During the 1996 annual meeting of Berkshire Hathaway, a woman asked Chairman Warren Buffett for some investment advice. She said she dabbled in stock with her husband, but they followed different strategies. Her husband bought perhaps 40 different companies for his portfolio. She largely stuck to buying two companies — Berkshire Hathaway and Microsoft Corporation. She asked Buffett if her approach was right. He cautiously told her he didn’t recommend selling.

Berkshire continued to outperform in subsequent years and Microsoft today is one of the world’s most-valuable company, with a market value of $1.3 trillion.

In the audience that day attending the meeting for the first time was Raamdeo Agrawal, chairman, Motilal Oswal Financial Services. He had been devouring Buffett’s annual reports for a while and had decided to attend the event in person. This was not easy then, he recalls, when cell phones were not omnipresent. 

A sub-broker’s relative lived in the US and hosted him in Connecticut, and from there they went to Omaha, where Buffett still holds court every year.
“First time...it was not that big. You see, now it is 40,000-45,000 people...it used to be 4,000-5,000 people in a smaller place,” he recalled.

He has since been there 22 times, hoping to learn something new every time from the now 89-year-old Buffett, and 96-year-old Vice-Chairman Charlie Munger.

The event was held online this year because of the Covid-19 pandemic. Many tuned in to watch and listen, though some wished they could have been there.

“I saw a major part of the event online. It was not as much fun as having Buffett and Munger together. Plus part of the fun was to see who else is there,” said Samir Arora, founder and fund manager at Helios Capital from Singapore.

Market veteran Dharmesh Mehta was another person who had hoped to be there.

“I had planned to attend this year. Also had got the tickets booked. It is a disappointment,” he said. He had attended the previous year with his son. Anyone associated with the capital market must experience it, he said.  

Rajeev Thakkar, chief investment officer at PPFAS Asset Management, who followed the event, noted that Buffett seemed more focused on holding on to cash than buying into the fall. 
Buffett believes there might be subsequent events after the pandemic that merit watching. These kinds of second-order and third-order consequences may end up creating opportunities for which he is conserving cash.
“…(if) some opportunity comes by, he could use that to buy something in the future,” said Thakkar.

Agrawal, who woke up at 1.30 am to watch the event on Saturday being telecast from the mid-western state of Nebraska in the US, noted that Buffett’s famous words about being greedy when others were fearful were conspicuous by their absence.

“He doesn’t think there’s fear on the Street,” he said. He believes this is a sign for caution amid unprecedented uncertainty in the markets. Others, too, picked up on the message of caution amid uncertainty.

“Buffett made a strong statement about investing in America. Come what may, the country will bounce back. Although he is clueless like most of us as to what is happening and how this will end,” said Mehta.   India, too, may need a stimulus like the US, he believes.

 
“It is a matter of timing. It is not a question of why, but when.”



Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel