Berkshire Hathaway’s annual shareholder meeting on 1 May brought the two nonagenarians Warren Buffett and Charlie Munger (chairman/CEO and vice chairman respectively) back together onstage after Munger’s absence last year. They were also joined by Ajit Jain and Greg Abel who run the insurance and non-insurance operating businesses respectively. Abel is expected to become the next CEO of Berkshire.

The most controversial part of the meeting was the board voting against two investor proposals calling for Berkshire to provide more disclosures on how it was tackling climate change and diversity.

The proposals won around a quarter of the vote signalling that a growing number of institutional investors including BlackRock, CalPEERS (California Public Employees’ Retirement System) and Federated Hermes were becoming an active force in promoting adherence to environmental, social and governance issues.

It’s not that Buffett disagreed the two issues were very important considerations, but he argued that the company was unusually decentralised, with its many subsidiaries having autonomy to run their own affairs. Its head office is staffed only by a dozen people.

He accused the institutions behind the climate proposal of not reading the annual report and fully appreciating Berkshire’s actions on climate change.

Abel pointed out that the utility operations under Berkshire Energy had been decarbonising since 2004 and it was early to sign up to the Paris climate accord to reduce emissions.

It is one of the largest renewable energy companies in the US having spent billions of dollars on building the infrastructure required to support green energy.

Noting the large number of new investors who had entered the stock market over the last year, Buffett provided a cautionary tale of trying to pick the best stocks even in industries with fabulous growth prospects.

Buffett pointed out that in the early 1900s there were around 2,000 auto manufacturers, but by 2009 there were only three left and two of them went into bankruptcy.

On the theme of extraordinary things that can happen, Buffett noted that even the brilliant economist and Nobel prize winner Paul Samuelson failed to anticipate negative interest rates.

While Munger and Buffett conceded that the world economy seemed to be working just fine with negative rates and higher debt to GDP ratios they also cautioned that it could end in disaster.

Despite low interest rates Buffett said the US economy was ‘running hot’ with price rises sticking and consumers seemingly happy to pay more for goods.

When you hear Buffett say, ‘this is one of the most interesting movies we have ever seen’, you know investors are in for a few more surprises yet.

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