Buffett in Spotlight At Berkshire Meeting
Sunday, May 6, 2007
At Berkshire Hathaway's annual meeting in Omaha yesterday, Warren Buffett discussed future profit, the housing business and potential successors.
Before the meeting, Buffett grabbed his ukulele and joined the Quebe Sisters Band. When Buffett sat down on a stool between three fiddle players, he joked: "I may well be looking for another job soon. This is my first audition."
Then Buffett and the band launched into "Red River Valley."
Buffett has said he has arranged for one of Berkshire's managers to succeed him, and he is in the midst of sorting through 600 to 700 applications for a new chief investment officer to manage the company's investments after he goes.
Buffett said he expects to hire three or four people as candidates for chief investment officer. He said each of the investment managers he hires will be given $2 billion to $5 billion to manage.
Buffett told shareholders not to expect a repeat of the big earnings gains Berkshire's insurance units had last year and in the first quarter.
He also said the company's residential construction businesses have been hurt by the U.S. housing slump. He expects that to continue for "quite a while."
But the subprime mortgage crisis won't be "any huge anchor" to the economy, though lenders and borrowers will have "plenty of misery," Buffett said.
"It will be a very big problem for those involved, but I think it is unlikely that factor alone triggers anything in the larger economy," he said. The prediction assumes that neither unemployment nor interest rates go up dramatically, he said.
At the meeting, the holders of more than 98 percent of Berkshire Hathaway shares voted against an investor proposal calling on the firm to divest a $3.3 billion stake in PetroChina because its parent, China National Petroleum, holds oil reserves and pipelines in Sudan.
He also said well-funded buyout firms are making it harder for Berkshire to make acquisitions.
"There's nothing worse in life than a competitor who's willing to pay too much," Buffett told Bloomberg News before the meeting. "People can get very high fees for managing funds, and as fast as they can get one fund invested, then get another fund."
Buffett, who is on the board of directors of The Washington Post Co., said about 27,000 people filled the Qwest Center arena for the start of the meeting.