On Saturday, Warren Buffett, the chairman of Berkshire Hathaway spoke in front of the 40,000 shareholders gathered for the annual meeting. The CEO was accompanied by his vice chair Charlie Munger and the team delivered extraordinary insight on themes covering investments, management, portfolio companies and economy at large.
Good news came this way to IBM Company which has been vigorously repurchasing stocks, out of which Berkshire Hathaway now owns 9 percent. Earlier in 2015 Berkshire invested in the tech company only to now reaffirm that the confidence in a bright future is not shaken. The forecasts are so bright even that Mr. Buffett said he believes IBM is on a good path to be earning more ten years from now considering the high quality and security of IBM’s cloud computing and corporate services.
Talking about one of the strengths of Berkshire Hathaway, Mr. Buffett stated that while his company fares still strongly in the reinsurance industry due to its ability to take on large risks, the industry in itself is expected to take a plunge. The blame is placed on investors and hedge funds that are setting up offshore reinsurers to gain tax advantage and use small businesses as a pretense.
From this perspective, a large part of Mr. Buffett’s speech was focused on the need for instilling the right culture in any company. What he meant by excellent culture was selecting team members with the best characters available. Placing so much emphasis on culture does not stop at the personal level, but it transposes to investment and business as a whole. That may be why the Berkshire and Hathaway team have been delivering the most desirable shareholder returns for more than half a century.
Image Source: forbesimg.com
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