Longtime shareholder describes 'what sets Berkshire apart from other companies'
Berkshire Hathaway (BRK-A, BRK-B) kicks off its first in-person shareholder since 2019, bringing droves of investors to downtown Omaha, and one longtime investor explained why shareholders are so dedicated to the company.
Despite Warren Buffett and Charlie Munger's prominence as spokespeople of the company, it isn't just about them, Garner Russo Managing Member Tom Russo told Yahoo Finance Live (video above).
"What sets Berkshire apart from other companies," Russo said, "is that the culture is such that the people who make investment decisions for subsidiaries have relatively strong autonomy."
"And they work closely with Warren and Charlie if and when they can find the number one challenge that the managers have," he added, "which is how do they deploy the internal cash so they generate such an abundance of?"
'That's where the genius is revealed'
The annual Berkshire Hathaway meeting is set to kick off Saturday, April 30. Dubbed the 'Woodstock for capitalists,' the event will take place in Omaha, Nebraska, and be presided over by Chairman and CEO Buffett and Vice Chairman Munger.
It is a unique opportunity for shareholders to hear Buffett, 91, and Munger, 98, discuss everything from investing, to their economic outlook, in addition to asking the dynamic duo questions. This year marks the first since the onset of the pandemic that the event will be held in person, with forty thousand shareholders expected attend.
Ahead of the event, though Russo said he's most interested to hear the observation of equity sales in general, he is equally interested in seeing Buffett and Munger interact.
"That's where the genius is revealed," Russo said. "You will take away from those conversations the messages that you can employ and build into your own investing strategy and approach. For me, it's Charlie and Warren's back and forth. That conversation has expanded with new members on the dais, and possibly more going forward. But that conversation, the high-level conversation, generally speaking the stuff that matters is the stuff about values and culture."
Buffett and Munger began holding the shareholder meeting decades ago, and it's since become a playground for investors around the globe. Shareholders throughout the world come to enjoy Berkshire-held company offerings like See’s Candies, Coca-Cola and Dairy Queen.
Russo, who has been attending the meeting for 30 years, said Berkshire is "very focused on expressing and showing examples' of how they value the investors."
'Extraordinary power'
This year, investors are eager to hear from Buffett and Munger following an array of investment pursuits, including stakes in Occidental Petroleum and HP, in addition to the acquisition of Alleghany, which Buffet purchased in March for $11.6 billion.
Over the last two years, Buffett and Munger have made their succession plan clear to investors, by installing four key executives at the helm of the conglomerate: Greg Abel, who heads Berkshire Hathaway Energy and is likely to become CEO, Ajit Jain, who oversees the insurance business, and investment managers Todd Combs and Ted Weschler.
When asked whether Warren and Charlie were open to new and exciting investments after introducing fresh blood into company, Russo feels optimistic.
"It's been amazing ever since I started," said Russo. "Warren, early days, decried the inability for his investment style to embrace technology because of its inherent short shelf life and the need to reinvest. And so that was the message. But somehow as that message was articulated quietly, they built a $31 billion stake in Apple that today is worth $150 billion, which today is worth over $150 billion. It's unbelievable for some who will say that they were slow off the start in technology."
In addition, Russo mentioned that Berkshire has continued to make international investments more frequently.
"The number one strength of Berkshire is that Warren Buffett, as he shows by his own work, believes he has the ability to do anything in the investment business, and he showed us that by all the steps he's taken over the decades," Russo said. "But he's able to do nothing for extremely long periods of time and that gives him extraordinary power."
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and YouTube