1999 Berkshire Hathaway Annual Meeting (Full Version) | Summary and Q&A

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November 3, 2020
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1999 Berkshire Hathaway Annual Meeting (Full Version)

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Summary

Warren Buffett and Charlie Munger host the 1999 annual meeting of shareholders and answer questions on various topics including business, directors, shareholders, and the market. They discuss the collapse of the hedge fund long-term capital, the impact of the internet on retailing, and the division of profits among employees.

Questions & Answers

Q: How do Warren Buffett and Charlie Munger regard themselves during the annual meeting?

Warren Buffett and Charlie Munger regard themselves as owners during the annual meeting, as evidenced by the large turnout of shareholders.

Q: Who are the directors of Berkshire Hathaway?

The directors of Berkshire Hathaway include Warren Buffett, Susan T. Buffett, Howard G. Buffett, Malcolm G. Chase, Charlie Munger, Ronald L. Olson, and Walter Scott Jr.

Q: Who are the auditors of Berkshire Hathaway?

Deloitte and Touch are the auditors of Berkshire Hathaway.

Q: How many shares of class A and class B Berkshire Hathaway common stock are outstanding?

There are 1,343,592 shares of class A Berkshire Hathaway common stock and 5,266,338 shares of class B Berkshire Hathaway common stock outstanding.

Q: What is the purpose of the annual meeting?

The purpose of the annual meeting is to elect directors.

Q: How are directors elected at the annual meeting?

Shareholders can vote for directors by proxy or in person at the meeting. Proxy cards are submitted to the inspectors of election.

Q: What is the report of the secretary on the number of Berkshire shares represented at the meeting?

There are 1,133,684 class A shares and 3,485,885 class B shares represented at the meeting through proxies.

Q: What is the business of the meeting after the election of directors?

After the election of directors, the business of the meeting is adjourned and questions are entertained from shareholders.

Q: What is the effect of the collapse of long-term capital management on the hedge fund industry?

The collapse of long-term capital management has raised concerns about the risk and irresponsible nature of the derivatives market.

Q: How do Warren Buffett and Charlie Munger evaluate the role of derivatives in business?

Warren Buffett and Charlie Munger consider derivatives to be risky and believe that the accounting for derivatives is weak. They have seen how derivatives can lead to financial losses and consider them to be an irresponsible part of the financial system.

Q: How do Warren Buffett and Charlie Munger calculate the intrinsic value of Berkshire Hathaway?

Warren Buffett and Charlie Munger calculate the intrinsic value of Berkshire Hathaway by discounting the future cash flows of the company using an appropriate discount rate. They consider the long-term growth prospects of the company and its ability to reinvest earnings and grow float.

Q: How does the internet impact the retailing industry?

The internet has the potential to revolutionize the retailing industry by offering consumers a wide variety of products and the convenience of online shopping. However, the impact of the internet on different retail sectors may vary, and established brands may still have an advantage over online competitors.

Q: How do Warren Buffett and Charlie Munger evaluate the prospects for the retailing industry?

Warren Buffett and Charlie Munger believe that the internet will have a significant impact on the retailing industry. While certain sectors may be more vulnerable to disruption, they emphasize the importance of brand names and trust in consumer purchasing decisions. They also highlight the potential benefits of the internet for certain businesses, such as jewelry retailing.

Q: How do Warren Buffett and Charlie Munger divide up the profits of Berkshire Hathaway subsidiaries among employees?

Warren Buffett and Charlie Munger do not comment on the specifics of profit sharing at Berkshire Hathaway subsidiaries. However, they encourage shareholders to read Alice Schroeder's comprehensive analysis of Berkshire Hathaway, which may provide insights on the subject.

Q: Do Warren Buffett and Charlie Munger have any suggested reading on profit sharing?

Charlie Munger suggests that the shareholder reads on profit sharing, but no specific titles are mentioned.

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