2001 Berkshire Hathaway Annual Meeting (Full Version) | Summary and Q&A

November 3, 2020
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2001 Berkshire Hathaway Annual Meeting (Full Version)

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This video is from the 2001 annual meeting of Berkshire Hathaway shareholders. Warren Buffett introduces the directors present and provides updates on the company's performance. He also highlights Ralph Willard, a retired executive who made important contributions to the company. The meeting includes discussions on various topics such as corporate regulations, election of directors, and the impact of liabilities on companies. Buffett and Charlie Munger, Vice Chairman of Berkshire Hathaway, answer questions from shareholders regarding investments, mistakes made in the past, and the influence of labor costs on businesses.

Questions & Answers

Q: Who is Ralph Willard and why is he being acknowledged?

Ralph Willard is a retired executive who made significant contributions to Berkshire Hathaway. Buffett expresses gratitude for the profit Ralph delivered over the years, which enabled the company's ownership of many other companies.

Q: How many shares of Berkshire Hathaway were outstanding at the time of the meeting?

There were 1,343,041 shares of Class A Berkshire Hathaway common stock and 5,505,791 shares of Class B Berkshire Hathaway common stock outstanding. These shares represented a quorum for the meeting.

Q: What was the first order of business at the meeting?

The first order of business was to elect directors. Shareholders were given the opportunity to withdraw their proxy and vote in person, or request a ballot if they hadn't already submitted a proxy.

Q: How many directors were elected at the meeting?

Warren E. Buffett, Susan T. Buffett, Howard G. Buffett, Malcolm G. Chase, Charles T. Munger, Ronald L. Olson, and Walter Scott Jr. were elected as directors.

Q: Who are the proxy holders for the meeting?

Walter Scott Jr and Mark D. Hamburg were the proxy holders for the meeting.

Q: Did the number of votes cast for each nominee meet the required majority?

Yes, the number of votes cast for each nominee exceeded a majority of the total votes related to all Class A and Class B shares outstanding.

Q: Was there any other business to be discussed at the meeting?

A proposal put forth by Berkshire shareholder Bartlett Naylor was originally scheduled to be presented, but he later withdrew the proposal. Therefore, it was not discussed at the meeting.

Q: Was there any mention of mistakes made by Berkshire Hathaway?

Yes, Buffett and Munger admitted to making mistakes of omission, particularly in not buying certain companies or stocks that would have been profitable. They emphasized the importance of learning from missed opportunities and not repeating the same errors.

Q: Does the potential for damage liabilities reduce the intrinsic value of companies?

Buffett explained that while some industries, such as tobacco, have faced large damage liabilities, he doesn't believe it reduces the intrinsic value of companies like Coca-Cola, See's Candies, or Dairy Queen. He cited his personal positive experience with these products and the fact that they are widely consumed without causing significant harm.

Q: Is Buffett concerned about the erosion of the legal principle of caveat emptor?

Buffett expressed concern about the increasing power of plaintiff's contingency bar and the lack of strong action by judges in cases involving junk science, junk economic testimony, and poor lawyers. He acknowledged that the lottery-like potential for large awards in liability lawsuits attracts lawyers to pursue such cases.

Q: How does Berkshire Hathaway evaluate and select companies to invest in?

Buffett and Munger explained that they look for businesses with enduring competitive advantages and top-notch management. They focus on understanding the cost structure of the business and its industry, but their main criteria for investment is a strong competitive advantage.

Q: Can the PE Ratio effectively evaluate investments?

Buffett noted that the PE Ratio is commonly used in financial analysis but it doesn't take into consideration factors such as cash or debt. He mentioned that Berkshire Hathaway evaluates each business individually based on its specific cost structure, competitive advantage, and potential for future earnings.

Q: Is hoarding cash discouraged by Berkshire Hathaway?

Buffett and Munger explained that they want to have all their money working in decent businesses, and cash is only retained when they can't find suitable investment opportunities. They emphasized the importance of deploying cash effectively and not leaving it unutilized for long periods, but they also recognized the need for a margin of safety.

Q: How do labor costs impact companies like airlines and Executive Jet?

Labor costs play a significant role in the profitability of airlines. If an airline's labor costs are significantly higher than its competitors, it will struggle to compete. In contrast, companies like Executive Jet operate differently, attracting employees with other benefits such as living flexibility and preferred shift schedules.


This video provides insights into the annual meeting of Berkshire Hathaway shareholders in 2001. In addition to updates on the company's performance, the meeting tackles various topics such as regulation, elections, and liabilities. Buffett and Munger's discussions shed light on their investment approach, mistakes made in the past, and the impact of labor costs on different industries. These insights provide valuable lessons for investors and businesses alike.

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