Buffett maps out hopes for Berkshire without him

Buffett maps out hopes for Berkshire without him

8:19pm EDT

By Jonathan Stempel and Jennifer Ablan

OMAHA, Nebraska (Reuters) – Warren Buffett on Saturday gave the most extensive comments to date about the future of Berkshire Hathaway Inc after he is gone, saying he still expects the conglomerate to be a partner of choice for distressed companies.

Buffett, 82, also defended his plan to install his son, Howard, who has little investing experience, as nonexecutive chairman, saying the younger man’s role would be to ensure that Berkshire had the right CEO in place.

During the financial crisis and its immediate aftermath, Berkshire helped prop up a number of companies, among them blue-chips such as General Electric and Goldman Sachs. Buffett’s investments were viewed by many shareholders as a seal of approval from one of the world’s most respected businessmen.

Short-seller Doug Kass, invited by Buffett to Berkshire’s annual meeting on Saturday to offer contrarian points of view, asked whether a successor would have the same heft. Buffett said it would not matter.

“Berkshire is the 800 number when there is really some panic in the markets, and people really need significant capital,” Buffett said.“If you come to a day when the Dow has fallen 1,000 points a day for a few days and the tide has gone out and you find some naked swimmers, those naked swimmers … will call Berkshire,” he added.

Whoever ultimately takes over Berkshire will run a conglomerate that employs more than 280,000 people in dozens of businesses worldwide, covering everything from ice cream to insurance and retail to railroads.

Kass later asked what qualified Howard Buffett, a 58-year-old farmer and philanthropist, to step in as Berkshire’s non-executive chairman when his father is gone. The elder Buffett insisted his son was ideal for the task at hand.

“He has no illusions at all of running the business. He won’t get paid for running the business,” Warren Buffett said. “He’ll only have to think about whether the board … needs to change the CEO.”

As in the past, Buffett talked about his successor as CEO without actually identifying him. Speculation usually focuses on a small group of top Berkshire executives, among them insurance boss Ajit Jain and railroad leader Matt Rose.

One long-time Buffett-watcher said the legendary investor seemed to handle the pressure from Kass and others well.

“Buffett hasn’t broken much new ground, but he’s handled Doug’s question well … and, as always, reinforced the Berkshire culture every chance he’s had,” said Jeff Matthews, founder of hedge fund Ram Partners LP and a Buffett biographer.

ECONOMIC INDICATOR

Berkshire’s breadth means that its performance is seen as a barometer for the broader economy. On Saturday, Buffett said he still stands by the actions taken by the U.S. Federal Reserve to stimulate the economy, even as he cautioned that the program could be “very inflationary.”

“This is like watching a good movie, and I do not know the end,” he said. “We have benefited significantly, and the country has benefited significantly, by what the Fed has done.”

Buffett also endorsed the last four years of deficit spending by President Barack Obama’s administration, saying it is a problem to get off that program but much less of a problem than if the government had followed a strict austerity program instead.

“We are seeing some recovery in housing prices which has psychological effects,” he said. “(By the next annual meeting) I think we will have moved forward … I don’t think there will be a surge of any sort, but I don’t think we will stall.”

Earlier Saturday, one of Buffett’s top lieutenants said things were picking up but could improve further.

“It feels like a 2 percent economy. If we want to see GDP click up to 3.5 percent, 4 percent, you need to see more consumption,” said Rose, CEO of the railroad Burlington Northern, in an interview.

Rose said Burlington Northern was seeing “across the board” increases in demand to ship things like concrete, roofing tiles and cars.

NO TWITTER, THANK YOU

Buffett may be optimistic about the economy, but he is decidedly more cautious about technology. Earlier this week he joined Twitter, taking the handle @WarrenBuffett – but insisted he only knew enough about it to press a button when told to.

On Saturday he said he disagreed with the recent guidance from the U.S. Securities & Exchange Commission that lets companies release material information on Twitter. Some see that as a threat to Berkshire’s press release service, Business Wire.

“The key to disclosure is accuracy and simultaneity … I do not want it, if I am buying Wells Fargo, to keep hitting up their web page and hoping I’m not 10 seconds behind someone else for some important announcement,” he said.

He also stuck by one of Berkshire’s more controversial investments, its recent acquisition of a number of newspapers. The annual meeting crowd applauded when CNBC anchor Andrew Ross Sorkin asked a critical question about the stable of papers.

“It’s not going to move the needle in Berkshire … we are buying the papers at very, very low prices with (regard to) current earnings,” Buffett said, adding that he expected to meet or beat a 10 percent rate of return, after-tax.

Yet as much as investors want to hear about Berkshire’s growth potential and the state of the economy, some also attend the meeting just for a good laugh.

The meeting opened, as it does every year, with a video montage. This year’s included a duet between Buffett and singer Jon Bon Jovi and a take-off on the TV series “Breaking Bad.”

Some of the best comedy, though, usually comes in the verbal sparring between Buffett and Vice Chairman Charlie Munger over the course of the day. The two are close – they shared an oversize box of peanut brittle during the meeting – but Munger’s acerbic tongue pops out from time to time.

“I come to see Charlie Munger needle Warren Buffett – only he can,” said Sherman Silber, a doctor and shareholder.

Buffett Says Next CEO to Aid Aura as 800-Number in Crisis

Warren Buffett, the leader of Berkshire Hathaway Inc. (BRK/A) since the 1960s, said the company’s next chief executive officer will bolster the company’s reputation as a source of stability in times of crisis.

“Berkshire is the 800-number when there’s really sort of panic in markets,” Buffett said today at the company’s annual meeting in Omaha, Nebraska, referring to first digits used for toll-free telephone calls in the U.S.

Buffett, 82, injected $5 billion into Goldman Sachs Group Inc. during the financial crisis of 2008 and made a $5 billion bet on Bank of America Corp. in 2011 after the lenders’ stock slumped. The deals gave Berkshire fixed returns on preferred shares along with warrants that allowed Buffett to benefit from rebounds in the banks’ stocks.

Doug Kass, the investor betting on a decline of Berkshire’s stock, said Buffett’s reputation helped him arrange the deals with companies seeking to restore market confidence. He asked today if the next CEO will be able to strike similar agreements.

Buffett said his successor will have access to even more capital as Berkshire grows. There will probably be times of turbulence when there are limited alternative sources of liquidity, giving a future Berkshire leader the chance to make investments on favorable terms, Buffett said.

Berkshire Brand

“When that happens when I’m not around, it becomes even more attached to the Berkshire brand,” Buffett said.

Investors have speculated about who might replace Buffett atop of the firm he and Vice Chairman Charles Munger, 89, built into a business valued at more than $260 billion. The CEO, who’s also Berkshire’s chairman and largest shareholder, has said his roles will be divided once he’s no longer leading the company.

Buffett said today that Berkshire’s board is “solidly in agreement” as to who should be the next CEO. He didn’t identify the individual.

Todd Combs and Ted Weschler, former hedge-fund managers who were hired in the last three years, will oversee Berkshire’s investments, Buffett has said. The portfolio includes the largest equity stakes in Coca-Cola Co. and Wells Fargo & Co.

The billionaire has also said his son Howard, 58, a Berkshire director since 1993, could be non-executive chairman of a board that also includes Microsoft Corp. co-founder Bill Gates. The younger Buffett has said he would protect Berkshire’s culture of giving managers autonomy to run their businesses.

“You don’t want a CEO who’s going to change that and drive managers away,” Howard Buffett told Bloomberg Television’s Betty Liu in an interview that aired Feb. 8. “That’s probably one of the key parts of it, is just making sure that part of the culture remains intact. And people that are best suited to run the business run the business.”

To contact the reporter on this story: Noah Buhayar in New York at nbuhayar@bloomberg.net.

Buffett Says Berkshire Stretched on Heinz Price in Bet on Lemann

Warren Buffett said his Berkshire Hathaway Inc. (BRK/A) was willing to invest $12.1 billion alongside 3G Capital in a deal for HJ Heinz Co. (HNZ) because of his faith in the buyout firm led by Jorge Paulo Lemann.

“They are extraordinary managers,” Buffett said today at Berkshire’s annual meeting in Omaha, Nebraska, where the company is based. “We stretched a little because of that.”

Berkshire and 3G reached a deal in February valued at about $23.3 billion to buy ketchup-maker Heinz, agreeing to pay 20 percent more than the closing price before the acquisition was announced. Berkshire gets an equity stake of about $4.1 billion, as well as warrants and $8 billion in preferred shares paying a 9 percent annual dividend.

The billionaire chairman and chief executive officer of Berkshire said the deal is designed to give 3G better returns than his firm if Heinz does well. 3G, which has overseen companies such as Burger King Worldwide Inc. (BKW), will run operations at Pittsburgh-based Heinz.

“It was an absolutely fair deal,” Buffett said. “I said, ‘I’m in.’”

Lemann, 73, Brazil’s wealthiest man, is a founder of 3G Capital, and previously led the $52 billion merger between Anheuser-Busch Cos. and InBev NV in 2008 with partners Marcel Telles and Carlos Alberto Sicupira. Buffett, 82, and Lemann sat on the board of razor-maker Gillette Co., and Buffett said today they discussed the Heinz deal in Golden, Colorado, in December.

To contact the reporters on this story: Zachary Tracer in New York at ztracer1@bloomberg.net; Margaret Collins in New York at mcollins45@bloomberg.net

Buffett Clashes With Munger Over U.S. Corporate Taxes at Meeting

Warren Buffett, the billionaire chairman and chief executive officer of Berkshire Hathaway Inc. (BRK/A), clashed with his long-time business partner over corporate taxes.

Buffett suggested ignoring companies’ complaints over tax rates, while Vice Chairman Charlie Munger said levies should be reduced.

“American business is complaining enormously about the level of the corporate income tax,” Buffett, 82, said today at Berkshire’s annual meeting in Omaha, Nebraska, where the firm is based. “I would have you take that with a grain of salt.”

Munger disagreed, saying that higher taxes hurt U.S. firms as foreign governments lower levies on competitors.

“The corporate tax rate should be lower,” Munger said. “When the rest of the world keeps bringing the rates down, there’s some disadvantage to us if we’re much higher.”

Munger, 89, said he concurs with Buffett that the richest U.S. individuals should pay more taxes. Buffett has pushed for higher levies on top earners, pointing out that his secretary has paid a higher percentage of her income in taxes than he has.

Buffett attributed his dispute with Munger over company taxes to politics. Munger is a Republican, while he’s a Democrat, Buffett said.

To contact the reporters on this story: Margaret Collins in New York at mcollins45@bloomberg.net; Zachary Tracer in New York at ztracer1@bloomberg.net

 

Buffett Not Convinced by Kass to Dump Berkshire Stock

Berkshire Hathaway Inc. (BRK/A) Chairman Warren Buffett said that Douglas Kass, the money manager he picked to ask tough questions at the firm’s annual meeting, hadn’t yet convinced him to sell shares.

Kass, who is betting on Omaha, Nebraska-based Berkshire’s stock decline, said today that recent takeovers of “pricier and more mature businesses” including HJ Heinz Co. (HNZ) could result in lower returns. Buffett, 82, replied that he was confident about the acquisitions, saying Berkshire’s growth into a $267 billion company has affected strategy.

“We’ve paid up for good businesses more than we would have 30 or 40 years ago,” Buffett said today at the meeting in Omaha. “Paying up for an extraordinary business is not a mistake.”

Buffett’s view on the best route to building shareholder value changed as his company’s market value and cash hoard ballooned over more than four decades. The firm, which said yesterday it had a record $49.1 billion in cash, spent much of last year’s earnings on a $12.1 billion investment in ketchup maker Heinz.

Kass, founder of Palm Beach, Florida-based Seabreeze Partners Management, answered Buffett’s call to change the panel at this year’s meeting by adding an investment professional who’s betting on the decline of Berkshire shares.

Berkshire and 3G Capital reached a deal in February valued at about $23.3 billion to buy Heinz, agreeing to pay 20 percent more than the closing price before the transaction was announced. Buffett said today that he invested with 3G because of his faith in the buyout firm led by Jorge Paulo Lemann.

New Approach

Takeovers, including Buffett’s biggest acquisition, railroad Burlington Northern Santa Fe, contrast with his earlier approach. In a 1978 letter to investors, Buffett said that “truly outstanding businesses” often sold in equity markets at a discount compared with the cost of negotiating to buy entire companies.

Berkshire Class A shares have climbed 22 percent this year to $162,904 in New York, beating the 13 percent gain in the Standard & Poor’s 500 Index.

Berkshire said in December that it bought about $1.2 billion of its stock from the estate of a longtime shareholder and boosted the price it’s willing to pay in the future for repurchases, signaling that Buffett viewed the stock as undervalued.

“You haven’t convinced me to sell the stock yet, Doug,” Buffett said today.

Berkshire will outperform other “giants of the past” because it has a better management system in place, Vice Chairman Charles Munger said.

Kass questioned whether Berkshire would suffer after Buffett’s eventual departure. He said Buffett’s reputation helped win deals with companies seeking to restore market confidence.

Buffett said his successor will have access to even more capital as Berkshire grows. In times of turbulence, Berkshire’s leader will have the chance to make investments on favorable terms, he said.

To contact the reporters on this story: Noah Buhayar in Omaha, Nebraska at nbuhayar@bloomberg.net; Hugh Son in New York at hson1@bloomberg.net

AIG CEO Calls Buffett’s Remarks on Expansion Strange

American International Group Inc. (AIG) Chief Executive Officer Robert Benmosche said he was surprised by Warren Buffett’s account of how he hired away four AIG executives in a push into commercial insurance.

“It kind of sounds a little strange to me,” the AIG CEO said today in an interview on the “In the Loop” program after Bloomberg Television’s Betty Liu showed a clip of Buffett’s remarks. “But that’s OK. I’m sure it was opportunistic.”

Buffett, the billionaire chairman and CEO of Berkshire Hathaway Inc. (BRK/A), told Liu yesterday that he hired the AIG managers to expand in business coverage after the men reached out to his company. Some of them had been in contact with Berkshire for a long time, Buffett said. Berkshire is seeking to add sales of commercial coverage “very big time,” Buffett said in the interview in Omaha, Nebraska, where Berkshire is based.

“I’m surprised that Warren would want to get into a business and wait for people to call,” said Benmosche, 68. “We have plenty of talent. And so, Warren wants to take a few people, and wait for them to call him to build a business, god bless him.”

Peter Eastwood, who was CEO of AIG’s property-casualty operation in the Americas, was among the executives joining Berkshire. AIG named managers this week to fill some posts after the insurer’s shares slumped 3.3 percent on April 26 as the departures were reported.

Robert Schimek was assigned by AIG to lead the Americas property-casualty unit, the company said in an April 29 statement. Alexander Baugh took over the global casualty business, replacing David Fields, who left with Eastwood.

Satisfied Customers

Schimek has shown his value in other roles, including his prior job running the Europe, Middle East and Africa region, Benmosche said. He also worked with clients in 2008, the year the insurer was bailed out, and assured them the company would survive the financial crisis, Benmosche told Liu.

“And you know what, he was pretty right,” said Benmosche, who joined the company in 2009 and repaid the U.S. rescue last year. “The brokers, the customers are all satisfied with who we put in place”

Berkshire has units that sell auto coverage and reinsurance and hasn’t played a big role in providing business policies, Buffett said. He’s built Berkshire into a company valued at more than $265 billion by investing premiums from operations such as car-insurer Geico before paying out claims. Buffett, 82, is hosting the company’s annual meeting tomorrow in Omaha.

AIG’s Rally

AIG surged today to the highest in more than two years, after yesterday posting first-quarter results that beat analysts’ estimates. The shares rose 5.7 percent to $44.52 at 4 p.m. in New York.

The departures prompted the first analyst question on a conference call AIG held today to discuss results. Benmosche said New York-based AIG has been successful in retaining top managers and the remaining executives are “outstanding.”

“I can see that our competition is struggling a little bit with their flows,” he said in responding to the query about executive departures, without naming rivals. “And so they have to get in businesses they weren’t in traditionally.”

To contact the reporter on this story: Zachary Tracer in New York at ztracer1@bloomberg.net

Updated May 4, 2013, 6:08 p.m. ET

Buffett’s Bear: More a Teddy than a Grizzly

By ANUPREETA DAS and DAVID BENOIT

OMAHA, Neb.—Berkshire Hathaway Inc. BRKB +1.25% bear Doug Kass spent weeks sharpening his claws to dig into Warren Buffett, but he didn’t draw much blood.

Mr. Buffett picked Mr. Kass in March for his contrarian views on Berkshire and invited him to ask tough questions at the company’s annual meeting, which concluded Saturday in Omaha. The 64-year-old hedge-fund manager from Palm Beach, Fla. holds a short position in Berkshire stock, meaning he is betting that shares of the giant conglomerate will fall. He also earned his “bear” credentials by writing an article in 2008 listing 11 reasons to short Berkshire stock.

Mr. Kass’s questions, while thoughtful, reflected many of the themes he outlined in that article, including questions about Berkshire’s size and its future once Mr. Buffett is gone, which are well-aired concerns among shareholders.

Mr. Buffett casually swatted them away.

“You haven’t convinced me to sell the stock yet, Doug,” Mr. Buffett said.

In a meeting in which Mr. Buffett largely reiterated positions he has stated publicly before—yes, he has decided on a successor, but, no, he is not saying who it is—many investors said Mr. Kass’s inclusion as a questioner added to the diversity and quality of questions during the five-hour session.

Warren Buffett stood next to the Golden Jubilee Diamond on May 5, 1996, in Omaha, Neb. The diamond, the largest polished diamond in the world, made its U.S. debut in Omaha at a special showing for shareholders of Berkshire Hathaway.

“I don’t think he made the case that Berkshire is a short,” said David Rolfe, chief investment officer of Wedgewood Partners Inc., which owns Berkshire shares and has $4 billion in assets. “He did make the case that the days of outsized stock returns are over, but Buffett and Munger have been saying that for some years now.” Charlie Munger is Berkshire’s vice chairman.

Mr. Kass also provided one of the meeting’s more memorable moments, when he used the forum to pitch an idea to Mr. Buffett rather than asking a question. Knowing the Berkshire CEO’s negative view of short selling, Mr. Kass proposed that Mr. Buffett give him $100 million in a managed account to make a wager, in which he would donate gains to charity. Mr. Munger handled the answer: “No.”

Mr. Kass, who has spent the past few days chronicling his trip to Omaha online and listing the similarities between him and Mr. Buffett—they both owned train sets as kids, to cite one—has consistently stated his admiration and awe of the billionaire investor. That probably puts him among the gentler bears in finance, and his questions were a far cry from the pointed barbs traded between activist investor Bill Ackman and Herbalife, the supplements company that Mr. Ackman is shorting.

Mr. Kass took turns lobbing questions at the octogenarians with shareholders and his fellow panelists. He started off by asking whether Berkshire, which grew by buying businesses cheaply, has had to turn to more mature and pricier businesses that generate stable cash flow but provide a lower return on investment and whether that was in preparation for Mr. Buffett’s legacy. “Is Berkshire resembling an index fund more appropriate for widows and orphans” than fund managers?” he asked.

Mr. Buffett argued, as he has before, that Berkshire’s size—80-odd subsidiary businesses, $264 billion in market value and over 288,000 employees—makes it tougher to do as well as the company did in past decades. But he took issue with Mr. Kass on the point that Berkshire is making expensive acquisitions. “We’ve paid up, partly at Charlie’s urging, for good businesses [more] than we would have 30-40 years ago, but even with some diminution from returns in the past, they can still be satisfactory, and we now realize that paying up for an extraordinary business is not a mistake.”

Another question touched on whether Mr. Buffett’s son, Howard, was qualified to become Berkshire’s non-executive chairman as part of a succession plan. “The probability of a mistake being made is one in a hundred,” Mr.Buffett responded. “It’s not his job to run a business. …He only has to think about whether the board and himself may need to change the CEO.”

Mr. Kass said in an interview that he thought his appearance went well and that he believed he had to take his chance with the $100 million request. While he thought Mr. Buffett dodged a few questions, including the one on Howard Buffett, Mr. Kass said that he thought the answers were honest and that his questions got shareholders thinking.

“My objective was to force people to look with a little more skepticism,” Mr. Kass said.

Bill Smead, a Berkshire investor who runs Smead Capital Management, said that in asking his questions and getting Messrs. Buffett and Munger to explain their business, Mr. Kass helped those shareholders who long for the higher returns of days past to deal with their frustration. “However, it is a foolish stock to short and his questions show that truth.”

WHITNEY TILSON: The Most Brilliant Things I’ve Learned From Warren Buffett

Julia La Roche | May 3, 2013, 11:26 AM | 2,588 | 

Value investor Whitney Tilson told us the No. 1 reason he makes the annual pilgrimage to Omaha, Nebraska for the Berkshire Hathaway annual shareholder meeting is to learn.

We asked Tilson, who runs Kase Capital, the most brilliant thing he has learned from the legendary Warren Buffett.

“I don’t know, how many hours do you have?” he responded.

Here’s what Tilson has learned both professionally and personally from the Oracle of Omaha:

“I remember going to the meeting during the internet bubble and he made it abundantly clear that this was a ridiculous bubble and that Cisco for example could not possibly be worth $500 billion, which is what it’s market cap was at the time. He and Charlie [Munger] were shouting from the rooftops about the dangers of leverage building up in the financial system during the next great bubble that was forming.  Then, in the aftermath, during the bust, he in early ’09, which turns out to have been an absolutely fantastic time in May of ’09 to have been investing, he was there as sort of a voice of wisdom and calm saying, ‘You know, it’s a turbulent world out there, but I’m finding a lot of good stuff to buy.’ So the way he talks about why he bought Burlington Northern, you know why the insurance business is attractive, you just learn so much about business and different industries, about what’s going on economically. So that’s all the professional stuff.”

“On the personal stuff, just the way he and Charlie talk about how they live their lives. And, the way they run Berkshire Hathaway.  The way they’ve conducted themselves.  I think they are admirable.  Even if I didn’t learn a thing from them on the investing front, I think I would go to learn from them about how to live your life in a good way. I remember them talking about ‘How do you define success?  How do you know when you’re successful?’ and Warren’s comment was ‘If the people who should love you, do love you.’ That’s always sort of stuck with me. And then Charlie takes the inverse of that and says, ‘You don’t want to be the guy who everybody shows up at his funeral just to make sure he’s dead.'”

Updated May 4, 2013, 11:48 a.m. ET

Berkshire Investors Eager for Buffett Q&A at Annual Meeting

By ANUPREETA DAS

Bitter cold did little to damp the enthusiasm of investors who flocked to Omaha to soak up the wit and wisdom of Warren Buffett.

When the doors of the convention center opened at 6:30 a.m. central time, a little earlier than usual to give people a break from the weather, hundreds of shareholders, including undergraduate students from Minneapolis and a father-son duo from Portland, Ore., had already been waiting in line for a couple of hours. The crowd streamed in rapidly, with several running to the sounds of the staccato change machine in Pink Floyd’s “Money.”

The previous night, many shareholders had attended cocktail parties and dinners to raise a glass to their hero and leader, Mr. Buffett, as well as reminisce about previous years and catch up with other Berkshire Hathaway Inc.BRKB +1.25% shareholder friends.

As many as 37,000 people are expected for the meeting, which is usually highlighted by Saturday’s lengthy question-and-answer session with Mr. Buffett, in which he doles out his views on the economy and Berkshire’s various businesses.

An added attraction for shareholders this year is the presence of Doug Kass on the panel of questioners. Mr. Kass, who runs a hedge fund, was handpicked by Mr. Buffett in March because of his bearish views on Berkshire, and has said he plans to ask some tough questions.

The Yellow BRKers, a shareholder group that started in the 1990s as an AOL discussion board, held a reception at the Doubletree Hotel Friday evening, welcoming investors from as far away as Latvia, India, Sweden, Norway, Hong Kong and France. People paid $5 to enter and bought their own drinks.

Shareholders could be divided into two groups: individual investors, many of whom came to the event to be entertained and inspired by Mr. Buffett and Berkshire Vice Chairman Charlie Munger, and fund managers and other professional investors, who were seeking more clarity on the conglomerate’s businesses.

Berkshire reported a 51% increase in first-quarter earnings Friday after the market closed, as some of its key insurance companies performed well and profits grew in its railroad. Mr. Buffett began Saturday’s meeting with a discussion on earnings, saying operating earnings growth was “quite satisfactory.”

David Rolfe, chief investment officer of St.Louis, Mo.-based Wedgewood Partners Inc., which manages more than $4 billion in assets, said he was most interested in hearing about the “minutiae of the business,” including Iscar and Burlington Northern Santa Fe. He said earnings were strong, without big surprises.

Berkshire said this week it had bought the 20% of Iscar, an Israeli metalworking company, it didn’t already own for $2.05 billion. Iscar, which makes metal-cutting tools, has flourished under Berkshire, opening new plants, expanding its product offerings and acquiring rivals.

Other shareholders were talking less about Berkshire’s first-quarter earnings and focused more on buying wares from the booths that Berkshire subsidiaries, such as See’s candies, Brooks running shoes and Dairy Queen ice-cream bars.

When Mr. Buffett, accompanied by Microsoft co-founder Bill Gates, walked around the exhibition hall on his way to the newspaper tossing challenge—a two-year-old contest in which shareholders get to compete with their chairman in tossing a folded newspaper—people swarmed around him like bees, their iPhones and cameras flashing. As Mr. Buffett made his way, one shareholder remarked: “The pope wouldn’t draw a crowd this large.”