OMAHA, Neb. (AP) — While 81-year-old Warren Buffett’s health has been on investors’ minds, many shareholders at Berkshire Hathaway’s annual meeting said Saturday that they aren’t that worried about Buffett’s prostate cancer diagnosis.
More than 30,000 people are expected to fill Omaha’s downtown arena and overflow rooms to hear Buffett and Berkshire Vice Chairman Charlie Munger answer questions for more than five hours. Outside the centerpiece question and answer session, Berkshire subsidiaries like See’s Candy, Justin Boots and Dairy Queen set up displays to sell their products to shareholders.
Questions about Buffett’s health are likely to come up because he just disclosed his cancer diagnosis last month. Buffett says doctors caught his cancer early, and it doesn’t represent a serious threat to his health. He plans to undergo radiation treatment in July.
“I feel real good,” Buffett said as he toured the exhibit hall Saturday morning.
Kevin Snook, of Lincoln, Neb., said if Buffett’s not worried about the cancer, then he isn’t either.
“Everybody’s worried about who the successor will be, but Warren and the board will chose a good one,” Snook said.
In fact, Buffett told shareholders in this year’s annual letter that the board has picked someone to succeed him as CEO if the need arises immediately, and it has two backup candidates. But Buffett hasn’t publicly identified his successor.
One of the first questions of the day was about whether Buffett’s successor will be able to make the same kind of deals he has, such as the $8 billion Berkshire invested in preferred shares of Goldman Sachs Group Inc. and General Electric Co. during the crisis of 2008. Goldman and GE both wanted Buffett’s stamp of approval along with Berkshire’s money.
“I don’t think that every deal I have made could be makeable by a successor,” Buffett said.
Buffett said deals like the ones with Goldman and GE haven’t been as important to Berkshire as investing in Coca-Cola Co. stock or buying entire businesses such as Iscar metalworking and the Burlington Northern Santa Fe railroad.
Shareholder John Zerngast, of Olathe, Kan., said the stock market might be uneasy about Buffett’s age and that of 88-year-old Munger, but it shouldn’t be because of how much Berkshire’s 80-odd subsidiaries and investments are worth.
Berkshire owns clothing, furniture, railroad, insurance, jewelry and utility businesses. It also has major investments in such companies as Coca-Cola Co., IBM and Wells Fargo & Co. On Friday, Berkshire said its first-quarter profit more than doubled to $3.2 billion from last year’s $1.5 billion because this year’s results weren’t hurt by major disaster losses in Berkshire’s insurance units.
Buffett says the growth in the stock’s book value — the company’s assets minus liabilities — has outpaced the Standard & Poor’s 500 index in all but eight years since 1965 while delivering a compounded annual return of almost 20 percent. In recent years, Buffett has repeatedly warned investors not to expect that type of return in the future because Berkshire’s size makes it nearly impossible to keep growing at that rate.