Eighty-seven-year-old Warren Buffett hosts the nearest thing investors have to a revival meeting Saturday, the annual meeting of Berkshire Hathaway. It’s an opportunity for Buffett’s admirers to question him at length about anything that strikes their fancy.
There’s a reason investors great and small seek guidance from Buffett. Sure, he’s plain spoken. That’s a good and under-appreciated quality in our age of bloviated self-promotion. But Buffett’s straight talk understates his value. Simpler sometimes is better. Buffett invests in high-quality businesses and special situations he deems worthwhile. His investment vehicle has become so large that it is like a more intelligent index fund. It’s a proxy for the U.S. economy leavened with Buffett’s own wisdom and investment acumen.
Still, there’s plenty to discuss. Why, for example, has the avowed technophobe become so enamored with Apple? Could it simply be the 1.44%-and-growing dividend yield? Buffett might explain.
And what to make of his faltering investment in Kraft Heinz, a collaboration with Brazil’s 3G Capital whose own co-founder, Jorge Paulo Lemann, acknowledged recently missed key food-industry trends. Buffett has earned the right to make mistakes. Hearing his explanations for them is all the more edifying.
Finally, perhaps the no-nonsense Midwesterner can help make sense of the through-the-looking-glass world in which we live. Does he think deficit-generating tax cuts are the answer? Is his globalist worldview threatened by the U.S. administration’s protectionist saber rattling? Given all the upheaval in the world, what geographies most excite Buffett today? Never shy about weighing in on politics, how does he rate Donald Trump’s high-beta presidency and its impact on the stock market and the global economy?
Thanks for having me invade your inboxes this week. I hope you’ve enjoyed the different perspective. Alan will be back Monday.
Have a good weekend.
The European insurance behemoth Allianz is done with coal. In a bid to encourage the wind-down of fossil fuel use, the Munich-based company is immediately pulling its coverage from coal mines and single coal-fired power stations. By 2040, it will have no exposure to coal-related risks, it said this morning. Allianz revealed a coal-divestment policy a few years ago, and has now also stepped it up by saying it won't invest in companies that don't reduce their carbon emissions. Financial Times
Twitter has advised all its 336 million users to change their passwords, after it admitted accidentally storing them in plain text before putting them through the usual encryption process that companies use to protect their users' passwords. Twitter says there's no evidence of any breach or misuse, but it did consider the gaffe serious enough to warrant a regulatory disclosure, rather than leaving it at a contrite blog post. Appropriately, this all came out on "World Password Day." Fortune
HSBC has announced a 4% drop in pre-tax quarterly profits due to a rise in operating costs. Those costs? Hires in HSBC's Chinese securities joint venture and general digital transformation, apparently. Quarterly revenues, though, rose year-on-year from $12.993 billion to $13.71 billion. The bank—Europe's largest by assets—also said it would conduct one $2 billion share buyback this year. CNBC
Walmart and Flipkart
Reports suggest that Flipkart's board has approved a takeover by Walmart and partners including Alphabet, rather than by Amazon. The deal would reportedly value Flipkart at $20 billion and give Walmart the largest e-commerce player in India, a market of 1.3 billion people. Amazon reportedly made a counter-offer just a couple days ago, although that apparently included a non-compete clause for Flipkart's co-founders. Fortune
Around the Water Cooler
Former Volkswagen CEO Martin Winterkorn has been charged with fraud in the U.S. over his role in the automaker's rigging of software to make diesel emissions seem cleaner. Specifically, he was charged with wire fraud and conspiracy to defraud VW's U.S. customers and violate the country's Clean Air Act. This is the ninth charge in the case—two people are already behind bars. Fortune
Nike CEO Mark Parker has apologized to his staff for not doing more to create an inclusive atmosphere and not taking seriously complaints about workplace issues, according to the Journal. The company has reportedly been plagued by a boys-club culture that led women there to circulate a survey about pay disparities—disadvantaging women and minorities—and alleged inappropriate behaviour. Wall Street Journal
Mining companies in South Africa have agreed to pay tens of thousands of gold miners $400 million in compensation for their contracting silicosis, a disease that comes from inhaling the dust from rocks in the mines. It's an incurable disease that scars the lungs and can lead to tuberculosis. The case, South Africa's largest group action, dates back all the way to 1965. The companies include Anglo American, African Rainbow Minerals, Sibanye-Stillwater, Harmony Gold, Gold Fields and AngloGold Ashanti. BBC
House Speaker Paul Ryan pressured the House chaplain to resign, but now the chaplain has rescinded his resignation. And Ryan, trying to avoid controversy ahead of mid-terms, has rolled over. In a new letter, Patrick Conroy defended his seven years in the post and said he would go only if fired or not re-elected. The attempted ousting came via Jonathan Burks, Ryan's chief of staff, who expressed displeasure with Conroy's prayer about tax legislation. Bloomberg