On Saturday, April 30^th, Berkshire Hathaway shareholders gathered in Omaha, Nebraska to hear from Warren Buffett and Berkshire Vice-Chairman Charlie Munger. For the first time since 2019, The Berkshire Hathaway annual shareholder meeting took place in person, much to the enjoyment of the tens of thousands in attendance. Previously nicknamed the “Woodstock for Capitalists”, it is widely regarded as one of the world’s most remarkable and unique celebrations of investing and wealth.

Here are some key takeaways for investors from the 2022 Berkshire Hathaway annual meeting:

1. Inflation and how to hedge against it

Buffet explained that the cause of the current high inflation environment is simple – “You print loads of money, and money is going to be worth less.” He also said Jerome Powell (Chair of the Federal Reserve of the United States) “did what he had to do”, indicating that high inflation might be a fair price to pay for rescuing the most highly indebted businesses in the US from the Covid pandemic.

When it comes to investing in an inflationary environment, most protection can be found in businesses with the power to raise prices on their products or services without losing business to the competition. Buffet noted that “the best defence against inflation is to be skilled at what you do, and to produce a good or service that will remain in demand which people will be willing to pay for”.

2. The opportunity in market volatility and speculative behaviour

Buffet has for long talked about the opportunities that the market’s gambling instinct can offer to those that stay the course and this year was no different. He said that short-term swings in prices can be buying opportunities for Berkshire: “Sometimes markets do crazy things. That’s good for Berkshire, not because we’re smart…but because we’re sane.” 

3. Focus on time in the market, not on timing the market

Buffett warned investors that he never knows what the stock market will do in the short term, which is why “timing the market” is a bad investment approach. Investors who believe they can time the market and get in and out at all the correct periods are unlikely to be successful. “We have not been good at timing,” Buffett said. “We’ve been reasonably good at figuring out when we were getting enough for our money.”

4. Cash is king

 Berkshire Hathaway is notorious for having a big amount of cash on its balance sheet, and some have criticised Buffett for not deploying it into the market more aggressively. However, he stressed the significance of keeping enough cash on hand to ensure that the company can always survive, particularly during market panics like the financial crises of 2007-2009. Buffett stated, “We will always have a lot of cash on hand.” “There have been a few times in history, and there will be more in the future, where you don’t get to play the next day if you don’t have it.”

Personally, what resonates most with me from reviewing the Berkshire Hathaway Annual Shareholders Meeting is Buffet’s message that:

“The best investment is by far, anything that develops yourself”.

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