These are very good and complete notes, of the 2011 and 2010 annual meeting, for download in a pdf file for those who have time:
And here below are stripped down notes, for the recent 2011 meeting, about the more important subjects:
“I think that for reasons that are laid out in the audit committee report, I don’t think there’s any question about the inexcusable part. He violated the code of ethics. He violated our insider trading rules. He violated the principles i lay out every two years.”
“The inexplicable part I’ll tell you what goes through my mind when I think about it. He made no attempt to disguise the fact that he was buying the stock.”
Buffett has related what he says is an anecdote he’s never spoken about publicly.
When Berkshire bought MidAmerican Energy Holdings in late 1999, bringing Sokol on board, Berkshire director Walter Scott told Buffett that the company should put together a special compensation practice for the new rising star. Buffett devised a payout that would have paid Sokol more than $25 million.
In a private meeting to discuss the plan, Sokol told Buffett that he was happy with the proposal, but suggested one change: Give half to his lieutenant, Greg Abel.
Here’s what Buffett’s takeaway is: “So I witnessed, and Walter witnessed Dave voluntarily — Greg had nothing to do with it, he wasn’t there — transferred $12.5 million with no credit to his junior partner. I thought that was rather extraordinary.
And yet who would have known that $3 million, ten or so years later, would have led to the kind of troubles that it has led to. That really is the fact that I find inexplicable.”
“I obviously made a big mistake not saying, ‘Well when did you buy it’?” Buffett said.
Citigroup reveal: For the first time, we learn that Citigroup’s John Freund — Buffett’s Chicago-based broker — was the first person to inform Buffett about Citigroup bankers’ role in bringing the Lubrizol deal to Sokol. “That set off some yellow lights, at least,” Buffett says. Buffett thought that Sokol’s idea for buying Lubrizol was his idea, because Sokol had been a stockholder in Lubrizol.
Buffett said he felt if he laid out facts that were sure to “create problems for [Sokol] in years to come,” he didn’t want to ignore all the good works Sokol did for Berkshire during his career.
Charlie Munger pipes in to say that the press release “wasn’t the most clever press release in the history of the world.” But he said you don’t want to write such things “in anger, you can always tell a man to go to hell tomorrow.”
Buffett doesn’t appear openly angry, but there’s a tinge of disappointment in his voice about the Sokol matter. He says Sokol had multiple opportunities, including in a CNBC interview immediately after his resignation was disclosed, to be more open about when and why he bought Lubrizol stock.
“If you were going to live another 50 years…” a shareholder questioner asks, what industries do Buffett and Munger wish they could become experts in?
The 80-year-old Buffett says he likes the question, “particularly the preamble.” And the forever young octogenarians, Munger and Buffett, do give an answer: technology or energy.
Tech is a big surprise. Buffett has practically been allergic to tech over the years, an aversion that even has withstood efforts of Buffett buddy Bill Gates.
Buffett says that America is still a good place for banks to lend money, and singles out Wells Fargo and US Bancorp as two particularly well-run firms. He also praises the recent letter to shareholders by JPMorgan Chase’s Jamie Dimon as a “tour de force” and a must-read.
Buffett said one benefit of conglomerates is allowing the tax efficient transfer of money from businesses that don’t have good ways of using it, into sister businesses that have better uses for it.
To Buffett, his view appears to boil down to this. People determined to break the rules will do so, regardless of compliance policies. How can the company stop someone from trading in his cousin’s name?
There have been question marks about the future of nuclear power since the crisis in Japan. “I think nuclear power is safe,” Buffett said. “Nuclear power is an important part of the world’s equation in dealing” with problems of harmful emissions from traditional energy sources, he said. (Buffett does admit there is and will be public resistance to nuclear power after the Japan crisis.)
Buffett has long feared nuclear war, and has lavished charitable contributions on anti-nuke programs. So it’s interesting to hear him defend nuclear energy so firmly.
Don’t question Buffett’s commitment to nuclear power. He views it as essential to helping fill the United States’ energy needs.
“I think some people misinterprted my interview when I said that it had suffered a major setback,” he said. “That does not change my view that nuclear power is important for the world.”
Munger adds that we can’t be so risk-averse about possibilities that are relatively remote that we forego useful solutions. He also says that there are always long-tail risks, like a tsunami hitting Iowa. (That’d be a hell of a storm, he cracks.)
Resumed notes source: http://blogs.wsj.com/deals/2011/04/30/live-blog-the-berkshire-hathaway-annual-meeting/
Two timeless must read articles written by Warren Buffett: