Breakingviews: Musk vs. Buffett: An Invitation for Investors to Take Sides


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Warren E. Buffett, the chairman of Berkshire Hathaway, prizes companies with healthy management incentives, simple operations and little competition.

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Nati Harnik/Associated Press

Elon Musk and Warren E. Buffett clashed over the weekend after Mr. Musk, Tesla’s chief executive, derided as lame Mr. Buffett’s concept of companies having “moats” to keep potential competitors at bay. When Mr. Buffett, the Berkshire Hathaway chairman, cited his confectionery maker, See’s Candies, as proof to the contrary, Mr. Musk pledged to launch his own candy maker. It’s an invitation for investors to take sides; many already have.

For the 40,000 shareholders who flooded Omaha for Berkshire Hathaway’s annual meeting on Saturday, Tesla looks like the epitome of a terrible investment. Mr. Buffett prizes companies with healthy management incentives, simple operations and little competition. Mr. Musk’s electric-car maker flunks on all three counts.

Take incentives. Mr. Musk is remunerated in part for pumping up Tesla’s share price — his new 10-year bonus plan could net him $55.8 billion in stock if the company’s market capitalization hits $650 billion and bull’s-eyes certain revenue and profitability targets. Investors won’t be complaining if he gets there, but it’s an incentive to take huge risks. If the company misses those goals, or fails outright, Mr. Musk has other irons in the fire. He holds a significant stake in the rocket company SpaceX, recently valued in a private transaction at around $26 billion.

The gulf in temperament is also growing wider. Mr. Musk last week threw a tantrum over “boring, bonehead questions” from analysts. He then took to Twitter to justify his outburst, complaining that they represented a “short seller thesis,” although he later said he was “foolish” not to answer them. Mr. Buffett, meanwhile, sat for hours on Saturday answering investor questions that ranged from punchy to banal.

The cultural divide is mirrored on the balance sheet: While Berkshire Hathaway holds $116 billion in cash, Tesla has just $2.7 billion in cash — roughly equivalent to one year’s capital expenditure — yet is burning greenbacks and has $500 million in debt coming due in a few months.

The Oracle of Omaha and the Playboy of Palo Alto have taken opposing positions before, including when Mr. Buffett’s Nevada energy company clashed with Mr. Musk’s solar-panel group SolarCity in 2016. Yet they share some common ground, too. Both think deeply about their customers. Mr. Musk often responds personally to Twitter requests — such as for a service center in Iceland or a hardtop convertible. He’d probably agree with Mr. Buffett that thinking like a consumer is paramount.

For now, at least, shareholders have Mr. Musk trailing Mr. Buffett. Tesla’s highly volatile shares are down 4 percent over the past year, whereas Berkshire Hathaway’s are up 19 percent. And investors have piled into short-selling Tesla, with almost one-quarter of the stock out on loan, according to Thomson Reuters data.

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There’s Only One Warren Buffett


The Berkshire Hathaway C.E.O.’s three-day extravaganza — er, shareholders’ conference — drew tens of thousands of fans to Omaha.

Shareholders Deborah Kiel, left, and Laura Flynn collected Warren Buffett swag at the Berkshire Hathaway Annual Shareholders meeting in Omaha.CreditRick Wilking/Reuters

OMAHA — Officially, it’s known as the Berkshire Hathaway Annual Shareholders Meeting.

Unofficially, a handful of nicknames describe the three-day extravaganza that happens in the first weekend of May, in which tens of thousands of people descend upon Omaha to revel in all things Warren Buffett.

There’s “Berkyville,” which captures the folksy, small-town tenor of the event. There’s “AGM,” an abbreviation of “Annual General Meeting,” preferred by the finance crowd. And there’s Mr. Buffett’s personal favorite: “Woodstock for capitalists.”

But the most revealing name is the shortest one: the meeting. Just as some New Yorkers refer to the Big Apple as “the city,” as if there were only one, scores of attendees consider this shareholders meeting to be in a class of its own.

In part, that’s because the atmosphere feels closer to a carnival than a buttoned-up investors’ conference. There are tables of merchandise and costumed mascots, Ping-Pong matches and a movie reel of celebrity-filled skits and spoofs. There is an unofficial circuit of V.I.P. parties and piggyback events. At the center of it all is Mr. Buffett, Berkshire Hathaway’s chief executive, one of the world’s most successful investors and the weekend’s enthusiastic master of ceremonies.

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Mr. Buffett’s likenesses filled the arena.CreditNati Harnik/Associated Press

“There’s a cult of personality, and I mean that in a positive way,” said Dan Calkins, the president and chief operating officer of Benjamin Moore.

For Alexis Ohanian, the co-founder of Initialized Capital and a former chief executive of Reddit, the fun began long before he touched down in Nebraska. “There’s such a range of people, even just from the plane out of Newark to here,” he said. Pointing to his business partner, Garry Tan, he added, “This guy talked to, uh, well, I don’t want to name drop.”

As if on cue, the investor Li Lu walked up to shake Mr. Ohanian’s hand; inches away, John Collison, the chief executive of Stripe, typed away on his laptop. For Mr. Tan, the big names mattered less than the Midwestern sensibilities: “There is a piece of this that really resonates with us, around being plain-spoken and investing in what you understand,” he said.

The epicenter of the festivities is Omaha’s CenturyLink Center exhibition space: One wing is fully devoted to booths of Berkshire Hathaway-owned brands. Friday is known as “shopping day.” It’s a dedicated opportunity for Mr. Buffett’s admirers to buy his brands, snack on his preferred foods (See’s Candies and Dilly Bars) and take selfies next to his various likenesses (or, in Mr. Tan’s case, in an Oscar Mayer hot dog costume). Another wing is home to a Madison Square Garden-like arena, where the actual shareholders meeting is held on Saturday.

Revelers line up overnight to get in — or, in capitalist fashion, hire other people to stand in line for them. This year, many people expressed gratitude for the gentle breezes and sunshine, a welcome reprieve from the torrential rainstorms of past years. A handful of revelers were dressed up in bow ties and silver-glitter heels. Others climbed up poles to snap photos of the crowd.

A Berkshire Hathaway shareholder hugs a Mr. Kool-Aid character in the exhibit hall.CreditRick Wilking/Reuters

By 7 a.m., attendees were streaming into the arena. Many purchased fluffy pretzels and pink beverages adorned with umbrellas from the concessions stands and settled in to be entertained. A parody of Jay-Z and Alicia Keys’s “Empire State of Mind” blasted over the loudspeaker, but the lyrics were changed to: “In Berkshire, financial strength is where dreams are made of, there’s nothing you can’t do.”

Then the “movie” started rolling.

As in previous years, Berkshire Hathaway had created a video reel of skits with celebrities, who ostensibly agree to participate for free. This year Katy Perry was one of about half a dozen big names on the screen, joking about the Left Shark debacle at the Super Bowl in 2015 and comparing the uncoordinated backup dancer to the Oracle of Omaha himself. The right shark, she said, was the one who showed up on time to rehearsal and got none of the credit — and that was Mr. Buffett’s vice chairman Charlie Munger. The crowd applauded loudly.

The Oracle of Omaha makes his entrance.CreditRick Wilking/Reuters

After the Berkshire Hathaway board was announced and earnings were delivered, the most beloved portion of the show began: Mr. Buffett and Mr. Munger held a question-and-answer session, taking on topics like global politics and cryptocurrencies. Mr. Buffett dispensed wise advice and spoke with occasional self-effacing charm. Mr. Munger delivered deadpan one-liners that drew raucous laughs, including his comparison of virtual currencies to “turds.”

“If you’re interested in business, this is the bucket-list event,” said James Weber, the chief executive of Brooks Sports. “It’s just priceless.”

Shareholders at the opening cocktail party.CreditRick Wilking/Reuters

For hard chargers in the financial industry, who are often laser-focused on performance, it’s a reminder that business can be fun. “Every year that I come personally, I walk away energized,” said Mr. Calkins of Benjamin Moore, who said he has attended the meeting 17 times.

Even after the main event was over, there was still plenty of weekend left to enjoy.

There was a picnic at Nebraska Furniture Mart, a 5K run and a chance to challenge Mr. Buffett in a game of Ping-Pong (he promised to “take all comers”). There were additional finance meetings, private dinner parties and an exclusive brunch held by Mr. Buffett at the country club.

“People aren’t coming here because they’re investing money,” said Conner Van Fossen, an Air Force member who attended the event with his father, Jim Van Fossen, for the first time. “It’s about the spectacle.”

DealBook Briefing: Is Warren Buffett ‘Semiretired’? Sort Of.


• He loves Apple — but wants the company, of which Berkshire owns about 5 percent, to keep buying back shares. He had less-kind words for cryptocurrencies, which he said will “come to bad endings.”

• He defended business with the gun industry, reiterating, “I do not believe on imposing my political opinions on the activities of our businesses.”

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Ali Asaei for The New York Times

Behind Nestlé’s $7.2 billion deal with Starbucks

Why is the food giant paying billions in cash for the right to sell Starbucks products in non-Starbucks locations worldwide? Because coffee is Nestlé’s fastest-growing product line — it’s also why it bought a majority stake in Blue Bottle last year — and buying the royalties to Starbucks products will supercharge its efforts.

There’s another possible reason, according to Corinne Gretler of Bloomberg:

The alliance underlines Nestle’s efforts to capture more upscale java drinkers in the U.S., where the maker of Nespresso and Nescafe has been outpaced by JAB Holding. The investment company of Europe’s billionaire Reimann family has spent more than $30 billion building a coffee empire by acquiring assets such as Keurig Green Mountain and Peet’s.

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Michael D. Cohen

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Jeenah Moon for The New York Times

How Michael Cohen made his millions

The federal raid and investigation into President Trump’s fixer has cast a spotlight on Mr. Cohen’s side businesses. Among the most notable aspects is Mr. Cohen’s expansive taxicab empire, encompassing several dozen medallions in New York and Chicago — and racking up tens of millions of dollars in debt.

Then there was this, from the NYT:

In 2016, Mr. Cohen went so far as to dabble in financial engineering. He spoke to investors about pooling distressed loans that financed taxi medallion purchases, repackaging them and selling them to investors, according to a person with direct knowledge of the discussions. He also explored buying up such loans at a bargain price in anticipation that their value would recover, the person said. The outcome of those discussions was not clear.

Another must-read: How the Trump Organization spent over $400 million in cash — much of it apparently from its own coffers — on properties in the nine years before Mr. Trump became president.

In other Trump investigation news: Rudy Giuliani had another, um, freewheeling TV interview. Mr. Trump knew about the $130,000 payment to Stormy Daniels months before denying any knowledge of it. Tom Barrack was questioned by the special counsel’s team. Meet George Conway, Kellyanne Conway’s husband, Wachtell Lipton lawyer and frequent Twitter pundit.

The political flyaround

• The Affordable Care Act isn’t gone, despite the president’s assertions. In some ways, the Trump administration is enforcing it more aggressively than the Obama administration did. (NYT)

• State budgets are looking rosier thanks to the improving national economy, but any lift from the tax cuts may be temporary, analysts say. (WSJ)

• The pharmaceutical industry is preparing to fight a move to rein in prescription drug prices (NYT)

• A closer look at Patagonia’s legal battle with the Trump administration over Bears Ears National Monument. (NYT)

• Don Blankenship, the former Massey Energy C.E.O. now running for a U.S. Senate seat in West Virginia, has been surging in recent Republican polls. (Politico)

• The Trump administration reportedly hired Black Cube, the Israeli investigative firm used by Harvey Weinstein, to collect information on Obama administration officials who worked on the Iran deal.

• As negative press piles up, Scott Pruitt, the E.P.A. chief, has reportedly bunkered down. An E.P.A. official reportedly tried to shop around negative stories on Interior Secretary Ryan Zinke.

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The United States delegation in Beijing for trade talks.

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Nicolas Asfouri/Agence France-Presse — Getty Images

What’s next in the U.S.-China trade fight

The Trump administration delegation left Beijing last week without a deal, as expected. But while President Trump continued to call for changes in the trade relationship, China appeared to soften its own combative tone somewhat.

Two new hot spots: China’s ordering 36 airlines to purge their websites of references to Hong Kong, Macau and Taiwan as separate countries, and the setting of global industrial and tech standards.

Elsewhere in China news: ZTE has asked for relief from a U.S. ban on American businesses selling to the Chinese telecom company. WaPo looked at the Chinese operations of Erik Prince, the Blackwater founder. Washington is worried about a wave of U.S. patent applications from Chinese citizens, many reportedly filled with false information.

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The oil market flyaround

• Exxon Mobil’s stock may be down, but it is poised to benefit from a recovery in global oil prices. (Barron’s)

• Oil futures hit multiyear highs today as prices cracked $70 a barrel. Saudi Arabia wants oil to reach at least $80 a barrel this year.

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Aleksandr Kogan obtained the data of up to 87 million Facebook users through a quiz app and sold the information to Cambridge Analytica.

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Agence France-Presse — Getty Images

What about that other Facebook data?

Aleksandr Kogan wasn’t the only academic to harvest data from Facebook users: Researchers have collected information from the site for more than a decade. But the proliferation of these data sets has made it easier to identify some of the millions of individuals whose information was collected.

More from Sheera Frenkel of the NYT:

One 2015 paper published in the journal Science looked at credit card spending data and found that data scientists could pinpoint 90 percent of the shoppers by name with just four random pieces of information from sites like Facebook, Instagram and Twitter.

Elsewhere in data privacy: What Europe’s new law, the General Data Protection Regulation, means for you. For Margrethe Vestager, antitrust is about data, not market power.

Elsewhere in tech: The YouTube host whose questions Elon Musk preferred over research analysts’ took a shot at Wall Street. Mr. Musk hung up on the chairman of the National Transportation Safety Board amid an investigation into a Tesla crash and also trolled Warren Buffett. The veteran venture capitalist John Doerr speaks on management and A.I.

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Masayoshi Son of SoftBank.

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Kazuhiro Nogi/Agence France-Presse — Getty Images

The deals flyaround

• SoftBank’s talks to invest in Swiss Re are reportedly close to collapsing. (FT)

• Glencore and Qatar aren’t selling their stake in Rosneft to CEFC China Energy after all. (WSJ)

• Investors have quickly soured on Good Doctor, the health care arm of Ping An that went public last week. Shares in the cybersecurity firm Carbon Black rose 26 percent on Friday, their first day of trading.

• Dan Loeb’s Third Point wants United Technologies to consider breaking itself up. The expiration of Jana Partners’s standstill agreement with ConAgra may mean renewed pressure on the food maker.

• Brompton Bikes, the maker of popular fold-up bicycles, has snubbed traditional investor firms for crowdfunding platforms. (FT)

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Jean-Marc Janaillac, center.

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Benoit Tessier/Reuters

Revolving door

Jean-Marc Janaillac announced plans to resign as Air France’s C.E.O., sending shares in the beleaguered airline tumbling. (Bloomberg)

The speed read

• Backstage Capital has announced a new $36 million fund that will invest exclusively in black female founders. (Recode)

• More than 1,500 items from the estate of Peggy and David Rockefeller are going up for auction, which Christie’s estimates could fetch over $500 million. (Bloomberg)

• Money hasn’t made Steve Schwarzman universally beloved. (NYT)

• How the mission to rebuild Puerto Rico’s power grid stumbled badly.(NYT)

• A legal secretary from Brooklyn left the Henry Street Settlement $6.24 million — the largest single gift from an individual to the social service group in its 125-year history. (NYT)

•The National Rifle Association asked members attending its annual convention in Dallas to “steer clear” of a local restaurant that said it would donate proceeds to help end gun violence. (NYT)

• Robocalls are getting worse. (NYT)

• Should you stop drinking Venezuelan rum? (NYT)

We’d love your feedback. Please email thoughts and suggestions to bizday@nytimes.com.

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Berkshire’s Annual Meeting: Buffett Approves of Apple’s Buyback Plan


Berkshire owns more than 60 businesses. Women are chief executives at six of those businesses, and the Berkshire-owned Ben Bridge Jeweler named Lisa Bridge as president late last year to run the jeweler’s day-to-day operations.

“I feel very good about the decisions we’ve made about our C.E.O.s,” he added.

He did not answer whether Berkshire would push for gender equality on the boards of the companies that Berkshire is invested in.

Mr. Buffett also said it was clear that women had been treated unfairly in the past.

“I have two sisters who are absolutely as smart as I am, and they have better personalities,” he said. “They didn’t remotely have the same opportunities as I had.”

Mr. Buffett said there was still a “pipeline problem” in corporate America, making it hard to find as many qualified women to lead companies.

But, he added, “you can’t use that excuse forever.”

— Emily Flitter

Buffett approves of Apple’s buyback plan.

Berkshire is quickly building its stake in Apple.

Since Berkshire first invested in the iPhone maker about two years ago, the stake has grown into Berkshire’s largest holding. At the end of the first quarter, Berkshire owned $40.7 billion of Apple’s shares, up from $28.2 billion at the end of 2017.

So what does Warren Buffett think about Apple’s announcement that it plans to buy back $100 billion of its shares?

“I’m delighted to see them repurchasing shares,” Mr. Buffett said. “We own 5 percent of it. With the passage of a little time, we may own 6 or 7 percent because they repurchase shares.”

Charles Munger added that he and Mr. Buffett don’t approve of every buyback plan, but he doubted Apple would find an acquisition target at a good price.

“The reason companies are buying their stocks is that they are smart enough to know it’s better for them than anything else,” Mr. Munger said.

What about Microsoft?

Given Berkshire’s investment in Apple, one shareholder wanted to know why Berkshire never invested in Microsoft. The question came with Bill Gates, Microsoft’s co-founder and a director at Berkshire, sitting in the audience.

“In the earlier years, the answer is stupidity,” Mr. Buffett replied. But then Mr. Buffett added that his friendship with Mr. Gates has grown over the years, and he has stayed away from investing “because of the inference” that could be drawn.

And Amazon and Alphabet…

Mr. Buffett has famously avoided investing in tech companies because he didn’t understand them. But one investor wanted to know if Mr. Buffett’s stance is evolving. Beyond Apple, the questioner pointed out that Amazon and Google parent Alphabet have the characteristics of companies Mr. Buffett typically likes to invest in: strong brand names and little competition.

Here’s the reason Mr. Buffett gave for not investing in Amazon:

“The truth is that I’ve watched Amazon from the start, and I think what Jeff Bezos has done is something close to a miracle. The problem is if I think something will be a miracle, I tend not to bet on it.”

As for Alphabet, Mr. Buffett said that he had “made a mistake.” He said he was unable to conclude that at Alphabet’s present prices, its “prospects were far better than the prices indicated.”

He then explained that he didn’t invest in Apple because it was a tech stock. “I went into Apple because I came to certain conclusions about the value with which the capital was being deployed and about the ecosystem,” he said.

The discussion did lead to one of the more humorous exchanges of the meeting:

Mr. Munger: “I’ve been to Google headquarters. It looks to me like a kindergarten.”

Mr. Buffett: “A very rich kindergarten.”

One thing Mr. Buffett and Mr. Munger aren’t fans of? Cryptocurrencies.

Warren Buffett and Charles Munger saved their harshest words for cryptocurrencies.

“Cryptocurrencies will come to bad endings.” Mr. Buffett said, responding to an attendee from Ukraine.

Mr. Buffett’s main argument against cryptocurrencies is the same one he has made about gold: They are not a “productive asset.” That means the value of cryptocurrencies is determined solely by what someone is willing to pay for it.

“If you had bought gold at the time of Christ and you figure the compound rate on it, it’s a couple tenths of a percent,” Mr. Buffett said.

But his criticism didn’t stop there. He said cryptocurrencies attract a lot of “charlatans” and “people of less than stellar character.”

Mr. Munger was perhaps harsher. “It’s just disgusting,” he said.

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Nati Harnik/Associated Press

Mr. Buffett isn’t backing off his comments about guns

In February, Warren Buffett was asked on CNBC about some chief executives distancing their businesses from the National Rifle Association. Mr. Buffett responded: “I don’t think that Berkshire should say we’re not going to do business with people who own guns. I think that would be ridiculous.”

That comment came up at Saturday’s meeting, and one shareholder wanted to know if Mr. Buffett had misspoken.

Mr. Buffett answered by largely repeating what he had said earlier this year:

“I do not believe on imposing my political opinions on the activities of our businesses.

“If you get into which of our companies are pure and which ones aren’t pure, I think it will be very difficult. I don’t think that we should question on the Geico policy form: Are you an N.R.A. member? And if you are, you just aren’t good enough for us.”

Mr. Munger then added:

”Certainly we’re not going to ban all guns surrounded by wild turkeys in Omaha.”

Warren Buffett is sticking by Wells Fargo

Over the past two years, regulators and whistle-blowers have revealed Wells Fargo employees were creating fake accounts using customers’ identities, forcing borrowers to buy unnecessary auto insurance, and overcharging on mortgage fees.

The Federal Reserve earlier this year restricted its growth until it demonstrates it is complying with bank regulations.

Berkshire first invested in Wells Fargo nearly three decades ago and is currently the bank’s biggest holder with a nearly 10 percent stake.

In response to a question about whether it was time to abandon the bank, which has already seen turnover in its executive suite and boardroom, Mr. Buffett said he thought Wells Fargo’s problems would only make it stronger in the long run.

“All the big banks have had troubles of one sort or another and I see no reason why Wells Fargo as a company, from both an investment standpoint and a moral standpoint going forward, is in any way inferior to the other big banks with which it competes,” he said.

He specifically praised the bank’s chief executive, Tim Sloan, a longtime Wells Fargo executive who took over when his predecessor John Stumpf resigned at the height of the fake account scandal. Criticism from Mr. Buffett could have increased pressure on Mr. Sloan. But the 87-year-old praised him.

“I like Tim Sloan as a manager,” Mr. Buffett said. “He is correcting mistakes made by other people.”

Mr. Buffett went further: What happened at Wells Fargo could’ve happened anywhere, he said.

“We know people are doing something wrong as we sit here at Berkshire. You can’t have 370,000 employees and expect that everyone is behaving like Ben Franklin.” On the fake account scandal specifically, which the bank has said resulted from intense pressure on its branch managers to increase sales, Buffett said: “Wells Fargo is a company that proved the efficacy of incentives and it’s just that they had the wrong incentives.”

— Emily Flitter

Is Mr. Buffett semiretired?

The question of who will succeed Warren Buffett has been a thread through many of the exchanges with shareholders.

Carol Loomis, a former Fortune writer, kicked off the question and answer session by reading a question from an investor, asking if Mr. Buffett is semiretired now. In recent years, Mr. Buffett has handed off some of his investing duties to Ted Weschler and Todd Combs, Berkshire’s two portfolios managers, and in January, Mr. Buffett promoted longtime Berkshire executives, Gregory E. Abel and Ajit Jain, to oversee Berkshire’s businesses.

“I’ve been semiretired for decades,” Mr. Buffett replied with a chuckle, but then he got serious.

“Ted and Todd each manage about 12 or 13 billion,” he said. “Together that’s $25 billion. They’re managing $25 billion and doing a very good job.”

He then quickly reminded the questioner of the size of the company’s assets: “I still have the responsibility for the other $300 billion.”

Charles T. Munger, Berkshire’s vice chairman, added: “I watch Warren. He spends most of his time reading and thinking and occasionally he’ll make a phone call or talk to somebody. Not much has changed.”

Another shareholder asked whether Berkshire will have trouble doing deals once Mr. Buffett is no longer with the company. Companies have regularly approached Berkshire over the years about being bought. That has allowed Berkshire to avoid bidding wars and to make acquisitions at lower prices.

The shareholder wanted to know if Mr. Buffett’s successor would continue to have access to those deals and whether Mr. Buffett and Mr. Munger should aggressively publicize the work of their successors to help pass on thei “hometown advantage.”

“I think the reputation of Berkshire as being a very good home for companies, particularly a very good private home for a company, I don’t think that reputation is dependent on me or Charlie,” Mr. Buffett said. “It may take a little — there may be a little testing period for whoever takes over.”

”The truth is that I think some of the other executives are getting better known,” he added.

— Emily Flitter and Stephen Grocer

Where does Berkshire’s health care venture with JPMorgan and Amazon stand?

A lot remains unknown about Berkshire’s health care partnership with Amazon and JPMorgan Chase more than three months after the companies announced the venture.

The three firms said in January that they were teaming up to try to find a better, cheaper way to provide health care to their own workers, a combined one million people. And they said if their idea worked, they would seek to share it with other companies.

Warren Buffett on Saturday again called the cost of health care “a tapeworm in terms of American business.” He lamented the success other countries — he did not name any — have had keeping their own health care costs at a lower proportion of their gross domestic product.

But just how Berkshire’s partnership will address the problem remains a big question.

Mr. Buffett had no more details to offer on Saturday. He said the people leading the effort are still searching for a chief executive. They could announce a hire “within a couple of months,” he added.

“Whether we can bring the resources, bring the person, that C.E.O., is terribly important. Bring the person, support that person and somehow figure out a better way for people to continue to receive better medical care in the United States,” he mused “We’ll see if that will happen.”

But Mr. Buffett seemed uncertain, though hopeful, about the effort as a whole.

“We are attacking an industry moat,” Mr. Buffett said. “That’s a huge moat. We’ll do our best. If we fail, I hope somebody else succeeds.”

Charles Munger, Berkshire’s vice chairman, weighed in: “I suspect that eventually when the Democrats control both houses of Congress and the White House, I suspect that we will get a single payer system, and I suspect it won’t be very friendly to the existing” pharmacy benefit managers.

— Emily Flitter

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A drawing of Warren Buffett at Berkshire Hathaway’s annual meeting.

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Rick Wilking/Reuters

Trade ‘is a win-win situation’

The Trump administration has taken a more combative stance on trade, particularly with China.

So it comes as little surprise then that one of the first questions put to Warren Buffett and Charles Munger was about trade. Here’s Mr. Buffett’s response:

“The United States and China are going to be the two superpowers of the world, economically and in other ways, for a long, long, long, long time. We have a lot of common interests, and like any two big economic entities, there are times when there will be tensions. But it is a win-win situation when the world trades, and China and the United States are the two big factors in that.”

“It is a win-win situation. The only problem is when one side or the other wants to win a little bit too much.”

About those accounting changes…

Warren Buffett warned in his annual letter that a new accounting rule would “severely distort Berkshire’s net income figures and very often mislead commentators and investors.”

Saturday morning Berkshire reported a net loss for the first quarter because of those accounting changes. The new rules require Berkshire to include in its earnings the gains and losses on the stocks it holds but has not sold.

In the first quarter, Berkshire’s net loss was $1.14 billion, compared with net income of $4.06 billion a year earlier.

Given the new accounting rule, Mr. Buffett suggested Saturday that shareholders should look at Berkshire’s operating income, which excludes gains and losses for Berkshire’s investments, for a more accurate picture of the company’s performance.

Berkshire reported its operating income rose 49 percent to $5.29 billion from a year ago.

— Stephen Grocer

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Shareholders walking through the exhibit hall at Berkshire Hathaway’s 2018 annual meeting.

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Rick Wilking/Reuters

Questions for Mr. Buffett

The main event every year at Berkshire Hathaway’s annual meeting is the question and answer session. Elisa Mala, a reporter working for The New York Times asked those attending Berkshire events on Friday what they would ask Mr. Buffett. Here is a sampling:

• What is the single greatest important investment in your lifetime? Is it a company? Is it a relationship? — Conner Van Fossen, Hanscom Air Force Base in Bedford, Mass.

• What are your thoughts about the future/sustainability of health care and Medicare, and how is Berkshire Hathaway’s joint venture with JPMorgan Chase and Amazon going to address this?Timothy Liu, San Francisco Bay Area.

• What does he see in the cryptocurrency market? Is it going to be the future? Is it going to replace the way we exchange value? Is it worth the hype? — Jason Lu, Shanghai

• Where do you see the job market going, given the rise of Artificial Intelligence? — Ralph Humphrey, Hillside, N.J.

• He’s been technology averse in the past. What makes him so bullish on Apple? — Brian Hanks, Salt Lake City, Utah

• How long he plans on doing this. —Bill Skidmore, Omaha, Neb.

— Elisa Mala

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Jessica Staben taking a selfie with 1-year-old Cecilia Johnson in front of a caricature of Warren Buffett, right, and Berkshire Hathaway’s vice chairman Charlie Munger.

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Nati Harnik/Associated Press

Scenes from Omaha: shopping day

(As Berkshire’s annual meeting has grown over the years, it has become a three-day event. Friday is Berkshire Hathaway’s shopping day, where shareholders can buy products from many Berkshire-owned companies.)

Shareholders moseyed around CenturyLink Center, where the annual meeting takes place, perusing dozens of booths displaying goods — many created specifically for the event — from brands like Geico, NetJets and Coca-Cola.

What was really on sale? All things Warren Buffett.

Investors could snack on a Dilly Bar, the long-favored Popsicle of the Oracle of Omaha, for $1 or snag “Warren and Charlie” rubber ducks ($5 for the pair at the Oriental Trading Company booth). There were Justin cowboy boots embroidered with the words “Berkshire Hathaway Inc. Shareholders Meeting” and guests had the option to “Put yourself in Warren Buffett’s boots,” as the marketing materials suggest, and purchase a style that had been owned by the man himself.

Jim Van Fossen, a retired financial planner, bought matching Berkshire Hathaway boxers for himself and his son, Conner Van Fossen. In town from Missoula, Mont., he said he wanted a memento of their first trip to the shareholders’ meeting.

Of course, shoppers and vendors were hoping for a sighting and interaction with the man himself. Failing that, they settled for selfies with his many likenesses. See’s Candies displayed Scotch Kiss confections “made by Warren,” and one staff member’s uniform bore Mr. Buffett’s autograph.

The most photographed autograph was at the Benjamin Moore paint booth, where Mr. Buffett had signed his name in permanent marker next to a wall-size mural of his face. All day long, revelers followed suit, decorating the wall with their own signatures in dry-erase ink, and snapping selfies to preserve the memory.

— Elisa Mala

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