Lessons from Berkshire Hathaway AGM 2016
1) Berkshire is open to additional acquisitions in the $10-$30bn range. They recently completed $32bn Precision Castparts.
2) On negative interest rates. Beware negative interest rates, Buffett is concerned not only about the really, really low interest rates in the U.S., but the negative rates abroad. What does that even mean? Buffett tells the world why this matters. "There could be a point where you'd really want to start withdrawing currency," Buffett said. He'd consider taking money out of banks, especially if negative interest rates result in customers being charged to park their money in accounts.
3) Berkshire would repurchase a significant amount of shares if its valuation declined to 1.2x book value. He’d back up the truck and aggressively buy back shares.There are very few companies with that kind of discipline. Most buy back shares when the price is expensive, because times are good. That’s when they have the most cash. This doesn’t work out well, for obvious reasons.
4) The reinsurance market has taken a turn for the worse and the next 10 years will probably not be as attractive as the last decade.
5) Europe's Mistake and if France should leave the Euro. Buffett didn't think so. But he said that the eurozone "lowered its standards" by letting some members into the monetary union.That was polite compared to Munger. He said that "you can't form a business partnership with your frivolous, drunken brother-in-law and expect it to work out."
However he did mentioned he is Long the EURO.
6) On Trump. Warren is not worried. He's still bullish on America if there's a Donald Trump presidency. When asked at the Berkshire Hathaway annual meeting if Trump might harm his company's interests if elected president, the CEO said, "this won't be the main problem." Then he reflected on the way his business and many others have survived all manner of regulation, meddling and turmoil.
In summary, I don't see a great correction of more then 20% coming soon. Hope this report helps and have a great week ahead!