Tomorrow, we get another glimpse into the machinations of the investing giant known as Berkshire Hathaway (BRK.B -2.3%) (BRK.A -2.6%) with its Q1 earnings report followed by its annual meeting.
Certainly, the event won’t have its celebratory “Woodstock of Capitalism” air since the annual meeting is taking on a virtual format. CEO Warren Buffett and Greg Abel, his head of non-insurance operations, will be the only ones fielding questions from three hand-picked journalists.
That means Charlie Munger, Buffett’s 96-year-old business partner, won’t be adding his wit and wisdom to the event as he munches on See’s Candies.
There are sure to be questions about how the COVID-19 pandemic is affecting the conglomerate’s insurance operations, especially in terms of business interruption insurance. Berkshire’s Geico has already said its refunding some premiums to consumers as reduced driving is leading to fewer auto accidents.
The pandemic is also likely boost claims for workers’ comp and health-care liability policies, and cancelled events coverage.
The coronavirus is also likely to hurt other Berkshire businesses such as Dairy Queen. Munger earlier said See’s Candies started putting workers on furlough in early April as its stores were shut.
But it may help others, such as Berkshire’s BNSF rail operations.
What won’t change is investors’ interest in how much cash Berkshire has — $128B at the end of Q4 — and what Buffett is likely to invest it in.
And investors will be listening intently on whether companies have approached Buffett for capital, like they did during the financial crisis.
But with the Fed stepping in with a number of lending facilities, companies may be more willing to borrow on the Fed’s terms than Buffett’s, who tends to invests through preferred stock that carries a pricey coupon.
Stock buybacks is one possibility, especially since Berkshire’s B shares have declined 12% in the past six months vs. the S&P down 4.4%.
What he won’t talk about are politics or specific investment holdings. That much, he’s already said.