Woodstock of

investing. This year he opened w ith the top 20 largest companies in the Capitalism world as r anked by stock market value. In 1790, the US had half of 1% of the world's population and now has five of the top six companies in the world. War r en said our countr y's system has worked ver y w ell. Of the Ber k shir e Hathaway - May 2021 top 20 companies today, 13 ar e from the US, thr ee from China, and one Annual Shar eholder s Meeting each from Taiwan, Kor ea, Japan and Saudi Ar abia. War r en asked, how many of the top 20 companies that wer e on the list in 1989, 32 year s ago, Jonathan J. Mar shal l Jam es Mar shal l ar e on the list today? His answer , ?none?. In 1989, 13 of the w orld?s Chief Investment Officer Chair man/Founder largest companies wer e from Japan, six from the US, including Exxon, GE, IBM, AT&T, Phillip Mor r is, and Mer ck. For the 16th consecutive year , Jonathan and I "attended" the Berkshir e Hathaway Annual Shar eholder meeting on May 1, 2021. The fir st 14 Inter esting to note that today Apple is wor th $2.05 tr illion, over double meetings we attended w er e live in Omaha, w ith the last tw o meetings the total value of the top 20 worldw ide companies in 1989. BH ow ns 5.3% vir tual due to COVID-19. Last year ?s live str eam meeting featur ed War r en of Apple today. War r en said that consumer s ar e so attached to the iPhone, Buffett (now 90 year s old) and Vice Chair man Gr eg Abel (59), but was that if they had to choose between their iPhone or their car , a lot of missing War r en's long-time par tner , Charlie Munger (97) who was unable consumer s would give up their car. to tr avel to Omaha for the meeting. To accommodate Charlie, this year 's This lesson is a classic case of not putting all your eggs in one basket. meeting was held in Los Angeles, wher e he lives. Including diver sified stock funds, like ones that invest in companies in the The live str eam for mat, w hich could be viewed on Yahoo Finance, was S&P 500 Index, can help you through the year s, vs. ow ning too many held on stage w ith War r en and Charlie sitting at the same table. The individual stocks, sticking w ith them too long and watching yester day?s differ ence in this year ?s meeting was that Vice Chair man Gr eg Abel and w inner s fall out of favor. Vice Chair man Ajit Jain (69) wer e both on stage at their ow n table, ver sus sitting in a chair in the audience answer ing shar eholder questions. War r en?s lesson in r isk toler ance was in r eview ing BH's fir st quar ter 2021 profits and losses. Due to the pandemic, in the fir st quar ter 2020, BH lost Rather than have six panelists ask questions of War r en and Charlie, ther e almost $50 billion (but he didn't sell) compar ed to a gain in the fir st wer e approximately 25 unr ehear sed questions asked by Becky Quick from quar ter this year of $11.7 billion. BH is in the process of buying back CNBC. War r en and Charlie hosted the annual Berkshir e Hathaway (BH) shar es, not selling shar es. In his 50-year car eer , War r en has never sold meeting for thr ee and a half hour s. They ar e both amazing in their desir e BH stock, even w ith major market dow ntur ns. to hold a BH annual meeting for that length of time when they could both After War r en?s histor y lesson, he asked Becky Quick from CNBC for the have r etir ed long ago. Dur ing the meeting, Charlie let it slip that "Gr eg would keep the cultur e once War r en r etir es," which War r en later fir st question. The follow ing ar e answer s to some of our favor ite questions from BH shar eholder s: confir med on the Monday after the meeting. In compar ison, 70% of the S&P 500 companies have a mandator y r etir ement in place. Accor ding to the Wall Street Journal (WSJ), the aver age S&P 500 chief executive r etir es at 60.1 year s old. Half of the S&P 500 Boar ds have a r etir ement age of 75 or higher , however , companies ar e consider ing age diver sity (5/4/21).

The live str eam meeting was infor mative but not as much fun as making the annual pilgr image to Omaha and actually attending a BH meeting at the Centur y Link Center w ith 40,000 other shar eholder s. Some of our favor ite things to do when we'r e ther e ar e to buy War r en Buffett books from the Bookw or m stor e, dine at some of War r en's favor ite r estaur ants, and visit the BH exhibit center featur ing 80 differ ent BH companies, w hile enjoying a Dair y Queen Dilly Bar (a BH company). The meeting typically star ts out w ith a 45-minute video set to gr eat music featur ing 80 of the BH businesses and their manager s. This year , War r en skipped the video and w ent r ight into the Q&A session.

War r en always likes to star t out the meeting w ith a histor y lesson in Woodstock of Capitalism

Q: Mr. Buffet, you'r e w ell know n for saying to be fear ful when other s ar e Q: What ar e your thoughts on Bitcoin? Warren dodged the question gr eedy and be gr eedy w hen other s ar e fear ful, but by all appear ances, stating that he wanted to avoid making hundreds of thousands of viewers Berkshir e was fear ful w hen other s wer e most fear ful in the early months who own cryptocurrency unhappy. Charlie didn't hold back. of COVID, dumping airline stocks at or near the low , not taking advantage CM: I hate the Bitcoin success. The whole development is disgusting and of the fear of gr ipping the market to buy shar es of public companies at contr ar y to the inter est of civilization. exceptional discounts and being hesitant to buy back significant amounts of Berkshir e stock at ver y attr active pr ices. I'd appr eciate hear ing your Q: Would you w r ite an insur ance policy for Elon Musk's (founder of Tesla thoughts sur rounding this time and how Berkshir e approached its and SpaceX) proposed mission to Mar s? Vice Chairman and manager of decision-making, specifically after it was assur ed through the CARES Act Geico, Ajit Jain, said no. that the gover nment w ould provide a robust backstop to the financial markets. WB: It would depend on the pr emium and would probably have a differ ent r ate if Elon Musk was on boar d. (Laughter) WB: The airline industr y that was selling for less than $100 billion lost a significant amount of money and they lost ear nings power. Right now , Q: Your thoughts on Robinhood as a tr ading platfor m/custodian and inter national tr avel has not come back, but I would say over all the their impact on new investor s? economic r ecover y has gone far better than you could say w ith any WB: Robinhood has become a ver y significant par t of the casino group assur ance. I think the airline business has done better because we sold, that has joined the stock market in the last year or year and a half. and I w ish them w ell, but I still wouldn't want to buy the airline business. Although ther e is nothing illegal or immor al about it, I don?t think you By BH not being involved, the airline industry had a better chance of build a society around people doing it. recouping $54 billion in federal support. Warren said the Federal government may not have been as generous with their support if they knew CM: Robinhood r elies on a controver sial pr actice called "payment for that BH owned 8% or 9% of the four largest airline stocks. or der flow " as their profit engine, in lieu of commissions. That is r eally waving the r ed flag of the bull. I think it's just God-aw ful that something Q: Explain to us how a new investor can get star ted in investing? Warren like that would dr aw investment from civilized men and decent citizens. warned new investors, that picking great companies is more complicated It's deeply w rong. We don't want to make our money selling things that than just selecting an industry. ar e bad for people, (where new investors are gamifying trading).

WB: In the 1900s ther e w er e at least 2000 companies that enter ed the Q: What ar e some lessons that you have lear ned in the past year ? auto business because it clearly had this incr edible futur e. In 2009, ther e wer e only thr ee left, tw o of which went bankr upt. So ther e was a lot mor e WB: My biggest lesson is to listen mor e to Charlie. He's been r ight on to picking stocks than figur ing out what's going to be a wonder ful some things that I've been w rong on. In past meetings Charlie has said, "I industr y in the futur e. It tells you that capitalism has worked incr edibly get paid for telling Warren Buffett, no". well, especially for capitalists. The world can change ver y fast in ver y CM: Well, I don't know. If you'r e not a little confused by w hat's going on, dr amatic ways, w hich is w hy it makes since to invest at least a por tion of you don't under stand it. We'r e in unchar ted ter r itor y. your money in index funds. WB: No matter how chaotic things have been, str anger things ar e going to CM: I disagr ee w ith investing in index funds. I pr efer holding BH to the happen in the futur e. A good reminder of one of Warren's favorite market, even after w e ar e gone. expressions, "Keep a margin of safety".

Q: Why did you tr im your stake in Apple stock? Significant this year is on Apr il 28, 2021, War r en's net w or th for the fir st WB: It was probably a mistake. Charlie, in his way, let me know it was a time exceeded $100 billion at $103.3 billion, now r anking sixth in the mistake. Warren has never been afraid to admit his mistakes ? it's one of world. War r en's ow ner ship stake in BH is 16.2% as of Mar ch 3, 2021 the reasons he is so likable, with thousands of loyal shareholders. BH did (Reuter s, 4/29/21). buy back $6.6 billion of their own stock in the first quarter 2021 after a Gr eg Abel, War r en Buffett's successor , has been the manager of Berkshir e record $24.7 billion (5% of BH shares) in buy backs of their own stock in Energy and now heads up the non-insur ance oper ations of BH. Gr eg is 2020, which indirectly increased shareholders positions in Apple. or iginally from Canada and gr aduated from the Univer sity of Alber ta in Q: What ar e your thoughts on investing in SPACs? SPAC stands for Special 1984. He cur r ently r esides in Des Moines Iowa, wher e Ber skhir e Energy Purpose Acquisition Company, which is a publicly traded company that is ver y active. starts out holding cash. SPACs were all the craze throughout much of 2020 Accor ding to the Wall Street Journal, investor s have descr ibed Gr eg as a into 2021. Warren expressed his dislike for the SPAC business model, which level-headed pr esence, likely to r un BH in a similar manner to War r en requires most SPACs to find a business to buy in two years. (5/4/21). WB: If you put a gun to my head and said you have to buy a business Listening to War r en and Charlie answer unr ehear sed questions about the w ithin tw o year s, I?d buy one, but it wouldn?t be much of one. We ar e not market is like listening to two w ise old timer s in a coffee shop. At 90 and going to have much luck in acquisitions while this sor t of per iod 97, ever y time we hear them together the exper ience becomes even mor e continues. Warren and Charlie warned about the rampant speculation pr ecious. War r en, being the per petual optimist that he is, mentioned going on in the stock market, particularly with SPACs, and said it is a seeing 40,000 shar eholder s again in Omaha, the fir st Satur day in May byproduct of the rush of new investors into the market. Warren warned 2022. As they say, "It's like getting an MBA in a day." Jon and I and some that no one tells you when the mania is going to end. of our Spectr um associates ar e looking for war d to next year in Omaha. Q: Give us your view s on low inter est r ates and the impact on the Impor tant Disclosur es: This report is for informational purposes only markets. and should not be construed as a recommendation or solicitation to buy or WB: Inter est r ates basically ar e to the value of assets what gr avity is to sell any security, policy or investment. The S&P 500 Index is a market matter , w ith the implication that when inter est r ates r ise, the value of capitalization weighted index composed of the 500 most widely held stocks assets could fall. whose assets and/or revenue are based in the US. The Dow Jones Industrial Average (DJIA) is an index that tracks 30 large, publicly-owned blue chip CM: Ther e is a good chance that this extr eme conduct of low inter est companies trading on the New York Stock Exchange (NYSE) and the r ates is mor e feasible than anybody thought, but if you keep doing NASDAQ. Indices are unmanaged and cannot be invested into directly. unchecked feder al spending, to keep the economy going, while holding inter est r ates dow n w ithout any r estr aints, it w ill end in disaster.