This weekend, Berkshire Hathaway (BRK.A, Financial) (BRK.B, Financial) will hold its annual general meeting, the first time the group has been able to hold it in person since 2019. At the meeting, Warren Buffett (Trades, Portfolio) and his right-hand man, Charlie Munger (Trades, Portfolio), will entertain the thousands of shareholders who descend on Omaha, Nebraska every year to listen to the billionaire speak.
This year could be quite an interesting year for Berkshire's investors, not only because it is the first time there has been an in-person meeting since before the Covid-19 pandemic, but also because the business is heading to a crossroads while having to deal with a highly uncertain economic environment.
With that being the case, here are three key subjects Buffett might cover over the weekend.
Succession plans
For the past couple of years, speculation about who will succeed Buffett after he steps down from the CEO position has been rife.
The Oracle of Omaha is not getting any younger, and shareholders have been looking for some guidance as to who will take over when he is no longer fit to hold the role.
Last year, Munger let slip that Greg Abel would be succeeding Buffett, and the corporation later issued a statement confirming this speculation.
With this being the case, he is expected to join Buffett and Munger on stage for at least a portion of the annual meeting this year to give shareholders a better understanding of who will be taking over the company after its legendary CEO steps down.
If Abel is given some time to speak, it will be fascinating to hear his views on the future of Berkshire.
Recent deals
I would also be surprised if we don't have some questions and comments about Buffett's recent deals.
Over the past couple of months, Buffett has been on a bit of a buying spree after a multiyear drought.
Berkshire has deployed tens of billions of dollars from its cash mountain to acquire Allegheny Corp. (Y, Financial), build its position in Occidental Petroleum Corp. (OXY, Financial) and acquire a new stake in computer business HP Inc. (HPQ, Financial). I think the audience will want to know why Buffett has suddenly decided to become more active and if more deals are planned. However, it seems unlikely he will give any insight into potential acquisitions.
We may also hear from Buffett about his decision to substantially increase Berkshire's share repurchases. Last year, the company spent a record $27 billion buying back its own stock.
Inflation and insurance
Inflation is likely to be a hot topic at this year's annual meeting as it is affecting all sections of the American and, indeed, global economy.
Buffett has previously said that his companies have been raising prices, and customers are accepting them, which shows how the enterprise is coping in the current environment.
I think there will be more commentary on this at the annual meeting and how it is also going to affect the insurance business.
Rising prices mean insurers will have to pay more to compensate policyholders in the event of a claim.
Buffett may add some color on how the business is coping with this changing environment and if he sees opportunities in the market where Berkshire can expand its insurance footprint as other companies exit.
Insurance has been the powerhouse of Berkshire's financial growth over the past six decades, and any potential growth plans could generate more value for shareholders.
The insurance float, the money Berkshire holds before paying claims, has ballooned from $19 million in 1967 to $147 billion at the end of 2021. It's expected to grow further after the Allegheny deal.
It will be interesting to hear if Buffett has any further plans for this division in the future.
