Warren Buffett warns on US inflation

A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.

New York (CNN Business)Berkshire Hathaway investors are set to descend on Omaha, Nebraska, for the company’s first annual meeting with shareholders present since 2019. It should be a victory lap for CEO Warren Buffett.

Shares of Berkshire Hathaway (BRKB) are up 10% this year and not far from a record high. Berkshire is easily beating the market. The S&P 500 is down nearly 12%.
Buffett has a lot to gloat about. Top Berkshire holdings such as Coca-Cola (KO) and Kraft Heinz (KHC) are thriving. The two food and beverage giants recently reported strong earnings. Coke’s stock is up 11% this year while Kraft Heinz has surged more than 20%.

    Berkshire also has a sizable stake in oil giant Chevron (CVX), the Dow’s top stock this year with a gain of more than 35%.

      Buffett and Berkshire vice chairman Charlie Munger have been criticized by some investors in the past few years as tech stocks took the market by storm. But Buffett and the 98-year-old Munger have held firm in their belief that owning quality, large cap American companies in the consumer, financial services and energy industries is a good recipe for long-term success.

      Warren Buffett: His life in pictures

      Warren Buffett, the chairman and CEO of Berkshire Hathaway, attends an event in Washington, DC, in 2012. He celebrated his 90th birthday last year.

      Buffett was born in Omaha, Nebraska, on August 30, 1930. He was the only son of Laila and Howard Buffett. Howard was a US congressman.

      A young Buffett, far left, is seen with his grandfather, Ernest, as well as his cousins and two sisters.

      Laila Buffett poses with her three children -- from left, Roberta, Warren and Doris.

      Warren Buffett stands in front of his childhood home in Omaha.

      Buffett teaches a class at the University of Nebraska-Omaha.

      Buffett married his first wife, Susan, in 1952. They had three children together: Peter, Howard and Susan. The latter two are seen here with their parents.

      Buffett and his wife pose at the beach with their three children.

      Buffett poses for a photo in 1980.

      Buffett testifies before a House subcommittee after the Salomon Brothers investment bank was caught in a treasury bond scandal in 1991. Buffett took over as the company's chairman of the board to guide it out of troubles with the Federal Reserve System.

      Buffett attends one of Berkshire's annual shareholders meeting. Seated with him here are his daughter Susan, left, and his wife Susan. Buffett's wife died in 2004.

      Buffett arrives at an Omaha Dairy Queen to autograph books and chat with Berkshire Hathaway shareholders in 2002. Many people were in Omaha for Berkshire Hathaway's annual shareholders meeting, which has been described as "the Woodstock of Capitalism."

      Buffett attends a GEICO ceremony in Trenton, New Jersey, in 2004.

      Buffett joins California Gov. Arnold Schwarzenegger during a meeting of Wall Street investors in New York in 2004. Buffett advised Schwarzenegger's gubernatorial campaign in 2003.

      Buffett sits atop a fake bull at the Berkshire Hathaway annual meeting in 2006.

      Buffett stacks his chips at a charity poker tournament in Omaha in 2006.

      Buffett plays the ukulele with a band during the Berkshire Hathaway meeting in 2007. He learned the instrument decades ago.

      Buffett stands in front of a portrait of himself, painted by Michael Israel, in 2008.

      Buffett throws out the first pitch before a Kansas City Royals baseball game in 2008.

      Buffett sits with Girl Scouts in Omaha in 2008.

      Buffett uses a large paddle to play table tennis in 2010.

      Buffett and Microsoft Chairman Bill Gates enjoy a meal together at the Hollywood Diner in Omaha in 2010. That year, the two launched The Giving Pledge, which encourages the world's billionaires to dedicate the majority of their wealth to philanthropic causes.

      Buffett is sworn in to testify before the Financial Crisis Inquiry Commission in 2010. The bipartisan committee was created by Congress to investigate the causes of the financial crisis.

      President Barack Obama awards the Presidential Medal of Freedom to Buffett in 2011. "Today, we know Warren Buffett not only as one of the world's richest men, but also one of the most admired and respected," Obama said. "Unmoved by financial fads, he has doggedly sought out value, put his weight behind companies with promise and demonstrated that integrity isn't just a good trait -- it is good for business."

      Buffett is mobbed by journalists and shareholders during Berkshire Hathaway's annual shareholders meeting in 2011.

      Buffett talks with his son Peter before the start of the shareholders meeting in 2011.

      Buffett poses for a photo in Omaha in 2012.

      Buffett and his second wife, Astrid, arrive at the White House for a state dinner honoring British Prime Minister David Cameron in 2012. The next month, Buffett confirmed that he had been diagnosed with Stage 1 prostate cancer. He underwent radiation treatments and told Berkshire Hathaway shareholders that the cancer was "not remotely life-threatening."

      Buffett looks out at Omaha in 2012.

      Buffett wears a Woodrow Wilson High School jacket as he attends an event in Washington, DC, in 2012. Buffett graduated from the Washington high school in 1947.

      Buffett is photographed for Forbes magazine in 2012.

      Buffett listens as his son Howard speaks during an interview in New York in 2013. Buffett and his late first wife, Susan, gave and pledged billions to each of their three children to fund charitable foundations. Howard, an Illinois farmer, picked global hunger as his target.

      Buffett spins a basketball with the help of Chris "Handles" Franklin, one of the Harlem Globetrotters, at the Berkshire Hathaway shareholders meeting in 2013. At left is football star Ndamukong Suh.

      Buffett and Berkshire Hathaway Vice Chairman Charlie Munger are seen on a giant screen during the Berkshire Hathaway shareholders meeting in 2013.

      Buffett arrives for a conference in Sun Valley, Idaho, in 2014.

      Buffett introduces products to shareholders before their annual meeting in 2014.

      Buffett goofs off with Cleveland Cavaliers mascot Moon Dog prior to an NBA game in 2014.

      Buffett does an interview in 2015.

      Buffett listens as presidential candidate Hillary Clinton speaks during an event in Omaha in 2015. Buffett said at the rally that he was supporting Clinton's bid for president because they share a commitment to help the less affluent.

      Buffett attends the world premiere of "Becoming Warren Buffett," a documentary about his life, in 2017.

      Buffett attends Forbes' 100th anniversary gala in New York in 2017.

      Buffett walks through the exhibit hall during Berkshire Hathaway's shareholders meeting in 2019.

      Buffett speaks during Berkshire Hathaway's virtual shareholders meeting in May 2020.










































      That’s not to say that Berkshire is totally against the idea of owning tech stocks. In fact, Berkshire’s top holding is Apple (AAPL). The company has also invested recently in Amazon (AMZN) as well as HP (HPQ).
      Still, investing experts point out that Buffett’s penchant for buying top companies and holding them for a long time is what remains key to the success of Berkshire Hathaway.

        “One thing that stands out with Buffett and Munger is their ability to produce such great returns over such a long period,” said Bill Stone, chief investment officer with The Glenview Trust Company, in a report. “The investment business is littered with shooting stars that had great returns only to flame out, sometimes in spectacular fashion.”
        Stone is also a Berkshire shareholder and will be attending the meeting.
        But other experts say they want to know how Buffett and Munger feel about the market in light of the recent slowdown in the economy and concerns that the Federal Reserve is expected to keep hiking interest rates.
        “With rising rates and inflation, what kind of asset allocation is appropriate? We’re looking for that Buffett and Munger wisdom,” said Sean Bonner, CEO of Guild, an investment education app catered to military members. Bonner is a Berkshire shareholder who’s planning to go to the meeting for the first time.
        Investors will also want to hear what Berkshire plans to do with its massive cash pile, which stood at nearly $147 billion as of the end of February.
        Berkshire has put some money to work this year, with plans to buy insurer Alleghany (Y) and a boost to its stake in oil company Occidental Petroleum (OXY). But Buffett has long talked about wanting to make an “elephant-sized” deal.
        There’s one issue that Berkshire investors won’t need to ask about this year though: the question of succession planning. Buffett announced last year that vice chairman Greg Abel, who oversees Berkshire’s energy, consumer and other non-insurance businesses, will eventually take over as CEO.

        Amazon and Apple add to market confusion

        It’s been a volatile month for Big Tech, and markets can’t figure out what to make of it all. 
        Investors are suffering from whiplash: mega cap tech stocks led a 1,000-point drop in the Dow last week and then recovered on Monday. On Tuesday we saw another 800-point Dow drop and another large recovery on Thursday. 
        Investors’ hopes of finally removing their neck braces hinged on Apple and Amazon reporting first-quarter earnings yesterday afternoon. Some cohesion between the two trillion-dollar plus companies could provide clarity on the market outlook. 
        Strong numbers by Apple and Amazon would increase investor confidence as the Federal Reserve plans to hike rates next week. Both companies also serve as gauges of consumer confidence; good news could assuage fears of a forthcoming economic downturn. 
        But that didn’t happen.  
        Apple did beat earnings estimates. Revenue grew nearly 9% on an annual basis as sales rose 19%. Earnings per share came in at $1.52, beating estimates of $1.43. The company announced a $90 billion share buyback and a 5% dividend increase. 
        But Apple’s outlook doesn’t look great. Shares dropped after CFO Luca Maestri warned of Covid-related supply constraints that could hurt second-quarter sales by between $4 billion and $8 billion. Apple is not immune to supply chain challenges, added CEO Tim Cook.
        Amazon disappointed investors with earnings well expectations. The stock dropped nearly 13% in post-market trading after the company reported a $7.6 billion loss on its investment in electric vehicle company Rivian. Amazon posted earnings of $7.38 per share, missing estimates of $8.36.
        Revenue at Amazon grew by 7% during the first quarter, compared to 44% last year. That’s the company’s slowest rate of growth for any quarter since the dot-com bust of 2001. Forecasts for the second quarter were also disappointing. Growth could slow to 3% from a year earlier.
        “The pandemic and subsequent war in Ukraine have brought unusual growth and challenges,” Amazon CEO Andy Jassy said in a statement. 

        McDonald’s has to ditch millions of Russian burgers

        Trash bins in Russia are overflowing with bad Big Macs and moldy McNuggets. 
        McDonald’s lost $100 million worth of food and supplies after it closed its restaurants in Russia following the country’s invasion of Ukraine. The inventory will “likely be disposed of” said the company.
        McDonald’s made the choice to shut down its 850 Russian restaurant locations and 108 restaurants in Ukraine due to the conflict but continued to pay its 62,000 employees and numerous suppliers in the region. 

          McDonald’s reported better-than-expected earnings and revenue as it offset Russian losses with price hikes in the US and strong international growth.
          McDonald’s announced in February that it closed its Ukrainian restaurants for safety reasons but that employees would provide local councils with extra food wherever possible. The restaurant said it hoped councils would distribute products like buns, donuts, cheese, milk and water to Ukrainians in need. 
          Source: Read Full Article