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Authors: Super UserWarren Buffett, legendary investor and Chairman and CEO of Berkshire Hathaway, says his company will continue to figure out effective ways of returning capital to shareholders.
Class A shares of Berkshire Hathaway have multiplied investors’ wealth by four times (up 302 per cent) in last 15 years.
The scrip rallied to $2,92,600 as of May 4, 2018 from $72,800 on May 5, 2003.
The stock, however, underperformed Nasdaq 100 index during this period.
The Nasdaq 100 index has risen 496 per cent in last 15 years.
Addressing Berkshire Hathaway shareholders at the AGM, Buffett said: “If we thought we couldn't use capital effectively, we would try to figure out the most effective way to return capital to shareholders.
We're never going to do anything that we think is harmful to continuing shareholders."
“I will not go for penny stocks.
We will still look for productive businesses and productive assets,” he added.
Commenting on the use of cash for special dividend, Buffett said, “We had a vote on whether people wanted a dividend the B-shares voted 47-1 against it.
They expect us to do whatever we think makes sense for all shareholders, and if we thought we can’t use the money effectively in the business, we should get it out.
We won't always be in a world of low-interest rates or high private-market prices.
It's very unlikely we'd pay out a big special dividend."
Commenting on Wells Fargo, Buffett said: “I expect Wells Fargo to come out stronger just like Amex and Geico in the past.” Berkshire Hathaway was holding over 48 crore shares of Wells Fargo as of December 31, 2017.
Since January last year, Wells Fargo shares have plunged 6.50 per cent till May 4, 2018.
"Wells Fargo is a company that proved the efficacy of incentives, and it's just that they just had the wrong incentives.
The fact that you are going to have problems at some large institutions is not unique.
I see no reason why Wells Fargo as a company going forward is in any way inferior to the other big banks with which it competes.
We have a large unrealised gain in the stock.
I like it as an investment.
The CEO is correcting mistakes made by other people," Buffett said.
The billionaire investor answered questions from shareholders, journalists and analysts at Berkshire's annual meeting in Omaha, Nebraska, for close to five hours at the AGM.
