Buffett says drugmaker Valeant had flawed business model

Warren Buffett tours the exhibit hall during the Berkshire Hathaway Annual Shareholders Meeting at the CenturyLink Center in Omaha, Nebraska, U.S. April 30, 2016. But Buffett, who is supporting leading Democratic presidential candidate Hillary Clinton, said that concerns over how this year’s presidential election might affect the economy may be overblown.

Because the meeting fell early this year, Berkshire also released only preliminary first-quarter results, rather than full results, which the conglomerate is to release on Friday.

Profit from the railroad and utilities operation slipped 16% to US$1.23bil. That’s “a compensation scheme that is unbelievable to me”, Buffett said. He has also agreed with Republican Donald Trump in calling an end for a tax break that helps hedge fund managers.

This was widely cited as a reason Omaha may have attracted fewer people to the weekend of events that Buffett calls “Woodstock for Capitalists”.

Overall, the main attraction of the shareholders meeting, says Hull, was Buffett’s discussions about the economy and the companies he’s watching.

Berkshire-Hathaway shares are the most expensive in the world. Buffett said he arranged the online version so more shareholders could see him and Munger at work and so business owners in other countries could become more familiar with Berkshire.

Hansen said he doesn’t want a quick reply from Buffett, whom he encouraged to weigh the suggestion and “interact with people such as Bill Gates”.

“I elect to get my 2,600 or 2,700 calories a day from things that make me feel good when I eat them”, he said, including See’s peanut brittle he munched during the meeting. “That’s my sole test”.

Berkshire Hathaway Inc.’s profit rose 8.2 percent in the first quarter as gains at manufacturing units and the investment portfolio overseen by Buffett offset a slump at insurance units and the railroad.

Tim Rinne with the Nebraskans for Peace group, which submitted the resolution, said before the vote that he knew the measure was likely to be defeated given that Buffett opposes it and he controls almost one-third of the votes.

Speaking on Saturday, Buffett vigorously defended Berkshire’s large, long-standing investment in Coca-Cola, rejecting critics who say the company’s sugary drinks harm people’s health.

“Ninety-nine percent of our consumers were being asked to subsidize the one percent that had solar units”, Mr Buffett said. “The auditors, I don’t think, are necessarily capable of holding that behaviour in check”.

Mr. Buffett also emphasized his worry that derivatives could cause major risks for most of the world’s largest banks if markets were disrupted.

The most interesting part was when he was asked why Berkshire had changed from investing in companies with high returns on capital and no-or-low capital requirements to those that require massive amounts of capital, like railroads and pipelines.

When it comes to the banking sector, Buffett says the derivatives contracts that big banks hold on their books can make the institutions hard to evaluate.