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Jason Stipp: I'm Jason Stipp for Morningstar, and welcome to a special Berkshire Hathaway edition of the Friday Five. Morningstar markets editor Jeremy Glaser is heading out to Omaha to cover the event for us, and I'm lucky enough to have him here with me today. Jeremy, thanks for joining us.
Jeremy Glaser: You're welcome, Jason.
Stipp: So a lot of people are talking about what they're expecting to hear at the Berkshire Hathaway shareholders meeting, but you have a list of things that you're not expecting to hear. [laughs] So it's sort of an interesting twist on that. Let's take it from the top, and tell me your first thing you're not expecting to hear at the Berkshire Hathaway meeting.
Glaser: Well, the first thing is I don't think Warren Buffett is going to rail against financial reform. Now, it turns out that he had some lobbyists in Washington trying to get rid of a few derivatives provisions in the current bill that's winding its way through Congress.
But I think, for the most part, he's pretty supportive of financial reform. He's been talking about it for a while. He's been saying that the banks need to reined in in some way. And this is someone who has a pretty substantial stake in Goldman Sachs, who has substantial stakes in a lot of other banking industries and in the insurance industry, but he still thinks there needs to be more regulation. I don't think you're going to hear him go on and on about how government needs to get out of everything.
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Stipp: So another thing that people always ask Buffett about during the meetings is where he's investing, where he's finding opportunity. What do you expect or not expect him to say in answer to some of those questions?
Glaser: I don't think he's going to tell us that the U.S. economy is in complete shambles and that you should stay away from U.S. stocks and only look at emerging economies or only look at other developed economies outside North America. He's been a stalwart of U.S. stocks for a while. He wrote a very famous editorial in The New York Times, at the bottom of the market, or even a little bit before the bottom, saying that he wants to keep buying U.S. stocks. I don't think we're going to hear him talk about how he thinks the U.S. economy is permanently impaired and that it's just going to continue to decline forever.
Stipp: So, for number three, a lot of people out there are really, really desperate for income, and they might really want Buffett to say something that he's probably not going to say. What is that?
Glaser: He has a lot of cash, but I wouldn't expect him to tell us that he's going to be paying it out as a dividend. I actually talked to Josh Peters about this earlier this week, and he has a lot of opportunities to put that cash to work across a number of different businesses. It doesn't make sense for him, right now, to pay it out to shareholders. Maybe if he's not there and somebody a little bit less capable, you might want to see that cash being returned, but I would not expect a dividend payout forthcoming from Berkshire Hathaway.
Stipp: Well, I guess if Buffett's investing your money for you, that's not a bad trade-off.
Glaser: Yeah, exactly.
Stipp: So, for number four, Buffett and Berkshire actually made a big, big acquisition last year. I'm sure there's going to be a lot of talk about it. What's something that you're not expecting to hear on that front?
Glaser: I don't think he's going to stand up there and say, "You know what? Forget railroads. I'm investing in airlines, because that's the future!" Warren Buffett has, for a long time, discussed how he doesn't think airlines are a very good economic investment. And if we look at the number of airlines that have gone bankrupt over the years--it seems like there's a new one every day--he seems to have been proven pretty much correct in that prognostication.
A lot of investors are getting interested in airlines stocks again. You see a lot of merger activity, with the potential United-Continental tie-up being announced in the next few weeks, but I don't think Warren Buffett's going to be diving into a deal like that.
Stipp: So, for number five, there are some things that Buffett just says over and over and over again each year. But there might be one of them that you're not expecting to hear this year. And what is that?
Glaser: Yeah, he can be a bit of a broken a record. And he always talks about how they're never going to split the Berkshire stock, and he likes to have this stable shareholder base and doesn't want people trading in and out of it. I don't think we're going to hear that so much this year, probably because he did go ahead and split the stock for the Burlington Northern deal. So, as much as I don't think he's going to say any of these things, you always have to keep an open mind that he reserves the right to change his policies at any time.
Stipp: We'll look forward to hearing your coverage this weekend, Jeremy.
Glaser: Thanks, Jason.
Stipp: Thanks for joining me. For Morningstar, I'm Jason Stipp. Thanks for watching.
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