Follow the Inside Value team's real-time coverage of the Berkshire Hathaway meeting at www.Berkshire2010.fool.com!
OMAHA -- Better known as Woodstock for Capitalists, the Berkshire annual meeting is full of starry-eyed capitalists eager to glean insight into the many questions and challenges facing this proud company from Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) Chairman and CEO Warren Buffett and his partner, Vice Chairman and Wesco Financial (NYSE: WSC) head honcho Charlie Munger.
The past year has been a mighty one for Berkshire, and things are just heating up. Not only did the company sacrilegiously split its Class B shares 50:1, but it also finally bagged its elephant in acquiring rail ringer Burlington Northern. And as if this stuff could get anymore Orwellian, one of Berkshire's biggest winners of the year was none other than BYD, a high-growth Chinese maker of batteries, cell phones, and electric cars. No, you are not hallucinating.
Those 5 questions
You can be sure Buffett and Munger will field plenty of questions on those subjects during their marathon question-and-answer session on Saturday. Frankly, those are layups compared to the five blunt questions that will absolutely, positively be asked in one form or another:
1. How do you feel about Goldman Sachs supposedly ripping its clients' tails off?
Unless you haven't kept up with the news because a bond trader ate your soul for breakfast, you know that Goldman Sachs (NYSE: GS) is under intense scrutiny for potentially screwing over its clients. This is exactly the kind of Wall Street behavior Buffett has long criticized, which puts him in an awkward spot given that Berkshire invested $5 billion in Goldman during the financial crisis. Will Buffett stand by Goldman, or take it out to the woodshed?
2. How are those derivatives going to shake out?
Buffett has been an outspoken critic of the lack of oversight for many types of under-the-radar derivatives trades. Ironically, Berkshire might itself be financially railroaded by a provision in the financial reform plan that would require the company and other derivatives counterparties to increase the collateral held against their contracts. Should the provision ultimately make its way into law and the courts not intervene, Berkshire might have to shell out billions in cash as collateral against its $63 billion in notional contract value. How much are we talking about here, big fella?
3. How concerned are you over the sovereign debt crisis?
Greece is in dire financial straits, while Portugal and Spain are the next contestants in the "Name That Eurozone Bailout!" Challenge. What are the potential global knock-on effects if one of these countries defaults? What is Berkshire's exposure, both directly and indirectly?
4. Who are your successors?
Buffett rightly fawns over the crown jewel of Berkshire's reinsurance business, Ajit Jain, though our read is that the next likely CEO of Berkshire is operator extraordinaire Dave Sokol, whom Buffett recently tapped to turn around the flailing NetJets business. Will Buffett inch any closer toward tipping his hand? And for that matter, any updates on the handful of candidates he's been eyeing to serve as Berkshire's next chief investment officer?
5. The market is pretty hot and heavy right now. Should we still buy American?
Buffett famously recommended buying American stocks 18 months ago. But with the market up 33% since then, unemployment at 10%, instability in the Eurozone, and underwater homeowners as far as the eye can see, are America and key Berkshire holdings American Express (NYSE: AXP) and Wells Fargo (NYSE: WFC) still a buy?
Follow along
The Motley Fool Inside Value team is eager to hear Buffett's thoughts on these topics and more. And we're just as eager to deliver that news to you in real time. We've built a special website for the experience -- Berkshire 2010 -- featuring dynamic tweets, photos, videos, blog posts, and articles, all aimed at making you feel as though you're right here with us.
And for you Inside Value members, keep your eyes peeled for a new Berkshire-themed special report hitting www.insidevalue.fool.com late next week.
Buffett will answer lots of questions this weekend. But if you could ask Buffett or Munger one key question, what would it be? Let us know in the comments box below. Then follow along with our Berkshire 2010 real-time coverage throughout the weekend.
