Berkshire Hathaway has first annual meeting since death of longtime vice chairman Charlie Munger

Warren Buffett’s Berkshire Hathaway gathered for its first annual meeting in an Omaha arena on Saturday, bringing together shareholders for the first time since the death of longtime vice chairman and right-hand man Charlie Munger.

Tens of thousands of shareholders filled the arena eager to vacuum up tidbits of wisdom from billionaire Buffett, who famously dubbed the meeting “Woodstock for Capitalists” and to pay tribute to Munger, who died at 99 in November.

The meeting opened with a video tribute to Munger recounting his life and highlighting some of his best-known quotes from the meetings over the years that drew applause, including classic lines like “If people weren’t so often wrong, we wouldn’t be so rich.” The video also featured old interviews with Buffett and Munger talking about their epic friendship.

The video also featured several of the classic skits the investors made for meetings over the years with holiday stars like a “Desperate Housewives” spoof where one of the women introduced Munger as her boyfriend and another video where Jamie Lee Curtis swooned over Munger.

As the video ended, everyone in the arena gave Munger a prolonged standing ovation to thank him for being what Buffett called “the architect of Berkshire Hathaway.”

For decades, Munger shared the stage with Buffett every year for the marathon question and answer session that is the event’s centerpiece. Munger routinely let Buffett take the lead with expansive responses that went on for several minutes. Then Munger himself would cut directly to the point. He is remembered for calling cryptocurrencies stupid, telling people to “marry the best person that will have you” and comparing many unproven internet businesses in 2000 to “turds.”

He and Buffett functioned as a classic comedy duo, with Buffett offering lengthy setups to Munger’s witty one-liners. Together, they transformed Berkshire from a floating textile mill into a massive conglomerate made up of a variety of interests, from insurance companies such as Geico to BNSF railroad to several major utilities and an assortment of other companies.

Munger often summed up the key Berkshire’s success as “trying to be consistently not stupid, instead of trying to be very intelligent.” He and Buffett were also known for sticking to businesses they understood well.

“Warren always did at least 80% of the talking. But Charlie was a great foil,” said Stansberry Research analyst Whitney Tilson, who was looking forward to his 27th consecutive meeting with a bit of a heavy heart because of Munger’s absence.

That absence, however, may well create space for shareholders to get to know better the two executives who directly oversee Berkshire’s companies: Ajit Jain, who manages the insurance units, and Greg Abel, who handles everything else. Abel will one day replace the 93-year-old Buffett as CEO. Abel and Jain are sharing the main stage with Buffett for the first time this year in the spot Munger used to occupy.

The first time Buffett kicked a question to Abel, he mistakenly said “Charlie?” out of habit.

Morningstar analyst Greggory Warren said he hopes Abel will speak up more this year and let shareholders see some of the brilliance Berkshire executives talk about. Ever since Munger let it slip at the annual meeting three years ago that Abel would be the successor, Buffett has repeatedly reassured investors that he’s confident in the pick.

Berkshire Hathaway remains successful amid drop in earnings

Buffett’s company reported a steep drop in earnings because the paper value of its investments fell and it sold off part of its massive Apple stake, but overall, Berkshire Hathaway’s many businesses performed well.

Berkshire reported a $12.7 billion profit, or $8,825 per Class A share, in the quarter. That’s roughly one-third of the $35.5 billion, or $24,377 per share, that Berkshire reported a year ago.

But those figures were heavily swayed by a large drop in the paper value of Berkshire’s investments. That’s why Buffett encourages investors to pay more attention to the conglomerate’s operating earnings that exclude the investment figures. By that measure, Berkshire’s operating earnings jumped 39% to $11.222 billion from last year’s $8.065 billion as its insurance companies led a strong performance.

The three analysts surveyed by FactSet Research had predicted operating earnings of $6,701.87 per Class A share.

Buffett did sell off nearly $6 billion in stocks during the quarter, including trimming about 13% of Berkshire’s massive Apple stake. The investment in the iPhone maker is still the biggest one in the $364 billion portfolio at $135.4 billion, and Buffett said he expects Apple to remain the biggest investment for years — even up to when his successor takes over.

But the estimated value of Berkshire’s Apple stake suggests that Buffett sold off more than 100 million shares. Buffett has said he invested in Apple’s stock because of how devoted consumers are to the iPhone and other Apple products.

Apple CEO Tim Cook, who is at the Berkshire meeting, told CNBC that he still considers it a privilege to have Berkshire as a major shareholder, and he knew about the sales before Berkshire disclosed them Saturday.

Berkshire reported a $2.6 billion underwriting profit at its insurers, up from $911 million a year ago.

BNSF railroad’s profits did disappoint and drop 8% to $1.143 billion, but most of its many other companies delivered solid results, including a 72% jump in operating profits at the utility unit that added $717 million to Berkshire’s total.

Berkshire’s revenue grew 5% to $89.87 billion in the quarter. The two analysts who reported estimates to FactSet predicted $87,044 billion revenue.

With no major acquisitions in sight, Berkshire’s massive cash pile continued to grow to a record $188.993 billion in the quarter. Berkshire even spent $2.6 billion repurchasing shares during the first three months of the year, but its companies include Geico insurance, BNSF railroad, several major utilities and an assortment of dozens of others keeping generating mountains of cash.

“We’d love to spend it but we won’t spend it unless we’re doing something with very little risk that will make us a lot of money,” Buffett said.