Buffett blasts Wall Street, announces Activision stake at Berkshire annual meeting

Yahoo Finance Live’s Julie Hyman and Brian Sozzi discuss Warren Buffett’s sentiments on Wall Street for encouraging gambling behavior in the markets as well as Berkshire Hathaway acquiring a 9.5% stake in Activision Blizzard.

Video Transcript

JULIE HYMAN: So here are the three things that you need to know this morning. Maybe investors will take their cue from Warren Buffet and do some buying. He found Berkshire Hathaway's long awaited places to spend the company's cash in the first quarter, spending $41 billion. That is the highest outlay for Berkshire going back to 2008. And that's even as Buffett at the Berkshire Hathaway annual meeting over the weekend laid into Wall Street for encouraging what he said was speculative behavior. And he said, the markets have become a, quote, "gambling parlor" over the past few years.

You see there are some of the notable attendees to the conference, including Tim Cook, in what has been a winning bet for Berkshire, speaking of gambling parlor. Apple shares have done quite well for the company, but in terms of where a Berkshire has been spending its cash, you know, the cash pile, by the way, is still $106 billion, even after some changes to its holdings in the first quarter, but they increased their stake in Activision Blizzard a lot to about 9 and 1/2% from just under 2%, increased the stake in Chevron a lot, boosted stakes in the likes of HP and Occidental as well, Sozz.

BRIAN SOZZI: Yeah, clearly, Warren Buffett is betting big on the future of oil here with that really aggressive 14% stake now in Occidental. And of course, Chevron catching some love as well. I think that is now valued at close to $26 billion, that holding in Chevron. But it was just fascinating, Julie, to hear how Buffett went about buying shares of Occidental in the first quarter. I have more on this in the "Morning Brief" newsletter on the home page now.

But it was just fascinating to hear him break down. Essentially, he outsmarted some of the biggest investors in the room, the likes of BlackRock and other money managers. He saw a dislocation in the stock price, and he drove that bus right through it and right into Occi.

JULIE HYMAN: Yeah, and this is sort of classic Warren Buffett and Berkshire Hathaway kind of behavior, right? After he's been holding out and holding out and holding out and saying he is not seeing enough attractive assets in this market, finally getting in, in a pretty decided and aggressive fashion. That Activision Blizzard stake also quite interesting, considering it's set to be taken over by Microsoft.

And of course, as always, when you watch these meetings, it's not just about sort of the classic Buffett and Charlie Munger isms or about what they're actually doing. It's also about the colorful commentary, right? Not just the classic stuff, but also some other commentary they make, that gambling commentary, and then the two of them also continuing to take aim at cryptocurrencies and Bitcoin in particular. Munger called Bitcoin a noxious poison.

And then Buffett said, what would I do with it? It isn't going to do anything. So this is something we've been hearing from them in recent years and those in the crypto world have criticized them for it, sometimes a little bit-- I don't know-- cattily, if you will. But it's interesting that they're still discussing that particular topic, too.

BRIAN SOZZI: Yeah, I think it was just a lot of greatest hits there from Warren Buffett and Charlie Munger. Didn't really think it was a lot newsy type of Berkshire meeting, but still, it was good just to see them on stage and doing what they do. And then also on stage, Julie, let's just stay on this one here, something else notable coming out of this week's conference, we're seeing more of Greg Abel, Warren Buffett's successor at Berkshire Hathaway.

I would say, Julie, he got mixed reviews out there on two fronts. First, he leads all the businesses, not insurance, over at Berkshire Hathaway. And he didn't really answer, I think, or a lot of folks think, strongly on what is going wrong with Burlington Northern Santa Fe, really seen as lagging key competitor Union Pacific out there on many operating metrics.

And then number two here, one that got lost, I would say, in the sauce a little bit. And I was talking to Cole Smead over at Smead Capital Management this morning. They are-- they have been a long-term Berkshire shareholder, have been reducing their stake. Nonetheless, telling me that most of Abel's wealth is still tied up in Berkshire Energy.

It really reflects when he first started at the company, so hence, that's where his wealth stands. He would have liked to see Abel start bringing more of his wealth in Berkshire, the holding company, as a vote of confidence. So the fact that Abel didn't really answer this, didn't have much to say on this topic is unnerving, I think, a lot of die-hard Berkshire fans out there.

JULIE HYMAN: Well, and then there's also the sort of, like I said, the sort of folksiness, the character of Buffett and Munger. What does Abel-- how does he present as a guy in comparison to those two?

BRIAN SOZZI: He's a suit, Julie. He's a suit. This isn't Warren Buffett. This is not Charlie Munger. And I have to wonder, once he eventually does take over, what does a Berkshire annual meeting look like? I can't imagine you're going to pack out a stadium to listen to Greg Abel. Now it's no offense to him whatsoever. He just has not crafted out that image over the past few years here, just setting himself up to take over for Warren Buffett here. Just the reality, he's just another CEO, just another CEO.

JULIE HYMAN: Oh, well, I guess, you know, you can't have everything.