notesfromthe2003berkshirehathawayannualmeeting,53.docVIP

Notes from the 2003 Berkshire Hathaway Annual Meeting, 5/3/03 By Whitney Tilson (Feedback@T) Note: This is not a transcript. No recording devices were allowed at the meeting, so this is based on many hours of rapid typing, combined with my memory (egads!). I have reorganized the content of the meeting by subject area. All quotes are Buffett’s unless otherwise noted. Words in [brackets] are my comments or edits. For more on this meeting, see my 5/5/03 column, Report from Berkshire’s Meeting. For my columns and notes on previous Berkshire and Wesco meetings, click here. COMMENTS ON BERKSHIRE HATHAWAY Q1 Results The economy has been quite sluggish -- it has been for a very long time. Right after 9/11, I posted a letter that said we had been in a recession [even prior to 9/11]. Since 2000, housing and autos have done very well, but everything else has been quite sluggish. Interest rates are down to 1.5%, but business continues to be sluggish. So, our non-insurance businesses didn’t do so great in the first quarter. But insurance businesses did great. The first quarter will show $290 million of pre-tax income, after $140 million in charges for retroactive insurance contracts. And, our float grew $1.3 billion to $42.5 billion in float. (Float is what people pay us to use the money.) I don’t see our float growing much from this point, but Charlie said that at last year’s annual meeting [and it’s grown 8.8% from Q1 02 to Q1 03]. I think our insurance businesses are in exceptionally good shape. We have some terrific businesses. Geico’s premium volume was up 16% in Q1, with a 6% underwriting profit. Gen Re, thanks to Joe and Tad, has turned the corner in a big way. And Ajit Jain [of National Indemnity] made so much money in the first quarter that I don’t even want to tell you about it. [Audience and Munger applauded.] When you see Charlie clap, you know he’s made us a lot of money. You never know what’s going to happen in insurance -- there co