Buffett Faces Kraft Heinz, Amazon Questions at Berkshire Meeting

(Bloomberg) -- Warren Buffett’s Berkshire Hathaway Inc. is holding its annual shareholders’ meeting in Omaha, Nebraska, today. Here’s a quick summary of what we’ve learned so far on the morning portion of the meeting:

• Buffett and Munger have been facing lots of questions about Kraft Heinz. Berkshire was stung earlier this year from the writedowns at the packaged food giant that the company helped create. Buffett has explained that the company overpaid for Kraft and that was one transaction that didn’t end up going well. While Buffett’s addressed the changing position of consumer brands, the pair seem to really hammer home the point that they believe the Kraft Heinz issues come back to overpaying on that acquisition. Buffett praised 3G and implied that he could continue to partner with them on future deals.
• Ajit Jain, who leads the company’s insurance operations, answered a question from shareholders about the unique contracts that Berkshire writes. It was the first time in this meeting that we’ve had one of the newly named vice chairmen address a shareholder question. That could be key for investors because it circles back to the succession issue --- Buffett and Munger were asked earlier if they would let the new guys speak more publicly and they left the option open, saying that Abel and Jain were around to answer questions.
• After one of Buffett’s investing deputies snapped up Amazon stock, the billionaire investor defended that move, saying it was part of a value investing framework. That’s an interesting point as value investors have been struggling for years as technology giants reign. Buffett and Munger have lamented how they missed some early technology bets such as Google.
• Buffett ramped up his criticism of buyout funds, saying that sometimes those returns aren’t calculated in an honest way. He’s normally faulted hedge funds for high fees and it’s interesting to get his thoughts on private equity.
• Berkshire bought back $1.7 billion of its stock in the first quarter, after the board tweaked the policy last year. Buffett was careful to thread that needle --- he wants to make sure that they’re buying those shares when they believe that they’re below intrinsic value instead of just aiming to do as many buybacks as they can.

For more on Warren Buffett Speaks at Berkshire Hathaway Annual Meeting, click here for our TOPLive blog.

To contact the reporter on this story: Katherine Chiglinsky in New York at kchiglinsky@bloomberg.net

To contact the editor responsible for this story: Tal Barak Harif at tbarak@bloomberg.net

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