Nebraska attorney Dave Begley follows up on his report on the appearance of James Hansen to support his proposal at the annual Berkshire Hathaway shareholder meeting. Dave reports:
The climate change resolution put forth by Dr. James Hansen was defeated but it gathered slightly more than ten percent of the vote.
In other business, Warren Buffett discussed the $3.6 billion capital investment MidAmerican Energy is making in windmills. His business philosophy is very important to understanding this topic. When he and Charlie Munger started, they purchased businesses that were not capital intensive. Think See’s Candies.
As they grew, large companies that fit their criteria were much more scarce so they purchased a railroad and utilities. From their point of view, the federal government is giving them essentially free money via federal tax credits to generate consistent cash flow. That’s the low capital model. Buffett said as much and he is not one to turn down free money passed out for the purpose of satisfying the political goal of reducing carbon emissions.
One shareholder complained bitterly about the price their Nevada utility paid consumers for excess electricity generated from roof top solar panels. Munger responded that their company can generate or purchase power at $0.03 kwh so it made no sense to be forced to pay $0.10 kwh to consumers for the fungible commodity. End of discussion.
One of the speakers on behalf of the resolution was Jane Kleeb of Bold, Nebraska (photo at left with me). She led the fight resulting in the cancellation of the Keystone XL pipeline that was to run through the Nebraska. Millions of dollars were lost here.
I completely disagree with her views but, in my opinion, she is one of the most effective politicians in the state and I admire her for that. Kleeb is a perfect example of how the left so often wins political fights. TransCanada and the proponents of the pipeline simply blew it. We conservatives need to win these grassroots fights.
On the political front, the question was put to Buffett as to how his businesses would do under either a Trump or Clinton presidency. Warren was indifferent as to who won the race. He has seen it all and he can adjust to anything. The Republic will not be destroyed if Trump wins.
One shareholder asked Buffett a rather pointed question regarding Berkshire-Hathaway’s ownership of Coca-Cola. The sugar water was accused of causing not only obesity but also death. Buffett’s reply was masterful. He said that he drinks the product in moderation and really enjoys it. Charlie Munger piped in that whenever such accusations are made, one needs to look at the benefits as Warren did in his analysis. I could not agree more.
Warren Buffett is absolutely hilarious. He told the story of how he visited Shelby, Nebraska native and former Ford Motor president Arjay Miller on the occasion of his one-hundredth birthday. Miller told him that four times as many women were over 100 than men. This caused Warren to quip that maybe he should consider a sex change operation but since Charlie is older at age 92, he should go first. Munger was the perfect straight man and said nothing.
The last questioner asked Buffett where he got his sense of humor. He replied that was just how he sees the world. Munger said that if one views the world accurately, one has to consider it humorous because it’s ridiculous.