3 Things to Watch for at Berkshire's Annual Meeting

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Warren BuffettThis weekend, more than 40,000 of Warren Buffett's disciples will descend on his hometown for, among other things, a marathon question-and-answer session with the Oracle of Omaha himself. The event they'll be attending is Berkshire Hathaway's (BRK.A) (BRK.B) annual shareholder meeting, better known as "Woodstock for Capitalists."

Any time the greatest investor alive is talking, we should all be listening. Buffett has become the third-richest human on Earth -- amassing a fortune of $44 billion -- simply by investing wisely and growing his businesses. It's no wonder that investors from all over the world will be traveling to Omaha to soak up all the wisdom they can get from him.

Before the oracle speaks, let's go over three things that Buffett is sure to touch on at Berkshire 2012.

1. His prostate cancer: As much as he'd probably like to avoid it, one of the main topics for the 2012 meeting will likely be Buffett's recent disclosure that he has stage one prostate cancer. Buffett has already done his best to quell any fears that the diagnosis is a serious issue for him or Berkshire, pointing out that the cancer is highly treatable and "is not remotely life-threatening or even debilitating in any meaningful way." So while some of the meeting will have to be focused on this issue, it's doubtful we'll hear much more that's substantive from Buffett on it; he's said pretty much all he can say for now.



2. Berkshire's next CEO:
Because of the recent cancer disclosure, expect this year's meeting to focus more on his successor. In his annual letter to shareholders in February, Buffett said that Berkshire's board has identified the person who will take over for him as chief executive, but he wouldn't name the individual -- and the annointed one isn't even aware of it. Currently, most agree that the leading candidate is Indian-born Ajit Jain, the 60-year-old head of Berkshire's insurance business. Buffett has said of Jain: "He's smarter than I am."

If it's not Jain, GEICO CEO Tony Nicely or Burlington Northern CEO Matthew Rose are also plausible picks.

3. Share underperformance and buybacks: Though Berkshire has performed well as a company, its shares have underperformed the S&P 500 year to date by about 5 percentage points, and over the past full year by around 3 percentage points. These are certainly not the kind of returns Berkshire shareholders are used to.

Some question whether uncertainty over the succession plan could be holding the stock back, something that you can be sure Buffett will be asked about this weekend. On the bright side, one good thing about the stock's underperformance is that Berkshire shares have become relatively cheap -- so cheap that the company instituted its first-ever share repurchase program last September. Might a dividend be next? Almost certainly not while Buffett is still kicking; he has shot down the idea repeatedly. Investors clamoring for a dividend will have to wait at least until Berkshire's next CEO takes over.

While these three subjects will be at the forefront of Berkshire 2012, I don't expect any of them to take over the meeting the way the resignation of David Sokol -- one-time leading candidate to replace Buffett -- did last year. And that's good news for Berkshire shareholders and non-shareholders alike: There should be room for plenty of meaningful questions to pick the brain of a brilliant investor.

Not only will the meeting be highly informative, but it will also be highly entertaining. Buffett and partner Charlie Munger keep the discussion lively with their famous back-and-forth dialogue and one-liners. While you won't find the meeting on CNBC -- cameras are strictly prohibited -- a full team of Foolish analysts (including yours truly) will be in Omaha to keep you abreast of everything that happens at Berkshire 2012. We'll be live-blogging the entire experience, sending out Buffett's and Munger's can't-miss investing tips, one-liners, and general words of wisdom. Make sure to enter your email in the box below to receive a reminder and link to our live chat, starting Saturday at 9 a.m. EDT.





Motley Fool contributor Brendan Byrnes owns no shares of any company mentioned above. The Motley Fool owns shares of Berkshire Hathaway. Motley Fool newsletter services have recommended buying shares of Berkshire Hathaway.



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