Berkshire Hathaway shareholders always celebrate Warren Buffett at the annual meeting, but among Saturday’s praise, investors also questioned a couple of recent business decisions of the conglomerate. Buffett marked 50 years of leadership in Berkshire by spending hours answering questions along with Vice President Charlie Munger to an overflowing crowd of more than 40,000 people from around the world. The feeling at the meeting was predominantly positive. Whether, several shareholders questioned whether Berkshire model of acquiring healthy companies and allowing them to continue largely unchanged sometimes harmful for employees. “We’ve never said that companies should employ more people than they need,” Buffett said. Both Buffett and Munger operate with small teams of less than 30 people. “We need our businesses to be the right size,” Munger added. Clayton Homes has been under scrutiny because of a story made by the Seattle Times newspaper and The Center for Public Integrity – a nonprofit organization that conducts investigative journalism – which questions its business practices. The story cited examples of high interest rates and of clients who felt cheated because they did not know that the lender company they were dealing with was owned by Clayton.
Transparency and goodwill of company
Buffett went with transparency of Clayton statistics to defend the company that operated 45% of the prefabricated houses sold last year in the country. “Clayton follows a pattern that is exemplary and rather extraordinary,” he said. Buffett said Clayton retains most of his mortgages after he loans to buyers, so he loses money if buyers default on payments. The houses that you build in a factory and then take to the site where they will remain are attractive to many people who can not afford other options. “I do not apologize at all for the loan terms of Clayton,” Buffett emphasized. Shareholder James Wilbur said he and his wife drove from Seattle to Omaha because they wanted to experience the event while Buffett and Munger are still around. Despite Buffett’s age, many investors still have confidence in the future of the company, even after his two senior executives have left. “I have no doubt about continuing,” said Chuck Sloup, 52, of Omaha. “They have some elements with a pretty impressive performance in each company.”
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