Wanda Lee got what she came for Saturday: meaty questions that touched on Berkshire Hathaway’s dealings with Wells Fargo, Kraft Heinz and a recent investment in Amazon.

The answers came during the legendarily long Q&A session featuring Berkshire Hathaway Chairman and CEO Warren Buffett and Vice Chairman Charlie Munger.

While breaking for lunch, Lee, a 42-year-old New Yorker, geeked out over the several questions that focused on 3G Capital and Berkshire’s stake in Kraft Heinz and another on changes in accounting rules that affected how companies like Berkshire report their earnings.

“I think relevant things were mentioned, which is great when you’ve come here” from a distance, she said.

Buffett and Munger fielded questions on a vast range of topics, including bitcoin, precision railroading and succession plans.

The troubled Omaha Public Schools pension fund was singled out, too — Buffett called it a case study of how an over-reliance on alternative investments can lead to weak returns.

Selected excerpts from the Q&A session:

Berkshire takes a 20-year lease in Omaha

Warren Buffett, in comments at the start of Saturday’s meeting, told shareholders that even though Berkshire’s landlord, Peter Kiewit Sons’ Inc., is moving, Berkshire has worked out a deal to stay in the building for another 20 years.

“I would say to Omaha that I think the fact that Berkshire has signed up for 20 years is very good news for Omaha,” Buffett said.

Berkshire has had offices in the Kiewit building at 3555 Farnam St. since 1962.

Kiewit is building a new headquarters in north downtown, expected to be ready in 2020.

Buffett, 88, said he considered signing a 10-year lease but was persuaded by partner Charlie Munger, 95, to go for 20 years. So he did.

And Berkshire — famous for its small headquarters staff, now at 26 — also has an option for a second floor in the building. “Management is loosening up a little bit,” Buffett said.

On 2019 attendance

Buffett said he believes this year’s annual meeting set new records.

He said 16,200 came to shop Friday afternoon, a couple of thousand more than last year, when 42,000 shareholders reportedly were in Omaha.

And Berkshire-owned Nebraska Furniture Mart did $9.3 million during a shareholder promotion this year — an amount some furniture stores would do annually.

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Why not invest all that cash in an index fund?

A shareholder asserted that Berkshire would have expanded its cash pile to $155 billion from $118 billion if it had kept the cash in a stock index fund versus U.S. Treasury bills.

It’s a perfectly rational observation, Buffett said.

Buffett expressed a willingness for Berkshire to change its investment strategy around its excess cash in the future. He said the change would be something his successor might wish to employ.

Buffett said he and Munger have liked having a lot of money to be able to make big moves fast. Opportunities tend to come in clumps when other people don’t want to deploy cash, Buffett said. The two believe the capital on hand will be well-deployed “and be better than an index fund.”

Munger said it’s “not a sin” for such a large company to be strong on cash. “We’re not going to change.”

Online competition for Berkshire retailers

Buffett said the jury is still out on how rapidly growing online retailers will do over time. Investors so far, he said, seem willing to look at losses as OK as long as sales are increasing, hoping better days are ahead.

The Nebraska Furniture Mart in Omaha does a significant dollar volume in online sales, Buffett said. Often, people still come to the store to pick up what they buy online.

“We don’t want to be a showroom for online operations. We have to have the right prices and we’re good at that at the Furniture Mart.”

Railroad profitability gap

Shareholders asked if the Berkshire-owned railroad would adopt precision-scheduled railroading and if it would lose ground to competitors if it didn’t.

PSR is a shift from waiting for cargo and leaving when customers are ready to setting departure times. Customers are ready or miss their trips.

Buffett likes the idea but didn’t commit.

“We are not above copying anything that is successful and there is a good deal that has been learned,” he said.

Buffett acknowledged that BNSF Railway has the lowest ton-mile revenue of the six biggest railroads in North America.

He said there are explanations for that, including longer hauls.

But he also said a competitor, Union Pacific, has been more efficient the last few years. They’ve “done a very good job on expenses,” he said, and “we do pay attention to Union Pacific.”

He noted that U.P. has cut a lot of people, including in Omaha. “We’ll see what that does to shipper satisfaction,” he said.

Berkshire will take notes, and, if changes are needed, “We’ll make them.”

He called BNSF a wonderful franchise, a fundamental business and one Berkshire will own for more than 100 years.

Are Kraft Heinz brands too old school?

Amid the challenges facing Kraft Heinz, Buffett endorsed the fundamentals of the company.

In response to a question that criticized Berkshire as missing changing consumer preferences within the Kraft Heinz brands, Buffett said he’s not worried about the brands. He said certain products are strong or growing 1% to 2% a year, while others are declining 2% to 3% a year.

That was the situation 10 years ago, he said, and will be the case in the future.

“There’s nothing dramatic happening in that,” Buffett said.

Buffett  said Kraft Heinz is earning more than it did six or seven years ago, and its products are still used in many households.

Berkshire owns 27% of Kraft Heinz, and its write-downs weighed on Berkshire’s fourth-quarter earnings.

Berkshire’s first-quarter earnings released Saturday didn’t include its share of Kraft Heinz’s results, because Kraft Heinz has delayed releasing them.

Buffett  repeated his previous comment that Berkshire and private-equity firm 3G Capital paid too much for Kraft Foods Group Inc. in 2015. (He adds that they didn’t pay too much for H.J. Heinz Co. in 2013.)

He says retailers like Amazon.com Inc., Walmart Inc. and Costco Wholesale Corp. have gained power relative to brands, which used to hold more leverage.

“Kraft Heinz is still doing very well operationally,” he says. But “you can turn any investment into a bad deal by paying too much.”

Munger  added: “It’s not a tragedy. Two transactions: One worked wonderfully and the other didn’t work so well. That happens.”

Is Buffett disappointed in Precision Castparts?

Berkshire bought Precision Castparts Corp. for about $32 billion in cash in 2015.

Margins since then have been lower, and a shareholder wanted to know if Buffett expects a turnaround.

Buffett  acknowledged that Precision’s margins are lower than expected, but he said he sees the earnings in a year or two improving “fairly significantly.”

When can we learn about how your potential successors think?

A shareholder asked why Berkshire’s two new business managers, Ajit Jain and Greg Abel, weren’t part of the shareholder meeting, and Buffett said they were in the front row, poised to answer any question.

That question came later to Jain and Buffett, who were asked how to safely place a price on unconventional insurance contracts that potentially expose the company to catastrophic risk.

After walking through part of his approach, Jain said his absolute test is: Pick up the phone and call Warren.

Greg Abel, vice chairman of non-insurance businesses, also was called on to talk about a few topics, including renewable energy.

Having two people onstage isn’t set in stone, Buffett said, and there’s been thought of having others there. But, he joked, he and Charlie are afraid of having the others show them up.

Munger spoke about Berkshire’s “radically different” structure and track record, and said, “I think you’re just going to have to endure us.”

Buffett added that the two investment managers, Todd Combs and Ted Weschler, would never appear onstage to answer questions. “Investment decisions are proprietary and belong to Berkshire. We’re not investment advisers.”

Geico’s race to the top

In the competition between Berkshire’s Geico and Progressive insurance to be the No. 1 auto insurer, Buffett said both are terrific, well-run businesses that sometimes copy each other.

But Buffett said Geico has the advantage in expenses.

“I feel extremely good about Geico,” he said, adding: “To some extent it’s a two-horse race, and we’ve got a very good horse.”

Buffett also was asked to respond to Elon Musk’s suggestion that Tesla might sell car insurance in conjunction with sales of its electric cars.

Buffett said he worries more about Progressive as a competitor to Geico than automakers.

The likelihood of their success, he said, is about as much as if insurance companies entered the automaking business.

How does Buffett value Berkshire’s insurance businesses?

“We have a very high value on that,” Buffett said.

He said Berkshire is an ideal home for an insurance business because it has a massive amount of assets that aren’t connected to natural disasters.

Berkshire doesn’t need to buy reinsurance and can use the float it holds more efficiently than most insurance companies, he said.

Does the Amazon purchase indicate a shift away from value investing?

One of Berkshire’s two investment managers recently invested in Amazon, the amount of which will be reported soon.

Buffett disputed that the Amazon investment wasn’t value investing. Both managers are value investors who go through the same calculations he would to invest in, say, a bank.

The two managers (Combs and Weschler), Buffett said, are smart, totally committed to Berkshire and very good human beings.

What guides him will guide his successors, Buffett said, and “I think they will be right more often than wrong.”

He and Munger said they give themselves a pass for not catching on to Amazon earlier, but they are harder on themselves for missing out on Google.

“We blew it,” Buffett said. “We had insight because we were using Google for Geico and saw how well it was working.”

Munger continued, “And we sat there, sucking our thumbs.”

Buffett reiterates his aversion to bitcoin

“It’s a gambling device … there’s been a lot of frauds connected with it. There’s been disappearances, so there’s a lot lost on it. Bitcoin hasn’t produced anything,” Buffett told a group of reporters ahead of the annual meeting.

According to CNBC, he said, “It doesn’t do anything. It just sits there. It’s like a seashell or something, and that is not an investment to me.”

However, Buffett said the blockchain technology that bitcoin is built on has some promise. “Blockchain … is very big, but it didn’t need bitcoin,” he said Saturday.

High on Apple, Berkshire’s largest holding

A shareholder wanted to know what Buffett’s thoughts were about Apple given that it faces lawsuits and the possibility of more regulation.

Buffett said, “All the points you raise I’m aware of, and I like Apple very much. … I like the fact that it’s our largest holding.”

Munger said that for his family members who have iPhones, it’s the last thing they’d give up.

Buffett said: That’s not a bad thing to own.

Mum on foreign holdings

Buffett declined to reveal Berkshire’s five largest foreign stock holdings.

Berkshire is not obligated to publicly disclose those holdings, and a questioner from Austria sought out that information.

Buffett called that proprietary information. He said Berkshire discloses what it has to disclose: “We aren’t giving away what belongs to our shareholders for nothing.”

Tim Cook, Bill Gates star with Buffett

The Berkshire movie as usual included an assortment of cameos by celebrities, including Apple CEO Tim Cook and Microsoft founder Bill Gates.

In one scene, Gates and Buffett waxed nostalgic as they walked through an old-fashioned candy store and shared their origin stories.

Buffett showed a copy of Benjamin Graham’s “Intelligent Investor,” a book he said “changed my life.”

Gates showed a copy of the magazine cover he saw that inspired him to go into the computer business. Buffett confided that if he had seen the same magazine, he would not have known what to do with it.

The movie also featured a spoof of Buffett visiting a secretive, secure development lab at Apple to work on a new project. It turned out to be a new, real-life newspaper-tossing app, Warren Buffett’s Paper Wizard. (Buffett is a former newspaper carrier who for years held newspaper-tossing contests during the annual meeting.)

The funniest moment in the Apple spoof came when Buffett went back in time and saw himself as a boy.

“Are you me?” Buffett asked him. “Buy Apple stock.”

Buffett was known for being late to get into tech stocks, though Apple now represents Berkshire’s largest single holding.

It also featured a song to the tune of Mark Ronson’s “Uptown Funk,” called “Berkshire Funk.”

How to develop the delayed-gratification skill?

A 13-year-old from San Francisco asked for advice on how kids can develop their skills at delaying gratification.

Saving money over spending money is not always the best course of action, Buffett said.

He said a lot can be said for doing things that bring you enjoyment rather than saving money every time. Buffett said he himself likes to spend “2 or 3 cents” of every dollar.

“Don’t go overboard on delayed gratification,” he said.

The American economy finds a way

A mom with an 11-week-old infant in tow wanted to know about future job prospects given increasing automation.

Buffett said the American economy and American people are remarkably ingenious and continue to find ways to employ more people.

Buffett said he didn’t know what the next “big thing” will be, but he knows there will be a next big thing.

World-Herald staff writer Henry J. Cordes contributed to this report.

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