Berkshire Hathaway Annual Meeting

I had the pleasure of attending this year’s Berkshire Hathaway Annual Meeting in Omaha during the first weekend in May. Dave Bromelkamp invited his older brother Mike, Saul Baumann, and me to join him on the trip to eastern Nebraska.

The Annual Meeting (which most people call a "festival") is unlike any other event I've attended. This mid-sized Midwestern city becomes a destination for investors worldwide, and the entire town focuses on the Annual Meeting. Every local I encountered on Thursday, from my Uber driver to the restaurant employees to the hotel front desk staff, asked if I was in town for "Berkshire Weekend." It's easy to see the locals' pride in Warren Buffett, Charlie Munger, and the Berkshire Hathaway company.

On Friday, the day before the Annual Meeting, Berkshire Hathaway hosts their subsidiary companies in a huge ballroom where attendees can shop and learn more about their products. The best way I could describe the atmosphere in the convention center that day was a combination of the Minnesota State Fair and the Mall of America. There were thousands of people milling about, trying to take advantage of the sweet deals, catching a glimpse of a celebrity, or finding one of the dozens of CNBC cameras to achieve their 15 minutes of fame. The biggest celebrity we saw during the weekend was Bill Murray leaving the meeting Saturday. Many attendees weren't even shareholders but Nebraskans who bought tickets to gain access to the shopping deals being offered. My favorite booths in the convention center were Dairy Queen offering $1 dilly bars (D.Q. is a Berkshire Hathaway company), and the bookstore. The bookstore had 20 books for sale that were some of Warren and Charlie's favorites. They also had various authors there signing books for the attendees.

Inflation Reduction Act and the Tax Incentives for Consumers

The Biden administration recently passed one of its more significant pieces of legislation—the Inflation Reduction Act of 2022. However, many debate whether a bill that includes almost $500 billion in new spending will do much for inflation in the short term. Proponents of the bill claim that the increased taxes derived from corporations and IRS enforcement will reduce the budget deficit.

The purpose of this post is not to get into a political discussion about whether this new bill will reduce inflation and the budget deficit. There are plenty of articles written about that already. Instead, we will take a closer look at the $386 billion earmarked for energy and climate and how individual taxpayers could take advantage of some of the new tax incentives.[1]

Energy Efficient Home Improvement Credit

The Energy Efficient Home Improvement Credit is similar to the old Nonbusiness Energy Property Credit that expired in 2021. Starting in 2023, homeowners can receive a tax credit of 30% for energy-efficient home improvements.[2] Eligible improvements include energy-efficient doors and windows, air conditioners, circulating fans, and more.[3] The lifetime limit for this tax credit increased from $500 to $1,200, meaning taxpayers can get more bang for their buck.

Climate Action – Investing Sustainably

Many scientists believe that the earth’s atmosphere is changing rapidly. According to the National Oceanic and Atmospheric Administration (NOAA), the earth’s temperature has risen by an average of 0.14°F every decade since 1880. The rate of warming over the past four decades is more than twice that at 0.32°F.¹

This temperature increase profoundly affects weather patterns and strains on our natural resource. Rising global temperatures significantly impact the world’s oceans. Scientists estimate that the global sea level could rise another one to eight feet by 2100 due to melting arctic ice sheets.² In the United States, the increased sea level will put millions of people and billions of dollars of real estate at risk from rising tides causing erosion, flooding, and environmental changes to wildlife habitats and farmland.

Introduction to Ethos ESG

As an investor, have you ever wondered if there was a way to align your investment portfolio with your values? Have you wished to see whether the companies you invest in are embroiled in controversies and avoid them? Or have you questioned whether the companies represented in your portfolio are doing something to make the world a better place?

Historically, investors utilizing traditional mutual funds and exchange-traded funds could not answer any of these questions. With increased interest in sustainable and responsible investment (SRI) strategies over the past decade, more and more investors have been looking to their advisors for answers. It’s been challenging for advisors to answer these questions without the help of a third-party research provider digging deeper into portfolios to find the environmental, social, and governance (ESG) factors of each underlying company.