Mike Santoli (2:42)

He'll start this meeting with a one hour business update. Then move on to that first Q and A session, which also will include Vice chair of Insurance Operations Ajit Jain starts in about 15 minutes. Let's give you a look at the rest of the day's schedule. The first Q and A session will be a little more than an hour. After that you can catch our halftime show with big names including Occidental's Vicki Hollub and Brooks running CEO Dan Sheridan. The second session starts at 12:45 with the BNSF CEO Katie Farmer and the new president of Berkshire's consumer products Service and retailing and NetJet CEO Adam Johnson joining Abel on stage after another hour long break. The official shareholder meeting will start at 3pm Eastern Time.

Becky Quick (3:21)

In fact, just a few yards from here inside the arena, shareholders are starting to take their seats. This has a little bit of a different feel this morning. It's quieter.

Mike Santoli (3:30)

Yes, it is.

Becky Quick (3:31)

There are still a lot of people here. In fact, when I was walking in, the lines were kind of out around the corner to both ends of this arena. Right now you see Tim Cook is on the on the floor kind of getting ready to take his seat. He's sitting with some of the directors. But the shopping here on the floor has been a little muted. There are a lot of people here, but not as many as we've been used to seeing the last couple of years when you got 40,000 people who are crammed into this place at once.

Mike Santoli (3:57)

Definitely a lot of curiosity about how this is going to go and how Greg's going to handle it, but it does feel a bit lighter. Not much of a press.

Becky Quick (4:05)

This is an evolution in Berkshire Hathaway do have some news this morning.

Mike Santoli (4:08)

No doubt about it. Berkshire Hathaway also just released first quarter results. Operating earnings total $11.35 billion. That's up 18% over last year. The big headline from the results is that Berkshire's cash pile jumped to a record of nearly $400 billion, about 397 billion. That's in new CEO Greg Abel's first quarter as a chief executive, of course. Berkshire, according to the filing, sold a big chunk of stock in the three months, just over $24 billion. But the company also bought $16 billion worth. At gives you a net sale number for the quarter of $8.1 billion out of the equity portfolio, which is over $300 billion in size. Berkshire's five main stock holdings remain the same in Q1American Express, Apple, bank of America, Coca Cola and Chevron. The company also bought back a total of $235 million in its own stock. The first buyback since the second quarter of 2024. Now Greg Abel had told you that they were restarting stock buybacks.

Becky Quick (5:07)

Yeah, he said that about early March.

Mike Santoli (5:09)

Amazon Squawk BO bought a 220 or something. So there was a little bit of suspense among the investors I spoke to about whether in fact they were more aggressive in buying more over the balance of the quarter. Who knows what they've done in April.

Becky Quick (5:19)

Right. These are only numbers through March 31st. So this was the beginning of things. But people are wondering what they're going to do with all that cash. Growing up to $400 billion almost. I remember when it crossed $100 billion and people thought, oh my gosh, what are they going to do with this $100 billion cash hoard that was only 2017.

Mike Santoli (5:35)

What they're going to do is quadruple it. That was the answer. Yeah.

Becky Quick (5:38)

And continue to grow it. Although we have talked to some of the directors here and the things that they out is that that cash hoard along with the $300 billion stock portfolio makes up a much smaller portion of the business than it used to because the operating earnings are just so strong.

Moderator (5:53)

These companies.

Mike Santoli (5:54)

I mean, the market cap is over a trillion.

Becky Quick (5:55)

Yeah.

Mike Santoli (5:56)

The book value rose to like 725 billion. So the operating business accounts for a lot more than than it used to. Although it still remains a question because if they're not buying back their own stock when they say it's below their estimate of intrinsic value, are they waiting for something in particular? By the way, it occurred to me that Greg Gable himself said he bought $5 million worth of Berkshire. So that rounds it to a nice quarter billion between the company and him that they picked up in the three months.

Becky Quick (6:20)

Right. He's taking his salary, as he told us about a month ago, and he's going to be plowing it back in, buying shares on the open market and basically on the after tax basis putting it all back in your shares so that he's aligned with shareholders as he sees this too. Now there are some highlights about who's out in the audience. You just saw Tim Cook, he's here along with the new CEO of Apple, John Ternus. Yeah, John Ternus. Saw him last night out and about. I know that Bryson DeChambeau is here. He's a friend of Greg Abel's and he's in the audience as well. But we've got a long term Berkshire shareholder with us that you'll probably recognize as well. Bill Murray is here on set with us today. And obviously you know him from Caddyshack, Groundhog Day, Lost in Translation, a million other films. You probably know that he's a Berkshire shareholder just from our coverage here in past years. But Bill, I didn't even realize you bought in in the 1970s. That's way back.

Bill Murray (7:12)

Well, I didn't do it. Good morning. I. I was led to a man named Sandy Gottesman in New York who I much later found out was a close friend of Warren's and did a lot of work with Warren and he had an account for me. And many years later I met Warren, I thought, he's such a nice fellow, I'd like to help him out. Maybe I'll buy some of his stock. And then I found out that I'd owned his stock for a couple of decades already, so.

Interviewer (7:39)

Wow.

Bill Murray (7:40)

So. But since then, I've just emptied all the mattresses and I'm all in on this thing here.

Becky Quick (7:46)

You've been coming for about four or five years maybe to the Berkshire annual meeting here. What brings you here? Why do you keep coming back?

Bill Murray (7:53)

Well, the first time I came was after I met Warren. And I got a kick out of it and a real kick out of me. He really makes me laugh and like, big, like body laughs. So I get a kick out of them. And I thought, well, I'll go out there and see what the Warren and Charlie show was like. And it was, it lived up to everything. It was really good. And I enjoyed sitting there in the dark with all the people who were so excited to sort of be in the club. You know, I didn't even know I was in the club, you know, and so I was like, I could have been here in the club all this time having, you know, walking around buying marshmallows and things.

Mike Santoli (8:29)

Kind of a little pressure on the new guy. Greg Abel's going to have to make you laugh now.

Bill Murray (8:33)

Well, you know, he, I think he's much friendlier.

Interviewer (8:36)

He.

Bill Murray (8:36)

I, you know, I saw him yesterday and he was really friendly.

Mike Santoli (8:40)

Certainly friendly. Yeah.

Bill Murray (8:41)

So he's very friendly. And I think, I think he's probably done a little research on it. Like, I know there's a challenge to be as funny as those two characters were. You know, that was, that was big time humor. That was very funny stuff.

Becky Quick (8:53)

Phil, I don't mean to put you on the spot, but as a shareholder, you probably look at this and think, okay, this is a changing of the guard. What do you want to hear? What Makes you feel comfortable with still being a Berkshire shareholder.

Bill Murray (9:05)

Well, you had Sue Decker on your show the other day, and she spoke of what was going to happen to the company, that it was no longer going to be the way that Warren had it, where you just sort of let your companies go, let them do their own thing. You don't bother, you don't interfere. That actually Berkshire was going to provide some guidance and suggestions like, and set goals for them and sort of streamline operations and just sort of tighten. Tighten them, tighten things up. And when she said that, I thought, oh, you mean like everybody else? You know, maybe that should work. That should work. So I was told to me by. I mean, my head is still ringing from the pinballs of numbers that you guys were talking about there a second ago. So it'll take me a second to get my thoughts. How many billion was that again?

Becky Quick (9:51)

Yeah, almost.

Mike Santoli (9:52)

Pretty good cushion to operate with.

Bill Murray (9:54)

So I feel comfortable knowing that, you know, it's sort of like sitting next to a guy at a poker table that happens to have $400 billion. You figure, like, well, when he's broke, I'm going to be broke.

Interviewer (10:04)

You know,

Becky Quick (10:07)

the feel is a little different, and it's an evolution. And as somebody who is a careful observer of cultural phenomenons, what would you have to say? Because I've talked to you in the past when you've sat and listened to. To Warren and Charlie. And by the way, folks, if you take a look at the stage, there's Warren Buffett walking in to the floor of the Berkshire Hathaway meeting. That's his daughter, Susie Buffett, another director of the company, sitting next to him. But the first time in 60 years that he's going to be sitting on the floor listening to this Q and A instead of actually taking questions from the shareholders.

Greg Abel (10:40)

Well, that'll be a great experience.

Bill Murray (10:43)

I was in a show once, and for some reason I came late and my understudy went on in the show, and I got to sit and watch our show. I was the only one of us that ever got to see our show, and it was fantastic. I thought, God dang, this is really good. I was really happy to see that. So I think he's going to have that same experience of what it's like to be there as a shareholder and, and, and to see how the story goes down, how. How Greg tells the story.

Mike Santoli (11:10)

And, you know, he's going to have his own kind of wisdom reflected back onto himself, because, I mean, the one thing Abel's going to do is talk a lot of continuity of the culture and the discipline and everything else.

Becky Quick (11:19)

Yes.

Greg Abel (11:20)

Yeah.

Becky Quick (11:21)

And that's a great analogy to this. What, what was the show?

Bill Murray (11:25)

There was the National Lampoon show off Broadway and I was in it with my brother Brian and Joe Flaherty, Harold Ramis, Dilda Radner, John Belushi and Paul Jacobs on the piano. And it was a, it was outrageous show at the time. It was a great, great show.

Becky Quick (11:42)

It was worth being late for.

Greg Abel (11:43)

It was.

Bill Murray (11:44)

I only did it once, but I'm

Greg Abel (11:45)

so glad I did.

Bill Murray (11:46)

I was lucky, you know, and I didn't get in trouble because it was just those guys.

Interviewer (11:49)

Yeah, right.

Becky Quick (11:52)

Well, Bill, I know you've got to make your way out to the floor.

Bill Murray (11:55)

I get lost going through the curtains.

Becky Quick (11:56)

I do too.

Bill Murray (11:57)

Nice to see you.

Becky Quick (11:57)

So we are going to head out to the meeting which is taking place in just a moment. We've got to get ready to start taking these questions from the shareholders again. We are just minutes away. You can see that room starting to fill up. If you've been watching all of this, a lot of news that's happening today, for sure.

Mike Santoli (12:13)

Berkshire shares are down nearly 6% percent since the start of the year. So a big question now is could Abel's comments today be enough to spark some enthusiasm for the stock? We're going to talk about that in just a moment with John Rogers of Ariel Investments. I would point out a couple of things about the, the stock investment over the last year, which is it was at a historic peak one year ago on this very day and also a historic premium to its valuation since then. Actually, other insurance stocks have actually been somewhat weak along the way. That's dragged down the perception of Geico's value. And obviously the valuation is moderated now. So it's about 1.4 times book value. It had been up around 1.8 times. The other thing I guess I'd say is defensive and quality stocks have not necessarily been in favor. The S&P 500 has been very difficult to keep up with. And by the way, also I was going to mention on a five year basis, the S&P 500 has just caught up to Berkshire Hathaway's performance. It's basically been outperforming for that entire period. In almost every rolling five year period. You can go back to Berkshire has outperformed. John Rogers of Ariel is right here in the house. He's a longtime shareholder and of course friend of Berkshire. John, good to see you.

John Rogers (13:29)

Great to be here.

Mike Santoli (13:32)

Just talk about your general thoughts as you Observe this transition from. From Warren as CEO to Greg Abel, and I guess what you might want articulated or clarified today.

John Rogers (13:41)

Well, you know, I think that sometimes in basketball, people think about whether Michael Jordan's the greatest of all time or LeBron James. There's no doubt that Warren Buffett's the greatest investor of all time and the greatest communicator of his investment ideas of all time. So it's huge shoes for Greg to fill. What I'd like to find out today is whether he's optimistic about the markets or not. It's been a difficult market. It's been really complicated by the war and everything else. And I'm wondering if his confidence is still there.

Mike Santoli (14:08)

Do you think his approach to the job. It's interesting to me that, that Warren Buffett, of course, created all of this value, at least initially, principally as a stock picker. He was a market junkie from a young age, and that was sort of his window on this. And then he bought whole businesses and he's become a massive insurance operator and all the rest of it. Whereas Greg has come from industry, he's owned whole businesses, been a CEO, made acquisitions in that way. So I wonder if he's still going to think about the sort of public equity portfolio as a principal driver of a value going ahead, or if he's going to look for ways to maybe do things with the operating side.

John Rogers (14:44)

I would think he will continue. Warren's playbook and Charlie's playbook, it's worked so extraordinarily well. It's created so much wealth, and the board really believes in Warren's beliefs. And of course, Warren is still there. So I think Greg will follow the pattern that is his, built all this opportunity to create real, massive generational wealth.

Mike Santoli (15:03)

There's a line of thinking that Berkshire Hathaway, at a time when everybody is focusing on the types of businesses or even just, you know, financial balance sheets that can't be dislocated by AI or anything else that Berkshire Hathaway should come to toward the top of the list, just given its asset mix and all the rest. I mean, is that something that you think about in terms of, you know, the enduring value of the company?

John Rogers (15:25)

Well, I do. I think there's a huge moat around Berkshire. When we walk around the center today, see all these marvelous businesses invested in that, you think they're so unique and so spectral, they really can't be replicated. So I think there's just so much value here in the portfolio, and I think it's going to perform Very, very well coming out of this sort of downturn over the last year.

Mike Santoli (15:45)

Does it? You know, there's one line of thought that almost $400 billion in cash now on the balance sheet that perhaps investors more broadly may not have as much confidence in allowing Greg to sit on that much cash because who knows how he's going to allocate it. Whereas people had some comfort level with

John Rogers (16:02)

Warren, but I think again, Warren's still there, the board's still there. Warren, such a presence. Greg has learned so much from Warren. So I know he'll be very careful with making those investment choices and how he uses the cash.

Mike Santoli (16:16)

And in general, I mean, your thoughts on the market? We have this other sort of tech concentrated S&P 500 run to new records, but the rest of the market I guess has also found some pockets of strength.

John Rogers (16:27)

There are and I've been looking at of course the leisure oriented stocks that I think are really cheap companies like Norwegian Cruise Lines and of course my favorite Madison Square Garden Entertainment that owns the Garden.

Mike Santoli (16:37)

Yes.

John Rogers (16:37)

And is going to benefit from the Knicks run to the world championship.

Mike Santoli (16:40)

No doubt about it. So a Chicago guy, you're okay betting on the Knicks that way?

John Rogers (16:44)

I really am. It's a wonderful team.

Mike Santoli (16:46)

It's really remarkable how sports team values are now getting reflected. There's a couple of public market plays and you know, the Atlanta Braves and all the rest of it all of a sudden. And the group that comes to this meeting seems interested in those types of idiosyncratic type companies.

John Rogers (17:02)

They really do, you know. Melody Hobson, my co CEO has started Project Level to invest in women's sports related franchises and teams. It's a wonderful thing. And I look at the NBA, you know, is going to be a worldwide phenomenon. You're going to have NBA League Sunday in Africa, you're going to have them in Europe, you're going to have them in Asia. All those eyeballs will be watching NBA talent and you can see world championships. It'll be truly world championships. So still a lot of value in professional sports.

Mike Santoli (17:28)

John Rogers, thanks so much for getting us kicked off today. Really appreciate it. Enjoy the meeting. Right now we take you to this year's annual Berkshire Hathaway shareholder meeting.

Cash App Narrator (17:42)

Is bitcoin complicated or do people just think it is? For a long time it felt like something only tech experts or hardcore investors really understood. Between all the headlines, new terminology and everything people say about it, it can seem harder than it needs to be. But what if getting started with bitcoin didn't have to feel overwhelming. If you've been curious about Bitcoin but haven't made the jump yet, Cash App makes it easy. You can set up Automatic purchases with 0 fees or buy larger amounts also with 0 FE. Start small or go bigger. It's designed to be simple. Either way, for a limited time, new customers get $10 added to their balance. Just use code CASH APP10 when you sign up. And don't forget this part. Send at least $5 to a friend in the first two weeks. Terms apply. Cash App is a financial services platform, not a bank. Banking services provided by Cash App's bank partners. Bitcoin services provided by Block Inc. Brand for additional information, see the Bitcoin disclosures at Cash App legalpodcast hi, I'm Jennifer Garner.

Jennifer Garner (18:44)

Being a business owner takes hard work and a whole lot of miles. So once upon a farm needed a serious business card. We chose the Capital One venturex business card with unlimited double miles on every purchase. We earn rewards on all the things we need to grow our business. Venturex business gives us big purchasing power so we can spend more and earn more. We redeemed miles to travel the country and partner with new stores. Capital One what's in your wallet?

Greg Abel (19:10)

Terms apply. See capitalone.com for details.

Uber Narrator (19:12)

On any journey using Uber, it helps to know you're getting into the right car. PIN verification adds an extra step to make sure your ride is your ride before the trip begins. Your app gives you a unique pin. Just tell it to your driver and they'll enter it in their app before the ride can start.

Moderator (19:26)

Hey, what's your pin?

Student Questioner (19:28)

Mm, 2538.

Uber Narrator (19:30)

That way you know you're in the right car, taking the right trip, and your driver knows you're the right passenger. Make sure your ride is your ride with PIN verification from Uber. One more way Uber is putting safety at every turn. Learn more on the Uber app.

Greg Abel (19:47)

Now we'll move to the more formal or not the formal, but our traditional Q and A question and answer. And we'll go again to the stations and to Becky. But today we'll start with Station one. Station one.

Warren Buffett (Deepfake) (20:02)

Hi, my name is Warren. Warren from Omaha. I've recently undergone a, let's call it a significant change in role. And I have, well, let's just say a not insignificant portion of my net worth tied up at Berkshire stock. Now Greg, I've been watching this company for a while. Long time. A very long time. And I've been telling people that I had no intention of selling a single share. Not one. So my question is a simple one, I'm 95 years old, I've got nothing but time and Cherry Coke and I want to know just so I have something to tell my fellow shareholders, why should they hold their Berkshire shares for the long term. Anyway? Greg, let me take it from here.

Greg Abel (21:08)

Well, Warren from Omaha, very astute question. If I think of what we've already discussed this morning, which is our culture and values and highlighted that the bedrock of Berkshire, then what did it create? It created the foundation that we have today and that sees this incredible set of assets that exist within, within Berkshire. We have our insurance business led by Jeet and his team and we talked about the, it being the heart with talent and opportunities because we have capital available and it'll be available at different times. So we've got significant opportunities there. If I think of our, our non insurance businesses, I, I spent a lot of time on those. But we've got unique opportunities on the, on the operational excellence side and we'll pursue them and there'll be incremental investment opportunities in there. We have our equity investments as we know and we also have a very important asset. We have our cash in US Treasuries and it, it serves a couple purposes. One, and you've heard Warren Charlie say this before. I've said it. We do not intend to be beholden to anyone. We start with that position. Thank you. And it's how we manage Berkshire and we'll continue to manage Berkshire. Now that asset, the cash and Treasuries also creates a unique opportunity. It creates the opportunity to deploy it across these different groups. It can be and it will be dependent upon the opportunity that is there. Is it a strong value proposition? But if it presents itself, will be prepared to act decisively and with and with significant capital. That's what, that's what it's there for. And we have, well, we will and do have opportunities on the, within the equity investments that we currently have. And beyond that we have our operating businesses as I said and there it can be deploying capital back into those businesses as I touched on the capital expenditure side or it can be the incremental opportunity to acquire 100% of a business. And then there's the opportunities that Ajit's already alluded to on the insurance side. But what's the other unique thing is yes, Berkshire is a conglomerate and we recognize that, but we are a unique conglomerate in that we can move our capital very efficiently and that's the value of the conglomerate is we can move our capital very efficiently across each of those Groups. We can move it from insurance to non insurance into equities or if we so choose to hold it in cash or back across those in a very efficient way, in a very tax efficient way. I would also add to the fact that how are we unique as a conglomerate? We live by the fact that we hate bureaucracy. We do not embrace in our. Thank you. Yes, Jeet's the biggest fan. He reminds me constantly and I love it, I treasure it. But no, we've heard many times the ABCs, the arrogance, bureaucracy, complacency that can creep into a company will kill a company. And we intend to never allow that to happen. So we have this unique opportunity to both take the businesses we have today, take that foundation and build upon it. We also have that capital to be deployed back into them. How will personally, myself and the team define success? We'll define success is can we ensure that Berkshire endures in its current form. That means we do business as we do today, consistent with the cultures, values, business principles we have with the both the long term objective and with great purpose and intent, create long term value for our shareholders that will define success.

Warren Buffett (Deepfake) (26:02)

Anyway, Greg, I'll let you take it from here. I've got a few things on my plate actually. Excuse me, I need to take this. Someone may want to sell me their business. I hope it's an elephant.

Greg Abel (26:25)

Now, as you, as you've all picked up, that was a, that was a deep fake. But, but here's the interesting thing. That was, that was done with zero input. For more in voice photo. You know, we, we got, we were able to obtain that with information that's out there and replicate those actions and that voice and the reality is that's what we're dealing with when we think of Berkshire and how we have to protect it every day it can go to deepfakes and they're using a way to try to penetrate our business. It can be the cyber attacks, but it's a, it's a great reminder for our team because that is a significant risk across Berkshire that we're managing every day. Cyber risk. And it's one that we take extremely serious. I touched on the technology side. We're constantly using technology to protect our businesses and then we're also trying to use technology to identify it. We've all or a lot of us have heard about Mythos and what's going on there. We're very focused on those risks. But Ajit, before we move truly to our first question, and you've touched on this many times, when we think of cyber risk and we insure it. What's our current approach across our insurance businesses and your thoughts there?

Interviewer (27:51)

Okay, so cyber is something we worry about in the insurance operation at two levels. Firstly, there is a huge demand by people in business all over the world who are interested in buying protection against some kind of a cyber incident. We have been slow in terms of consciously, we have been slow in terms of entering that class of business as an underwriter. The reason for that is, firstly, on cyber, I find it very difficult to have some meaningful method to assess and model the aggregation. People will tell you we've got it under control and they'll show you all kinds of models, but nothing that I can really hang my hat on in terms of we really have a good feeling for what the aggregate exposure is, because any risk we take on the first question, we ask ourselves, how bad can bad be? And I'm not sure we can answer that question as well as we should. So the second reason is cyber has been a very popular, fashionable product in these last several years. We have not played in it. Now, as it turns out, there haven't been very many cyber losses. So people who've taken on cyber risk have actually made profits. And as a result of which, the premiums that cyber insurance commands has been coming down over time. So we'd hate entering a line of business where prices are coming down. So we're sort of sitting on the sidelines, and I'm not sure when, but I'm pretty certain that the day will come when we will have a fairly significant role to play in cyber. Secondly, you know, we being a large company exposed to cyber perils ourselves, we try and do the best we can. We, I think, are as good as anyone else. Now, cyber insurance is very highly regulated by the regulators, and we've been consistently above what the regulations call for. So I think we're doing the best we can, but I cannot be categorical about it.

Greg Abel (30:19)

Thank you. Go to the now, truly the Q and A session. Becky, we'll start with you and thank you for being so patient. Thank you.

Becky Quick (30:36)

Thanks, Greg.

Moderator (30:37)

This first question, Ajit, let's follow up with the AI. This is slightly different, though. This comes from Billy de Ross in Ardsley, New York, who writes, in an era of increasingly complex risk models and AI tools, where does human judgment still provide Berkshire a competitive advantage?

Interviewer (31:00)

Okay, Becky, just repeat the last part of the question.

Becky Quick (31:04)

Yeah.

Moderator (31:05)

Where is human judgment still a competitive advantage for Berkshire when you consider AI tools that are out there?

Interviewer (31:12)

Yeah. So AI also is very fashionable, right? Now people are jumping into it from the insurance space and from the non insurance space. And clearly if AI becomes reality as is being projected, then there's no question about it, it'll be a huge game changer. Right now what we are seeing is AI being used as a productivity tool, as a mechanism for reducing labor costs and, and doing routine, repetitive things. I do not think I will reach a point where you can make a trade off on things like pricing, settling a claim that is still years away. And, you know, I tend to be skeptical. I'll be surprised if I can solve that problem for you. So if you're counting on AI telling you which stock to buy and which one to sell, I don't think that's going to happen.

Greg Abel (32:16)

Ajit, I, I, I found it interesting. Aid and I were together a few weeks ago and Ajit got his team on the phone because we were discussing this exact question. Becky. And your team immediately went to. Yes, the cyber risk, which we've already touched on. They then went quickly to the fact that really across the insurance businesses. And it's that building concept that we're very focused on. How do we become more efficient in creating code and managing it? They immediately went to that aspect of it. And then as you touched on becoming more productive, more efficient, and they went as far to say, I thought the example was really good. I mean, if we were looking at a risk and we had our traditional underwriters doing it, we might have looked at the five largest risks. And your team highlighted that. Now we can pretty much, in a fairly quick way, yes, we focus on those, but we'll get a very quick view on another. Using technology, we'll probably look at those other 15 risks and have a strong view on it. Is that fair?

Interviewer (33:24)

Yeah, that's it exactly.

Greg Abel (33:26)

So using it within the businesses, but well aware it's evolving, I think is a fair way. Yeah. So thank you. Thanks, Ajit. Thank you. Now formally, Station one, unless Warren, you're up there again. Hi, everyone.

Lavia (33:44)

My name is Lavia and I'm from Irvine, California, born in Kunming, China. And I really want to say it's my honor to see both Mr. Buffett and Mr. Alba today. I really want to assume, Mr. Buffett, your speech has helped me get through many, many dark moments in my life and stand back up, not only in investment. I really appreciate you. Okay. My question is, as a young investor navigating both uncertainty and rapid technology change, I often struggle to balance my patience with action. How would you personally distinguish between the two, please?

Greg Abel (34:34)

Sure. I Think. I think one of our greatest strengths at Berkshire is patience and being disciplined when it comes to allocating our capital. There will be opportunities that come over time and for yourself and it doesn't mean there's not opportunities now, but it doesn't mean you need to deploy all your capital or spend all your money right now. And that's really our approach we take every day. And we recognize we've got a significant asset in our cash and US treasury is using it ourselves as an example. And I would think of the cash you're holding is that, and that's an asset. It's a great opportunity. You'll, you'll feel the moment or feel there's a strong value proposition within opportunity. When do we see those? We, we've outlined our investment philosophies which is one, we very much have to understand what we're investing in. So we want to have a strong, it can be you touched on technology and the things you're seeing there and the evolution and how fast it's all changing. I always start with, and I know we always have at Berkshire, do we understand this business? Do we understand the opportunity and more importantly, do we understand the risks? Then we want to have a very understandable view of what the economic prospects look like for the next five, ten years. Not, not yes, the next year matters, but we're not in that investment for a year. It has to be a long term view of where that, where that opportunity will go. We take it one piece, one step further. We're going to be in these investments forever. So we think that way and we need to, we, we like to have a strong view on the management team that they're, they're capable and operate with, with high integrity and if, if we can get to that position. But the most forward one being then at the end, the value has to work for us to deploy our capital. We're not anxious to just deploy capital into subpar opportunities. We want to know it meets our principles and then we'll, as I said earlier earlier, we'll act decisively both quickly and with significant capital. Anything you'd like to. No, thank you, Becky.

Moderator (37:16)

Oh, this question is for Greg and it comes from Mark Lunder in Miami who says he's been a Berkshire shareholder for 30 years. He said, greg, given your background as a business operator, which difference from Warren's roots as a public market investor, could you share how you balance your time between overseeing the wholly owned subsidiaries and the $288 billion now equity portfolio? Also does your operator Lens change how you evaluate new investment opportunities compared to Warrant's historical approach.

Greg Abel (37:54)

Thank you, Becky. So obviously, yes, the many years of operating a variety Berkshire Hathaway Energy and then in the role of the vice chairman of non insurance operations. Fortunately that was. Jean and I were in those co roles for the past eight years, nine years now. But that created a very significant opportunity for myself personally to understand those businesses. And as I've already touched on, we have exceptional businesses, exceptional leadership there. But there's still opportunities there. But, but it does. REM does. I'll spend a certain amount of time associated with those businesses and, and make sure we're allocating our capital properly and we're still thinking about risk across those businesses and encouraging operational excellence. Because listen, having been inside a business it's easy to look at your internal metrics and convince yourself you're doing okay and you have to look outside and say well what is the customer seeing feeling what are our competitors doing? And I think that's what we can bring on the operational side, I've touched on bringing Adam on or him taking on the incremental role across 32 businesses. He'll bring that great operating knowledge and we have a sheet on the insurance side now when it comes to the equity portfolio and again allocating time still we have significant opportunities there as we look at deploying our capital that that's on the balance sheet and I, I shared where our, our cash and and US Treasuries were. I would highlight if you think of our equity portfolio as it, as it exists today. I articulated this in the letter. It's in a, it's in a very. We have a concentrated portfolio and we highlighted that by calling it across the core. But it's the best name is really a concentrated portfolio of investments. And we had our, our core for you and you concentrated investments. I highlighted in, in the letter we have our Japanese investments and it's interesting if you then go to the next number of companies where we have positions that are very significant and I would add that associated with those we may still be acquiring shares or, or rationalizing what's the right position across that portfolio. So the first group when I highlighted it was just under 200 billion and remains at that we have and closer to 100 say 85 billion right now. You then add in associated with be it the other investments you have a B of a Chevron, Google, companies like that. There's another $70 billion of investments. And, and what that highlights is a very significant portion of our total investments are highly concentrated and sit across a limited portfolio that the, the active management of that is really limited is really what I'm, what I'm highlighting. We know those businesses well. We know the management teams. Those are the things that Warren and I would still be absolutely collaborating on and discussing discussing. We don't have to discuss them every day, but if there's something going on across those businesses, we'd be discussing it that week or that month and maybe it's where they're going or what we've, we've learned. The Japanese companies just announced their results in the last 48 hours and that was an active conversation and I, that Warren and I had just around their results and the businesses and what we're seeing there yesterday morning. So those are core, but it doesn't mean we just set them aside or they're concentrated investments. We're constantly aware of them and evaluating them. Ted manages another 20 billion or just under 20 billion of our capital and his responsibilities go far beyond that. He obviously helps us across a variety of our other opportunities or helping us assess risk or capital deployment in our, in our businesses. So we're fortunate to have that. But it's a, it's a portfolio that's very manageable when you think of the, the management around it and the, and what's required of it. The, the as as we've touched already is the opportunity to deploy that cash in U.S. treasuries at the right time is a very significant opportunity, including equities, including what we may see on our, our, on our. Within the operating businesses and including the, the insurance side. But so when it comes to allocating the time, yes, there's a certain amount of time spent on operations and, and we'll prioritize that because we see a huge opportunity to continue to improve and close those gaps and operational excellence. We see opportunities within our existing portfolio but that's, that is either adding to them or right sizing it and then constantly evaluating what other opportunities are out there either in whole totality, acquiring a company that's private or public, equally looking at what are the incremental opportunities if we're going to own a piece of a company and those are evaluated in the same fashion, that is we look at, as I said, economics and really tied to the last answer. Ajit, any thoughts here?

Interviewer (44:08)

Yeah, I really think capital allocation and operating businesses are two sides of the same coin. And a comment that Warren had made several years ago, I think goes a long way when he made the comment saying that a good capital allocator will make a good operating manager and vice versa.

Greg Abel (44:34)

Well said, Ajit.

Interviewer (44:36)

I didn't see it.

Greg Abel (44:39)

Well said, Warren. No, but obviously we recognize it and it the last thing I just say around that and I owe it. I mean when you think of our operating companies and I touched on this, we have a very deep bench. We have exceptional operators that understand their business, they understand their industry, their customers. Yes. Do we have still have opportunities to get better? Yeah. It's continuous improvement and we'll close those gaps. But we have exceptional teams there. And be it myself, Adam, we spend our time making sure we're comfortable how the capital is allocated. Do we understand the risks and then are we aware of those gaps? So thank you, Becky. Let's move to station 2.

Jackie Han (45:27)

Good morning Mr. Evil and Mr. Jin. My name is Jackie Han from China, currently working in Toronto, Canada. This is my ninth bookshare meetings. So I guess I'm officially a repeat customer. And like the most shareholders, I plan to stick around for the long term. Over the years, Mr. Buffett has often said that capital allocation is Berkshire's most important responsibility. Today we are in a very different environment. Interest rates are higher, cash actually earns something again. And competition for quality assets has increased globally. The station lady actually read my mind a little bit actually. My question is how should long term investor think about their capsule allocation approach today when patience has a real opportunity cost. And also for Mr. Abel, as you step further into this role, how do you personally balance patience versus action, especially when standards are shaped by decades of Ms. Buffett's track record. Thank you, thank you.

Greg Abel (46:31)

And thank you for attending your ninth shareholder meeting. Yeah. So again when it comes to our capital allocation approach and, and the in the long term approach we've taken, it's very much aligned with our owners and our shareholders that are here. They've taken a very long term approach around their, their investment. They've. We're fortunate to have this unique ownership base within our, our shareholdings. And again over the long term there will be significant opportunities for Berkshire and this is where it's back to the patience and the discipline around capital allocation. Do we have any idea what will occur tomorrow or will that event be three years from now, two years from now? But there will be dislocations in markets that again will allow us to act. And that's where the both disciplined approach, knowing how we're going to our investment philosophy around those activities. And I would add it's not that we don't see exceptional companies out there today that we'd love to own a. I'll be careful because I wouldn't want to say we, we, long term, we'd be happy on those companies because there's excellent companies that have excellent management teams that, that we evaluate. And I would say when you think of the world, it doesn't mean there's multiple handfuls of those type of companies, but they're there. But the price relative to the opportunity, the economic prospects of that company and the related risks, we're not interested in acquiring those, those companies at that, at that price. And that can be a piece of them or all of them. That, that doesn't mean that opportunity won't be there in the future. It's what we spend our time preparing for. That is one, being disciplined, but two, being aware of some core opportunities we would treasure or value at the right price. And that really ties back to the discipline. And you asked me personally my plan for patience over maybe quote, action. Again, it aligns to, I took this role and am so fortunate being in work with Ajit and others. But we do it because we love and believe in Berkshire. Warren brought this great commitment to Berkshire, a great understanding of Berkshire and passion. And with that he wanted to create something that was very long term, including the opportunities it would create personally. And I know all of us, we bring that same passion and we fully intend to do it consistent with how we've, how we've done it in the past. So thank you. Yeah, yeah, Xi, please. I should have. Thank you.

Interviewer (49:57)

You know, insurance, much like investing, is a game that requires patience. And it is very difficult to get people to sit back and do nothing. When I recruit people, my modus operandi, I tell them right up front. I said, I tell them, your job is to say no. You will get bombarded with deals day in and day out, but your base case is just say no. I said every now and then you will come across a deal that will hit you with a two by four and it'll be screaming money. That's when you come to me and we make a decision whether to do it or not. You know, all kidding aside, it is very difficult to sit there and do nothing while everyone else is being mined and dined by brokers and taken to London. I think the real test of being successful certainly in insurance and therefore investing as well, is the ability to say no.

Greg Abel (51:13)

Yes. Well said. As you. I think it applies to insurance and I think your earlier comment, I mean it is, it's so applicable across all our businesses. They did remind me of one story and I'll just share it quickly. We, we were, we'd acquired a company and we were still in having a challenging matter with how we were going to resolve some matters. And I remember the, the deposition, and I don't want to say it's one of my most proudest moments, but it was close to it. They said, well, how would you describe Greg as a, as a CEO and a manager? And they said, well, all he says is no. And I think that's part of management. You have to be ready and including investment, you have to be disciplined. Disciplined and ready to say no. And trust me, we understand that a lot of people have this urgency to act, but you described it incredibly well. Thank you. Let's go back to Becky.

Becky Quick (52:17)

Thanks, Greg.

Moderator (52:17)

This question is for Ajit, and the writer is Mindy Wasserman. The question is how and when can you offer insurance to ships crossing the Strait of Hormuz?

Interviewer (52:34)

I mean, the short answer is depends on the price.

Greg Abel (52:47)

Ajit, I like your Charlie answer. Obviously, some thought has gone into that because there's a lot of dynamics there.

Interviewer (53:01)

Yeah. There is a lot of chatter. There's a lot of need. Fortunately, there's enough capacity in the industrial world today that would like to right that risk for no other reason, but people are sitting on excess capital and they'd like to find a way to deploy that excess capital. We ourselves have taken small participation in a program that's being put in place so as to write insurance for the ships in the, in the state of Hormuz. We haven't written any deals as yet. It's still being fine tuned. But if we can get our terms in terms of the underwriting decisions and the fact that the US Navy will escort these ships, we have put a price on which we will be comfortable underwriting that risk. But nothing's happened as yet.

Greg Abel (53:56)

Thank you. Thanks, Ajit. Thanks, Becky. Station three.

Jia Shen (54:06)

Good morning, Mr. Abel. My name is Jia Shen and I'm from China. So my question is about the key investing principle, staying within your circle of competence. I imagine you and the Mr. Buffett each have a somewhat different circle of competence. So how do you plan to manage the portfolio by. Established by Warren Buffett? Thank you.

Greg Abel (54:34)

Thank you. Yeah. As far as managing the existing portfolio and what's in that? That portfolio, as you, as you touched on, was put together by. Put together by Warren, but it is a group of companies that Warren understands thoroughly. And I would be very comfortable that I understand the businesses, the economic prospects of those businesses. So. And that's why when I outlined it. In the letter, I was really trying to send the message that, yes, we're very comfortable with those, we understand it. And yes, it's a concentrated portfolio, but their businesses will evolve and there's risks that may surface, so we'll constantly evaluate it. But it's a portfolio very, very comfortable with. And Warren touched on Tim's, Tim Cook's amazing success with Apple. But Warren and Tim were recently discussing this and they were talking about, Warren didn't invest in it because he saw it as a technology stock. He saw what the product was and how much the individual consumer valued it. And it's a remarkable perspective, but it would be very much a similar perspective that I think many of us would, would apply. But, you know, maybe electricity. I know a lot. I know how to make sure something gets generated and how we're going to transfer and all that. But am I really that interested in how they make the Apple phone? I, I'll be intrigued by where they make it and some of the risks and challenges around that. But I, I do fully in our team, you know, when we talk about it on a more broad basis, listen, we're looking, saying, do we, do we understand the value and what, why that product has value? And it's really that value to the, to the consumer. I think the unique opportunity we have and so fortunate is that Warren comes into the office each day. It's fortunate that we get to discuss potential, other opportunities that may be out there, bringing a different set of skill sets. But in the end, we're going to narrow pretty quickly down to what's, what's the opportunity? Why, why is it valued? Why does the consumer, whoever's using it, the whatever industry is it. It is what's, why will that company and that product endure? And then associated with that, where are the risks associated with that? And that. And that pretty much is how Warren approached it, how I approach it. So the, when it comes to our existing portfolio, yes, we'll always be well, well aware of what we've invested in. But as far as understanding those, the opportunities and risks within them, very comfortable that have a strong view in that and we're comfortable where we're at. Thank you. Ajit, anything there?

Mike Santoli (57:54)

No.

Interviewer (57:54)

Okay.

Greg Abel (57:54)

Okay.

Moderator (57:56)

Becky, this question is for Greg, but I think it's important that you take it while Ajit's on stage with you so he can answer some of it too. It comes from Zachary Phelps from Medfield, Massachusetts, who writes. Ajit Jain has been described by Warren as irreplaceable. He's helped build one of the greatest insurance operations in history and has been the backbone of Berkshire's underwriting discipline. How are you thinking about succession planning for Ajit and the insurance business? And how do you ensure that the underwriting culture, the insurance moat, is preserved in the next generation of leaders? And Greg, I'll just add, for compression's sake, I did get questions about your succession planning too, so maybe you can add that in there.

Greg Abel (58:41)

I don't know how I'm supposed to take that. No, both succession, obviously succession's an important topic and I'll come back to our board, both relative to Ajit and I, and I touched on this earlier. I mean, Ajit joined Berkshire in 1986 and is the architect of our insurance business along with obviously Warren and input from Charlie. But it's a. We've created a franchise that's second to none and we couldn't be more proud of it. And as it was touched on the culture and the discipline within it, within it is exceptional Now. I found it really interesting and I, you know, when Warren announced the transition last year and as you don't recall this, the very first thing that happened was we left that meeting. There's a lot going on and Warren said let's to Tajitu, but then also myself, let's get the insurance managers together, our top five, along with Ajit and with Mark Hamburg and let's, let's sit down and talk about the business. Let's talk, let's discuss the culture. And it was a remarkable opportunity for me to one, expand my knowledge base on the insurance side. And I obviously been working with Ajit for a number of years and had other board opportunities or had a wide understanding of it, but then to spend time with the sheet and our team and have Warren's perspectives, it was great. And that was literally the first action Warren took. And what I could see within that group was a very deep group of management experience, insurance experience. And they absolutely had the same values and culture that, that Ajit has highlighted now. I think when it comes to culture, she touched on it already, which is, it is challenging to keep a culture where you maintain that discipline because as he said, inaction and telling people, you know, take a few months off when they're used to being active is not easy if they're that type of underwriter or, or selling products. So that's the delicate balance. But when it, when it comes to Jeet, we're fortunate he's got an exceptional group that works with him and, and then also operates a number of our critical subsidiaries, they're. They're deep in both knowledge and talent. I would then also highlight our board takes the succession issues very sincere. Seriously, both with Ajit and myself, we have a. We have a plan. They have a plan in place and they discuss it. So if Ajit were unable to perform in his role today, or I was unable to perform, our board knows what action they would take. Ajit.

Interviewer (61:46)

Yeah. So in terms of the culture and the underwriting orientation, which is so critical, there are a few simple rules that I've followed over the years and it's come at a cost, but I think net net is still a positive. Let me just lay it out in terms of how I think about this issue. Firstly, we have a very small number of people who actually get involved in the decision making. My top three lieutenants in my reinsurance operation, forgetting about companies that we acquired. We have been together for 35 plus years now and we've become friends. And the other thing, to minimize any kind of competition among these people and stepping on each other's toes, we have a compensation plan that gives fixed salaries, fixed compensation to the individuals, as opposed to having some complex formula that results in they get the upside and Berkshire gets the downside. I try and stay away from that as much as possible.

Greg Abel (63:03)

Thank you.

Interviewer (63:03)

A problem with all the compensation plans I've seen then. The other thing that is important is. People need to have experienced going through a tough time and the fact that it doesn't penalize them. We insulate them from the ups and downs of the marketplace so that they feel secure and they do the right thing and. Yeah, so those are the elements that I think allow us to have a long term orientation and not get sucked into the latest fashion of the year and just do stuff for the sake

Greg Abel (63:45)

of doing your compensation question. Such a critical point, Ajit?

Interviewer (63:51)

Yeah, yeah, the compensation thing. Having seen all these programs over the years, I remember having mentioned to Warren at some point in time, I said, warren, you give me a compensation plan, I'll game it. You'll not be able to figure it out for years down the road. And that's the problem, together with the fact that if the employees lose, they want to go back and renegotiate the plan. And if they win, they're happy to walk away with everything. So that's the big challenge.

Greg Abel (64:26)

Thank you. Thank you, Ajit. Thank you, Becky. We'll go to station four.

Student Questioner (64:36)

Hello, Mr. Abel. My name is Kansas and I attend Elkwin South High School in west Omaha. Mr. Abel, you may remember me from last year. And I'm here to question your company's business model again. It is compromising my future and the planet's future. Mr. Abel, in your first letter to shareholders, you wrote, berkshire Hathaway avoids businesses that undermine the fabric of society. But Berkshire's electric utilities continue to invest in fossil fuels that are driving the climate crisis. Can you tell me and my graduating class when Berkshire Hathaway's utilities will retire their fossil fuels, transition to renewable alternatives and stop causing irreparable damage to the environment and my generation's future? Thank

Warren Buffett (Deepfake) (65:25)

you.

Greg Abel (65:31)

Thank you. I, I had a very long and extensive answer last year to the, to the question. And, and it is an important one, but I think it's one we have to recognize when we, and we, we have. I'll touch on rail or rail too. We have certain companies where we very much operate now. And this would be our utilities. It would be our, including our pipelines. We operate as a steward of those assets. We operate as a steward of those assets effectively for our states and for our customers. And whenever we approach resources, for example, that we may own or what we're going to build, it's very much first and foremost we absolutely need to comply with the current laws that are in place, including the federal laws, so we know what those parameters are. And as we see federal law and state law across our many states. But the federal law, there are things they do and there are things implemented to reduce the impact on the environment. We're very sensitive to that. And our, our teams are absolutely committed to both complying and absolutely doing it right. I would then add that if we're discussing our facilities, for example, across the river in Iowa, we have plans on resources and when we'll retire our coal units potentially and our gas units, that's very much driven by state policy. The state will decide that is through their policy legislature and through our regulatory processes how we'll operate, how long we operate these assets. Because in the end it's that those customers that both bear the, bear the cost and bear the risk and very much we are very respectful of that. And as I said, we're stewards of that. Do we provide input into that process? Absolutely. So, for example, I, I know I touched on this last year, but if I look at our Iowa utility, this is, this changes every year because of the load growth we've discussed. But if we look at, on a, on a, on a 12 month, 365 day period, 93, it'll be very close on this. Approximately 93% of our energy came from renewable energy. That's remarkable. They. They absolutely lead the nation. And we've done that in a way where we could do it in an affordable way. But yes, we still have our carbon resources there. We still operate our. Our coal plants. We need them to deliver, as I would call protection to the system. I. It stabilizes it and there's peak times. We need it. But do we use them less? Absolutely. But that's a policy our state made many years ago, and we provided a lot of input, as I said, and we've deployed the capital to ensure that could be delivered. But the reality is, state by state, they'll decide what resources we'll deploy to serve the customers, and they'll also very much provide us input on when we'll retire our units. The real challenge going forward, and it's well beyond Iowa, because I think Iowa and our other utilities, we approach it in a very prudent way. And we've got one. I. Prudently, we're doing it consistent with our state policy, but want to do it in a. Call it a frugal way. We're trying to. We're not building for just sake of building. We're trying to do things that we feel are best for our states. But, but the challenge is when you talk about the hyperscalers and the data centers, there's. That's putting a lot of pressure on the system. And there'll be a, you know, if you, if you look at the amount of gas units purchased, there'll be an incremental amount of carbon units used as we go forward, if that's going to be a valued. If artificial intelligence and the consumers want that, that. And that's a valued product. It's going to put a lot of pressure on the systems and on the type of assets we use and the industry uses. Ajit, anything on the insurance side? Because I know you've gone on the insurance side as far as how. What do we ensure, how do we approach it?

Interviewer (70:41)

Yeah. So right now, in the insurance sphere, the supply is greater than the demand, and that makes it very difficult to be able to carve out a deal that rationally is good for the buyer and the seller. When supply is greater than demand, then it's the seller that loses. So because of that, we haven't been active in getting involved in writing insurance for these new facilities, the data centers, the hyperscalers.

Greg Abel (71:18)

Yeah, yeah.

Interviewer (71:20)

But clearly there is a surge in demand. And as long as supply doesn't go crazy, we will get a few days in the sun sometime in the next few years.

Greg Abel (71:34)

Yeah. Thank you. Very valid question, but again, very, very proud. I would say literally proud, because I think the one thing we've always emphasized across our utilities, across our regulated entities, that would include bnsf, they have to move certain product that has certain risks and dangers around it. We are a carrier of that. We have to. That's an obligation that came with, with that railroad. Just like our utilities, there are certain things we do that are absolutely required. And the key is that we do it consistent with what's required both federally and at the state level, and that we're exceptional stewards of the underlying assets. So with that, I just. We're going to move. Ajit, thank you. We're going to move to our next session.

Jennifer Garner (72:37)

Hi, I'm Jennifer Garner. Being a business owner takes hard work and a whole lot of miles. So Once Upon a Farm needed a serious business card. We chose the Capital One Venture X Business card with unlimited double miles on every purchase. We earn rewards on all the things we need to grow our business. Venturex business gives us big purchasing power so we can spend more and earn more. We redeemed miles to travel the country and partner with new stores. Capital One what's in your wallet terms apply.

Greg Abel (73:05)

See capital1.com for details.

Uber Narrator (73:07)

With Uber's new women preferences, women riders can request a woman driver whenever they want. Like Amy, who's traveling solo in a city she's never been to before. Or Danielle, who works night shifts at the hospital. Or Kelly and Jana, who were way overdue for a night out because sometimes comfort comes from having another woman with you. Request women drivers with women preferences on Uber. Learn more on the Uber app.

AT&T Business Narrator (73:37)

Before we had AT&T business Wireless coverage, our delivery GPS wasn't the most reliable. Once our driver had to do a 14 point turn to get back on route. A 14 point point turn, an influencer, even live stream the whole thing. Not good for business. Now with AT&T business Wireless, routes are updating on the fly and deliveries are on time. And the influencer did get us 53 new followers though.

Greg Abel (74:02)

AT&T business Wireless Connecting changes everything.

Becky Quick (74:12)

Thanks for listening to our coverage of the 61st Berkshire Hathaway annual Shareholder Meeting. There's more to come in a second podcast and then a third. If you already follow Squawk Pod, that should be coming up right in your feed. Check out our show notes as well for links to more resources and a listening guide to this podcast.

Becky Quick (74:29)

I'm Becky Quick.

Becky Quick (74:30)

Stay tuned.

Dr. Guy Winch (74:39)

Men are struggling with their mental health at some of the highest rates we've ever seen, but most aren't getting the support they need, and that needs to change. I'm Dr. Guy Winch, your host for season three of the Visibility Gap, presented by Cigna Healthcare. This season, we're focusing on men's mental health, bringing together real stories and expert insight to explore the pressures men face every day and why opening up can feel so difficult. Join us for the new season wherever you stream your podcasts.