Becky Quick (1:42)

Big shoes to fill and a big promise.

Greg Abel (1:44)

I'm committed to doing this every year. Your entire salary, my entire salary as long as I'm the CEO.

Becky Quick (1:51)

All that and more coming up today. It is Thursday, March 5, 2026. Squawkpod begins right. Good morning everybody. Welcome to Squawk Box right here on cnbc. I'm Becky Quick along with Joe Kernan and Andrew Ross Sorkin. Andrew, good morning. It's good to see you.

Joe Kernen (2:09)

Morning from Washington D.C. but you can't tell right now because it's like Foggy Bottom behind me. This is typically where you see the Capitol right behind us. You know, this shot.

Becky Quick (2:19)

Wow.

Joe Kernen (2:19)

Joe was just, Joe was just sitting in this chair before I think about a week and a half ago. And here we are in anyway maybe

Andrew Ross Sorkin (2:27)

the fog go away. We'll take your word for it. Hopefully it's there. We didn't miss anything.

Joe Kernen (2:35)

The clerk will report.

Becky Quick (2:36)

Senator from Virginia, Mr. Kaine moves to discharge SJRES104 to direct the removal of United States Armed forces from hostilities within or against the Islamic Republic of Iran that have not been authorized by Congress. From the Committee on foreign relations, Mr.

Joe Kernen (2:51)

President, Senator from Virginia. I ask for the yeas and A's.

Becky Quick (2:54)

Mr. Johnson. No. Mrs. Capito.

Andrew Ross Sorkin (2:57)

No on this.

Joe Kernen (2:58)

The yeas are 47, the nays are 53. The motion to discharge is not approved.

Andrew Ross Sorkin (3:04)

The Senate voting down an effort to stop America's involvement in the Iran war. The vote on the so called War powers resolution was 47 in favor to 53 opposed. It was largely along party lines. Passage would have meant senators would have a say before future US attacks. The House is set to vote on a resolution today. Even Senator Fetterman who voted no on it. Rand Paul went the other way and voted yes on it. But Fetterman was pointing out this is all for show because he has 60 days from the beginning of before anything. So it was just done to register disapproval at this point and nothing was going to happen and it wouldn't happen anyway and it wasn't going to pass. But certainly within Congress right to do this and they've done it in the past for different, for different operations. It goes back the only time we've declared war in the last hundred. I guess World War II was the last time there was actually a declaration of war and there were a couple of incidents with Obama guys where you still had something that was passed after 9, 11 that allowed for anyone even remotely concerned with that. You could make the case that I still have the authority to do something like that. Libya less so. And then some previous. I mean think about it. Korean War never declared. The Vietnam War never declared. It is. And as it. Remember when we talked about strategic ambiguity for Taiwan, the writers of the Constitution, they said one thing in article one and another thing in Article two and there is some ambiguity. The Commander in Chief has the right to command the military as he sees fit. Yet Congress has to weigh in on actually declaring war. So both sides have always been able to find enough wiggle room to do exactly what's happening.

Becky Quick (5:08)

The document has stood the test of time.

Andrew Ross Sorkin (5:10)

Yeah, yeah, they were, they were pretty savvy or they didn't know exactly how to.

Becky Quick (5:15)

How can you anticipate to be happening 250 years?

Andrew Ross Sorkin (5:19)

Like exactly 250.

Becky Quick (5:20)

Exactly right. All right. In the meantime, the CEO of Anthropic still trying to reach a deal with the Pentagon on use of his company's AI. The Financial Times says that Anthropic chief Dario Modi has been speaking speaking with an undersecretary of defense in an effort to define how the Pentagon could use the company's technology. An agreement could mean that Anthropic avoids the designation of supply chain risk. Reuters is reporting that Emodi has spoken about this situation in recent days with Amazon CEO Andy Jassy and others. Separately, in a letter that was shared with cnbc, a group of former defense and intelligence officials and policy experts called for Congress to investigate the Pentagon's decision to designate Anthropic as that supply chain risk. And without naming Anthropic, a tech industry group whose members include in video, Google and Anthropic voice concern to the Defense Department over that supply chain risk designation. In the meantime, the FTSE reports that OpenAI is looking to add to protections to its own agreement that was reached recently with the Pentagon. That deal has faced criticism from OpenAI employees, and CEO Sam Altman admitted that in his words, the timing of that deal looked both opportunistic and sloppy. And there is fallout kind of on all sides of this. It's a continuing conversation. We've been having the discussion here all week on set, going back and forth about what should happen. We brought it up yesterday with Treasury Secretary Besant. Just this idea. It's one step to say you're not going to use the technology. It's quite another thing to say that this is a supply chain risk, which means that Defense, that anybody who's a contractor to the government can no longer use that technology as well.

Andrew Ross Sorkin (7:06)

And there's nothing close. Sorkin. I mean, for what it's used for in this context, there's nothing. And we're still using it, right? Even though we say we're not. We still are, right?

Joe Kernen (7:16)

No, look, we're going to be using the Defense Department's going to be using Anthropic, I imagine, at least for the next six months as they get off boarded and maybe onboard other models in this particular moment. Yes, Claude. And the product that Anthropic provides is probably the quote, unquote, best product. Having said that, it's possible in two months from now that the next version of what OpenAI is doing will be the best version of it. It may be that Google is the best version of it. But interestingly to me, the backlash that's happening inside OpenAI and the fact that OpenAI plans to and if already hasn't effectively requested basically the same protections that Dario at Anthropic was requesting. I think throws this whole thing up into a question. So when you hear Treasury Secretary Bessen say, we can't have companies telling us what to do, well, if that's true, then why are we signing up deals with OpenAI? I think ultimately, and this is where I think Sam Altman is right, you don't want, effectively, CEOs to be making the decisions necessarily about how and what these products can or cannot do. Having said that, and you've probably heard the analogy many times, if you're going to manufacture a vehicle and it happens to have a button inside the vehicle that's under development, and you know that if you hit the button, it does terrible things. You're a health care company. You create a drug that mostly does good things, but maybe does some terrible things. The question is whether you should be selling. Either selling that product at all or if you're going to. It should probably come with restrictions.

Andrew Ross Sorkin (8:59)

We were talking yesterday. I understand the, you know, you don't want perhaps the security of all Americans being, you know, looked at, but don't we already have autonomous weapons that we're using? Isn't. Isn't that sort of what I mean? Not necessarily just drones, but. Okay, so we want them, and we're okay with it, but we don't want them being too good. I don't. I don't understand. Don't we want the best autonomous weapon? We just got to admit it. We want killing machines that work for war, and we want to give our soldiers the Joe we have.

Joe Kernen (9:35)

Right, sure. But the product. If the founder of the company is telling you that the product doesn't work,

Andrew Ross Sorkin (9:43)

well, that's a difference. That's a different story.

Joe Kernen (9:44)

But that. No, that is the story. That is the story. If you talk to Dario, he will tell you that they are trying to make the product work. They want the product to work. But there are still. You talk about hallucinations. You know, we have these conversations about how good or bad AI is. In this particular moment, it is unclear whether the product will work the way it's supposed to work all of the time. And if you're in the business of killing other people, I would hope that you would only want to use a product in which the company could stand behind the actual product. If you believe that, that component part,

Andrew Ross Sorkin (10:20)

if you believe that that's. There may be other reasons. You remember how many times in the past defense contractors just had this. You know, there was a backlash culturally against ever doing supporting or even.

Joe Kernen (10:34)

I don't think that that's, I don't think that's what's really not the issue here. And first of all, I don't think that's the issue. And I think the, I know that, but I think the secondary issue, and maybe it's really the first issue here, is one of personalities and of politics. I mean, unfortunately, that's, to me, where this has gotten really all bollocks up. We're talking about supply chain risk and this and that. But ultimately, if you understand Emil Michael at the Department of War and you understand where Dario is and you look at the politics of both of those, both of those folks, you look at the politics of the, of the Secretary of the treasury yesterday and some of the things that have been said over the years, and even where OpenAI is, it all makes a lot more sense than the underlying argument about what's allowed and what's not allowed, because effectively, OpenAI is trying to do exactly what Anthropic's doing anyway.

Becky Quick (11:25)

And Andrew, I will also say earlier this week we had Alex Harstick on with us. He is a veteran. He's now involved in and investing in all sorts of defense companies and beyond. His point was that the language of Silicon Valley is so different than the language of the Defense Department and that they end up talking over each other in some ways, too.

Joe Kernen (11:47)

It is easy to comment on the nomenclature difference between Silicon Valley and the military industrial complex. So when the Pentagon talks, the Pentagon is a command and control culture.

Becky Quick (11:58)

He thinks if you can boil this down and maybe get to the point where you have other intermediaries who are kind of helping you talk this through, you might be able to reach some sort of agreement. And I wonder if that's why, as the FT is reporting, Dario Modi is talking to Andy Jassy and others about exactly what this is.

Joe Kernen (12:18)

Well, look, the reason he's talking to Andy Jassy is Andy Jassy is one of their largest investors. That's why he's talking to Andy Jassy.

Becky Quick (12:24)

But he also has a better idea, I think, Andy Jassy of how to talk to the government in some of

Joe Kernen (12:28)

these ways, too, to some degree. But I would argue, by the way, Emil grew up in Silicon Valley. I mean, the guy who is negotiating this deal, the one who has been on Twitter saying what he's been saying about Anthropic and the like, worked at Uber, to me, this is not a conversation about people talking past each other or something else. These people know each other they know each other and don't like each other. That's what's happening here.

Andrew Ross Sorkin (12:54)

Well, that happens too. So we all can agree that we want the best AI operated autonomous weapons that we can possibly get, but we definitely don't want them like master weapons. We know we don't.

Joe Kernen (13:08)

Right.

Andrew Ross Sorkin (13:08)

But we don't want the weapons to be launched and then come back and hit the place they were launched. Correct. That would be bad.

Becky Quick (13:13)

That would be bad.

Andrew Ross Sorkin (13:14)

Okay, you want war games? We want them to work.

Becky Quick (13:17)

War games. I don't know if you remember the math we brought.

Andrew Ross Sorkin (13:19)

It's a moral question. Do you want the. I mean, think about the nuclear arsenal. Do you really want to make things like that that can never be used

Becky Quick (13:30)

or that can be used without a human?

Andrew Ross Sorkin (13:32)

Well, that was the. Think of the neutron bomb, leaves all the buildings, just kills people. Well, we're a business show, but these things matter.

Greg Abel (13:44)

Teas will be next.

Becky Quick (13:46)

Coming up, for the first time in some 60 years, Berkshire Hathaway has a new leader. CEO Greg Abel joins us for his first sit down interview since succeeding famed investor Warren Buffett earlier this year. And he came out of the gate with an 18 page shareholder letter. No pressure.

Greg Abel (14:02)

President Lincoln said, yes, this letter is very long, but I didn't have time to make it shorter. Use that to everyone because everybody would be texting me, yeah, I'm halfway through, but so far it's going well.

Becky Quick (14:16)

Squawk pod will be right back.

Joe Kernen (14:20)

Listen up. TrueTrade has revolutionized the trading industry with its AI driven technology. This isn't hype, this isn't theory. This is a smarter, modern way to engage the financial markets. True trade puts institutional grade trading technology in the hands of everyday Americans. Tools once reserved for the wealthy. No need to know what or when to trade. No trading experience. Doesn't matter. You purchase the platform, connect your trading account, download the mobile app and turn it on. It's that simple. And if that's not exciting enough, TruTrade assists their clients in accessing tens of thousands of dollars in tradable funds, giving you the ability to participate without risking your capital. Join thousands worldwide who are already benefiting from TrueTrade's trading technology. Visit TrueTrade IO that's Truid T R A D E IO TrueTrade where technology earns for you. Trading involves risk, including the possible loss of principal. See terms and conditions.

Becky Quick (15:15)

Cash now. More later from Opendoor. Gives you cash up front for your home, plus all the profit later. That's no chaos now. No cash left behind later. Skip the showings now, pocket extra profit later. This is so simple now. This is so awesome. Later or sell fast now and pop the champagne later. Cash now, more later. Now available nationwide. Start your offer@opendoor.com radio. Profits calculated after fees and costs. Eligibility and offer price may vary.

Greg Abel (15:45)

What do the steam engine, electricity and

Becky Quick (15:47)

AI have in common? These technologies not only change how we work, they can transform entire economies. I'm Stephanie Wong, host of where the

Joe Kernen (15:55)

Internet Lives, a podcast from Google and

Becky Quick (15:57)

Latitude Studios about the unseen world of data centers. Explore how data centers are unlocking growth

Greg Abel (16:03)

in every sector of the economy.

Joe Kernen (16:05)

From agriculture to medicine to manufacturing, data

Greg Abel (16:08)

centers are powering a new era of AI innovation.

Becky Quick (16:11)

Listen to where the Internet lives wherever you get your podcasts. This is Squawk Pod from CNBC Stand

Joe Kernen (16:20)

Becky by in 3, 2, 1.

Greg Abel (16:23)

Fewer please.

Becky Quick (16:24)

Good morning everybody and welcome back. We have some breaking news right now coming from from Berkshire Hathaway. The company has just filed a Form 4 and an 8K. And joining us to talk about those topics and his first letter to shareholders after taking the reins from Warren Buffett is Berkshire Hathaway CEO Greg Abel. Greg, welcome. It is great to see you this morning.

Greg Abel (16:45)

It's great to be here. Good morning, Becky. Morning, Joe.

Becky Quick (16:48)

Yeah, we really appreciate your coming on set. We have so much to talk about. But let's jump in with the news that is just crossing the wires. And that's what's coming from the 8K. That's the big headline here, that Berkshire Hathaway has begun repurchasing shares of the common stock under the previous policy that had been out there before. How many shares are you buying back? Why are we hearing about this?

Greg Abel (17:11)

Yes. So we've had a long standing policy that when the intrinsic value as we see it and computed on a conservative, conservative basis when it exceeds our market price. Berkshire has always acquired shares. That's been our long standing policy. We highlighted that in the 10k and in my letter that that remained in place and we've just recommenced yesterday. So the point being we see value, the intrinsic value exceeds the current market value. And we started recommence purchasing and we felt it was important to communicate to our shareholders, our partners, our owners, that with the transition of leadership and that this is the first time we're purchasing shares, it was important to let them know we've recommenced.

Becky Quick (18:01)

Yeah. The last time that you had bought back shares was May of 2024. Berkshire shareholders have long realized that it might be Charlie maybe or Warren talking to each Other kind of figuring what they thought was a fair value for the price of things. Did you talk to anybody about it or you looked at it, you thought this is a good time to be, be buying back?

Greg Abel (18:20)

No, absolutely talk to Warren. So how we, how I approached it was obviously looking at the value, having a view of intrinsic value. Consulted with Warren relative to the value and the timing of is it ready to, are we ready to recommence? And the thought there was. After the consultation we filed our 10k. We there's a 70, a 48 hour cooling off period Monday and Tuesday and we commence purchasing on Wednesday morning.

Becky Quick (18:51)

Have you been looking at this for a long time?

Greg Abel (18:53)

We look at it continuously.

Andrew Ross Sorkin (18:56)

What are the three top things that would make you think that is something to the price of sales? Is it what jumps out as, as a signal that the intrinsic value is not recognized by the share price? Which thing.

Greg Abel (19:12)

What we always look at is what are the economic prospects of each of our companies in Berkshire and we look at that over the long term.

Andrew Ross Sorkin (19:20)

Gut feeling more than are there numbers where you say okay this hit, you know, 80% of book this part of Berkshire or something like nothing.

Greg Abel (19:29)

That's really just looking at the economic opportunities that exist within Berkshire. And are we comfortable that the value proposition is very strong and we're doing it on behalf of obviously our shareholders and owners. We have to view this as value that we're creating value for our shareholders long term.

Andrew Ross Sorkin (19:47)

So if the stock goes up from, from the announcement or from the buybacks, how long, how long would you do this? How much will you keep doing it until it remains the case that you feel it's, it's undervalued? You can do as much as you want.

Greg Abel (19:58)

Correct. As long as our intrinsic value exceeds the market value, again conservatively determined, we'll continue to repurchase. But the one thing we have never done is we don't disclose the amount, the timing or the computation. But we did feel this time it was important because of the change in leadership that we should not even ballpark.

Becky Quick (20:17)

So we're not going to, we're not going to hear from hear something like this from you again. We won't know when you're in the market buying back.

Greg Abel (20:23)

This is a one time event to

Andrew Ross Sorkin (20:25)

let our shareholders say it's a $20 billion buyback and we are, we're halfway through, we won't know anything thing Correct. Is that a reasonable number? Could it be, it could be a lot more Berkshire.

Greg Abel (20:35)

It's completely dependent upon the intrinsic value and how that equation remains in place.

Becky Quick (20:41)

So Berkshire shares up until a minute ago were down maybe 1% over the last year. Market's been up. You guys have $373 billion in cash as of the last filing.

Greg Abel (20:52)

Correct.

Becky Quick (20:52)

I guess you're looking around and it tells you that this is something that makes way more sense to you than buying other things, other stocks, but making other purchases.

Greg Abel (21:01)

Exactly. We always look at effectively three buckets when we're allocating our capital. We have our existing businesses deploying capital back into those both for their current operations and incremental opportunities that really exists every day. And we're constantly challenging ourselves. Are we thinking about that properly? As you highlighted, Becky, there's also do we acquire stock? And when we're looking at companies, do we acquire whole companies also? And then there's the do we acquire equities, other equities. And we, as we've highlighted, we always look at that as very similarly to buying 100% or 2%. And then the third bucket where we deploy our capital is share repurchases. Each of those with the amount of capital we have are, can be done independently. So when we're purchasing our shares, it's not taking away from any of the other decisions.

Becky Quick (21:56)

Okay, we're going to come back to this line of questioning and some of these issues here. But before we do, I want to talk about another form that you put out today too. That's a Form 4. It may not jump out as people as being as significant as I think it is, but in it you say that you are buying 21 Class A shares. This is the disclosure of that $15.3 million. What's the significance behind that purchase?

Greg Abel (22:19)

Yes, and the significance is if you look at my 2026 compensation that I'll receive this year, what, what we've done is, and what I've done is taken the after tax dollars of approximately $15.3 million and reinvested it or purchased Berkshire shares with the after tax dollars.

Becky Quick (22:44)

All of the extra, all the after tax, basically taking all of your take home pay and putting it into shares of Berkshire.

Greg Abel (22:51)

Yes, and the why is really important. One, as we've always highlighted, absolute alignment with our shareholders, our partners, our owners is critical. I already have some shares, but the goal was to continue to demonstrate alignment with them. Two, as CEO, I absolutely obviously believe in Berkshire with, with the transition from Warren. And I inherited a company that has an incredible foundation. I believe in its future, the opportunities that exist there. So I was very excited to use my after tax proceeds and my compensation as you highlighted all of it and effectively do it as we came out of the blackout period. Now there is another part to this that's really important because I really view this more as a plan or an approach. I'm committed to doing this every year going forward. Higher salary, my entire salary as long as I'm the CEO. And I touched on it in the, in the letter. I hope it's 20 years, but I will do that. So we'll file our 10k, I'll write the letter and after the 48 hour cooling off period, I'll purchase 15.3 million next year or whatever it is after tax dollars.

Andrew Ross Sorkin (24:16)

I love, I love the Midwest, but I was kidding you when you walked in, I said is your first move. You're, you're going to Miami, you're going to move the headquarters Miami. But now I understand leaving in stay in Omaha. What are you going to spend your money on anyway? Right, as well buy some Berkshire. You got nothing to do. You're going to go out, watch some cows or something. That's free, isn't it?

Greg Abel (24:35)

There's nothing better than Berkshire. And it's what I do every day. I wake up, you know, thinking about Berkshire. I go to sleep, think about Greg,

Andrew Ross Sorkin (24:42)

if you decide to splurge on, on your commentary, it's like you're looking around, it's like I'm going to buy Berkshire stuff.

Becky Quick (24:48)

What I think is interesting about this, Greg, is that you are effectively taking home less pay than Warren Buffett was when he was taking home $100,000. That was the salary that he took. It was had to be the lowest pay in all of corporate America. Did he come up with this plan?

Greg Abel (25:03)

No, this was completely myself and by that I just mean I wanted that alignment again believe in Berkshire and, and the thought being that it did evolve, like I said, okay, I'm going to do this year. And then shortly thereafter I thought well no, I'm going to do this every year and it's best just to tell the world. And over that period of time it'll be hundreds of millions of dollars of, of my after tax dollars, just like our shareholders.

Becky Quick (25:33)

I can't imagine anybody, any other corporate leader doing this, but I can't imagine myself.

Andrew Ross Sorkin (25:37)

I'm not worried about how you're going to do on this either, so.

Greg Abel (25:42)

Well, I believe in Berkshire, but it is interesting. Becky and Joe, you're touching it like to me, of course it's a logical thing to do when you're leading the company and there's other leaders and CEOs that do the one offs every once in a while. But to take all your after tax dollars and to do it on something

Andrew Ross Sorkin (26:02)

similar with verse in stock. I with you. I'm an owner. I'm an owner and I.

Becky Quick (26:07)

You did not take your entire.

Andrew Ross Sorkin (26:08)

Got a couple hundred shares.

Becky Quick (26:10)

No, I did not take your entire. Greg, what did Warren say about this? What did the board say about it?

Greg Abel (26:16)

Both were obviously very supportive. Warren very much had your reaction that no one else in corporate America does this and said and the other thing is that this is so Berkshire because one thing we, we do not do at Berkshire across any of our businesses or with our executives, we don't have equity stock programs, we don't have option program.

Becky Quick (26:38)

You've never been given a share of Berkshire ever, Correct?

Joe Kernen (26:41)

Yeah.

Greg Abel (26:41)

So the whole idea is our shareholders, our owners use their after tax dollars to buy Berkshire. I'll do the same. So. So Warren acknowledged immediately the alignment with our values. And I highlighted this to our Berkshire board in our February board meeting and they were just absolutely supportive of it. Obviously.

Becky Quick (27:03)

Greg, Andrew's got a question as well.

Greg Abel (27:05)

Yes, Andrew.

Joe Kernen (27:06)

Hey, Greg, it's great to see you. I applaud it too. But I just, just to contextualize it because we talked about selling shares, am I wrong, back in 2022, that you sold Berkshire Hathaway Energy and collected effectively $870 million, by the way, which I also applaud. But I just contextually what's going on here in terms of your total, total compensation and what's going into this?

Greg Abel (27:30)

Correct. So. So Andrew, back in the summer of 2022, there was the decision to sell Berkshire, my Berkshire Hathaway Energy stock that had really accumulated going back to 1992 I think is the duration of those holdings. And obviously we had built the energy company, were acquired by Berkshire in 2000 and then in 2020, 22 monetized it. And again with a very similar concept, I took a portion of those proceeds on an after tax dollar basis and purchased Berkshire stock.

Becky Quick (28:14)

Yeah.

Andrew Ross Sorkin (28:14)

I bought, I'll just say about a heck of a lot more than 21 shares.

Becky Quick (28:20)

21 shares that cost $730,000.

Joe Kernen (28:23)

Oh, that's right.

Andrew Ross Sorkin (28:24)

Oh, that's right. Yeah, you're right. You're right. This was 32.

Becky Quick (28:30)

Greg, let's talk through some other issues. That $373 billion that you had on cash as of the last filing. Do you see other opportunities? Are you looking for a big elephant? Elephant hunting as Warren always said he was doing?

Greg Abel (28:46)

Right. So I touched on it a little bit earlier, but the 373 million and billion. A billion. Sorry. Thank you. Unfortunately, it's a billion. You know, we really view that as an opportunity. And so we do continue to look across the different investment options that exist out there. And there really are options. We're looking at these different buckets and looking for the right opportunity. But there is no need to. Obviously we want to deploy the capital into areas that we see long term value creation for our shareholders. But the goal isn't to just take down the.

Becky Quick (29:28)

I guess my question is, do you see value out there in the market right now? Are things expensive as you weigh them or do you see pockets of opportunity?

Greg Abel (29:37)

As we see opportunity, you'll see the capital deployed and we're deploying it in certain areas across our businesses, across certain repurchases of our shares, across other equity opportunities. But the, the repurchase of our own shares is a great example. Is that Warren and I were just talking about discussing this yesterday. We wish we could purchase more shares of our shares, but the intrinsic value has to be there. So if you go back over all the years that we've been purchasing shares, if we could acquire more, that's a great use of our capital, but it has to meet that intrinsic.

Becky Quick (30:14)

But that's what I'm kind of getting at. You are now the person who's going to be responsible for deploying all of this capital. I guess Ted Weschler is there. He's going to be. He has 6%. He's managing his money and the manage money that Todd Combs was managing before too. But what is your view of the market at this point? It's something we asked of Warren all the time. Do you think things are expensive? If you think Berkshire shares, you're going to buy back some but you're not going to deploy everything. You'd love to buy back more, but it's not cheap enough. What do you think when you look at the overall market?

Greg Abel (30:45)

Yeah, I mean obviously we've commented on our shares. We file our. Where we highlight what we've acquired and what we've disposed of regularly, you know, and we have some activity there, but it's not significant.

Becky Quick (31:02)

Yeah. Are you. I guess. Are you reading through 10Ks and 10Qs constantly and thinking I'm looking for ways to deploy this or are you looking at things a little differently than maybe perfect because you're such an operator.

Greg Abel (31:14)

Yeah, I'm an operator but I love businesses and I love reading. So I do the same thing. I'm, I'm going through case cues. I'm looking at their, what are they saying about their businesses. I'm looking at the industries that we, we traditionally look at and incrementally to make sure one have a thorough understanding of the industries, what businesses stand out there. It doesn't mean it's an immediate, that there's an immediate value proposition there to acquire it, but that doesn't mean. Or a portion of the business, but it doesn't mean it won't be there a month from now or three months. So I view of it a lot of preparation waiting for when we see that opportunity, that the, the value exists within a specific opportunity.

Becky Quick (31:59)

You said you talked to Warren yesterday. How often do you talk to Warren Buffett?

Greg Abel (32:03)

Yeah, Warren and I pretty much. He's in the office every day. So we're talking every. If I'm in Omaha, we're always connecting. If I'm traveling like I was yesterday, I often check in just to, just to catch up on what he's saying, what he's hearing, what am I feeling. So if it's not every day, it's every couple of days.

Andrew Ross Sorkin (32:27)

Greg, would you do these large positions in like S and P bets that Warren has done at times in the past? He sold a lot of puts, brought in billions of dollars in premium back in the, the early 2000s. You've made some Mac. Warren used to make macro calls or at least hedging calls on the overall indices, not just individual stocks with. Would that continue with you?

Greg Abel (32:51)

I mean if we see the right opportunity, yes. But it's not, it's not a strategy.

Andrew Ross Sorkin (32:58)

He hasn't done it as much lately, I don't think has he. But he, I don't think he ever lost any money on any of this. Things that he.

Greg Abel (33:04)

Not that I'm aware of. But I mean as we all know these financial markets have become more fine tuned and those opportunities, excuse me, may or may not exist going forward by where there's that you can see an opportunity and we would pursue or deploy capital but if we saw an opportunity that, that made sense to us. Absolutely.

Andrew Ross Sorkin (33:25)

How about you remember back in the financial crisis when major companies would say Warren can you. And he'd say yeah, I'd be glad to step in. Here's what you'll do. 12% preferred stock convertible into 8, 10 Goldman blue chip companies. That, that it was like a no brainer. If I could have done it, I would have mortgaged the house and gotten those terms if I could. Would you do that?

Greg Abel (33:52)

Again, absolutely. We.

Andrew Ross Sorkin (33:53)

Look, let me think about it. You can have some time, if you want to know.

Greg Abel (33:58)

We don't need to pause on those. And, and, you know, we still. It's not a distress time, but we still receive those calls even today. Warren receives them myself, maybe not in a distressed situation. And we look at them, we evaluate them, but we're always prepared to act, and we'll act decisively and quickly.

Becky Quick (34:16)

Can you act the same way Warren did, which would be to do a deal for tens of billions of dollars and basically get it done in three days without necessarily telling the board until after the deal had been cut?

Greg Abel (34:30)

Well, within that period of time. We have a very good process in place between Warren and I and our board as to how we'll act as we have in the past, and we'll act very decisively and quickly.

Becky Quick (34:44)

So you can do a big deal without in three days?

Greg Abel (34:47)

Well, I would always. We have certain parameters or I would make sure, for example, our lead director is aware of what we're doing. But it does allow me to act and act quickly.

Becky Quick (35:01)

Okay. What about the idea of a dividend? That was something that Warren Buffett's never been a fan of. Would you potentially give a dividend back to shareholders if you don't see other opportunities in the market?

Greg Abel (35:12)

Yeah, and that's really, as you know, we have our dividend policy in place and the thought. And it's reviewed and approved by our board, again on and on an annual basis, and one that Warren has put forward every year. And we've. We've. We've maintained that. That we will retain a dollar if we see the opportunity to create more than a dollar for our shareholders. And that's been the test. And we. And as long as we meet that test, we would continue to hold the dollar because we believe we can create value for our shareholders long term. Now, incremental to that, we do see the repurchases as an opportunity effectively to deploy, to return capital to our shareholders instead of dividends. You're basically saying, well, it's part of it. So if we didn't meet that test, we do a dividend, but we do constantly look at the repurchase.

Becky Quick (36:06)

I don't think I. That's more than I think I've heard from Warren and Charlie in the past. Just the idea if you didn't meet that test, you'd do a dividend. Is that something you see in the near future?

Greg Abel (36:15)

Well, we don't see it in the near future because we. We're clearly meeting the Test as we see it. But we've always stated if we don't meet that test, that's the time.

Becky Quick (36:25)

So basically what you're saying is no change.

Greg Abel (36:27)

Correct.

Becky Quick (36:28)

Okay.

Andrew Ross Sorkin (36:28)

Could you ever see a time

Becky Quick (36:32)

would

Andrew Ross Sorkin (36:32)

you rather Warren a lot of technology. He may not have been the first person there, but he finally did enter and he entered Big Apple, other companies. Is there any chance that some type of blockchain, new technology, crypto related. Maybe not. Maybe not Bitcoin itself, maybe not, you know, Ether or anything like that. But. But a company that builds out a blockchain that suddenly all the tokens are moving on this. It looks like the future. Would that ever be a possibility or crypto would never be a word you'd see on a, on a Berkshire. I don't think you'll see crypto ever in any.

Greg Abel (37:16)

Ever is a long time. You never seen it. But I just don't see it. What I do see is that when it comes to technology again from even from an operational perspective where we're seeing how we use it, the impact it's having, it does allow us to develop strong views and a better knowledge base around certain companies that are technology companies or how we're using the technology. Technology. So technology will always be on the table and looking at what could include

Andrew Ross Sorkin (37:44)

some type of blockchain.

Greg Abel (37:47)

No, I don't know because I haven't seen anything that would make sense that there's a value proposition where you see the asset and how it produces value.

Andrew Ross Sorkin (37:55)

Some people think it's going to disintermediate the entire banking industry. You don't want to just watch.

Greg Abel (38:01)

We'll be happy with our hard assets.

Joe Kernen (38:03)

And the.

Andrew Ross Sorkin (38:04)

But not gold. But not gold. What about gold miners? How about airlines?

Greg Abel (38:09)

Where's.

Andrew Ross Sorkin (38:09)

Where are you on that now? Remember how many times Warren's been in and out of. Oh my God, I'm in them, I'm out of them.

Greg Abel (38:15)

I know this is one of your favorite topics. We're very happy that we own NetJets and the service it provides to its great customers.

Becky Quick (38:24)

Greg, let me ask you a couple of quick news questions. First of all, back in January, Berkshire filed an SEC registration for the potential resale of up to 99.99% of the Kraft Heinz holdings that you own. More recently, you did say that you supported Kraft Heinz CEO, the decision to pause on that planned split of the company. Have you made a decision about what to do with that investment?

Greg Abel (38:52)

Well, we did announce, as I said, support for Steve. Pausing.

Becky Quick (38:57)

Yeah.

Greg Abel (38:58)

And just for a little bit of Background. As you know, when they first said they were going to split, we didn't. We, we express concerns with it.

Becky Quick (39:05)

You were vocal about it, right?

Greg Abel (39:07)

Because they did. When they brought Kraft and Heinz together, the whole idea was that there'd be a lot of synergies, a lot of opportunities. And then they announced and it's as I highlight in the letter, it's been a disappointing investment. There's no question at the same time to break them apart when they're facing a lot of challenges and haven't resolved a lot of their issues yet. We had concerns with that, including now adding dis. Synergies to it. So for Steve to come in and say we're pausing it, there's opportunities within Kraft, Heinz to fix things and get the business back on track and then he'll evaluate things, we thought that was absolutely the right approach and we filed our registration. Straight statement really to be in a place that if we ever did sell, we'd be able to. But it's not that we're going to take any immediate action currently.

Becky Quick (39:59)

Okay, good. Another issue this week, S and P said that it may own, it may cut Pacific Core Utility, which is a Berkshire owned utility, to junk because of the wildfires and the lawsuits that have been resolved about it. This is another issue you touched on and you're saying letter to shareholders. I think in the letter to shareholders you basically said you accept responsibility for wildfires but you're going to fight unjustified claims in court. And you think that this is one of those situations.

Greg Abel (40:27)

Correct. So any time we're responsible for something, we're willing to take absolute responsibility for it and, and resolve such matters. But there is a delicate balance and it goes well beyond wildfires in the utility industry. The wildfires are very specific to the west and we've seen them some challenges in Texas and the Midwest that, you know, it's not an issue just to the west, but you can see it creeping. But what we see is a bigger issue in the regulate, in the utility industry and that is does the regulatory compacts continue to exist? And by the regulatory compact I mean we deploy capital into these businesses, businesses. We, we receive a return that's reflective of us taking a certain amount of risk. And the minute they start expanding that risk to be pretty much anything, including things you're not responsible for. We're saying that's, that wasn't the investment thesis. That's not the relationship that existed.

Becky Quick (41:30)

Just to put some context to this, this came after a Feb. 25 ruling where an Oregon jury awarded $305 million to 16 plaintiffs. That's about $19 million per plaintiff. Those plaintiffs blame Pacificor for not turning off the electricity.

Greg Abel (41:46)

Right. And. And there were lessons learned because if you look. And that's. We're saying when the ones where we clearly caused a fire for not turning off the electricity, we're taking responsibility for those. But separately, there were a number of fires there. And this gets beyond. But. But there is one area and one fire we're pushing back, and it represents more than 60% of claims. It was a lightning strike. And we're just saying we're not responsible for that. We're sorry. Absolutely. That these people's lives have been impacted. We feel for them. But that's not the utility's responsibility to take on those costs and obligations. So that's where we're drawing the line.

Andrew Ross Sorkin (42:29)

You guys know the insurance business pretty well, I think. You know, when you're covered, things you need to cover and things that you can't run a business.

Greg Abel (42:37)

Right. And it goes back to that regulatory compact. That's not part of. We didn't sign up for that.

Becky Quick (42:43)

This. This was your first letter that you wrote. It was long, 118 pages or so. It was that.

Greg Abel (42:50)

I know. But I will say on the length I've had, that's the first response I get from everybody when they text me as they're reading it. Jesus is really long and halfway through. And I use this quote back to him. And it won't be a perfect quote, but I. Lincoln, President Lincoln said, yes, this letter is very long, but I didn't have time to make it shorter. Use that to everyone, because everybody would be texting me. I'm halfway through. But so far it's going well. I text them that. That quote every time.

Becky Quick (43:23)

I mean, you're stepping into some pretty big shoes. Warren's been riding that leverage for 60 years, and it's something that had a huge following. Was a tough letter to write.

Greg Abel (43:32)

Absolutely. So those are. There's. Those. The shoes to fill are tough on all fronts, but Warren's an exceptional communicator and how he does it. So to take the letter and really want to make sure we're communicating to our. Again, to our owners and shareholders that something that they would value. It was not easy. I've told Warren of all the. Listen, the responsibilities transferred are great, but as far as the work and the task I had to do, that was the toughest to sit down and make sure that that was done, at least from my perspective. Well. And unfortunately, When I, when we were discussing it, he said, and the second letter doesn't get any easier.

Becky Quick (44:18)

So you have that to look forward to.

Greg Abel (44:20)

Yeah, exactly. That's not what I wanted to hear.

Andrew Ross Sorkin (44:23)

Every year.

Greg Abel (44:24)

Every year.

Andrew Ross Sorkin (44:24)

And it'll come fast too. It's like you just finish it. Like, like, like taxes.

Greg Abel (44:29)

But you know what, when you.

Andrew Ross Sorkin (44:30)

Yeah, yeah.

Greg Abel (44:31)

You know, when you do write it, it's like everything or when you prepare for something now it's valuable. Yeah, I had to reflect on a lot of things and then when you're

Andrew Ross Sorkin (44:40)

done, it's just leading into it.

Greg Abel (44:42)

It's leading into it, right, exactly.

Becky Quick (44:44)

Greg, very quickly, operating income was down in the fourth quarter more than 29%. That was largely because of weakness in the insurance business. And as underwriting profits were down, I think close to 50%. What happened?

Greg Abel (44:57)

Yeah, so in the fourth quarter, which then translated for the 12 month results is that. Yeah, our insurance results were down. You can see a lot of capital coming into the industry. We're going to, we or our team and his team will continue to apply the discipline that the price and the risk have to be right for us to write a policy. So as we back out of that with capital coming in, you'll see those results be what they are relative to how much capital we deploy into it. So that had a significant impact. And then the other piece of that is we did across our non insurance businesses take a $1.555 billion impairment and that was across four of our businesses and realistically smaller businesses and challenged industries.

Andrew Ross Sorkin (45:53)

Industries.

Greg Abel (45:53)

If it had been any of our major businesses, I would have touched on it. But it really related to four of our smaller businesses. Again in, in industries that we see as challenged.

Becky Quick (46:03)

Greg Abel, the new CEO at Berkshire Hathaway, sitting down with us for the first time today. We really appreciate it, Greg, and we look forward to seeing you at the annual meeting.

Greg Abel (46:12)

Absolutely.

Andrew Ross Sorkin (46:14)

It's not Creighton anymore, is it? Is it? Do you have a team that you like in the, in March Madness is

Greg Abel (46:19)

coming and I'll be, I'll be, I'll be cheering for. Let's just say, Joe, as you touched on earlier, all the Midwest teams.

Andrew Ross Sorkin (46:25)

All the Midwest teams.

Greg Abel (46:27)

All of them, all of them, all of them. We've got, you know, my wife's from Iowa State. I have allegiances with Nebraska because my, I mentioned earlier, my one grandfather was born in Unadilla, Nebraska. I've always followed the corn, Oscar, you name it. I've got a spectrum of teams and, and my family reminds me of that pick a team.

Andrew Ross Sorkin (46:47)

Iowa State was looking good and then I bet on them and that's they were number four, I think. Yeah, they lost the last two games.

Greg Abel (46:52)

Yeah, they've had a rough couple of games. Hopefully they find it. But it's been a pleasure to be on. Thank you, Becky. Thank you, Joe. And just being here.

Andrew Ross Sorkin (47:02)

Don't be a stranger.

Greg Abel (47:02)

Absolutely. Great to have you back. Thank you.

Becky Quick (47:05)

We'll be right back. Not every sale happens at the register.

Greg Abel (47:10)

Before AT&T business Wireless, checking out customers

Becky Quick (47:14)

on our mobile POS systems took too long. Basically a staring contest where everyone loses.

Greg Abel (47:19)

It's crazy what people will say during an awkward silence.

Becky Quick (47:22)

Now transactions are done before the silence takes hold.

Greg Abel (47:25)

That means I can focus on the

Becky Quick (47:27)

task at hand and make an extra sail or two. Sometimes I do miss the bonding time. Sometimes.

Joe Kernen (47:33)

AT&T business Wireless connecting changes everything, guys. It's no use putting it off. The best time for an underwear refresh is now. Tommy Don Underwear is designed for a perfect fit that's stays put all day. There's zero chafe thanks to four times more stretch than competing brands.

Greg Abel (47:50)

And their innovative horizontal quick draw fly is a game changer.

Joe Kernen (47:53)

With over 30 million pairs sold, there are thousands of men out there more comfortable than you.

Becky Quick (47:57)

Don't settle for less.

Joe Kernen (47:58)

Go to tommyjohn.com today for 25% off

Greg Abel (48:01)

your first order with code comfort.

Joe Kernen (48:02)

That's tommyjohn.com comfort Tommy John comfort Perfected Ondeck is built to back small businesses like yours. Whether you're buying equipment, expanding your team or bridging cash flow gaps, On Deck's

Andrew Ross Sorkin (48:16)

loans up to 400,000 dol.

Joe Kernen (48:18)

Make it happen fast. Rated A by the Better Business Bureau

Andrew Ross Sorkin (48:21)

and earning thousands of five star trust pilot reviews, On Deck delivers funding you can count on.

Joe Kernen (48:26)

Apply in minutes@ondeck.com depending on certain loan attributes, your business loan may be issued by Ondeck or Celtic Bank. Ondeck does not lend in North Dakota. All loans and amounts subject to lender approval.

Becky Quick (48:38)

And that's it for Squawk Pod today. Thanks for listening. Squawkbox is hosted by Joe Kernan, Becky Quick and Andrew Ross Sorkin. Tune in weekday mornings on CNBC at 6 Eastern to get the smartest takes and analysis from our TV show right into your ears. Follow Squawkpod wherever you get your podcasts. Have a great day. We'll meet you right back here tomorrow.

Joe Kernen (49:01)

We are clear. Thanks, guys.

Greg Abel (49:13)

Martha listens to her favorite band all the time. In the car, gym, even sleeping. So when they finally went on tour, Martha bundled her flight and hotel on

Becky Quick (49:25)

Expedia to see them live.

Greg Abel (49:26)

She saved so much, she got her seat close enough to actually see and hear them. Sort of. You were made to scream from the front row. We were made to quietly save you. More Expedia made to travel Savings vary

Becky Quick (49:40)

and subject to availability.

Greg Abel (49:41)

Flight inclusive packages are atoll protected.