Warren Buffett presides over the 2025 Berkshire Hathaway annual shareholder meeting — 5/3/25

[Music] Stand by. Good morning, everybody, and welcome to CNBC's special coverage of the 2025 Berkshire Hathaway Shareholder meeting. I'm Becky Quick, here with Mike Sani this morning. We are live in Omaha, Nebraska, on the floor of the CHI Center exhibit hall. That's where Berkshire companies are selling their wares to shareholders. They have been doing that since yesterday. In fact, right now you're looking at the live picture. That's Warren Buffett arriving behind the scenes. Uh, you can see him walking through with Melissa. Melissa's in charge of this whole place, this whole operation. She's really set things up for us. And um, backstage this time around. It's been a little—There's the—the cane that he talked about in the annual letter. Yeah. Kind of like remembering that it's there. But he is getting ready to go up on stage and prepare for some of these issues that are here. Greg Abel is already here, the vice chairman who is the heir apparent. Um, he's here and preparing behind the scenes as well.

And I have to tell you, Mike, it's—it's been um a little chaotic this time. Even behind the scenes, there are extra security here. There's Secret Service here because Hillary Rodham Clinton is here, and there's a seat on the floor, and that has added to some of the secure measures that are always pretty secure here this time around. The shareholders right now are taking their seats, and that comes ahead of Warren actually making his way up to the stage. Everybody I've spoken with in the last day or two, and many of them have been coming for years, have remarked on how it seems more busy, how it seems like there's just a little more density of people, a little more fuss. So yeah, the 138,000 tickets were requested ahead of time. That's up 10,000 from last year. They don't anticipate all of those people are going to be here. This place only—this place only holds 40,000. Uh, but it—it felt very busy yesterday. The lines just to get in to shop here on the floor were around the corner, um, edging back and forth. This morning there were protests outside. There were marketers outside trying to take advantage of the situation as well. And they use up the attention that—that we give this thing. This—this is a shareholder meeting like no other.

Absolutely. Well, we'll give you a quick look at today's schedule. Uh, the morning question and answer session, as Becky said, kicks off at 9:00 a.m. Eastern. Warren Buffett, Greg Abel, and Ajit Jain will take questions for about two and a half hours. After that, we will join you again, then to break down everything we just heard. Right around noon, Buffett and Abel will head back to the stage and sit for another two hours of questions. We'll wrap up all the day's headlines when that ends and bring you a post-meeting analysis until 2:30 p.m. So, buckle up. We got a long day.

Absolutely. We'll—we'll catch you from all angles. And we have a great lineup of—of guests on tap as well, including Jeff Rocker of Berkshire Automotive, Irv Blumkin of Nebraska Furniture Mart, and board member Ron Olsen. Uh, let's take a quick look. Of course, uh, along with the start of the shareholders meeting, we do get results out of Berkshire Hathaway, with stock closed at an all-time high yesterday. Get you up to speed on those numbers. Coming into uh the meeting, uh, we—we were looking for a handful of things. Uh, the stock, of course, sitting at an all-time high. The B shares up nearly 20% this year. The earnings this morning are showing a bigger drop in operating results than perhaps expected. There was a pretty significant drop in insurance underwriting earnings year-over-year. And the surge in the value of the Japanese yen led to foreign exchange losses. That's kind of a mark-to-market thing. Also, the—the equity portfolio did take a $5 billion—also accounting loss. It's not really relevant because it just says stocks were down as of March 31st on a year-to-date basis.

Now, overall, the headline is that earnings did come in well below expectations. I would say kind of a steady as she goes in the operating businesses along with that slight decline in insurance underwriting. In the release, Berkshire said, "Our periodic operating results may be affected by the impact of ongoing macroeconomic and geopolitical events." The release also said, "The pace of changes in these events, including international trade policies and tariffs, has accelerated in 2025." And I have to say that is the question that I received most from shareholders who have been writing in hoping to get um questions in front of Warren Buffett and Ajit Jain and Greg Abel; for this, tariffs was front and center. Imagine more questions on that than anything else.

Yeah. Yeah. It's certainly the—the—the biggest swing factor that's shown up in the last several weeks uh that could impact them. Also notable, Berkshire did not list the value of its five largest holdings as of March 31st. Of course, they listed the stocks. They are the same—same five top: American Express, Apple, Bank of America, etc. Um, however, um, didn't change; it would appear there's no material change in the amounts uh, in terms of buying or selling. One thing that is notable that we've been watching is just that cash hoard. Did he put any of that money to work uh, before March 31st? And the answer is no. That cash hoard actually grew. If you're looking at the numbers, at the end of 2024, it was $334.2 billion. Now, at the end of the first quarter, it's $347.7 billion. And—and that's substantial. I mean, it's—it's a small buildup from where we were at the end of the fourth quarter, but it is a substantial buildup from where we were just a couple of years ago at the end of 2023.

Absolutely. Just, you know, look, it's coming in the door every day, and uh, it'll pile up if you don't do something with it, right? All the dividends, all the T-bill interest, everything else that's—that's coming in. So um, clearly that story is going to remain the question of is it a market call or is it simply the lack of compelling huge opportunity to work in the month of April when the market was really volatile with some of these things coming through. One interesting statistic, and I got this off of AI looking through some of these things: the cash hoard that Berkshire has is now greater than the cash that four big tech companies have—Apple, Microsoft, Google, and Amazon—combined. You always think of those big tech companies as having so much cash, not knowing what to do with it. Well, Berkshire's got more than those four. Well, they're using it to build data centers. They also buy back a lot of stock. Actually, notable: Berkshire Hathaway did not buy back any shares in the latest quarter, which is not too much of a surprise because Buffett kind of lays out the parameters under which he'll repurchase stock. It has to be at a certain valuation. And the stock is trading rich right now, as I was talking about yesterday, about 1.8 times uh book value at—at last report.

Let's dig further into Berkshire's earnings now uh with David Samra, managing director and portfolio manager at Artisan Partners. He manages Artisan's International Value Fund. It's a five-star fund that has outperformed the S&P this year, up nearly 7 and a half percent. David is also a Berkshire shareholder uh and been coming to this meeting for more than 30 years. David, is that right?

Yep. I went to Columbia Business School where Warren went to school, and I've been coming to this meeting ever since.

Excellent. Um, so just—I guess top line, I mean, how are you thinking about the position Berkshire finds itself in as it goes into this meeting and—and you know, just a quick take on the results?

Well, I think that uh their largest business, which is obviously insurance underwriting, is impacted in the first quarter by the LA fires. The LA fires is one of the largest natural disasters uh that we've had in this country. And Berkshire, of course, is set up not only to underwrite natural disasters like that, but also obviously have the capital to be able to pay a large claim like that, which is relatively unique in the property catastrophe insurance industry. Um, so I think you'll see in their earnings that insurance underwriting went backwards versus this time last year in the first quarter. uh, but uh overall that insurance business continued to do well. We also saw in their second largest group of business, which is their manufacturing and retail operations, that there was just modest growth, which I think is reflective of what's happening with GDP generally. Saw nice growth in the energy business. I think Greg Abel does a terrific job managing that company. And then, of course, you have the insurance operations—sorry, the investment operations uh which are—which are very relevant. You had some mark-to-market during the quarter, but of course we've got $600 billion worth of assets there, including the treasuries and the roughly $300 billion of equities that are going to have some impact quarter to quarter as they swing and generate investment income. So I would say generally speaking it was a rough quarter in insurance. Uh, that might help premiums pricing for insurance uh have some stability uh as uh capital exits that industry to pay these insurance claims. So that might help pricing stay more stable as we go through the year. So that'll be generally good for insurance. Um, uh but I think that the earnings look pretty solid. You know, a big part of what we've been seeing over the last several years here is bringing more of Greg Abel and Ajit Jain to the front, having them on stage asking questions. And yesterday, Sue Decker, the lead director, was with us and—and said that, "Look, at this point, Greg's really practicing the job of CEO." What do you think about that transition process? How do you feel about things?

Well, I think Greg's been a CEO of a very large company for a long time, so maybe practicing uh is a little bit of a stretch. Um, the second largest component of Berkshire's earnings is that very long list of companies that are here uh today uh on display, and uh it's important to have some oversight on those businesses. You know, as Warren and Charlie say that they—they sort of abdicate responsibility uh to running those businesses. And I think that having Greg on board uh will provide uh some incremental level of supervision uh that—that may help those from an operating perspective and—and his um street cred when it comes to capital allocation. That's a question that we've—we've seen brought up too. How do you feel? It's interesting that he was very involved in those Japanese investments which have done extremely well, and it was very clever the way that those were put together uh with Berkshire being able to borrow in yen, which did impact the earnings this quarter as the yen has appreciated. Uh, but that—that investment was very clever, and those businesses are very—very complex businesses, and so that's very good news with Greg being involved in those investments and the success of those investments. As I talked to uh investors in Berkshire, there is a little bit of a disagreement over whether the company—whether Buffett himself is—is stockpiling all this cash and creating maximum flexibility for this eventual transition—financial flexibility—and essentially just sort of give a clean slate in that regard or maybe it's just, you know, an outgrowth of the fact that he doesn't really see that many well-valued large opportunities. Maybe it's a combination of both, but is there—you know, is the way you think about that in particular, and do you think also that that means down the road there's going to be some kind of catalyzing restructuring uh that some people have talked about for a long time—a big buyback or something like that?

Yeah, I can only speculate, of course, because I haven't had a conversation with anybody about it, but um I think there was a combination of factors. Uh, I think Apple's valuation had increased significantly, and so disposing of a meaningful amount of Apple stock has caused uh cash to pile up. I think that generally speaking, the market is at a valuation that doesn't scream undervalued. So there's not a lot of uh uh big bargains that are out there. Uh, and the third thing that I would say is if you look at the absolute dollars there and the potential to make a—an acquisition today—a few hundred billion dollars in a well-timed acquisition could—could be deployed. Uh, so I think that uh—that as is always the case with Berkshire, they have a significant amount of capital available to be deployed when there is a bargain available, when there is something meaningful to buy. And we're just not in an environment where there's any distress out in the market or there's excess—where there's a lack of liquidity. Uh, but Berkshire should be able to put that money to use.

Is there anything you're in particular eager to hear uh you know Warren and the team address today in the Q&A?

Uh, I'm uh interested to hear their thoughts on uh the underwriting cycle, you know, because that is their—their big business and what might happen there. And it's fantastic to have Ajit Jain up on the stage to be able to address those issues. Uh, there are some wildfire issues that have been impacting the energy business. So it will be interesting to see if they have any commentary around that. Uh, and—uh—I think that uh it will be interesting to hear, of course, Warren's thoughts around tariffs. That is the topic of the moment. Uh, Warren owns a number of businesses. You could look at Fruit of the Loom, for example, or Brooks, where the manufacturing is done largely over in Asia uh or in other parts of the world, and uh tariffs should have a meaningful impact on those businesses.

Yeah, I'll tell you I talked to the Benjamin Moore CEO yesterday, and they used to manufacture paint in Canada. They stopped in 2015. They are in the process of matching up with a partner so that they can start producing again in Canada just so that they can have some cans that they can tell the Canadians—or produce there to avoid the anti-American backlash. And they said they're going to have five-gallon—paint five-gallon buckets that are available starting in mid-May. They'll have one-gallon buckets available by the middle of July.

Yeah. And I think there's a lot of uncertainty in the market. You can see it in the price of gold, and maybe you're seeing it in the valuation of Berkshire Hathaway today. This flight to safety and the correlation between those assets is pretty interesting.

Oh yeah. Over the last six months, I pointed that out yesterday. Gold and Berkshire Hathaway shares have basically diverged from most other stocks.

Yeah. I—I think the differential that we showed was up 19-plus percent for Berkshire Hathaway, down by just over 3% for the S&P 500. That's the biggest divergence going back more than 10 or 15 years, I think, that we've seen. Maybe even longer than that. $1.1 trillion market cap plus. So, uh, I don't know if anybody who's coming here 30 years ago thought we'd get there, but it's pretty—certainly not.

Certainly not. But I'm glad that we did.

Yeah, David, great to have you here.

Thank you very much for having me.

All right. Well, Apple remains one of Berkshire's top five holdings according to today's report. Shares finished the week lower by about 2%. They snapped an eight-day winning streak yesterday despite beating on the top and bottom lines after the bell on Thursday. Let's bring in CNBC technology correspondent Steve Kovach to discuss Apple. Hey, Steve.

Hey, Mike.

Yeah, I mean, you guys were saying the tariffs were the talk of the town out there in Omaha. They were the talk of the town in Cupertino two days ago when I was out there reporting on this earnings report. And what we learned really is Tim Cook's management of the supply chain ahead of those April tariffs. So what he told us—Jim Cramer and I talked to him uh about these earnings reports—and what he told us was they were able to kind of move supply around in order to uh mitigate the worst effects of the tariffs right now in the June quarter, and telling us that this quarter—in the June quarter—they're expecting more than half of the iPhones sold in the United States will have been sourced in India, which of course has that lower tariff rate compared to the massive one uh they're facing over in China. Also kind of painting this picture that, you know, what we can expect moving forward in the months and years to come, that more and more uh uh products that are sold in the US will be sourced not from China but from India for the iPhone side, and then for other products that means like AirPods and watches and—and things like that—and Macs—that's all going to come from Vietnam. In fact, if you go out and buy one of those products right now and look at the back of—of it and see where it's made, it's likely going to say Vietnam right now. So, and a lot of this started uh years ago, especially during COVID when they had all those CO shutdowns and things like that. But look, guys, the headline number, of course, is they're still expecting an impact from these tariffs—$900 million uh cost is what they're estimating, and it's going to hit margins just a little bit. Margins are still strong—between 45 and 46—12% is what they're estimating here. And then there's the clarity beyond the June quarter, which is what investors were really pushing for, and analysts are really pushing for on the call. We saw a couple downgrades on Wall Street yesterday because of this. There's just no clarity what the tariff picture really looks like beyond the June quarter, and that's why we saw shares down uh better than three and a half percent yesterday.

Guys, hey, Steve, I will tell you Tim Cook is here. He's been coming to this meeting for—for many years at this point because Apple's his largest shareholder, and you know Apple is Berkshire's largest stake uh or has been. We don't know exactly what the latest numbers are. He's here—saw him from afar last night, and I was just out on the floor of the convention center. There's not only a seat for Tim Cook but about four guests—just says Cook across five seats. So he's going to be here um in the audience. I think he wasn't there just now. I was hoping to grab him beforehand. Didn't make it because I think we started a little earlier than we generally do uh with this programming, but obviously it's a big question and uh one that some shareholders had written in questions about too. Why the sales in Apple and how—how big of a position it's going to continue to be.

Yeah. I mean, and Steve, it is still uh you know, Berkshire owns 2% of the company at last report. So, it's not as if this is a—you know, sort of a trivial—by far their largest holding—investor in Apple right now. So, I also be interested to hear, Steve, do you think there's—there's been any discernable demand effects aside from the tariffs? Uh, if in fact overseas, you know, a lot of what you see in terms of maybe backing away from American brands even bears on Apple at all.

Yeah, two things. Uh, well, first let's talk about American demand real quick because this was really interesting. What Tim Cook told me a couple days ago was remember ahead of those April 2nd tariff announcements, everyone was kind of talking about pull-forward demand. Are we going to see people rushing out buying iPhones ahead of time? Tim Cook told me he saw no evidence of that, at least in the March quarter, that people were kind of anticipating and buying uh ahead of time and therefore implying the growth we saw in iPhone was organic demand. This was, you know, forget tariffs. This was people were just excited to buy the new phones. They had a new model that launched. But you're totally right, Mike, to point out the anti-American sentiment. We've been seeing this for a number of years, even before President Trump initiated these tariffs, that Huawei came back online and started making phones again a couple years ago. And just quarter over quarter, year-over-year. Huawei continues to eat into the market share in China. China sales were down to $16 billion. Now, the—the growth rate is not as bad as it was before. It was still -2% in China year-over-year—not as bad as that negative 11 that we saw in the December quarter, but still China is way down from its peak. And part of that, at least, is that negative sentiment or this nationalistic view that we have to buy these homegrown brands like OPPO and Huawei. Uh, so that's just a trend that we're going to continue to see. And then the question becomes, what exciting thing can Apple do over in China to get those customers excited? Some people are saying that might mean a new kind of phone design—those foldable phones that those customers typically like. And then, of course, there's artificial intelligence. We know that big miss that they had in this past quarter uh delaying that big Siri AI update that caused a lot of analysts to reduce their expectations for iPhone sales. And in China, they love specs, they love AI, they love cool technical things like that. And when Apple can't offer it, but one of those Chinese brands can, uh, that's why we see so many people gravitate to that. Mike.

Yeah.

Well, Steve, uh, thanks very much for all the color. We'll see what we hear, uh, if Warren addresses, uh, any of that today in the room.

Well, you know, Berkshire shareholders traveled to Omaha to hear Warren Buffett speak, but also to shop. It's been pretty unbelievable watching the number of shareholders that—that poured in here yesterday trying to get some advanced shopping done. There are probably fewer people on the floor right now than you might usually see. And that's because people are vying for seats right now. There's no reserve seating here. You want a seat, you better get your—your—your rear end in—into one. Uh, but See's Candies brought over 24,000 pounds of chocolate. Sales were up 9% over Friday of last year. I—I will promise you they will sell out of all of that candy. They do every single year. And then you've got Squishmallows. There are Warren and Charlie special Squishmallows that are made for Berkshire Hathaway. There's Warren Buffett getting a look at his Squishmallow yesterday. They're over at the Jazwares booth, and they're in pretty high demand, too. They're only available here, and they sell about a thousand per hour over the course of two days. Talked to the CEO yesterday who said their only limiting factor is that they only have 12 registers. So, if they could get people out faster, they would. Every year they've brought more people to try and do registers and then meet people in the crowds going through this year. By the way, there's only one book that's being sold here on the floor at the Bookworm. It's a new book, 60 Years of Berkshire Hathaway. The book is the brainchild of Carrie Silva. She's a longtime friend of the Berkshire family and a former manager of this annual event. There's only 5,000 copies of that book for sale, and there are 10 that are being auctioned specially. Last I heard, the highest bid that they got for one of those was $150,000. Those are signed by Warren Buffett. You can only get the last 10 copies that have been signed. He promises he's never going to sign another one, except for maybe to Carrie Silva. Um, but that's where things are going now. Buffett and SOA signed 20 copies to raise funds for the Siena Center that serves the homeless population here in South Omaha. And Buffett wrote in his annual letter that he would match the contributions from shareholders who purchased the special 20 books with a starting price of $5,000. 16 have already been auctioned off, with one going for that $150,000. That was yesterday here. The other four will be awarded to the highest bidders here at the meeting in person this weekend.

All right. President Trump's uh 25% tariff on auto parts going into effect today, but automakers getting a little bit of relief last week after Trump signed an executive order softening some of the levies and offering a partial reimbursement plan on cars assembled in the US. Ford and Stellantis ended the week higher, but GM down about 4% after lowering its full-year guidance. Our next guest thinks the president's willingness to compromise is a good sign for the industry. Joining us now is Jeff Rocker, CEO of Berkshire Hathaway Automotive, the largest GM dealer in the country. Jeff, great to have you here.

Mike, Becky, it's always great to see you here at the annual meeting. How are you navigating through all this?

Well, uh, obviously these are exciting times in the automotive industry, and the tariffs are certainly uh in the headlines every day. Uh, but I would tell you I wish I could give you absolute clarity on exactly how tariffs are going to manifest themselves, but I can tell you what we've seen so far and the impact of tariffs in—

Our industry so far. And that is the last couple months, a surge in sales. And that obviously is being driven by consumers that want to beat the tariffs, so to speak, because the inventories that are on our dealership lots today are obviously not burdened with tariffs. So, while we don't know what the future will look like, uh, in terms of tariffs, we, uh, uh are enjoying a couple of months of FOMO out there as consumers rush to take advantage of these non-tariff cars and inventory.

Jeeoff, I'll tell you very quickly, we were just watching Tim Cook make his way into the the floor of the convention center. You know, this is a little bit of star sighting here at the annual meeting. Um, Tim Cook making his way through, and um, we're expecting more people. It's always great to see Tim here.

Yeah, it is. As you were just highlighting, Berkshire still a significant shareholder. The, the, the pull-forward effect, the FOMO effect that you're talking about, how's that going to—I mean, how are you planning for that to have an impact down the road? Is it going to mean you're going to see slower sales in the back half, or is this like a one-off FOMO that you don't think will have a big impact later?

Well, I think that this, uh, FOMO syndrome is different than what we saw during COVID, and I think that it is much more temporary and fleeting. In fact, the demand peaked already, we believe, in the month of March with a 17.8 million SAR. The SAR in April, while still above run rate, was just 17.3 million units. And we look for probably another month, uh, that's above run rate, maybe in the mid to high 16s next month. But we're already seeing some of that surge in demand moderate. And I think it is prudent to consider it pull ahead. And so we—what we would forecast is that we're going to see business normalize over the next few months. And then as vehicles become burdened with tariffs in the second half of the year, that it's likely there will be some offset to these strong sales that we've enjoyed the last couple of months. But we're still optimistic about the year in total. We think it'll be lumpy. But going into this year, most industry experts predicted a 16 to 16.5 million unit SAR. We were at that run rate through the first two months of the year, to then when tariffs were announced again, we had that 17.8, a 17.3 last month, but I think for the full year I would still guide to a 16 to 16.5 million SAR. Again, you may see Q2 be the peak and Q4 be the trough, and then I think as we turn the page into '26, while we don't have a crystal ball, uh, that that's likely—likely to be the new normal because we won't have inventories that are fully burdened by tariffs until late in the third quarter and the fourth quarter.

It's going to be tough, I guess, in that environment though to respond to lower—Oh, we're actually seeing, uh, Greg Abel here, uh, talking to Warren Buffett as well—as well, right? So, it looks like they're getting ready to get straight here. Looks like Warren's making his way back to the ramp that leads up to the stage. Just quick, I was going to say it's going to be tough to try to get prices down or create deals, create incentives in that environment, right? You already have an affordability issue.

Well, affordability. Uh, Becky, when we talked last year, that was one of our key topics, and it remains the biggest challenge in our industry. Uh, obviously the inflation of vehicles over the last four or five years and higher for longer rates have driven car payments to where, uh, it is an affordability issue for many consumers. But the consumer's been resilient. And I do want to share my own, uh, perceptions, and that is that, uh, the administration, I think, is learning a lot about the unintended consequences of the originally kind of shock and awe announced tariffs. I, I also think that we've got very, very smart people running the OEMs and in the supply chain. And I think between some prudent compromises from the administration coupled with some prudent measures by the manufacturers and the suppliers, uh, that the ultimate manifestation of tariffs will be, uh, much more moderate than what has been perceived in the headlines.

That certainly is the hope. But Jeff, thanks for spending some time here. We're actually seeing um Hillary Clinton walk into, uh, to the meeting. Hillary Rodham Clinton, as, uh, as Becky mentioned, she would be in attendance here. We are just a couple of minutes away. Uh, Becky's making her way into the arena for her official role in moderating the Q&A before that first Q&A starts. I do want to remind you of today's schedule. We'll hear from Warren Buffett, Greg Abel, and Ajit Jain in just a few minutes in that Q&A session, and it will last about 2 1/2 hours. Becky will rejoin me for the halftime show. That's at 11:30 a.m. Eastern. Then the afternoon Q&A with Buffett and Abel starts at noon. That'll go until about 2:00 p.m. And stay tuned for in-depth analysis in our postgame show following that afternoon session. And we've got more big names on deck for CNBC's coverage live from Omaha today. Activision founder Bobby Kotick will join us as well as the chair of the House Financial Services Committee and Republican Congressman from Arkansas, French Hill. So, right now we are getting ready to send you into this year's annual Berkshire Hathaway meeting. Uh, as I said, Becky's making her way into the arena, and she will take it from here.

Heat. Heat. Heat. Heat. Heat. Heat. [Music]

You ready to start?

I'm ready anytime.

Okay, let's go. You can start. You ready to go?

Yep. Thank you, sir. We're good.

Okay, if everyone will please take their seats.

Yeah, this is my—this is my 60th annual meeting, and, uh, and it's the biggest, and I think it'll be the best yet. And, uh, I would, uh, before I start, I'd like to give you a few figures from—from, uh, yesterday because we set all kinds of records. Uh, yesterday we had, uh, um, 19,700 people that joined us in the afternoon between noon and 5:00. And that was up from 16,200, which was a previous record the year before. Uh, and, uh, in every aspect we set records. Uh, See's Candy did, uh, uh, $317,000 against 283,000 the year before. And most of these were limited by capacity. I mean, there were—there were lines there throughout the total day. Brooks did 310,000, uh, was an all-time record sales day for them. And I think they have close to 3,000 runners lined up for Sunday, uh, which is a lot of people to get up—I, I think we, we've had 2,200 or 2,400 before, but but 3,000. And, uh, that doesn't count me, and it won't count me, and, uh, I could go up and down the line. Jazwares, uh, um, around 250,000, double the previous years. They, they just sell as fast as they can sell. Most of—most every—every place had—had, uh, had, uh, people lined up at the, uh, at the cash register sometimes for a lot longer wait than we wish we had. But, uh, but we'll learn the game eventually. And it goes on and on. Every—every company set records, and, uh, and, uh, there's no way of knowing how many people we have here today. We have people listening in around the world, uh, but, uh, uh, I think we're setting—we'll probably set records in a great variety of ways. And, uh, I would, uh, we're going to have—in a minute we'll get to the question and answer, but I—I'd like to first introduce our directors and—and, uh, uh, I'm I'm Warren Buffett, and I was born and bred right here in Omaha. Uh, we have Greg Abel. He was born and bred in Canada. And we have Ajit Jain who was born and bred in India. So, we, we have a very diverse group and, uh, uh, in the audience, and I will introduce them alphabetically, and if they'll stand as I introduce them, and, uh, I know it'll be an effort, but withhold your applause till the end so that, uh, so that we can get through the list, but we'll alphabetically, uh, with Howard Buffett. Howard, would you stand and, uh, withhold the applause? It'll go to his head. Uh, Susan Buffett, we have Steve Burke, Ken Chenault, Chris Davis, Sue Decker, who's our lead director, Charlotte Guyman, Tom Murphy Jr., Ron Olsen, and I'll have a few—and when we finish I'll have a few more things to have about him. Wally White and Mel Whitmer. And with that you've got our all-star cast. And Ron, if you don't mind standing, I would like to point out that—that Ron, they finally got through an age director thing at—at Berkshire. Uh, I think we had five that were over 90 here not so long ago, but, uh, but we put in the highest—Sue tells me anyway that it's the—the highest age, uh, uh, limit that any—any of the companies she checked out came up with. But, uh, Ron has been on the board for 28 years and, uh, been associated with Charlie Munger at Munger Tolls for many years beyond that and has been around at a variety of times of crisis and joy and disappointments and surprises and everything else at Berkshire and has been of invaluable help to us. So, I think—I think I'd like to give a special hand to Ron [Applause] Olsson, and, uh, I think I'll do something else that isn't done usually at annual meetings, but I—I haven't had a chance. Uh, I listened to them on Thursday afternoon. I—it's the only—it's the only—it's the only investment quarterly call that I listen to. But, uh, I listen to Tim Cook, and I understand—and it'll be tough for me to see him from up here. But Tim Cook, there he is. I'm somewhat embarrassed to say that Tim Cook has made Berkshire a lot more money than I've ever made Berkshire. I, uh, credit—credit should be given to him for—I knew Steve Jobs briefly, and Steve, of course, did things that nobody else could have done in developing Apple, but—but, uh, Steve picked out Tim to succeed him, and he really made the right decision. Steve died young, as you know, and, uh, nobody but Steve could have created Apple, but nobody could—but—but Tim could have developed it like it has. So—so on behalf of all of Berkshire, thank you. There's a couple other people I'd like to thank. Uh, I don't do any work in terms of the show or anything else around Berkshire, but, uh, what you see today, uh, is the product of a lot of people at Berkshire. They forget, you know, they don't think of themselves as the one who's supposed to screw a light in and leave for somebody else specialist to come along and do other things. Uh, the people of Berkshire put on this—this show every year, and, uh, uh, you know, our—our chief financial officer and just everybody pitches in. It's a remarkable organization that way. But it's led this year, uh, in the last few years by Melissa Shapiro, and she's made this whole thing work. Melissa. And then we got an idea a while back—well, many years ago, uh, well, I'll take it all the way back, uh, maybe, uh, 65 years ago I met, uh, Carrie Swaim's grandfather, and, uh, his wife was—they had nine children, and Susie and I joined a—a, um, playhouse group, and I don't look like the kind of guy that would join a playhouse group, but it was—turned out to be a great—a great move in many ways. First of all, I enjoyed the plays, uh, but beyond that, uh, I met not only—not—not only Carrie's grandfather who ran an insurance company in Omaha, Bill Kaiser, uh, but I, uh, also met, uh, the Blumpkin boys', uh, parents, Louie and—and Francis. So, in—in one sort of accident, um, when I was in my 20s, uh, came up with all kinds of good things, and in connection with Carrie, her father ran a company called, uh, Central States, and later on we bought that company, and then her father ran the company. Her sister went to work for Berkshire some years ago, and then, uh, she decided to have a family and subsequently had four kids. So, she left, but Carrie moved right in, and Carrie, uh, uh, had amazing talents behind—just like a good many people do. They—they—they—they have talent you don't—you don't realize till, uh, you give them some responsibility. And so, 10 or 11 years ago, but, uh, I asked Carrie to do a 50th anniversary book, uh, about Berkshire and just use her imagination, and—and she never—she didn't need to check with me or do anything. She just—she'd never edited a book. She'd never published a book. She'd never dealt with the printers before, but she just went out and promptly put together this 50th anniversary book. And then this year, uh, well, then Carrie, of course, got married and had three kids, so she had to leave us. But—but, uh, and we have a—we go to a baseball game once a year, and we invite some of our distinguished alumni like Carrie to join us. And, uh, Carrie, uh, uh, even though she was raising three children, uh, and you may have met one or two of them, uh, in the last day or so, she volunteered to bring—bring together a 60th anniversary book, and, uh, which I—I asked for, and, uh, again, she took the whole thing. She just did it, uh, she kept doing the things with her kids, and every now and then she'd—I'd ask her how it was going, and she'd tell me how it was going, and so she put together the 60th anniversary book and, u—um, got it done by—you know, maybe a week before the meeting because I—I gave her the assignment very late, and, uh, yesterday we sold, I think it was 4,000 plus—4 to 4,500 maybe. We—we 4,400. Uh, we printed 8,000. We intended to print 5,000, but so we sold 4,400 books yesterday, and, uh, we'll have 3,000—I guess roughly 3,600 left out there today. And it's kind of a whimsical, and—but—but accurate and, uh, uh, she came out with just the book I hope she would come out with. And, uh, and then as we went through, uh, this publishing experience, uh, Carrie wouldn't take a dime. Um, but I did get her to name her, uh, favorite charity, and—Steven Center, which takes care of homeless people, uh, and does a great many other things. Uh, it's located about five or six miles from where we are here south. Has been doing a wonderful job. Her grandfather helped form it. Uh, her husband's now joined the board, and, uh, we are selling 20 copies of—this is a commercial place, isn't it?—we are selling, uh, uh, 20 copies that—we sold 10 prior to the meeting. That's all we let them sell, and we raised a few hundred thousand doing that. Uh, I think we sold one for $100,000, and, um, but we limited that to 10. And the only difference in these and the $25 version is that, uh, Carrie and I signed them. Uh, but we saved six for yesterday, and, uh, the six brought $148,000, which is a pretty good average per book of about 20-odd thousand, and I—then I had them say four more. So, uh, this afternoon when we disband at 1:00, uh, the, uh, area right behind us that has all the goods in it in the bookstore, uh, they will sell the final four, and when we get all through, I'll match whatever we've raised for the—the 20, and, uh, and we'll give the, uh, Steven Center a boost both in financially, but also in awareness. Uh, so anyway, [Applause] that—and when you look at that book, Carrie really did the whole thing. I mean, there's a lot of information in there. She dug through it, and—and she came through a couple times maybe to check a fact or two, but she—she—she got all—she got material from the Munger family. She—she just did a wonderful job, and—and—and, uh, I—I—I—I couldn't get her to take a penny for it. So, I'm going to ask her to do a lot of other things in the future. Okay. Uh, with that, I think we've—we've covered all the—the business. So, uh, we will move to Becky—the questions that she's received from—I don't know how many she's received, but from all over the country and perhaps outside the country, and she's picked out a group of them which, uh, she has not shared with me, uh, and, uh, we will alternate questions between Becky and, uh, the audience which we have by zones and—and, uh, and with that I will, uh, turn things over to Becky for the first question.

Thanks, Warren. Um, this first question comes from Bill Mitchell. I received more questions about this than any other question. He writes, "Warren, in a 2003 Fortune article, you argued for import certificates to limit trade deficits and said these import certificates basically amounted to a tariff, but recently you called tariffs an act of economic war. Has your view on trade barriers changed, or do you see import certificates as somehow distinct from tariffs?"

Yeah. Well, the import certificates were distinct, but they—they—their goal was to balance, uh, imports against exports, and so that the trade deficit would not grow in an enormous way. In fact, it would have—and it had various other provisions in it to—to help, uh, uh, third-world countries as that time as they were called to perhaps catch up a little bit, uh, and they—they had a variety of aspects to them, but basically they were designed to balance trade, and, uh, I think you can make some very good arguments for the fact that balanced trade is good for the world, and the more balanced trade there is, the better it will continue to be better for cocoa to be raised in Ghana and coffee in Colombia and a few things, and—and over time the, uh, American industry has gone from being an agricultural country. This was—this was nothing but an agrarian country. I mean, that—uh, virtually, uh, and that was only 250 years ago, and we have become a very industrial country, and, uh, we did not want to make that a situation, uh, in my view, uh, where we ran, uh, greater and greater deficits, building up greater and greater debts against the country. So, I—I designed this, uh, import certificate thing which, uh, Charlie thought was a little—too much like Rube Goldberg. I don't know whether that—time name is—but it's gimmicky, but, uh, it's certainly a lot better than anything I—I think than we're talking about now. And there's no question that trade—trade can be an act of war. And, uh, and I think it's led to bad things. Just the attitudes it's brought out, uh, in the United States. I mean, we should be looking to trade with the rest of the world, and we should do what we do best, and they should do what they do best. And, uh, I don't think it—that's—that's what we did originally. I mean, we were good at producing tobacco and cotton, uh, uh, 250 years ago, and we—and we traded it, and, uh, uh, we want a prosperous world, uh, with eight countries with nuclear weapons, including a few that are what I would call quite unstable. I do not think it's a great idea to try and design a world where a few countries say, "Haha, we've won," and, uh, uh, other countries, uh, are envious. [Applause] So, so my—my—my import certificate idea, which went no place, uh, uh, I think we got extra copies—probably not a great demand for the copies. Uh, if anybody did, and if you'd like and write the office, I think we could—we could probably send you a copy of it. But the main thing to do is not—use trade should not be a weapon. And the United States—United States, we've won. I mean, we have become an incredibly important country starting from nothing 250 years ago. There's nothing—been anything like it. And it's a big mistake in my view when you have 7.2 billion people that, uh, don't like you very well, and you got 300 million that are crowing in some way about how well they've done. And, uh, uh, I don't think it's right, and I don't think it's wise. Uh, I do think that the more—the more—the more prosperous the rest of the world becomes, it won't be at our expense, the more prosperous we'll become, and will—and the—the safer we'll feel, and your children will feel someday. Uh, so [Applause] that's—but don't ex—don't expect my import certificate idea to go up there with Adam Smith's Wealth of Nations or anything. Okay. Uh, let's go to area one.

Mr. Buffett, uh, Mr. Abel, and Mr. Jain. Good morning. Uh, I'm St. J. I'm from Hong Kong. Mr. Buffett and Mr. Munger did a very good and successful investment in Japan in the past five or six years. The recent CPI in Japan is currently above 3%. Not far away from its 2% targets. Bank of Japan seems very determined in raising rates while Fed, ECB, and other central banks are considering to cut them. Do you think BOJ, Bank of Japan, makes sense to proceed the rate hike? Will its planned rate hike deter you from further investing in the Japanese stock market or even considering to realize your current profits? Thank you very much for arranging this greatest event every year. Finally, I wish you healthy always and keep holding this shareholding. Thank [Applause] you.

Well, I'm going to extend the same goodwill to Japan that you've just extended to me. I—I—I—I let the people of Japan determine their best course of action in terms of economics. It's an incredible story, uh, and, uh, five—it's been about six years now, as you pointed out. I was just going through a little handbook, uh, that probably had two or three thousand Japanese companies in it. Um, one problem I have is that I can't read that handbook anymore. The—the print's too small. But, uh, the, uh, and here were these five trading companies. They have a special name for them in Japan, but they were selling at ridiculously low prices. And, uh, so I spent about a year acquiring them. And then we got to know the people better, and everything that Greg and I saw we liked better as we went along. So, we got fairly close to the 10% limit that we—we told the companies we would never exceed without their permission. And, uh, so we did ask them reasonably whether that limit could be relaxed, and it's in the process of being relaxed somewhat. Uh, we—I—I would—I would say that I'll speak for Greg beyond me that I—in the next 50 years, uh, and I hope he's running things then, uh, we won't give a thought to—to selling those. I mean, they—it, uh, uh, and, uh, Japan's record has been extraordinary actually in terms of that. Uh, uh, my guess is that Tim would tell you, Tim Cook would tell you that iPhone sales there are about as great as any country outside the United States. American Express would tell you that they sell their product very, very well in Japan. Coca-Cola, that we do business with—another big investment of ours, they do extraordinarily well in Japan. They have a number of habits in, uh, in a civilization that operates differently than ours. Uh, Japan is by far the biggest. Uh, they—this is the container they've always preferred, uh, their soft drinks and—and they have, uh, have a whole different sort of distribution system there. But we have been treated extremely well by the five companies. They—they—they talked with Greg primarily. Uh, I went over there a year or two ago, but, uh, Greg—Greg's—Greg's more cosmopolitan than I am. So, he—he's a—which isn't saying much actually, but—very little—and—but he is—how many times do you think you've met with representatives of one company or the other?

Yeah, when you think of the five, there's definitely a couple meetings a year, Warren.

And I think the thing we're building with the five—five companies is one, it's—it's been a very good investment, but we are really, as Warren touched on, we—we envision holding the investment for 50 years or—or forever. But I think we also are building relationships to do incremental things with each of those companies. And we really do hope to do big things with them, uh, globally. They bring different perspectives and different opportunities, and we see—and that's the—that's why we're building that long-term relationship with them. It's super long-term, and—and—and they have a much—they have a—they have different customs. They have different, uh, approaches to business. That's—that's true around the world. And, uh, and, uh, we're—we—we don't have any intention in any way of trying to change what they've done because—do—because they—they do it very successfully.

And, uh, and our, our, our main activity is just to is just to cheer and clap and, uh, and that I can still do it at 94. Uh, so, uh, we will own [Applause] those, you know, we we will, uh, we we will not be selling any stock. I mean, that is just it's that that will not happen, uh, in in decades if then. Uh, and I my guess is that they will find things because they cover the world pretty much. Uh, the five trading companies, we will find things occasionally that may be very large for any individual company there. Uh, they may in some way be assisted by some some help we bring to the situation. Uh, but but that will be an expanding relationship. Uh, it's too bad that Berkshire has gotten as big as it is because we love that position and I'd like it to be a lot larger than than it is. But even with the five companies being they're very large companies and they're large companies in Japan, uh, and we've got at market that you know in the in the range of $20 billion invested, but I'd rather I'd rather have a hundred billion than 20 billion and that's the way I feel about several other investments we have, but, uh, size is an enemy, uh, a performance at Berkshire and, uh, I don't know any good way to solve that problem. But, but, uh, Charlie always told me that having a few problems was good for me. I never quite understood that. But he if you listen to him moralize, you would understand. And, uh, and and it's not an impossible problem at all, that, uh, and the Japan the Japan investment has has just been right up our alley.

You want to add anything on that?

No, I think, uh, you've touched it, but um as you said, it's right up our alley and I I absolutely agree, Warren. I I do believe we'll see some very large opportunities long term and that and that's just been a great plus of that that relationship.

Yeah.

Yeah. I would say they they they want to they would like to present us with opportunities. We would like to receive them. We've got the money. We both get along well very well with each other. And they have different they have some different customs than than we have. Uh, they drink the number one Coca-Cola product. They drink over there something called Georgia coffee. Uh, so, uh, I'm I'm I haven't converted them to Cherry Coke and they're not going to convert me to Georgia Coffee. But it's it's a perfect relationship. I just wish we had could get more like it. Uh, uh, and I never dreamt of that when I picked up that little wasn't so little, was about that thick, but sometimes two companies to a page and and a couple thousand pages, I believe. But it's amazing what you can find when you just turn turn the page. We showed a movie last year that, uh, about turn every page and I would say that turning every page, uh, is one important ingredient to bring to the investment field, that, uh, and that very few people do turn every page and the ones who turn every page aren't going to tell you what they're finding. So you you got to do a little of it yourself.

Okay. Uh, Becky, this next question comes from Advate Prasad in New York. He writes, "Today, Berkshire holds over $300 billion in cash and short-term investments, representing about 27% of total assets, a historically high figure compared to the 13% average over the last 25 years. This has also led Berkshire to effectively own nearly 5% of the entire US Treasury market. Beyond the need for liquidity to meet insurance obligations, is the decision to raise cash primarily a d-risking strategy in response to high market valuations? Or is it also a deliberate effort to position Berkshire's balance sheet for a smoother leadership transition, providing Greg Abel with maximum flexibility and a clean slate for future capital allocation decisions?" And I will add one line from another shareholder, Mike Conway, who asks, "Are you encouraged you may see some fat pitches coming your way?"

Yeah. Well, I wouldn't do anything nearly so noble as to withhold investing myself just so that Greg could look good later on. [Applause] Now, if he if he gets any edge, what I believe, I'll resent it. So, the, uh, now the the amount of cash we have is we we we would spend well, we came pretty close to spending 10 billion not that long ago, for example, but we'd spend a hundred billion. I mean, and and those decisions are not tough to make, uh, when when something is offered that is that, uh, makes sense to us and that we understand and, uh, offers good value and where we don't worry about losing. And the one problem with the investment business is that things don't come along in an orderly fashion and they never will. I mean, it isn't like every day. Uh, you know, the the long-term record is sensational, but that is not a product. And I've been in, see, I've had um 200 trading days times 80 years. And yeah, at at, uh, 16 million trading days, it been we kind of, uh, uh, I mean 16,000 trading days. It it would be nice if every day you got four opportunities or something like that and you know you could and they were expected to be equally attractive. You know, if I if I was running a numbers racket, you know, every day would have the same expectancy of that I would keep 40% of whatever the handle was. And so the only question would be is how much we transacted. But we're not running that kind of a business. And so we're running a business which is very very very opportunistic. And, uh, Charlie always thought I did too many things. Uh, he thought if we did about five things in our lifetime, we we could we could, uh, we'd end up doing better than if we did 50 and and, uh, and that we never concentrated enough. Uh, so that we would rather have if we've got 335 billion now in treasuries, we would rather have conditions that have developed where we would have like 50 billion or something like that. But that that just isn't the way the business works. And we have made a lot of money by not wanting to be fully invested at all times. And, uh, um we don't think it's improper actually for people who are passive investors just to make a few simple investments and sit with their life, uh, sit for their life in them. But we've made the decision to be in the business. So, uh, we think we can do a little better than that by behaving in a very irregular manner. But if you told me that I had to invest, uh, well our let's say that we have a roughly 40 billion a year coming in and we start with 335. If you told me I had to invest 50 billion every year till we got down to 50 billion, that would be the dumbest thing in the world to invest in that manner. Things get extraordinarily attractive very occasionally. The long-term trend is up. Nobody knows. And, uh, I certainly don't know. Greg doesn't know. Ajit doesn't know. Nobody knows what the market is going to do tomorrow, next week, next month. And nobody knows what business is going to do tomorrow, next week or next month. But they spend all their time talking about it because it's it's easy to talk about and, uh, but it it it has no value. Uh, I've never found anybody I wanted to listen to on the subject. And, uh, the on the other hand, I found the leafing through things like that big Japanese book that I can't read anymore. Uh, the, uh, it's it's a that's a treasure hunt. And every now and then you find something and occasionally, very occasionally, but it'll happen again. It, uh, I don't know when it won't. It could be next week. It could be 5 years off, but it won't be 50 years off. He will have we will be bombarded with offerings that that, uh, we'll be glad we have the cash for. And it'd be a lot more fun if it would happen tomorrow, but it's very unlikely to happen tomorrow. Very very unlikely to happen tomorrow, but it's not unlikely to happen in five years. And then it gets the probabilities get higher as you go along. It's kind of like death. I mean, if you're 10 years old, the chances that you're going to die the next day are low. Get to be 115 or something like that. It's almost a cinch. Particularly if you're a male. I mean, all the records are held by females in terms of age. And, uh, I tried to get Charlie to have a sex change so he could test out whether it [Applause], uh, he did pretty well for being a male. I'll put it that way.

Okay. Station two. Good morning, Warren, Greg, and Ajit. My name is Jackie Han. I'm from China and now work in Toronto, Canada. This is my eighth Berkshire hustling meetings at this point. I've probably spent more time with you than most people spend on Netflix. As you might guess, coming from a Chinese family, we've always had a soft spots for real estate. So, the your question isn't why don't you own a house, it's why are you still buying stocks instead of more property? So, here is my question. With today's high interest rates and global uncertainty, do you still believe in being greedy when others are fearful or the value investing facing new challenges in today's environment? Thank you.

Yeah. Well, in respect to real estate, it's so much harder than stocks in terms of, uh, negotiation of deals, time spent, the involvement of multiple parties in the ownership. Usually when when when real estate gets in trouble, you find out you're dealing with more than the equity holder. Uh, uh, but there have been times when, uh, large amounts of real estate, uh, have changed hands at bargain prices, but usually stocks were cheaper, but they were a lot easier to do. So, uh, Charlie did more real estate. Charlie enjoyed real estate transactions, uh, and and he actually did a fair number of them in the last 5 years of his life. Uh, but he was you know he was playing a game that it was an interesting game to him. Uh, but I think if he you'd asked him to make a choice when he was 21, he had to either be in stocks exclusively the rest of his life or real estate the rest of his life, he would have chose the stocks of the second the there's just so much more opportunity at least in the United States. There's so much more opportunity that presents itself in the security market than it does in real estate. And in real estate, you're dealing with a usually dealing with a single owner or a family that owns maybe a large property. Maybe they've had a long time. Maybe they've borrowed too much of money against it. Maybe the population trends are against them. But but to them, it's an enormous decision. When you walk down to the New York Stock Exchange, you can do billions of dollars worth of business, totally anonymous, and you can do it in 5 minutes. And the trades are complete when they're complete. In real estate when you make a deal a big deal with a distress lender it you know when you sign the deal then you go into another phase I mean then people start negotiating more things and more things and it's it's it's a whole different game and a different type of person to some extent enjoys the game. Uh, uh, we, uh, we we did a few real estate deals that came our way in 2008 and n but the the amount of time that they would take us compared to doing something intelligent and probably better, uh, and securities, uh, there was just no comparison. I mean, in a real estate deal, every every sentence is as important as a person and and in stocks, uh, if somebody needs to sell 20,000 shares of Berkshire or something and they call us and the price is right, it's done in 5 seconds and and it closes all the time, that, uh, people who you certainly wouldn't want to have marry your daughter or they behave well actually um in in in in stocks. Partly that's because that they're probably having their their, uh, wires or phones or whatever it is, uh, recorded as to what they've said and everything. But but the the completion rate for working on anything in stocks is if assuming you're got a meeting of the minds on prices essentially 100% in real estate. It just begins when you agree on deals and then they they take forever. So that for a guy 94 it's it's not it's not at the most interesting thing to get involved in something where the where the negotiations could take years, uh, and, uh, we we have the capability. There have been some huge failures in in in fact it, uh, if you go all the way back to Zeckendorf in the 1960s he was going to change the world and Century City out in California is a product of his and and if you go to, uh, Urus if you go to he was sitting on top of the world with the earth buildings and, uh, so people tend to get in trouble in that business. Uh, the banks usually don't want to recognize it, but that takes a long time to go through the through the bank processes. They just got through redoing the Musk cologne that he made when he was buying it three years ago, uh, uh, the company that's now X and you know 3 years to work out a transaction that, uh, or you've got parties on both sides that aren't ready to act that we find it much better when people are just ready to pick up the phone and you can do hundreds of millions of dollars worth of business in the day I've been spoiled but I like being spoiled so we'll keep it that

Okay, Becky. Um, this question comes from Sam England in San Francisco and and it's for Warren and Ajit. As AI systems become more capable and harder to interpret, how do you see that affecting the insurance industry's ability to assess, price, and transfer risk? Are there parallels to past disruptions Berkshire has navigated in underwriting or capital allocation?

Okay, Becky. And he's got about a 100 points of IQ on me and he's just going to be here this morning, so I'm going to let him answer the question first.

Well, uh, there is no question in my mind that AI is going to be a real game-changer and it's going to change the way we assess risk, we price risk, we sell the risk and then the way we end up paying claims. Having said that, I certainly also feel that people end up spending enormous amount of money trying to chase the next new new fashionable thing. We, uh, are not very good in terms of being the being the fastest or the first mover. Our approach is more to wait and see until the opportunity crystallizes and we have a better point of view in terms of risk of failure, upside downside. So right now the individual insurance operations do dabble in AI and try and figure out what is the best way to exploit it but we have not yet made a conscious big-time effort in terms of pouring a lot of money into this opportunity and my guess is we will be in a state of readiness and should that opportunity pop up we'll be in a state where we'll jump in promptly.

Yeah. And I was just add I wouldn't trade I wouldn't trade everything that's developed in AI in the next 10 years for for a Jeep. So if you gave me a choice that, uh, gave me a choice of having a hundred billion dollars available to participate in the insurance property casualty insurance business for the next 10 years and a choice of getting the top AI product out of whoever's whoever's developing it or having a Jeep making the decision. I would I would take a Jeep [Applause] anytime and I'm not kidding about that.

Okay, station three. Hello, I'm Sean Seagull from Chicago, Illinois. Thank you for investing your time to you and the executive committee for putting on this meeting and for bringing together a diverse group of people in an attendance under one roof. Out of all the companies that Berkshire Hathaway owns, there was one that you acquired, the Chicago based company Portillo's Hot Dogs. How did you know that this would be a good fit for the overall company's portfolio?

Well, I'll have to ask Greg about that because I don't know anything about it. So, maybe he bought it when I was looking the other way. But I think I got to call a friend on this one.

Yeah. I I um I we own a lot of companies, but I do like to think I know most of them, but but the, uh, uh, and maybe a subsidiary of a subsidiary in some way, but but I I really don't know a thing about it. I'm sorry, but that that may be a good thing. I do know something about hot dogs, though. So, and and we do have a lot of companies in Chicago, Warren.

Yeah. through Marmon and that's been a great opportunity where we've accumulated a a variety of, uh, excellent companies under that portfolio but as you noted, uh, I don't believe Portillo's falls under that no I I look at I I look at the financial statements of about yeah perhaps 50 or 60 of our companies, uh, every every month. Uh, but in the case of Marmon for example, Marmon itself owns over a hundred companies and, uh, yeah it, uh, it was the creature of it was created by Jay Pritzker and, uh, and his brother Bob and it was a remarkable company when we bought it but but it was highly diversified already and then we've diversified it further. So it is it is something of a Berkshire within Berkshire and, uh, uh, we found we found that that's working, uh, very good as arrangement. It it was interesting Jay Pritzker was a, uh, remarkable manager and there's various branches of the Pritzker family. So the you'll, uh, it's it's really goes back to a Pritzker before J and so on. But in in 1954 they changed the federal tax code very dramatically in the United States. It was quite a blow to me because I'd been at Columbia and I'd been reading a J.K. Lasser book about the tax code and then they went and changed the whole damn thing. So it but 54 was a big year, big change. Those years come every now and then like 1986 and, uh, and you may see a big one one of these days. Uh, and there was a company called Rockwood Chocolates in in U Brooklyn and they made Rockwood Chocolate Bits, which we used to sell at the Buffet grocery store and people made chocolate chip cookies out of them and everything. And, uh, then it turned out that cocoa, which lately has had a big run to cocoa was 5 cents a pound in 1941 when LIFO was first allowed for for insurance for for tax purposes. And the Rockwood Chocolate Company went into on the LIFO message. So they they owned like 30 million pounds or thereabouts of cocoa. And then cocoa took a run in 1955. And I had just moved to New York. And, uh, uh, there was a provision in the new tax code that if you were in two or more companies, uh, and you did certain things and you've been in them for 5 years and you got out of one of them that there would be no capital gains tax unlife all inventory gains and tax rates were on 48% maybe 52%. And so you so there was this huge profit cuz cuz u, uh, the cocoa had gone up in price but that made it terrible for them in selling Rockwood chocolate bits because the price of retail of the chocolate bits did not match what was going on at wholesale. Something almost identical has been happening in the chocolate business recently. Hershey chocolate just came out and said they're going to have a bad quarter and we're paying $4.50 a pound for chocolate that from cocoa because things are going on in West Africa that that make, uh, cocoa prices go up dramatically. In any event, Jay Pritzker bought control of Rockwood the chocolate company. And like I say, I was 24 or five years old. And they called the meeting to split off the to, uh, one one of the chocolate businesses in a way that would then enable them to to recognize the gain on this these cocoa beans without paying 50% roughly 50% federal taxes on the gain. So I went to the meeting which was in Brooklyn and nobody was there. This is in the turn every page category except one guy and I was 24 and he was 29 and it was Jay Pritzker and nobody had showed up at the meeting and it was kind of a crummy building they had but they had a lot of cocoa there and Jay just gave me a lecture or a lesson really I should say on on the tax code and I mean it I I could have gone to graduate school for years and never learned as much as he did. And then later we actually bought the company that Rockwood Company after he did some other things became the basis for Marmon. And Marmon among other things, uh, developed the car that, uh, won the first Indianapolis Speedway race and, uh, it invented the rear view mirror which I'm not sure is a great great advantage in economics or anything but but, uh, the guy that would they used to have on the Indianapolis 500 they had two people in the Our one guy was to look back and see what the other people were doing and the other guy was to drive the car and our guy got sick and, uh, so they invented a rear view mirror. So if you want to look at the kind of you know what's going on in the laboratories of Berkshire Hathaway and we we got people working on things like the rear view mirror a war.

Yep. I'm happy, uh, a friend did call. Um so that's that still works. Um, Peter Eastwood who runs, uh, one of our Berkshire subsidiaries and does a great job of running it, uh, tracked down that Portillo's is owned by a private equity firm called Berkshire Partners. So that was the basis of the question, but it's not associated with, uh, with Berkshire. So, we got we got to the bottom of that one.

Yeah. Thank you, [Applause] Peter. That's just a sample of the way we operate [Laughter] around.

Okay, Becky. All right. This question comes from Jessica Pune who says, "You've long been a strong believer in the American tailwind and the resilience of the United States, and history has proven you correct. Today, the US appears to be undergoing significant and potentially revolutionary changes. Some investors are now questioning the concept of American exceptionalism. In your view, are investors being overly pessimistic about the US economy or is the country indeed entering a period of fundamental change that requires a reassessment from a new perspective?"

Well, I would say that Jessica, who I believe is some, she is the, uh, stepgranddaughter of one of our managers that I I mentioned in the annual report, may not be the same one. But in any event, uh, America's been America's been insignificant and revolutionary changing really ever since it was developed. I mentioned that, you know, we started out as an agricultural society. We started out as a society with with high promises and we didn't deliver on very well. We we said all men were created equal. And then we wrote a constitution that said blacks get three counted as three fifths. And and in article two, you you'll find male pronouns used 20 times and no female pronouns used. So, you know, it took till 2000 I mean, you know, 2000 or 1920, I should say, uh, till the 19 till the 19th amendment was passed, saying, "Oh, yeah, we promised the women this back in 1776, and now we'll do something about it." And then we didn't do something about it for a long time. So, we're always in the process of change. will always find all kinds of things to criticize, uh, in the country but the luckiest day in my life is the day I was born you know because I was born in the United States and at the time about 3% of all the births in the world were taking place in the United States and, uh, I'd like to say that I had something to do you know listen sent messages out to my parents for God's sakes moved to the United States before I born or anything but I was just lucky and I was lucky to be born male I was lucky to be born white I was l all kinds of things but it's been if you don't think the United States has changed since I was born in 1930 it's been we've gone through all kinds of things and gone through great recessions we've gone through world wars we've gone through the development of a atomic bomb that that, uh, we never dreamt of, you know, at the time I was born. So, I I would not get discouraged about the fact that that doesn't look like if we've solved every

Problem that's come along. And uh, uh, if I were being born today, you know, I, I would just keep negotiating in the womb until they, they said you can be in the United States. So, it uh, uh, we're all pretty lucky. [Applause] Do you want to give any? We've got two non-United States guys here just to get the other side who now live in the US. Okay. Station four.

Hi Mr. Buffett. My name is Daniel, and I'm from Tenafly, New Jersey. First of all, I just want to say how grateful I am for getting the opportunity to ask you a question. When it comes to your principles of investing, you often talk about how important it is to be patient. Has there ever been a situation in your investing career where breaking that principle and acting fast has benefited you? Thank you.

Well, that's a good question, and uh, there are times when you have to act fast. In fact, uh, we made a great deal of money because we're willing to act faster than anybody around. Uh, Jessica Tombs is, I, I think she's the stepdaughter of, of um, or stepgranddaughter of Ben Rosner, a manager of ours. And in 1966, I got a call from a fellow named Will Felsteiner in New York, and he said, "I, I represent uh, Mrs. Annenberg." Uh, and there were, there were actually nine Annenberg sisters, I believe, before Warrenberg came along as the son. But he said, "We have a business we'd like to sell you." So, I called Charlie up, and uh, I got a few details, and it sounded very interesting, and uh, uh, Charlie and I went back to the office of Will Felsteiner in New York. He was a marvelous guy. Never met him since, but uh, he was handling things for Mrs. Uh, well, a, a Simon, but she, her name was Annenberg, and her husband had been the partner of, of Ben Rosner, but he had died. And uh, and Ben got kind of tense about working with her. Uh, and so he, u, offered us this business at a bargain price. He offered us a business for $6 million. It had $2 million of cash. It had a $2 million piece of property in the 900 block of, of u, what's the key street in Philadelphia down there? Market Street. And uh, and it was making $2 million a year pre-tax. And the price was $6 million. And Charlie and I went back to this place, and uh, Ben Rosner was there, and he really, he just was upset about doing business with his, his partner's widow. He was, she was extremely wealthy, and uh, and, and he just didn't, he wasn't enjoying it. He was very nervous about selling it. And he, he said to me and Charlie, he said, uh, uh, he said, "I'll run this business for you until December 31st, and then I'm out of here." And I got Charlie. We went out in the hallway. And I said, "If this guy quits at the end of the year, you can throw away every book on psychology I've ever read." And so that began a wonderful, we bought the company, had a great relationship, and did I know that morning when I got a phone call uh, from Will Felsteiner. There's background about it, uh, uh, I, I've had a couple of times, and that was one of them where people in the East felt that they had a, a stereotype in their mind of what people from the Midwest were like. And uh, Ben had been married, his first marriage was to a woman from Iowa. And he just figured that anybody from the Midwest was okay. And uh, the trick when you do, when you get in a business with somebody or you get in a room with somebody like that and they want to sell you something for $6 million that's got $2 million of cash and a couple million of real estate and is making $2 million a year. Uh, you don't, you don't want to be patient then. You want to be patient in waiting to get the occasional call. My phone will ring sometime, you know, and with something that, you know, wakes me up. I may be sleeping in there or something, but it, it, you just never know when it'll happen. And that's what makes it, what makes it fun. I mean, it, it, uh, uh, so patience, it, it's a combination of, of, of patience and a willingness to do something that afternoon if it comes to you. You don't want to be, you don't want to be patient about, about acting on deals that make sense, and you don't want to be very patient with people are talking to you about things that will never happen. So, uh, it's, it's not a, it's not a constant asset. It's not a constant liability. So, be patient.

Greg, you?

Well, Warren, I was going to add, uh, as you're being patient, I, I happen to know, and I think that goes for our uh, Ajit also and all our managers. Uh, very patient when we're looking at opportunities. And as you touched on, we want to act quickly, but while we're being patient, um, never underestimate the amount of reading and work that's being done to be prepared uh, to act quickly because we, we do know, be it equities, but I would include a variety of, of private companies that when the opportunity presents itself, we're ready to act. And, and that's a large part of uh, being patient is, is using it to be prepared.

Yeah. And, and of course, it, it doesn't come in anything like an even flow. I mean, it's the most uneven sort of activity you could get into. And uh, uh, the main thing you have to do is you have to be willing to hang up after 5 seconds, and you have to be willing to say yes after 5 seconds. And, and uh, uh, you can't, you can't be filled with self-doubt in the business. You just forget it. Isn't going to work that, uh, uh, go into some other activity. Uh, uh, but you also, I mean, one of the great pleasures, it is the great pleasure actually in this business is having people trust you, and that's, that's really the why, why work at 90 when you've got more money than anybody could count, you know, if they started today and had the machines there helping them and everything else. It, it, that it means nothing in terms of, of uh, how you're going to live or how your children are going to live or anything else. Uh, and uh, but it, it, it, and but both Charlie and I, we just enjoyed the fact that people trusted us, and they trusted us 60 years ago or 70 years ago, and, and, and partnerships we had, and uh, we never sought out professional investors to join our partnerships. Among all my partners, I never had a single institution. I never, I never wanted an institution. I wanted people, and I, I didn't want people that were sitting around and having people present to them every 3 months and, and tell them what they wanted to hear and all that sort of thing. So, and, and that's what we got, and that's why we've got this group here today. So, it, it's all worked out. But that, uh, it, it's you don't want to be patient when things are going your way, when, when the time comes to act. It, uh, you, you want to get it done that day. Okay, Becky.

This question is from Flavio Montenegro, a shareholder from Guatemala. Um, a couple of years ago in this meeting, Mr. Jane outlined the significant challenges GEICO faced in modernizing and integrating its IT systems. It was also mentioned that competitors were ahead in their pricing strategies because of the use of telematics. Today, GEICO's turnaround is evident through strong pricing and operational improvements. Could you provide more details on the specific actions taken under Todd's leadership and how those changes will help sustain a long-term competitive advantage in the coming years?

Yeah. Uh, Todd has done a great job for us in terms of turning around the operations. When he took over, uh, there were two major issues that Geico was behind its competitors on. Firstly, the term we used, and we all have been using, is matching rate to risk, and secondly, telematics. We were at the bottom of the list in so far as telematics are concerned about 5, 6 years ago. Uh, since then we have made rapid strides in telematics, which used to be a source of competitive disadvantage to us is no longer so, and I would argue that our telematics at Geico is about as good as anyone else's today. So that's been one huge catch-up. Secondly, in terms of matching rate to risk, there again, I think we have caught up with our competitors, and we're as good as anyone else in, in the field. All this together with the cost reduction effort that Geico, and Todd gets a lot of credit for, he has basically reduced the workforce by 20,000. Starting with something close to 50-odd,000, he's brought it down to 20,000, and that translates to uh, I guess at least $2 billion per year. So all this has allowed Geico to become a much more focused competitor. So much so in the last seven quarters, Geico has shown a combined ratio that has an eight in front of it. And I never thought I'd live to see the day when anyone could have a combined ratio as low as it is right now. So I think Geico has done a great job. Uh, it's 80 combined translates to the largest profit anyone is making on the underwriting side in the personal automobile business. So you know, we've achieved a lot, he has achieved a lot, but I do not want to be so arrogant as to say that mission accomplished. Uh, we've achieved a lot, but I still think we need to do a lot more in technology. AI, as we talked about, is going to be a big force, and we need to play catch-up there. Not catch-up, but we ought to be in a state of readiness. So I think Geico is in great shape right now. Uh, did Warren, you want to add anything?

No, I, it's, it's, it's a fascinating case study, but, and that's what's so interesting about the whole game of business, but particularly about our businesses is that, that each one is a little different. Uh, but they're all, they all have challenges of certain sorts, and but they also many, certain numbers have opportunities. We, we paid $50 million for half of GEICO in 1976. What turned out to be half of GEICO. $50 million. 50, 50, uh, we now own 100%, but 50% of $2 billion that we earned in the first quarter is a billion dollars, which on a $50 million investment is, you know, 20 for one in a quarter. Uh, so it, you know, now that takes years to develop, but the interesting thing is the auto insurance policy which didn't even exist 100 years ago. I mean, you, you didn't, you just, well, I should say 120 years ago. Uh, but there it's by far the largest item in the property casualty insurance business. It's, it's huge. The only thing I'd like to add is, in addition to the underwriting profit, Geico provides $29 billion a float.

Oh yeah. In addition. Yeah.

And, and that's not unimportant when you paid $50 million to get the business. It's giving you $29 billion to work with for nothing. And on top of that, gives you a billion dollars of, of profit in a quarter. Uh, the interesting thing about auto insurance is that, that we are, the company was started in 1936. We're selling the same product as 1936. We're, we're being more sophisticated about pricing it than we were then. Somebody just made the judgment, a fellow that came from USAA uh, made the judgment that, that government employees, the name Geico stands for government employees insurance company, that government employees were better drivers than average, and uh, I don't think he was an actuary or anything else, but he just made an observation, and uh, so he left USAA, which is still a very successful company, and he started Geico for a few hundred thousand, and he made money the first year from my underwriting. He made money the second year. This is not a public offering type thing deal, you know, use phony accounting for 10 years and all that sort of thing. They just prices to make money, and uh, that's exactly what's been done since 1936. The policy really, you know, your insurance, your auto insurance policy that looks a lot like the one that you had then. And this huge field has sprung up uh, around us, and it's still growing, and, and of course, nobody likes to, to buy insurance, but they sure like to drive, and, and, and uh, Geico is a fascinating story. And about three times over the years, the company has gotten sidetracked one way or another, and uh, and then it gets back to its basics, and, and it's a wonderful, wonderful business, and, and uh, we showed at this annual meeting one time a, a uh, message from Leo Davidson and, Lauren Murdavid Davidson in, in January of 1950. He was the only person in the building that uh, I'd gone down on a Saturday to visit, but turned out they didn't work on Saturdays in Washington, and I pounded on the door till finally a janitor let me in, and I said to the janitor, is there anybody I can talk to here except you, and he didn't take it personally, and he said, well, there's one guy up on the sixth floor, and a fellow named Leo Normer Davidson did wonderful things for me. You, you get breaks in life in terms of people you will meet who can just change your life dramatically. And uh, if you, if you, you need a handful of those, and uh, and when you get them, you treasure them, and we've had them on, on this board at Berkshire. You know, if you take Tom Murphy and Sandy Goddisman and Walter Scott and Bill Scott, we, we one thing we've done is we've held on to, to human assets. We've made lifelong assets out of people that, that are the right sort. And uh, with incredible talent, but also just lots of fun to work with and always doing more than their share. And you know, to get a chance to talk to Lauren Davidson on a Saturday afternoon, you just listen carefully. Uh, and that comes in the, in the category of turn every page. You know, some of them you want to turn pretty fast, but, but uh, you just get lucky in life, and you want to take advantage of your luck.

Okay, station five.

My name is Benjamin Graham Sanderson from Pasadena, California. Warren, thank you for all you've taught us over the years. Earlier, you said nobody but Steve Jobs could have created Apple, but nobody but Tim Cook could have developed it like he has. Warren, nobody but you could have created Berkshire. And I presume you view Greg as an outlier among outliers, but he seems so normal. Sorry, Greg.

Yeah, that's a nice way of saying not normal, actually, but I appreciate it. So, I was hoping you could share what specifically about Greg makes him your preferred successor. And Greg, we're excited to get to know you more over the next few decades. Thank you. Thank you. Thank you.

Well, you, you've hit on the most important question, and, know, in terms of the business. We've got a wonderful group of businesses. We've got a, we've got an ability to do things that nobody else can do, which is hard to get in a capitalistic system. It's been developed as fully as, as the United States has been. I mean, imagine being able to create something that is in a very, very, very big playing field. I don't think you'd really be very, very hard to develop anything like it. I don't think you could develop the people around it, that let alone the capital position, you know, and the history and everything else. And the answer, of course, is it, it, it does take a, a long, long time, and it takes getting around you a small cadre of people which then spreads out somewhat. But uh, where you've got mutual trust, uh, where people do more than their share, and I've been around a lot of businesses over the years, and by nature I'm somewhat critical of everything. I mean, I, I, I'm looking for what's wrong in things because that's part of investing is, is looking, you know, what aren't you, what are you missing? Uh, but we have, you know, we've got people that if they're asked to put on a show like this, instead of doing whatever their regular job is, they, they participated. I went around the groups of people who were exhibiting yesterday for an hour and a half, and these are people who are thanking me, you know, and totally enthused about coming and doing a lot of work for which they don't get paid anything extra. I don't know anything about the arrangements the individual companies make, but they, they work hard, and they enjoy their work, and uh, you know, you really want to work at something you enjoy. I've always had, I've had five bosses in life, and I liked every one of them, and they were all interesting. I still decided that I'd rather work for myself than anybody else. But, but if you, if you find people that are wonderful to work with, you know, that's the place to go. And I've, I've told my kids that basically that you don't get lucky like I did when I found it seven or eight years of age. What really interested me, you know, could have taken a lot longer, but, but uh, you want to uh, find the song, find the sound is uh, there's a movie called The Glenn Miller Story, and Glenn Miller went on from having a broken-down band for 15 years to, to uh, turning out the first, he found the sound, and, and uh, and created the first gold record. I don't know whether any of you know what it was, but it was the Chattanooga Choo Choo, and in 1941, I think it was. Uh, and he turned around from being a, a nothing in with a band that he had till he found the sound. And uh, I always have told my kids ever since that their, their, their sound isn't my sound, you know, but uh, and you don't find it necessarily on the first job you take, cuz you got to eat, you know, and but if you get lucky like I did, you, you find it, you find it when you're very young, and then, you know, just keep doing it, and uh, and don't worry, don't worry too much about starting salaries, and don't worry about, about uh, and be very careful who you work for because you will take on the habits of the people around you. So there's certain, certain jobs you shouldn't take, and uh, but you've got the greatest country in the world, and you got the greatest time in the world. So, uh, I would say that that, uh, well, I while I'm handing this over to Greg that, uh, that, you know, you can't even dream all the dreams that you could have about a place like Berkshire. But the big thing you have to do though is always is to be sure you can play the next day. I mean, in terms of, in terms of financial activities on a meaningful scale, uh, you know, you, you don't want to go, you don't, there was a, a book about, what was the name of that book, you only have to get rich once. I mean, you don't, you don't want to do anything that risks uh, what's been created. So you don't, you, if, very stupid things are happening around you, you do not want to participate. If people are making more money because they're borrowing money or they're participating in, in securities that are really pieces of junk, but, but uh, but they, they hope to find a bigger sucker later on. You just have to forget that, and it, uh, that'll bite you at some point, and, and the basic game is so good, and you've been so lucky to be born now. I mean, if, if I'd been born in 1700, I'd say I want to go back in the womb. What the hell with this? It's too hard. And but now I've come along to do something where I can just play around all day with things I enjoy doing. And uh, and uh, it's really uh, it's a pretty wonderful life. Anything Greg, you want to add or subtract from that?

Nothing to subtract, but um, I, I would always just say I couldn't be more, as I've said in the past, more humbled and honored obviously to be in this role, but to, to have actually been part of Berkshire for Warren, it's now 25 plus years, had the opportunity to be part of Berkshire and to, to work with you and Ajit and our, our board, but many other people in our company, and as you touched on, um, when you find something like that, and you find something like that like Berkshire that's so special, it's, it, you fall in love with it, and it's, it becomes just what you want to do every day, and it's just an incredible opportunity. So, thank you. [Applause] And to the gentleman who asked the question, if you don't find it immediately, you know, uh, don't starve to death or anything in the meantime, but, but, but uh, you will find it, and, and you'll, you'll find it in, in the right individual, in, in a sense. It's somewhat like finding the right person in marriage. I mean, that uh, probably the first, some of you married may have married the person you, you met on your first date. Although I guess they don't even have dates anymore, but, but the uh, uh, but you know, it's, it uh, sometimes it pays to wait, too. Okay, Becky.

Uh, this is a question from Mark Bonnke and Helen Friedrien in Rapid City, South Dakota. As the US dollar quickly loses value in relation to other foreign currencies in 2025, is Berkshire Hathaway taking steps to minimize this currency risk and its impact on quarterly and annual earnings? If so, please explain. And I, I'll just add from Mary Chang, another shareholder. Berkshire currently borrows in Japanese yen to offset its currency risk and its Japanese stock investments. In the future, will you invest in foreign currency denominated assets unhedged?

Yeah. Well, we always have um, pretty much uh, the Japanese situation is different because we, we do intend to stay so long with that position, and the funding situation is so cheap that u, we essentially have, have attempted to some degree to, to match purchases against yen-denominated funding. Uh, but that's not a policy of ours. In fact, that's the first time we, we've, we've done that. And, and we've owned lots of securities of, of, of in, in foreign currency. So uh, we do nothing in, in u, in terms of the question about its impact on quarterly and annual earnings. uh, we don't do anything based on its impact on quarterly and annual earnings. I mean, there's never been a board meeting I can remember where I or a conversation I had with Charlie when I said where I say if we do this our annual earnings will be this, you know, and therefore we ought to, whether it's accounting or whe anything, uh, we just, you know, the number will turn out to be what it'll be, what counts is where we are five or 10 or 20 years from now. And, and if you start focusing on what number you're going to produce, uh, you will quickly get tempted, at least based on the experience I've seen from viewing 20 companies, you will get so you'll one way or another uh, play around with the numbers, and sometimes seriously play around with the numbers. And uh, uh, I've seen people that, that you know, I trust him in all kinds of other ways, but they regard playing around with numbers is perfectly okay. And that's just not something, you know, that we just don't think about that. So uh, actually the, the uh, the end, um, um, uh, the relationship of the end behavior of the end in the last quarter, you know, resulted in certain gap charges, and uh, but it doesn't make it, it doesn't make any difference; it'll change next, you know, next month or next year. And, and obviously, we wouldn't want to be owning anything that we thought was in a currency that was really going to hell. And that's the big thing we worry about with the United States currency. I mean, it, the tendency of a government to want to debase its currency over time is there's no system that beats that. You, you can pick dictators, you can pick representatives, you can do anything. But, but the people, there, there will be a, a push toward weaker currencies. And of course, that is, I mentioned very briefly in the annual report that, that the, that fiscal policy is what scares me in the United States because it's, it's made the way it is, and uh, and uh, all the motivations are to doing a lot of things that will cause, can cause trouble with, with money. But that's not limited to the United States. It's all over the world, and some places it gets out of control regularly. I know they, they know, they know, they, they devalue at rates that are breathtaking, and that's con, that's continued. I mean, and

You people can study economics, and you can have all kinds of arrangements; but in the end, if you’ve got people that control the currency, uh, you can you can issue uh paper money, and you will or you can engage in clipping currencies like they used to centuries ago. And then there will always be people, and it’s the nature of their job. I don’t I don’t I’m not singling them out as particularly evil or anything like that, but the natural course of government is to is to make the currency worth less uh over time, and uh and that’s got important consequences. And it’s very hard to build checks and balances into the system to keep that from happening.

And uh, we’ve had a lot of fun here in the last either the first 100 days or the last 100 days, whatever you want to call it, the uh uh watching what happens when people try to make sure that they aren’t running fiscal risks and uh that game isn’t over, and it never will be over, you know, in finality. If you look if you look up in in search the great inflations of post World War II, it’s just the list that goes on forever, and the same names keep popping up and everything. So currency is a the value of currency is a scary thing, and and uh uh we don’t have any great system for beating that. We do in this particular Japanese position because we expect to hold it for 50 or 100 years or more, and we will be owning something as denominated in the end and easily predictable, and we’ll just as long as the the carry honored is right and everything will will uh will attempt to issue uh Japanese denominated liabilities, but that that’s not because of anything we care about in terms of quarterly or annual earnings. Greg, do you have anything to say on that?

I was just going to say that relative to the question that there’s no question we were fundamentally very comfortable with investing in the five Japanese companies and recognizing we’re investing in yen. The fact we could then borrow in yen was a almost just like a nice incremental opportunity, but we were very comfortable both with the Japanese companies and with the currency we would ultimately realize, i.e., in the yen. Yeah, we we only made as I referred to earlier one big currency play which was connected a little bit with when I wrote that article for Fortune, and we got long 12 other currencies as I remember only four or five of them are really big currencies, but when when I say we got long it that means we’re short the dollar, and uh so we held that position for a couple years, and we we made several billion dollars on it, which was significant to us then, still is. Uh the uh Charlie always felt that if if he had to pick an area outside of stocks in which to invest, and he knew a lot about bonds, he knew a lot about real estate, he knew a lot about a lot of things. But he he said the he thought he could he he thought he could make a lot of money out of being in foreign currency. But uh uh we just we’ve done it once. It’s not inconceivable we would do it again, but it’s unlikely. Uh, but there could be things happen in the United States that would make us want to own a lot of other currencies. And I I suppose if we if we made some very large investment European country or some there might be a situation where we would do a lot of financing in in their currency, but it’s it it was something that just was sort of obvious to do in the Japanese situation where we had the ability to borrow a very very low carrying uh carrying cost and uh and we felt very good about the income we’d be receiving from these securities, and we and if the present condition which it won’t I mean it never does but pre prevail for decades and decades we would probably keep doing the same sort of thing, but uh things change in the world too. So don’t take that as a prediction. Okay, section six.

Uh, good morning, Warren and Greg, Ajit. Thank you so much for hosting this event. Good to be here. My name is Dash Boyinder, and I’m from the great country of Mongolia. A little bit background about my country: Mongolia is an emerging market and landlocked country sandwiched between Russia and China. But we are rich in history and minerals and have full democracy and a growing economy. Last week we hosted our our second annual Mongolia investor conference in New York to attract investors like yourself. I know you meet and give advice informally to government leaders such as South Korea, China, and India. What advice would you give to government business leaders of emerging markets like Mongolia to attract institutional investors like yourself? It’d be great if you have long-term plans for exposure to emerging markets as a hedge or an opportunistic investment. Lastly, I welcome all of you to Mongolia, and my country folks would be very happy if you can make it to our economic forum this July. Oh, thank you.

Yeah, I I have trouble planning a trip to Council Bluffs, which is just a few miles from here, but takes an optimist. Uh, actually I met a fellow here at the annual meeting um oh probably 20 years ago or more who did a lot in Mongolia and uh uh it he’s he did very well in Mongolia and uh actually moved there for quite a while. Uh I would say that if if you’re looking for advice to give the government over there, it’s to develop a reputation for for having a solid currency over time. I mean that we we we don’t really want to go into any country where we think that there’s a a chance I mean a significant probability of runaway inflation. It just it’s it’s too hard to figure. People other people have figured out ways to make money in in hyperinflationary situations, but uh that’s not our game, and I I I don’t think I’d play it well. So, uh we wouldn’t be we that that would be that would be a factor with us, the chances are and we won’t find anything in Mongolia that fits our size requirements aside from that. But I but like I say I it uh I think my friend that I met here 20 years ago has done very well in in uh Mongolia. And if if the country develops a reputation for being business-friendly and currency conscious conscious uh and I think that that bodess very well for the the res the residents of that country particularly if it has some other natural assets that uh it can build around. Uh I don’t know that much about the minerals there or anything of the sort, but but uh uh I mean who would have been on the United States in 1790? But uh um we we we didn’t we didn’t have to have perfection. We just had to be better than the other guy for quite a while. And we started out with nothing, and we ended up with close to 25% of the world’s GDP and faster growth rates and generally sounder currencies and all kinds of things that uh so uh I wish you well.

Okay, Becky, this question is from Peter Shen in New Jersey. Uh, it’s for Mr. Buffett and Mr. Jane, in recent years, large private equity firms like Blackstone, Apollo, and KKR have aggressively expanded into insurance, raising permanent capital, managing float, and aiming to replicate the model that Berkshire pioneered decades ago. Given that these firms are now directly competing for insurance assets, often using higher leverage and more aggressive investment strategies, how do you view their impact on Berkshire’s insurance operations and underwriting discipline? Do you believe that the qu private equity model poses risks to policy holders in the broad financial system, and has this competition made it more challenging for Berkshire to find and price insurance opportunities safely and profitably today?

Okay. Yeah. Part of the question is very easy. There’s no question the private equity firms have come into the space, and we are no longer competitive in the space. We used to do a fair amount in this space. Uh, but in the last 3 4 years, I don’t think we’ve done a single deal. Now you ought to separate this whole segment in two separate segments. One is the property casualty end of the business and the life end of the business. Uh, the private equity firms that you mentioned are all very active in the life end of the business, not the property casualty end of the business. uh, you are right in identifying the risks in these private equity firms are taking on both in terms of leverage and in terms of credit risk, and while the economy is doing great and credit spreads are low these pe the private equity firms who’ve taken the assets from very conservative investments and I wouldn’t say high octane, but they’ve certainly invested these assets in situations where that is where they get a lot more uh return on the investment, and as I said as long as the economy is good and credit spreads are low they will make money they’ll make a lot of money because of leverage; however, there is always the danger that at some point the regulators might get cranky and say you know you’re taking too too much risk on behalf of your policy holders uh and that could end in tears. We do not like the risk-reward that these situations offer and therefore we put up the white flag and said, you know, we can’t compete in this segment right now.

Yeah, I think there are people that want to copy the virtuous model, but usually they don’t want to copy it by also copying the model of the CEO having all of his money in the company forever. And uh I mean they’ve got a different equation. They’re they’re interested in and and you know, and that’s capitalism, but they have a whole different uh situation. And then they probably have a somewhat different fiduciary feeling uh about what they’re doing. And uh and sometimes it works and sometimes it doesn’t work. And if it doesn’t work, they go on to other things. And if I what we do here at Berkshire doesn’t work, I spend the end of my life regretting what I’ve created. So it it uh it’s just a whole different personal equation. And uh there is no property casualty company that can basically replicate Berkshire. That that wasn’t the case at the start. I mean at the start we just had National Indemnity a few miles from here, and anybody could have duplicated what we had, but uh but that was before A G and and the G came with us in 1986, and and at that point the other fellow should have given up. [Applause] Yeah. Station seven, please.

Hi, my name is Marie. I’m from Melrose, Massachusetts. Thank you for the time today. As a young person interested in investing like myself, I would love to hear your insights, Mr. Buffett. What were some pivotal lessons you learned early in your career? And what advice do you have for young investors who are looking to develop their investment philosophy? Thank you.

Well, those are good questions. I wish I thought of it myself earlier in my life. Uh the you know who you associate with is just enormously important, and don’t expect that you’ll make every decision right on that. I mean, but you you are going to go into you’re going to have your life progress in the general direction of the people that you that you work with that you admire that become your friends. Uh I mentioned a few fellows that that have died in the last couple years. Well, all of those people were people that that that that uh you know, if we were working together on something one 10,000th of size of Berkshire, I mean, they’d be the kind of people you choose. You just they’re there people that make you want to be better than you are. And you want to hang out with people that are better than you are and that you feel are better than you are because you’re going to go in the direction of the people that you you associate with. And uh and that’s that’s something you learn. And of course, you learn it late in life that uh you you uh it’s hard to really appreciate how important some of those factors are until you get much older. But when you’ve got people around you like Tom Murphy and and like like well like just name him Sandy Goddisman that uh Walter Scott but uh you’re just going to live a better life than than uh you do if you just go out and look at somebody that’s making a lot of money and decide you’re going to try and copy them or something of the sort. Uh uh so I would I would I would try to I tried to be associated with smart people too where I could learn a lot from them, and I would try to look for something that I would do if I didn’t need the money. I mean, what you’re really looking for life is something where you’ve got a job that you’d hold if you didn’t need the money. And I’ve had that surely had it for a very, very long time. In fact, all the fellows I named uh had it. And uh and they also, every one of those ones I named, they always did more than their share, and they sought they never sought more than their share of the credit. They just behaved as the way you you’d like anybody you you work with. And when you find them, you treasure them, and and when you don’t find them, you still keep doing whatever causes you to eat uh or enables you to eat. But uh but you don’t you don’t give up on on looking around, and you will find you’ll find people do wonderful things for you. I mentioned I mentioned uh uh earlier the you know going down to GEICO and knocking on the door when the door was locked. I mean who knows what was behind that door went in but but no in 10 minutes I found that I had a man that uh was going to be just wonderfully helpful to me. And of course if somebody’s going to be helpful to you, you want to try to figure out ways to be helpful to them. So you get a compounding of of good intentions and good behavior. And unfortunately you can get the reverse of that in life too. And uh and you know with a lot of I I was lucky in having a a good environment for uh living that kind of a life, and other people you know have a whole different environmental situation. Have to overcome it. But don’t be don’t feel guilty about your good luck if you’ve got if if you know if you’ve got uh well if you live in the United States you you know you you you’ve you’ve uh there 8 billion people in the world and there’s 330 million United States you’ve already won the game uh to a great degree and then just keep making the most of it. But you you don’t want to you don’t want to associate with people or enterprises that ask you to do something that or tell you to do something that you shouldn’t be doing. And uh that’s one of the problems. I mean the different professions select for different types of people, and uh uh there’s it’s interesting to me that in the investment business uh uh so many people get out of it after they’ve made a pile of money that that uh uh it it you really want something that you’ll stick around for. You know whether you need the money. Greg doesn’t need the money. A G doesn’t need the money uh remotely, and they but they enjoy what they do and they’re so damn good at it. It’s it it’s uh you know it just well I’ve had the advantage of seeing how that works over time. The best manager I ever knew, and there’s a lot of contention for who that would be, but actually was Tom Murphy senior that uh who lived the the almost 98 and uh I’ve never seen anybody that could get the potential out of other people uh more than than uh Murf. I mean, if if if you wanted to if you wanted to become a better person, you went to work for for Tom Murphy. And uh uh there are all kinds of successful people that really don’t have that sort of don’t bring that to the party. And and I’m not saying that’s the only way to succeed, but I think it’s I think it’s the most pleasant way to succeed for sure. And uh uh and I think that you know the the Berkshire experience is pretty dramatic. I mean to to operate with Sandy Goddisman from 1963 until he died a couple years ago. And um Walter Scott for 30 years and Clayton operated with him for 25 years or so, whatever it was. Yeah. 30. Yeah. And and uh you know, you really can’t miss it. Uh and you know, you you’ll learn all the time, but you’ll you’ll not only learn how to be successful at business, you’ll learn how to be successful at life. And uh uh so that’s that’s that’s my recommendation and that u and uh and for some reason I apparently you live longer too because pretty amazing. I mean, these people I’m talking about, including myself, I mean I mean, you know, I like to attribute it to this and a few other things, but I I I think a happy person lives longer than somebody that that that’s uh doing some things that they don’t really admire that much in life. Okay. Uh let’s move on to I guess it’s Becky next.

Um, the first quarter ended March 31st, and it did show that Berkshire’s cash pile expanded from the end of the last year. But the greatest market turmoil came in April. Martin Devine, a shareholder from Scotland who is attending the meeting today wants to know, has the recent market volatility presented Berkshire with opportunities? And Martin just wrote in an addendum in the last 40 minutes or so pointing out that you mentioned Berkshire almost invested $10 billion recently and wanting to know if you could talk more about that.

Well, the I can give you a good answer to the second part of which is [Laughter] no, the but 10 billion wouldn’t have done that much. You know that’s the other side another side of it. Uh, what has happened in the last uh 30 30 45 days 100 days whatever whatever you want to pick up whatever this uh this uh period has been is is it’s really nothing. There’s been three times since we acquired Berkshire that Berkshire has gone down 50%. Uh, in a fairly short period of time, three different times. Nothing was fundamentally wrong with the company at any time. But but this is not a huge move. Uh, the Dow Jones average 381 in September of 1929. They got down to 42. So that’s by going from 100 uh to 11. Uh, this is not this has not been a dramatic uh bare market or anything of the sort. I mean it it it you know like uh some pointed out if I’ve I’ve had 200 and 50 trading days a day, you know, for however many years I’ve been old enough to trade stocks. Got 17 or 18,000 days. There’s been plenty of periods that that uh uh just are dramatically different than this. I mean, when the day I was born, the Dow Jones was a 240 and my first that was August 30th, 1930. And between that and the low, it went from 240 to 41. I mean, so if people think that it made a really major change, it it didn’t if it if it gone up 15% instead of down 15%, people think they take that with remarkable grace. But uh but uh if it makes a difference to you whether your stocks are down 15% or not, you you’re you need to get a somewhat different investment philosophy because the world is not going to adapt to you. You’re going to have to adapt to the world, and you will see a period in the next certainly in the next 20 years. You’ll see a period that that that will be in what somebody in the market described one time as a hair curler compared to anything you’ve seen before. I mean that just it just happens periodically. The world makes big big big mistakes, and surprises happen in dramatic ways, and the more sophisticated the system gets the more the surprises can be out of right field. That’s that that’s just that’s part of the stock market, and that’s what makes it a good place to to focus your efforts if you got the proper temperament for it and a terrible place to get involved if if you get frightened by markets that decline and and get excited when stock markets go up. I don’t mean to sound particularly critical. I mean, I know and people have emotions, but you got to check them at the door when you invest. Okay. Station 8, please.

Good morning, Mr. Muffet, Mr. Re, and Mr. A. My name is Peter Chen. I’m from Shanghai, China. This is my first time attending this shareholders meeting. I would like to ask a question about the wisdom of life. Have you ever encountered any major setbacks or or low points in your life, and how did you get through and overcome them? Thank you very much.

Yeah. Well, everybody gets setbacks and uh and some people have particularly bad luck in that respect and others get through it with fairly minors. But Charlie, you know, but uh he had setbacks, I had setbacks. I mean, it it it’s it’s part of life and uh and they’re not any fun. I don’t have any great advice for you about about uh you know having the time of your life while you’re having some major setback, but but uh it it you know it it comes with lifetime you know it uh you certainly have a setback when you die, and so everybody’s got that setback guaranteed to them, and uh but some people get and I mean it It it isn’t a laughing matter in a sense because I mean people get extraordinary bad luck and other people get extraordinary good luck. Usually the people who get good luck don’t really think it was so much luck as themselves, but but you’re just going to have it. I think you’re going to I think that you’re less likely to have it in terms of medical problems in terms of you know various things in life. I mean, you were born at a good time. I mean, you if you look all the way through the history of China, when when would you rather have been born? You know, 100 years ago, 500 years ago, 1000 years ago, or now, you know, it it it’s just hands down, you’d be lucky. I mean, you know, if if I came from 20 generations of shepherds, I I I think I get kind of tired of, you know, my life just looking at these sheep every day. But, uh, you know, we can sit here and I can I can watch Nebraska not quite played the same game of football that we played 20 years ago. But, but I mean, everything in life has been made so much better uh that you’ve got to figure that you do a lucky store straw by, you know, staying in the womb for a couple hundred thousand years and then just emerging at at the right time. Uh so I would I would focus on the things that have been good in your life rather than than than the bad things that happen because bad things do happen. But but uh it it it it’s uh it it it can often be a wonderful life. You can get terrible breaks in it. I mean, you know, it uh uh so far that really hasn’t happened with me, but it’s happened with some of my friends, but you get some bad breaks from time to time. Uh uh but for 94 years I’ve been able to drink whatever I want to drink. And you know they they predict all kinds of terrible things for me but it hasn’t happened yet. So and it’s true. I mean, if you look at what pro football players are making now and everything compared to what they were making 30 or 40 years ago, you can say, “Well, isn’t that wonderful?” But if you look at the if you look at the lifespan of professional athletes, after a while, you get used to really decide that you’re better off if you uh if you really weren’t the first one chosen to be on the baseball team or the basketball team or anything. Anything else. The uh the human body uh well Charlie and I and I think I speak for the others to some extent that and we we never didn’t we never really exercise that much or did anything. We were we were carefully preserving ourselves for the years. So look at the bright side of things to the extent that you can and that uh and you know you’re lucky enough to you’re here today. You’re healthy. You’re you come from a long distance, and and uh and you’re getting a chance to learn more about something that interests you. uh compare that with the situation a couple hundred years ago that you would have been offered. So anyway, that’s enough moralizing. Okay, Becky. Uh, this

Question comes from Himanchu Bendal, for Jeet and Warren. Um, autonomous vehicles are already driving across roads in American cities with no driver involvement. How do Warren and Ajet think about any disruption risk from these autonomous vehicles to GEICO's auto insurance business, which is built around understanding and underwriting human drivers? Wouldn't what we call auto insurance today just become product liability for autonomous vehicles and autonomous software companies?

Well, a Jeep. Yeah, there's no question that uh insurance for automobiles is going to change dramatically once self-driving cars become a reality. Uh the big change that we will see is what you identified. Most of the insurance that is sold and bought revolves around operator errors and how often they happen, how severe they are, and therefore what premium we ought to charge. To the extent these new self-driving cars are more safe and are involved in fewer accidents, uh that insurance will be less required. Instead, it'll be substituted by, as you mentioned, product liability. So we at Geico and elsewhere are certainly trying to get ready for that switch where we move from providing insurance for operator errors and be more ready to provide protection for product errors and errors and omissions in the construction of these automobiles.

Yeah, we expect we expect change in all our businesses, and uh it's a good thing we didn't—and Charlie pushed me into it—but but uh if I'd settled for being in New England textiles, you know, and even though it worked well for 70 years or so prior there too, you know, it the world changes and and if the game didn't change at all, it really would be very interesting. You know, it uh uh if every time you if every every time you you know swung at a baseball, you hit a home run, the game wouldn't be interesting. If every time you hit a golf a golf ball, you had a hole in one, it wouldn't be interesting. So it the fact that there will be things you have to think about all the time as you go along and you'll make mistakes and all that—that's really part of the fun. I mean that your your your brain would turn to mush if you didn't have a few problems now and then.

So, um I I uh you know, auto insurance will change, although it's remarkable how little it has changed, but it's only been around since, you know, a relatively small time. And who knows what we're doing to move in transportation 100 years from now? You go back a couple hundred years ago, who could have predicted the United States would look like what it does and people would move like they do and people would enjoy themselves like they do. And I mean, it's just it it it's it's a it's a dynamic world. And the biggest thing we have to worry about, unfortunately, is that that uh we've learned how to destroy the world too and in in in in recent years. And so we've got this wonderful world which now we we know that there are eight countries that and probably a ninth coming on that can destroy and and uh uh and we don't have what I would consider the necessarily the perfect people leading each of one of the nine or or some of the nine countries.

And uh you know when Einstein came up with E equals MC² back in 1905, he uh he didn't dream of the fact—I mean that energy could really be converted or uh mass could be converted into energy and the way that we change the world. When I was born in 1930, they had known about the law of physics that that Einstein had come up with uh 25 years earlier. Nobody to my knowledge had thought what can this do to change uh warfare in the future. And literally uh it just wasn't thought. Einstein didn't think about it at at that point. And uh and then in 1939 Roosevelt got a letter around u month before Germany moved into Poland—got around August 1st. It's the most famous letter in history from from Leo Zard. Leo Zard couldn't get his letter in front of Roosevelt because who ever heard of Leo Zard? But but he got Einstein to sign it. And uh Roosevelt probably understood about as much about physics as I do. So he he didn't understand it, but he understood that Einstein signed it. So he calls in General Rover, may not have been general then, and said, "We should do something about this." And and all we did was learn how to destroy the world. And uh we needed to do it, and and uh Germany had Heisenberg and he looked like he was he was ahead of us and uh uh we can't put that genie back in the bottle, and it's the world does change and we've got all these—one we've got wonderful things but u but we also have you—Um, we have a guy in North Korea. If you if we criticize his haircut, you you know, who knows what he might decide to do with what does North Korea need uh nuclear weapons for? I mean, it uh can that be a good thing in the world? But they're not going to go away. So, it's a it's it's a world of change.

And we are enjoying incredible change that's contributed everybody in this room living so much better than people were living a couple hundred years ago. But we haven't been able to to avoid—we haven't changed human beings very much so far. We've we've certainly changed weapons of mass destruction and and uh but we haven't made much progress with the human race and and uh we'll see what happens with that. But in the meantime, we'll see changes in auto insurance too and cars and and uh that that will be be more in it be easier for us to deal with it than it was when we had to deal with the problems of of turning out textiles in New England. And uh you know, and you deal with the world as it develops. And like I say, everybody here is living in the luckiest period. But but but you know, enjoy your luck and uh and uh and you still try to figure out the answers to what's going to happen. Yeah. In all insurance as we go along and we've we've done pretty well actually adapting to the answers. There's a few big problems in insurance and uh I don't know how the insurance industry adapts to them particularly, but but that makes the game interesting. You really don't want you wouldn't want to go out and play golf if you are going to hit the ball in the hole on every hole.

I just like to add we talked about the shift to product liability and to protection for accidents that take place because of a error in terms of how the product was designed or supplied. Uh the only thing I want to add is in addition to the that shift I think what we'll see is a major shift where the number of accidents that take place and need to be provided for will drop dramatically because of automatic driving. But on the other hand, the cost per repair, every time there's an accident, the cost of repairing and bringing everything back to where it used to be would go up very significantly because of the amount of technology that's going into the uh into the car. How those two variables interact with each other in terms of the total cost of providing the insurance, I think, is still an open issue.

I'll give you two interesting figures to ponder. When I walked into Geico's office in 1950, the average price of a policy was around 40 bucks a year. Uh it varies all over the lot depending on location, everything, but but uh uh you know it's pretty easy to get up to $2,000 and depending on how urban your areas are and uh everything can get considerably higher. During that same time, the number of people killed in auto accidents uh have fallen from roughly six per 100 million miles driven to little over one. So the cars become incredibly safer and it costs 50 times as much down or thereabouts to buy insurance policy.

Well, uh, when people talk about the developments in car driving and all that sort of thing, it it's a lot easier sometimes. I mean, the the Buck Rogers aspect of it people look at, but they don't actually think of what really happens to the math of the business. the insurance auto insurance industry has been a huge growth industry and for that matter uh homeowners insurance prices in Nebraska have doubled in the last 10 years adjusted for general inflation and uh convective storms you know have just gone on a tear and it's still unprofitable over the home homeowners insurance in Nebraska after doubling the price in the last 10 years. So, it's very hard to predict what these big changes mean and you just have to keep thinking all the time, but you don't want to read some research report that says the world's coming to an end or the world's going to be wonderful because of this or that because there's about 50 other developments going on at the same time that you uh that you need to think about that uh and that you needed to keep observing as you go along. You don't re you never reach an answer in this business. You reach a point of action that you take. But but but uh we try to get into as high probability things as we think we could do and play the game in the same way. But but but it will be different than you think. And and you should wake up every morning and think about that too if you're if you're in the business of of managing businesses.

Hey, Warren, as we approach the break, uh would you like to address the operating earn?

Oh, yeah. Yeah, let's put up the uh we released our 10 Q this morning and um uh we always try to do it on a Saturday so nobody gets a jump on other people. And we we just have three simple um chart. You'll see that uh our insurance underwriting income was down dramatically for the first quarter and last year was as good a year as you'll see in insurance. Uh uh and it's always unpredictable in insurance but everything broke our way uh or the insurance industry's way last year. Prices are down this year. Risks are up this year. So you don't have to be a genius to figure out what the answer is on that. So uh but we have we do have unusual advantages in the insurance business. Uh that can't really be replicated by our competition. That doesn't mean they aren't trying to get advantages. We don't have that. But we'll try to replicate anything that seems better. In fact, we'll try and top it. But we I wouldn't talk about our insurance business as much as I do it unless I really thought we had some really permanent advantages in a very very large industry. We just announced within the last 24 hours that we and Zurich and Chub have arranged a joint operation to be the uh writer of of really large sums that that very few people can do. And of course, we got to write them at the right price in terms of liability, but but we can do that sort of thing without blinking, and anybody that wants to do it wants to get us in it. I mean it uh so anyway our investment income uh did not change that much because we have a float that grows a little bit which gives us more money for investment and then we have retained earnings which grow. So we would expect in any year to have like 40 billion or more that that we'll build up investments unless we find things uh to do with it. So the investment income rates on treasuries are less than they were or short-term bills I should say are are less than they were before. So you had that negative effect pulling it down but not that much and we had more money. So we came up with a little more earn in the way of earnings. The railroad is earning a little more than than last year, but it's not earning what it it it should be earning at the present time. And but that that's solvable and uh and and is getting getting solved. Uh and it's still an incredible asset for Bergkshire. The energy company last year was having particular problems and those are absent this year. So those earnings are up and uh and then uh among our range of general businesses they were pretty much a push and I think I think you did a little calculation the other day on how many were up and how many were down.

Yeah. Of our uh 49 that we measure closely uh 20 21 were up and 28 were down. So you can tell it was really a a mixed quarter when you go go across uh the operating the non- insurance operating businesses.

Yeah. The next slide uh I'm getting a five-minute warning here. The uh we'll throw the long ball now. The uh uh shows our financial condition which continues to hold a lot more in cash treasury billables than I would like but I but that's simply a question of when opportunities occur and and if you get real opportunities every five or six years you're you know you have to be patient. Charlie always pointed out that we made most of our money out of about eight or nine ideas over 50 years and u and we talked about it every day and we read every report and we did everything else. But but if you think you can get an idea a day from listening to your friend Ray Bulk or or doing a lot of reading of the of the financial information published or uh forget it because every now and then you get extraordinary opportunities and most of the time you don't have much of an edge. Uh so uh we also have on that thing our float which continues to build. I don't think any there's no company that has property casualty company that has our fold is their achievement.

Yeah. Clearly we are heads and shoulders above anyone else.

Yeah. it. Uh so that is money that as long as we're writing it and underwriting profit is absolutely free money. But um and and we would expect that over a 50 or 100-year period that that we would be able to say the same thing. But uh there will be there there will be years when you have a very bad underwriting record and and it'll lead into the float earnings. But so far in the last 20 years, I think uh we've only had what one underwriting loss of any.

Yeah, I think if you look at the entire range including life insurance, our cost of float is 2.2 negative. That means we've got the float plus somebody's given us 2.2% of that of cash to—

Yeah. It's like running a running a bank where people leave their money with you and and you pay a minus 2.2% and you don't have any check clearing or anything else to do and it's included in that. So it it but we run our business actually with a different mindset than than than any other PC company I think probably in the world and and and I wouldn't be talking about it if I thought they could duplicate it.

And then uh the final the final pages on share repurchases and clearly we haven't made any we have not made share repurchases so far this year and uh share repurchases if if Bergkshire buys Bergkshire shares and repurchases we now pay more than you will pay if you buy Bergkshire shares. I don't think people generally know that, but but there is a a tax that was introduced here or so ago. Uh where we pay 1% and that not only hurts us uh because we pay more for it than you do. It's a better deal for you than for us. Uh but it actually hurts some of our investy companies quite substantially. And you know, Tim Cook has done a wonderful job. I mean, really wonderful job running the Apple, but he spent a hundred billion dollars roughly in a year repurchasing shares and there's a 1% charge attached to that now. So that that's a billion dollars a year that he pays when he buys Apple stock in, which we like compared to what you pay. and and it doesn't sound like much, but well, a billion dollars sounds like a lot still in order, but uh there are people that want to increase that that particular rate dramatically and and uh and you you won't read about it or anything like that, but it does make it slightly less attractive uh than than it was before. And we will only buy in our shares if we think that they are almost certainly underpriced as valued very conservatively and and uh uh we get that opportunity occasionally. But the higher that charge goes that the federal government charges us for doing it, the less we will be able to do over purchases.

So on that happy note, we will rejoin uh at 1:00 and uh uh we will I'm sorry that correct that to 11:00 and then we will yeah 11:00 and then we'll continue till 1:00 and then in the meantime enjoy yourself and uh uh and I think all our Doors are still open. So, bring the cash register.

Sure. Sure. I'll help you here.

Yeah. Okay. Good.

Welcome back to CNBC special coverage of the Berkshire Hathaway shareholder meeting. I'm Mike Sani live in Omaha, Nebraska. After taking questions for 2 and 1/2 hours, Warren Buffett in his 60th annual meeting has called a break, promising to be back on stage in just 30 minutes. We have a big halftime show for you right here. Becky Quit is heading back over to join us. We'll speak live shortly with Activision founder Bobby Kodic, a long time Bergkshire attendee, and Nebraska Furniture Mart chairman Irv Blumpkin. Warren started the meeting to uh by thanking all the special guests one by one. Uh he also talked, of course, about record-breaking sales on the floor at all the booths from his operating companies. And uh and then near the end of the session, he got around to his take on this morning's results. As he did welcome those special guests, he initiated a a special shout out to Tim Cook, obviously CEO of Apple, who's in attendance, and said that Cook had made more money for Bergkshire than Buffett himself had. And it was a a pretty friendly gesture, obviously, wanting to underscore Bergkshire's appreciation. uh he sold out a lot of that stock not this past quarter but in the past year and obviously still owns about 2% of that company. Um he also said he loves the investments in the Japanese trading companies. Those were investments from a few years ago and um he said they won't be selling any stock in those companies for a very long time if ever.

Um one of the strongest stances that Mr. took in the morning session came during his answer to a question about tariffs and the impact of our our relationship around the world. Listen here—world in the United States. I mean we should be looking to trade with the rest of the world and we should do what we do best and they should do what they do best and uh I don't think it—That's that's what we did originally. I mean, we were good at producing tobacco and cotton uh uh 250 years ago and we and we traded it and uh uh we want a prosperous world uh with eight countries with nuclear nuclear weapons, including a few that are what I would call quite unstable. I do not think it's a great idea to try and design a world where a few countries say, "Haha, we've won." And uh uh other countries uh are envious are envious. He stayed on that topic and doubled down as he got more questions, calling the Trump administration's protective stance a quote big mistake. Trade should not be a weapon weapon. And and the United States. United States, we've won. I mean, we have become an incredibly important country starting from nothing 250 years ago. There's nothing been anything like it. And it's a big mistake in my view when you have 7 12 billion people that uh don't like you very well and you got 300 million that are crowing in some way about how well they've done. And uh uh I don't think it's right and I don't think it's wise. Uh I do think that the more the more the more prosperous the rest of the world becomes. It won't be at our expense, the more prosperous we'll become and will and the the safer we'll feel and your children will feel someday.

Thanks. Buffett also addressed Bergkshire's record cash horde of nearly $350 billion. He says he's sitting on the sidelines for now, but he wants to be ready when a buying opportunity presents itself. Come on. Every now and then you find something and occasionally, very occasionally, but it'll happen again that uh I don't know when it won't. It could be next week. It could be 5 years off, but it won't be 50 years off. He will have we will be bombarded with offerings that that uh we'll be glad we have the cash for. And it'd be a lot more fun if it would happen tomorrow, but it's very unlikely to happen tomorrow. Very, very unlikely to happen tomorrow, but it's not unlikely to happen in 5 years. And then it gets the probabilities get higher as you go along.

Buffett also weighed in on the markets and the rough start to the year. He wasn't exactly concerned though about the volatility, saying if you can't take the heat, you might want to stay out of the kitchen. Yeah, the world makes big big big mistakes and surprises happen in dramatic ways and the more sophisticated the system gets, the more the surprises can be out of right field. That's that that's just that's part of the stock market and that's what makes it a good place to to focus your efforts if you got the proper temperament for it and a terrible place to get involved if if you get frightened by markets that decline and and get excited when stock markets go up. I don't mean to sound particularly critical. I mean I know people have emotions. Becky is now back with us. We've heard his strong stance uh Becky on tariffs, the position uh on the record cash and of course his downplaying of the recent market correction uh which I quite enjoyed him mentioning that on the day he was born the Dow was at 240 and then it went down to a low of 41 which was in 1932 at the depression low down 80%. That's what that's how the market greeted him. He basically says you got to deal with—

Yeah. He's basically if your hair's on fire right now about the volatility of the markets, relax. You're not really cut out for this business. I thought you might appreciate that. You know, that's kind of your take on things like all the time.

Well, right. I mean, act like you've been there before. And in his case, he has been there before many times in many cycles. And um obviously that's another theme. He always likes to sort of broaden it out and say, "This country's been through a lot over the years. It's going to get through this and it's it's a better place now than it ever was before. It's going to be better in the future." That's always a a sort of a welcome theme I always find to this. Uh he's he's not going to be one who's he's going to say, "Look, it's the end of, you know, American exceptionalism." It's kind of the opposite of what we do in the news news business. You know, it is a it is a calming influence. Um it is a long-term view, a long-term perspective on things and um really interesting to see. He did mention though, I don't know if you talked about this before I sat down, but he did mention at the very top that oh by the way, there was an opportunity to spend $10 billion. We almost did it recently.

Yes. Somebody else asked later, one of the shareholders wanted to know what was that? Can you talk more about it? His very simple answer was no. It was fascinating. He also said as he was discussing all the cash that is built up, he said, you know, hundred billion that's something very easy to deploy. He says those decisions are easy when they come, right? Um for him, I guess they are. If you have 350 billion, I guess they are. But I think he wanted to accentuate that they weren't really making an outright market call, but they do like the idea of having dry powder uh being and he basically said the willingness to not be fully invested over the years has actually made them a ton of money because it meant that they had the ammunition to act when the time came. It also sounded to me a little like a marketing ploy. Hey, we got a lot of cash and we are willing to put it to work. Our phone lines are open, so call on in. Um, look, he he he joked about it being a 5-second decision where we either hang up or we say yes. That may be an exaggeration, but he and Greg Ael were both very clear about the idea that we are doing the work. We are looking around. Yeah. We know what we would say yes to or how to adjust a deal that we would

Say yes to pretty quickly. What else jumped out to you in terms of notes as we were as we were going through with a lot of these things?

Um, I I thought Ajet made some very interesting commentary on the insurance business. Not something we talk about regularly, but this idea of private equity really getting into the insurance business in a big way. He said that hasn't happened when you're looking at property and casualty. It has happened on the life insurance end of things, and basically they're waving a white flag. Hey, we're not going to compete here. You can have that business because you're more aggressive than we were. They can't get the returns from it.

Um, well, you could get the returns, but I think it's the risk they're worried about for the price for the price. It's mispricing the risk in their view. That was interesting. We mentioned earlier they bought back no stock in the in the corner. Um, now we know that the valuation of the stock is not really in his zone where he wants to be aggressive buying back the stock. However, I found it interesting that he cited the buyback tax that was imposed 1% on on everything you spend buying back your own shares. That seems like a little bit of a rounding error, but I guess he implied it was material to their decision. Look, it cost us more than it cost anybody out in the public to buy a share version, right? And and you have two opportunities. You you know, for a regular public public company, you can issue a dividend that you give back to them and let it figure out themselves or you can buy back shares. Now, if buy share buybacks are tax disadvantage from the government perspective on things, that that changes their opinion probably. Neither. No, but I I think that was a message to the operators of the companies that they own. Maybe we'd rather see a dividend than than a tax buyback because he cited, you know, Tim Cook spends a billion dollars in taxation, 100 billion back, right? And that is a, you know, we love what Tim Cook is doing. That that was really interesting. I mentioned that off the top. I thought that was telling.

Yeah. Yeah. Very much so. Um, they didn't look like they had any sales from the best we can tell from this most recent quarter. They slowed down with the sales at the end of last year, too. So maybe that's a message that hey, Apple is here and here to stay.

Sure. And we appreciate what he's doing, but back too. I mean, right, it was over 40% of the equity portfolio at one point. It's down toward 20% in 2022 or something now. So it's not as if it seemed as if it was this big glaring. There were there was an interesting question from a shareholder. Several shareholders wrote in about those Apple share buybacks. We haven't gotten to any of them yet. I may or may not in the second half. But one of the interesting perspectives is was this because of tax changes you thought might happen if Kla Harris came into into into office with this?

Um, right, cuz he alluded to that last year.

He did. Yeah. So it's kind of an interesting perspective on that end too.

For sure. Uh, we are continuing here at the annual meeting. This is a very quick break before we go back in for more Q&A. But in the meantime, we're going to get the chance to to speak with some of the Berkshire managers here today. Retailers are actually in the eye of the storm right now as tariffs disrupt supply chains and drive up costs. For more on how the industry is adapting, we are joined by Irv Blumitin. He's the chairman of Nebraska Furniture Mart. And and Irv, it is great to see you today.

Great to see you, too. So, we get the special privilege right now of talking to some of the managers who are actually running the businesses trying to deal with any of the potential changes that are coming and on their way. Greg may be pretty involved with what some of your companies are doing. I don't get the sense that Warren is paying close attention. He trusts you to do those things. What are you doing to try and prepare for any potential tariffs that come down or tariffs that you are paying at this point?

Well, it's very interesting. It's very disruptive. It's tough to make a plan, and we've been very patient in just waiting it out and uh, you know, we've got alternative uh uh strategies to deal with it depending on what we know they're exactly going to do. We're at a point right now where uh um we've got July 9th is a big time for us to figure out what to ship, what not to ship.

July 9th. July 9th. July that day. That's the date somebody's going to need to make a decision whether the tariff stays. Oh, the 90 days in the tariff stays or it goes up to 40 or 50 depending on what country we get it first. So what are your dual uh kind of paths depending on if there's? So we're trying to ship as much as we can by mid-July. So the the goods we have, we know exactly what we're going to pay. And then we're just going to take a wait and see and be patient, be able to adapt. We have a lot of resources both domestically uh that we can rely on and gives us a broad base to be able to make those kinds of decisions.

And wait, domestic manufacturers that you can use instead? Uh, domestic warehouses that have brought in goods that they'll they'll have plenty of goods to cover themselves for a very short period of time because there is going to be a time where uh depending on what happens after the 90 days where you may see a short supply of goods from overseas.

I want to go back to a long time ago, back in 2007. You and I u I got to travel with you and some of the other Nebraska Furniture Mart executives and and Warren to go to China. You were doing some sourcing at that point, and you know where you were doing your sourcing at that point versus now I think is very interesting. Let's play a clip of that. That was a long time ago. You've been going to China for how long?

About 10 years. About 10 years for the business. What? And how much of your stuff comes from China right now?

Probably 75%, 80% comes from China today. Where did it used to be 10 years ago? Where was most of the furniture coming from?

United States. North Carolina. Mostly North Carolina. And what had what's happened to the cost of furniture over the course of that time as you moved from sourcing overseas?

It's gone down dramatically and tremendous deflation in the category.

Yeah. Wow. Um, and what values of the customer though? Yeah. What what kind of things are we looking for this trip out? This this trip mostly case goods and some upholstery, sofas, love seats along with bedroom sets, dining room sets, occasional tables.

All right. So that was 18 years ago. You were doing a lot of your sourcing in China at that point. It had moved from North Carolina. What's the picture look like now in terms of your sourcing?

Uh, the sourcing in our case, other than about 10%, has moved to Vietnam, Cambodia, Malaysia, Indonesia. And uh, you know, again, that's where cheaper labor had been. That's where the furniture industry has migrated to. There's still some electronic stuff coming out of uh China, and there's a couple of categories that those countries haven't been able to produce at this point in time, but I'm sure there are a lot of people working towards those countries to figure out alternatives.

Yeah, that's why the stakes are so high for July 9th, right? Because they're very very high stated tariff levels for for those exporters, right? Is there anything that would bring manufacturing back to the United States, North Carolina or elsewhere?

It's interesting. I just came back from North Carolina last week, and uh, it's a long process. I I seriously doubt there's going to be a lot of manufacturing brought back to the US. Um, and uh, you know, you just got to figure out alternatives. We we do about 20%, 25% of our business in the US on US made domestic product or imported products in parts, and then they assemble them here. But I don't see it as a big as a big opportunity over the long term.

I want to thank you for being with us. And by the way, you haven't changed in 18 years. It's great to still see you.

Thank you very much. Great to see you. Thank you. All right. Sticking with tariffs, Warren Buffett was fairly fairly vocal this morning. We caught up with a number of his managers on the Berkshire portfolio and talked to them about the adjustments that they are trying to make right now in the face of higher tariffs. And they're starting to use the vertical integration we have. And that's been a blessing with the the tariffs. We've had no price increase as a result, really because can it help the Canadian lumber as long as it's used for housing, no tariff on that, but also um 27 supply companies of our own and great procurement teams, we've been able to offset all that. You know, tariffs are a challenge for for everybody, and the biggest concern we have is the impact on the consumer. Yeah. After years of high interest rates and high inflation, consumers are pretty weary. And now it's fear, right? It's the uncertainty that's causing them to become a little more cautious in their purchasing decisions that will have the biggest impact on our business. You know, we are dealing with uh that and managing our price margins, relationships with our customers. We're local for local in most of the markets we serve. So, we, you know, innovate locally, we manufacture locally, we buy raw materials locally. So, you know, we do have some slight impact from tariffs, but generally it's not a big issue for us. During um Trump number one, the supply chain really started to reconfigure itself, too. It was almost like a circulatory system that found a new path. And so, we're going through wave two of that right now. Um, and we're in touch basically daily right now with all the key vendors working through this together. And it's gonna it's going to end up fine, but we're going to have a third quarter that's going to be a little challenging as everything settles. We're preparing as if things were to slow down a little bit, but some of our areas, Joann's business is responsible on the commercial side of the business, data centers, doing extremely well, right? I think she'll have uh hopefully her best year and some very good years prior to that. So, so there's a lot of pockets of that and uh and I think we're in a good spot on that. We're fortunate. We manufacture all of our products here in the United States, and most of our inputs are sourced in the United States or North America. So we haven't seen any significant impact from a tariff perspective. We do do a lot of business in Canada and with this by Canadian um backlash so to speak. We are concerned about that. So we stopped manufacturing in Canada in 2015. Uh, but I'm happy to say we're going to be starting to manufacture in Canada again here later this month, and um throughout the summer we'll be adding more SKUs to the offering being manufactured there just to be supportive of Canadian retailers.

All right, so that's what you're hearing from the Berkshire managers who are actually on the front lines trying to deal with all of this. There's been a lot more to talk about with them this time around, and we will continue to hear pieces about how they're managing with all of this. Joining us right now to talk more about Berkshire and uh what we've been seeing over the years is Activision founder Bobby Kodc. He is a longtime Berkshire watcher and been coming here for more than 30 years, I think.

Bobby, which is really hard to imagine. I don't know exactly when I started. It was when I bought my first Berkshire share. I I think that was in '94, but I don't remember exactly. Why'd you start coming? What What brings you back every year?

Uh, for me, you know, this is the probably the most important event that's a reminder of how important capitalism is as the foundation of democracy. And uh, so that's, you know, it's almost like a religious experience from that perspective. Just a constant reminder of like how integral to our democracy capitalism is.

Do you do you learn something every year when you're here or is it a resetting of what you already know?

Well, you know, I I think probably the greatest insight I just took away from the last couple of hours is there's this great perception of market volatility that's existed over the, you know, let's say the last three or four months. But as Warren pointed out, the S&P is down 3%. That's not much volatility. And I think it takes someone like Warren with the clarity of thought to actually remind us that there's been historically a lot more volatility in markets than what we've seen in the last five. I have to admit I'm throwing out all these shareholder questions I had as a result because it was what's going on with the treasury markets? Are there are they going to dump foreign ownership of these things? Is what's going to happen with the dot? Like all these questions that were so kind of petrified as to what was happening like got to throw all of these out now. They were relevant 3 weeks ago and now they're almost all the way back.

Yeah. Although at the same time, as much as you want to take a a big picture perspective and say that we've been through these crises and trials and challenges before, it does seem there's certain extraordinary things happening right now if you were running a business to say there's such a wide range of potential policy outcomes and what it's going to mean for the economy right with with the tariffs. So I guess that's, you know, the the the messages were all in suspense for a few months and and and Warren saying, you know, he doesn't really feel like this is the way to wage that fight. I I think the the greater challenge though is if you think about where we are fiscally as a country, you know, 37.5 trillion and growing of debt for now more than 5 years, a debt to GDP ratio at 120% or more. You know, I think one of the things that we have to start to come to terms with is you can't have successive years of a trillion and a half and $2 trillion dollars of deficits, a debt at 37.5 trillion with a trillion dollars a year of interest and not address spending. And it's not just federal spending. It's going to be municipal spending, state spending, but spending has gotten out of control. And you know, when you think about 5% of individual taxpayers contributing 66% of taxes and 20 20 companies contributing 25% of corporate taxes. We need to do a better job of making sure that we're not actually putting a greater tax burden on the on the US. I don't know that it's sustainable, but we have to start addressing spending. But neither one of the political parties seems to have a huge appetite for for really going after spending. Doge is trying to make things more efficient, but if we don't go after some of the big ticket items, whether that's social security, whether it's Medicare, whether it's defense spending, if you don't go after some of the big big nuts out there, um, not to mention interest on what we pay on all of these things, you're not going to be able to bring that down.

Well, think about it. Medicaid and Medicare in the last four years are up 45% to 50%. That's just not sustainable. And then you look at the things that nobody wants to talk about. You know, K through 12 US expenditures are something in the neighborhood of a trillion dollars. But we're now at a place where kids are graduating at 30% of their grade level expectation, graduating in math and science and reading at 30% of grade level, and I think the you know, let's say there's 50 million plus people in the K through 12 system, but in almost every grade in every subject if you're averaging 30%. And that's now two generations. You're we're not going to have a competitive workforce.

What's the way to address that though? I mean, just spend don't spend the trillion dollars doesn't seem in itself the way to do it. Uh, for a trillion dollars you should expect an excellent outcome. That that is so much money. One of the challenges though is you've seen the shift of expenditures is largely towards administrative expense and not the classroom. State of California 80% of the $122 billion annual K through 12 budget goes to administrative expense. 80.

Um, Bobby, what are you hoping to still hear from from Warren and Greg in the second half of questions?

Um, I I think hopefully we'll we'll hear more about um what I'd like to hear. What are the areas of opportunity that might exist? And you know, Warren's never going to give you any specifics. I mean, you asked the question on the what was the $10 billion opportunity, but um maybe we'll gain some insight, but for the most part, for me, I just want to hear the reminders of, you know, what's important in the way that you run a business, you think about society, what really matters. And, you know, I get that. And so, that's why I come.

Bobby, uh, before you go, I just want to talk a little bit about Elaine Wynn. She was a dear dear friend of yours who very recently passed away, and I haven't gotten the chance to talk to you publicly about that since. How you doing?

It's not easy. You know, uh, Steve and Elaine were my parents and original investors and, uh, you know, it's not quite real yet, but it's an incredible loss, not just for me, but, you know, for so many people for all the work that she did in education, in the arts, and um, it's it's been difficult. She was somebody who came here frequently, too, and it was always very good to see Elaine here among people, and I know a lot of people here are remembering her, too. So I want to thank you for being with us today and for me again a remembrance for Elaine Wynn. It's kind of safe and thank you for having me. I really appreciate it.

Thank you. All right, we've still got some uh big names on deck uh for our post-show analysis, including Berkshire board member Ron Olsen. But I do think we're going to go to Katie Kramer on the floor. Is that correct?

Hi Mike. I tracked down one of the shareholders today from the morning session. And this is Benji Sanderson from Pasadena, California, who asked a question of Warren Buffett this morning. Benji, tell me what time you got here today.

Woke up at around 4:20 a.m. and got in line no later than 5:00 a.m. today. How does it How does it work to be able to ask a question on the floor of the shareholders meeting?

Yeah, it's a complete lottery. So, I was just lucky number one on zone 5 today. Completely pulled a number, was randomly selected. So, luck. You asked about Greg Abel and about um his potential succession of Warren Buffett leading Berkshire Hathaway. Tell me why that was the most important thing for you today.

You know, Warren knows thousands and thousands of managers and he's met them over the years and he's a very careful selector of people and businesses. So, the fact that he's chosen Greg but hasn't talked much about it was pretty interesting to me. I assume he's a like I said an outlier among outliers. So, just wanted him to basically introduce him to us, kind of leave us leave us um a little nugget of wisdom about him before he passes.

Did you go through a few drafts of the question? Did you workshop it a little bit with people? What was the process like?

I was sweating for about an hour from the time I was selected until I asked the question, trying to word it just correctly. Luckily, Warren left us with a little quote about Steve Jobs and uh Tim Cook earlier today. So, that was a good an easy segue into my question.

Were you satisfied with the answer?

You know, to be honest, not really. Uh, Buffett is a great teacher, and I think he's in a stage of his life right now where he's leaving the wisdom he wants to leave to everybody. So, I'm noticing many of the questions are very are being answered in very indirect ways um for better or for worse.

So, what are you looking forward to hearing this afternoon in the next question session?

There are a ton of fantastic questions. So, the cash pile is obviously top of mind. He's an investor and he has cash. So, we're all on edge. What is it going to do with it? What might you do? What might Greg do? Um, I'm also I don't think the question about Occidental Petroleum has been answered yet um or asked or answered yet. Vicky Hall, the CEO of Occidental has expressed in the last few days. I think that she would it would be a dream come true for her for Buffett to buy controlling interest of Occidental. Um, so I really hope someone asked that question. I've considered asking it as well, but that'll be very interesting to hear, especially given that Greg is not only the successor, but the energy expert at Berkshire. A lot of thoughtful shareholder questions to come. I'll send it back to you guys. We'll do some more shopping and head into the afternoon session.

All right, Katie, thanks. Wow, he has a lot of clear views on what else might be in store in the next session, uh, the Q&A. Uh, we do have Warren Buffett and Greg Abel. They are heading back to the stage for the final Q&A session for another couple of hours. Uh, this is a compressed program, but they're still out there. Uh, going to take two hours of uh of Q&A on the way in. Uh, did want to mention perhaps the lightest moment in the in the morning session where somebody asked about Berkshire's ownership of the hot dog chain in Chicago, Portillo's. It turns out this person who got a question to Warren Buffett kind of botched it. The real owner is Berkshire Partners, which is a private equity firm not affiliated with uh Berkshire Hathaway. So, uh, somebody fumbled that opportunity, but yet it still led to a very interesting and fun 10-minute answer from Warren Buffett about the restaurant business. We're going to take you there to the afternoon Q&A session right now.

We're right at She's not here yet, but she just come up. She's coming up. Okay. Our directors are just coming in. Yeah. We'll give it a May not start right at 11, but it's close. Okay, everyone. Okay, we're ready to go. And uh I'm going to lead off by uh actually recommending a movie. I know that's why you came, but uh I would recommend to all of you that u you go to Amazon Prime. I've got no financial interest in this, but you go to Amazon Prime and click on a a documentary called Becoming Katherine Graham. It's an incredible story uh from 50 or so years ago and to some extent I had the good luck to be kind of a u a viewer of some some American history that I I think is fascinating. So if if if you feel that uh that I misled you, you can write me a note and I promise to report how many how many readers didn't agree with but, Becoming Katherine Graham and you'll see a story of a a remarkable story of American history and there are a good many portions in there that uh I who lived through that period didn't know about uh at the time. And uh I think I don't think really every American citizen ought to watch it. So with that, uh I hope you uh all spend some more money out there and our friendly shops and we will go to station 9.

Uh, hi Warren. My name is Robert and I'm a shareholder from uh Toronto, Canada. Uh, so Warren uh, three years ago Charlie Rose uh, asked you a question to the effect of what you wanted to be remembered for and your reply was he was a teacher. So in that spirit, u Greg, I'm curious to hear maybe a story of where you learned something very, you know, profound from Warren. I'm sure you've learned many things, but if there's a story that kind of comes up in your mind, we'd love to hear it. And vice versa, if we have the time, Warren, what's something that you maybe learned from Greg? Thank you.

Yeah, I will turn this over to Greg in just one second. But now, the main thing I'd like to be known for is old age. Well, Ward is uh obviously a remarkable teacher and and I benefit from that every day and and and as I've already touched on for many years, um I'm fortunate that if I had to uh be remembered as something right now, obviously I'd uh want to be uh

Remembered as a great father, but equally a coach. And that goes to family, friends, and just being involved with the kids I coach in hockey or baseball, or whatever it may be. I think we've got a great opportunity to give back to them at a very young age. So, obviously, those would be how I'd want to be remembered, and hopefully, that'll be many, many years from now. But I love thinking of Warren truly as a teacher, and he's in every day, get the opportunity to continue to learn. Warren and I, his dialogue is strong every week, and we're always talking around opportunities in Berkshire or things that are going on globally or in the U.S., and each one's truly a learning moment.

I'll maybe go back to the very first meeting with Warren, because it still stands out in my mind. Obviously, it was an incredible opportunity. Warren was buying or acquiring Mid-Americ Energy Holdings Company at that time, or or thinking about it, and we had the opportunity, with my partners, to go over there on a Saturday morning, and we're discussing the business. Warren had the financial statements in front of him, and like anybody, I was sort of expecting a few questions on how the business was performing, or a variety of things, but Warren locked in immediately to what was on the balance sheet and the fact we had some derivative contracts, the weapons of mass destruction, um, and associated with the utility business. We do have them because they use them to match certain positions, and they're never matched perfectly, but you do have them, and we're required in the regulated business. But I just remember Warren going to it immediately and asking the composition of it and what was the underlying risk in it and wanting to thoroughly understand it. And it wasn't that big of a position, but it was absolutely one of the risks he was concerned about as he was acquiring Mid-Americ, and obviously, in light of Enron and everything that had gone on, it was a very pertinent question.

And then the follow-up to that was then there's an energy crisis in the U.S. around electricity and natural gas, and a variety of folks were making significant sums of money. This is a year or 18 months later. And Warren's follow-up question, a couple of years later to me, was—and I knew it was more just checking or testing—so, how much money are we making during this energy crisis? Are we making a lot? Do we have are the speculative positions in place, and are we making it? And the answer was we're really not making any more today than we would have been six months ago because all those derivatives were truly to support our business and weren't speculative. So just that focus on understanding the business of what he was acquiring, understanding the risks around it, still stands out in my mind.

Warren, yeah, it's one thing we've really never talked about here, but I spend more time looking at balance sheets than I do income statements. And Wall Street really doesn't pay much attention to balance sheets, but I like to look at balance sheets over an eight or ten-year period before I even look at the income account because there are certain things it's harder to hide or play games with on the balance sheet than you can with the income statement. And neither one gives you the total answer on anything, but you still ought to understand what the figures are saying and what they don't say and what they can't say and what the management would like them to say that the auditors wouldn't like them to say. And there's just a lot to be learned, and you do learn more from balance sheets, in my view, than most people give them credit for.

I'm not worried about being remembered; people don't remember well, they don't remember enough about Katherine Graham, for example, in terms of this story that shaped America in many ways. Certainly, it had just all kinds of impact. And I think history is so fascinating, and Charlie was probably the best person you could imagine in what he learned. Charlie was never satisfied with just superficial things about any subject. He really wanted to understand it, and he always would tell me that you know, don't take a position on anything until you can describe the arguments against it better than the person who is arguing with you; that you should be able to argue their case better than they can. He was a remarkable teacher, but so were those other fellows I mentioned. And of course, my dad was an incredible teacher. Tell you, make the most of the people you meet that are going to make you a better person and probably forget about the rest to quite an extent.

Okay, let's move on to number… Well, Becky, you're next. This question comes from David Rubin, a shareholder from Scottsdale, Arizona. It's a question for Greg. We've heard over the decades and are familiar with Warren and Charlie's investment thesis and their circle of competence. During the first ten years after taking over as CEO, Greg will be tasked with allocating more capital during that time than Berkshire has had to allocate in its history. Given this, I'd like to hear from Greg about his views on capital allocation, particularly into new businesses.

Sure. So, um, this bar is not too high. No, it's—but very fortunate when you think of Berkshire again, and we've talked about this, where we start from, and I'll clearly touch on the investment and the related investment allocation, but we start from a great place where we've got a great culture within the business. We have values that we, as a management team, and really, as defined by Warren and Charlie and everybody associated with the business, we've got great values that really set Berkshire up well for the future. And obviously, as we deploy capital and allocate capital, it's critical to Berkshire as we go forward, and equally it's around managing risk. But when I think of our values, there are a couple that are absolutely critical. One, will maintain the reputation of Berkshire and that of our company, and I view that in investing or how we operate things across each of our businesses; that will always be a priority and something that will ensure is in the forefront of our minds.

I think equally, as we then look at our various—our back to Warren's balance sheet comment—we will have a fortress of a balance sheet, and we want to—I thought Sue Decker, our lead director, said it well yesterday—we've got a significant set of cash right now, but it's an enormous asset to have that, and that will continue to be a philosophy. Yes, when we can deploy it, we'll deploy it well, and I'll come to that. But equally, we do recognize it as a strategic asset, and it allows us to weather the difficult times and, at the same—and not be dependent on anybody. So again, that will be an investment philosophy. We will remain Berkshire, and we will never be dependent on a bank or some other party for Berkshire to be successful.

I would then move to touch on allocation of capital; be absolutely critical, but with that comes management of risk and understanding risk, and that falls upon all our managers—insurance, non-insurance—but we'll bring that across Berkshire. And then the other value I would touch on, but that really relates to where I'm going, is ultimately we have a great set of operating companies that do produce significant cash flows. Be it in the insurance companies creating float or our various non-insurance companies producing significant cash flows on an annual basis. We intend to continue to ensure that's a strength of Berkshire as we go forward. It's absolutely critical to our long-term success.

Now, with those cash flows and with the float, and then equally as touched on, we have significant resources already on our balance sheet. We'll really continue to move forward with a very similar philosophy. It's an identical philosophy to what we've had currently and for the past sixty years. We'll start by looking at those opportunities within our business, and by that I mean within our insurance, non-insurance businesses. Are they properly capitalized and have the opportunity to manage their business, and that that will continue to exist. They'll operate in an autonomous way, but in the end, Berkshire still manages the capital that will go into those businesses or what potentially will come out of those businesses.

Equally, the next opportunity is to acquire businesses in their totality or 100%. And there are great times when we can do that. Warren touched on—we had one that was interesting in the last quarter, the ten-billion-dollar acquisition. But again, the value relative to the risk have to be right. And if it's right, we want to own it. If it's not the time, there'll be another time to own assets like that. And then there's the opportunity to own pieces of companies through the equity. But as Warren's always highlighted, and again this will be our approach to how we think around those companies, though we own a piece of a company, we own a piece of that cash flow; we own a piece of their balance sheet. It's not just a share certificate. And as we approach that, and really we'll approach it with the thought that we're going to own this company for the long term. It's again understanding what—be it the 100% company or the 1% company—do we thoroughly understand, and thoroughly do we have a strong view of what those economic prospects of those companies will look like? And Warren said it earlier: five years from now, ten years from now, twenty years from now, if we don't have a view of that, we won't be investing, be it 100% or 2% of a company through equities. We have to thoroughly understand what those prospects look like and associated with understanding those prospects, we need to understand the underlying risk of the businesses. And it's really the investment philosophy and how Warren and the team have allocated capital for the past sixty years. It will not change, and it's the approach we'll take as we go forward.

Warren: Yeah, and I don't want to go on too long on this, but this is important because it's very obvious that the country, for example, needs an incredible improvement, rethinking, redirection, even to some extent in the grid. We've outgrown what would be the model that America should have. And in a sense, it's a problem something akin to the interstate highway system where you needed the power of the government really to get things done because it doesn't work so well when you get forty-eight or fifty jurisdictions that each has their own way of thinking about things. And of course, in World War II, we called in people at a dollar an hour. And we knew we had to turn out ships like crazy. And we knew that we had to convert Ford Motor from being a car manufacturer into an aircraft manufacturer in a matter of days, not weeks, not months. So you need to—there are certain really major investment situations where we have capital like nobody else has in the private system. We have particular know-how in the whole generation and transmission arena. The country is going to need it, but we have to figure out a way that makes sense from the standpoint of the government, from the standpoint of the public, and from the standpoint of Berkshire, and we haven't figured that out yet. I don't know whether Greg wants to even explain a few of the major problems, but that is a clear and present use of hundreds of billions of dollars, and you know, you have people that set up funds, and so they're getting paid for just assembling stuff, but it's not the way to handle it. The way to handle it is to have some kind of a government-private industry cooperation similar to what you do in a war. And I don't think when they were doing the highway system, I don't think that the government set up its own guys that were going to pour the whole cement or anything like that, but you needed a cooperation, and we're at that point, I think, in terms of energy, but I don't think we've made any progress particularly though.

Tell us more about that, Mary.

Yeah, and I think these are very unique—in that not unique in that it's sort of reflective of where we're at. There will be very significant investment opportunities across a variety of industries, as Warren touched on in the electric industry or the energy space. We obviously know that well with our existing business, and the capital required to meet the long-term needs of what's currently projected as demand is enormous, and we, as Berkshire, will be in a good position to help address those needs. But the model around it and the risks that need to be addressed to deploy that type of capital will be different than they are today.

Warren's point: Yeah. The muscle of the federal government will be needed, but the test of whether you can have forty-eight or fifty, depending on the nature of things, jurisdictions that are cooperating to do something that has opposition will have opposition in every single state. If they'd taken a vote on during World War II or if they'd taken a vote on the interstate highway system, it would have been slowed down to an incredible degree. So the question is how to use these strengths that this country has to actually turn it into what it should be capable of while still preserving, you know, a republic with forty-eight and connected in a couple unconnected states, and it will be interesting to see what happens, but we do have capital and we actually have some knowledge that very few places have. We know what the game's about. But putting together that energy with knowledge and with capital and everything is just not easy. And it should be something that we're capable of in the country. But the country was not designed for having, in a certain way. It was not designed for having forty-eight different jurisdictions that could mess up anything that you were attempting to do. And during wartime, it's one thing to get agreement, but during peacetime, it's something—it's a different problem. That's going to be one for the next generation. But I'm just—it's important.

Okay. Station 10. Good morning, Mr. Buffett and Mr. Abel. I'm Durkas Tang. I'm fourteen years old. My father, U Mo Tang, MGRT CEO, brought me here for two consecutive years, and I promise I will come back every year since I queue up at 2 a.m. every meeting you hold. My dad owned BRKA shares, and he said I need to work hard to earn my piece of BRKB. We are both from China, Hong Kong, and I would like to ask what's the essential element for a global teenager like me if we want to be part of Berkshire like Mr. Greg Abel, like what piece of knowledge I should learn so you hire me in the future.

Well, if you're talking about the future, you better talk to Greg. So we'll let Greg answer that. My final words. Finally, Mr. Buffett, I learned a lot from this meeting, and of course, I will come here every year, and I wish you can attend as many as possible, as you and Mr. Charlie Munger, the most respectful people, have inspired me and my father a lot. I wish you happy and healthy, and maybe one day in the future we can make the world more prosperous altogether, like you said. Thank you.

Okay. Thank you. Yes. Well, I think your dad said it best; he highlighted that to become part of Berkshire, to own some Berkshire shares, you're going to have to work hard, and I think hard work takes all of us a long ways in life, and I would never diminish that. There's a lot of things that matter in life, but if you start with a great work ethic and have that attitude that you want to contribute, you're going to go a long ways in life, and you'll find great enjoyment because, as Warren said, you'll then, if you work hard, you're going to find the things you love in life, and it'll lead to that. And we truly look forward to the day you're part of Berkshire. Thank you.

Yeah. Keep a lot of curiosity and read a lot, as Charlie would say. Okay, Becky. This question comes from Matthew Teisac in Leighton, Utah. He said, "Please discuss your strategy on how to protect our company from future liabilities due to wildfires blamed on our electric utility companies out west."

Well, that's a very good question, and we made some mistakes in the past when we bought Pacific Corp. in 2005. Warner Scott and David Sol and myself, three guys who are capitalists at heart and had—but we're dealing with our own money, but we made a mistake by not carving it up into the seven states that we were buying, and it came with an aggregation where it wasn't state by state, and we kept the same structure, and that was a big mistake. There are—every part of the country is going to need electricity, and there are going to be places where public electric or privately held electric utilities would be very foolish to operate, and how that gets resolved in a democracy, we will find out, but those are the facts as they stand now, I would say.

Greg: Yeah, the reality—the risk around the wildfires, i.e., that do the wildfires occur—they're not going away, and we know that, and the risk probably goes up each year. So, but what we can do to reduce the risk of it impacting our system and our underlying assets and the unfortunately liabilities that come with such events, we can change that and manage that. We can't eliminate the risk, but we can reduce it. And that's where we've got our teams in the west, but we really are approaching it across all our energy infrastructure because the reality is the wildfires have now occurred in Texas. They've had a variety of them throughout the U.S., and we're all very focused on how we manage that risk. How we manage it is we start by addressing the actual assets, how we're maintaining them and where we invest them, invest into them. So we try to make sure that they're either not causing the fire or potentially even hardening the system as to what can they withstand. So it's very much—we start with the operational focus. We then take it even further, and this is something Warren and I've discussed many times, is that the utilities started to recognize when we have these unusual weather events, and Warren touched on what's been happening in Nebraska with storms, but they're equally occurring or significant events occurring west. But when we have those, we've gotten very, very good at saying, okay, we have to manage the system differently; we'll potentially deenergize because there's likely to be an event. But the one thing we hadn't tackled, and this is very relevant to the one significant event we had back in 2020 in Pacific Corp, is we didn't deenergize the system as the fire was approaching, because our employees and the whole management team have been all their lives trained to keep the lights on, and the last thing they want to do is turn those lights off and have a system deenergized. And after those events and as we really looked at how we're going to move forward in managing the assets and reducing that risk, we have clearly recognized as a team that we have to deenergize those assets. So now, as we get fires encroaching at a certain number of miles, we deenergize because we do not want to contribute to the fire nor obviously harm any of our consumers or contribute, unfortunately, if there's a death. And that's really where we had to take our team—that we're managing a different risk now. It's not around keeping the lights on; it's around protecting the general public and ensuring the fire does not spread further. So we've gone as far as that, and I would—I'll stand corrected on this one—but we're probably the one utility or across our utilities that does that today, and we strongly believe that.

Becky, can I just follow up on that?

Yeah.

Doesn't that open you up to other risks if you shut down your system, a hospital gets shut down, somebody dies?

We're—we've, you know, fortunately that's something that we do deal with a lot because we have power outages that occur by accident. So when we look at critical infrastructure, because it's an excellent point, and we're constantly re-evaluating it, and we do receive a lot of feedback from our customer groups as to how do we manage that? But that is something we deal with on a more routine basis than we'd ever like. The lights go out. We have to make sure the hospitals stay on; emergency units can respond, and all that. But there is risk there. So then we spend a lot more time educating the consumers and our consumer groups, our customers. Okay, this is what will happen. We need to understand your unusual situations and how can we best tackle that again, so we just don't take on another liability. So there's a lot around deenergization, and then just to take it to the last step, and Warren's touched on that just in general on energy policy. We have to work with our states and our regulators to ensure this was never a risk we took on or envisioned when we were investing in utilities. Nor would any of the investors who've invested in other energy companies. You earn a—you earn a very set return for taking on a very set defined risk associated with that asset, and this has gone well beyond that. We don't earn the type of returns, nor can you earn a large enough return to take on these risks. So it's not just about solving the return side; we really have to solve the risk side, which means we work with our regulators. We're working with our state legislators to get to the right answer. And that's really just—that'll be an ongoing process. There are not silver bullets out there, but every day our teams across utilities are working hard to reduce that risk, recognizing the fundamental risk of the wildfires is not going away.

Yeah.

But there are some problems. Yeah. There's some—there's some problems that can't be solved, and we shouldn't be in the business of taking your money, investors' money, and tackling things that we don't know the solution for. And there's—you can present the arguments, but it's a political decision when you are dealing with states or the federal government. And if you're in something where you're going to lose, the big thing to do is quit, and you do—you present your case as well as you can and everything else, but if you don't hold the pen in the end, we don't have any business taking your money and doing dumb things with us, and we can do our best to explain what the intelligent things are, but it's your money, and so it's very hard to tell how to handle the questions of politically determined decisions that are going to go to court in many cases. But you know that it just doesn't—it doesn't make sense. We know what we think a sensible system would…

Be, but, and we ought to explain what what what we think it is and and uh uh you know, do the best to get our position because it's pro-social to have the right solution, to have it. But uh, the right solution, for example, in the interstate wasn't to let 48 states each decide on their own way of doing it and award contractors the jobs based, you know, there's just there's some problems that can't that can't be solved, and we are not in the business of trying to solve insolvable problems.

Yeah, I'd go for that. But then the problem you have, of course, is that the people that work for you, that's it's their job. So they they they they want to have reasons to keep going. And uh, that's a that's a it's those are tough choices if you're managing, but that's what's that's why they have managers.

Yeah, Warren, I was just going to add because you touched on something really important there that um effectively, for example, with the utilities and the wildfires, um we c we can't just become the insurer of last resort, and that we're going to cover any cost and all costs irrespective of what occurred. And that's a little bit of the situation we're in right now with our largest uh challenge, a 2020 wildfire where there were one of four fi there were four fires occurring at a a challenging time. One we've always asserted was a lightning strike that was not inside our service territory. The fire burnt into our service territory, and we became responsible for that fire effectively through the courts, and we've continued to hold firm that we're not responsible for that um rightfully. I mean, we didn't contribute to it uh and we didn't initiate it, nor did we feel we ever contributed to it, um but it's getting uh again, if you look at the risk that's there, we have to manage through things like that; we'll get through that litigation. We're happy to report, for example, on that one, after 5 years, the Oregon Forestry Department has come out and said the the the fires the other fires we did have that we were able to manage and extinguish did not contribute to that fire. And that fourth fire is the largest fire of the four. It can it's 60% of the claims. We're 5 years into effectively getting that information into the courts. Now, that will outline our legal strategy obviously going forward, but it's things we're dealing with, but we continue to learn from this as a as utility and industry. So, we're in very much each of the legislators, as I said, making sure we get clear definition where liability falls, what can the economic damages be, but most importantly, what can the non-economic damages be? And again with the thought we can't be the insurer of last resort. We just can't be responsible for everything that happens in in a state.

Yeah. If we want to do it with our own money, we we can do it, but we're not going to we're not going to do things with your money that we think are stupid. I mean, you ought to get rid of us if if if if we do it. And uh, it's easy to it's easier to do stupid things with other people's money than it is with your own money. That's one of the problems government has just generally. We don't want to bring it to private enterprise.

[Music] [Applause]

But it is important that the United States have an intelligent energy policy, just as it was important during World War II that we learned how to make ships instead of cars extremely fast. And we figured out the answer. We combined private enterprise with with with with the power of the of of of government. And uh, but what how feasible that is in a in a democracy, and you know, it it was clearly obvious during World War II it needed to be done, and we did it. But it's not so clear when when uh you get 330 million people all arguing their own self-interest and and of course deciding what'll happen and and and having the people often who are making the decisions reacting as they did 20 years earlier, uh you know, when they don't really bear the responsibility for the decision. But u anyway, that's management, and we'll do our best.

Station 11. Hello, my name is Alitia Burk, and I'm from Poland, but I currently live in Chicago. This question is on behalf of an inspiring man that I know, Wid Ahmed, who's here with us today. Mr. Buffett, nearly 74 years ago, on a cold Saturday in January 1951, you traveled eight hours by train from New York to Washington. You went all the way on nothing but hope that some might teach you more about the insurance industry. Arriving at Geico's office to find the doors locked, you persisted until a janitor let you inside. You credit that meeting with Lori Mir Davidson for the insurance float that was the rocket fuel behind Berkshire's success. In 2011, when I was 15, I wrote you with similar determination asking to meet. You kindly wrote back saying you had only 3,000 days left and more pressing priorities. Well, Mr. Buffett, it's now been 5,000 days since you replied. And so, inspired by your persistence in 1951 and the tenacity of Mrs. B, I humbly renew her my request for just a quarter of the time Dave gave you—a single hour in your office. You may wonder why must it be you? You have often shared an anecdote about a Polish Jew who survived Auschwitz who said to you once, "Warren, I'm very slow to make friends because when I look at someone I ask myself, 'Would they hide me?'" You said that the number of people who would hide you was the best test of a life well lived. Well, I believe that at this meeting you have four you don't have 40,000 shareholders, but you have 40,000 people who would hide you. You are a testament to a life extraordinarily well-lived. Yet even you have not fully witnessed this transformative power of a I'll let you write I'll I'll let you write my biography, but I I I think I've got the point of your question. So respectfully I ask again, Mr. Buffett, before Father Time wins, will you please grant Wita Ahmed an hour of your time, or any time you can dedicate? Thank you so much for your time. Thank you.

And and I will say this: if I grant an hour to everybody of the 40,000 here, I will have an interesting I'll have an interesting time the rest of my life. But I will I will I'll give you one tip. Uh, I found that when I was very young and uh I would I would drive around to various companies all over the country and uh because I was very young and these were companies were offbeat and they didn't have investor relations departments there, almost every CEO would see me because they figured I'd never they'd never see me again. And uh uh and they didn't they weren't getting calls like that. And I would ask them two questions. I I would I would explain to them, "It's not a bad idea," incidentally, uh if you're going to walk into somebody's office and you say you want 10 minutes of their time, take a u hourglass and stick it on the on the desk of the person you're talking to and turn it up so it's going to go for 10 minutes and you say you're going to you're going to leave in 10 minutes unless they ask you to stay. And uh uh that sets the terms. But then once you have that, you if they're in the coal business, we'll say, which happened to be one that I was interested in 70 years ago or so, uh you just ask them one question: "If they were to be stuck on a desert island and they had to own only one of their competitors' stock during the 10 years they were going to be on that island, which one would it be and why?" And then after they give you that answer, you said the same thing. You were going to short uh your net worth while you were on the island. Which would it be and why? Because every manager likes to talk about their competitors. They're they're they're like went to school kids, you know, when when they get into talking about their competitors. And I probably learned more about various industries by just making sure that they didn't think I'd stay too long and that in the meantime they would have the floor and talk about their competitors. I kept my own mouth shut in those days. Uh that's a lesson I've lost somewhere along the line. The uh uh you're you're not you're you essentially they've outsourced uh or I shouldn't say outsourced, but they've they've departmentalized investor relations of all companies of size frankly now. So, you've got, you know, 3,000 companies or whatever they have, and they all have departments, and each one of them has an investor relations department practically, and their job is to say, "This is the best thing you can do today is buy our stock." Well, that the whole concept is total idiocy. Uh, but it's a big business, and it gets bigger, and the investor relations department gets bigger, and and uh you know, and and it uh it's what we have now, but do a little of your own work your own way, but uh Berkshire Hathaway has got plenty of material out there for you to read, and when you get through reading it all you'll know way more than most the people that work at Berkshire. So, uh, you you don't need a personal interview. If we take it, if we take an hour times, even the 40,000 people we may have here, plus plus Becky's many listeners and viewers, uh, it just doesn't work. So, uh, I admire I admire your effort, but but uh but you'll just have to settle for that is the admiration that you get in this.

Okay, Becky. Um, this is a question that you touched on in a lot of ways in the last answer um from before, but I did get this question from a few different people. So, I'd like to ask it. Ricardo Bri, a longtime shareholder based in Panama, says that he was very happy to see Berkshire acquire 100% of BHE. Um, it was done in two steps. One, in late 2022, 1% was purchased from Greg Abel for $870 million, implying a valuation of BHE of $87 billion. And then two, in 2024, the remaining 98% was purchased from the family of Walter Scott Jr. for $3.9 billion, implying a valuation of $48.8 billion for the enterprise. That second larger transaction represented a 44% reduction in valuation in just 2 years. Ricardo writes that Pacific Corp liabilities seemed too small to explain this. Therefore, what factors contributed to the difference in value for BHE between those two moments in time?

Well, we don't know how much we'll lose out of Pacific Corp and decisions that are made, but we also know that that certain of the attitudes demonstrated uh by that particular example have got analogies throughout the utility system. And and uh we there's a lot of there's a lot of states that that so far have been very good, decent to operate in, and there are some now they're rat poison, as Charlie would say, to operate in, and uh that knowledge was was accentuated when we saw what happened in the Pacific Northwest, and that's accentuated by what we've seen as to how utilities have been treated in certain other situations. Uh and then on top of that, so that it wasn't just a direct question of what was involved at Pacific Corp. It was an extrapolation of of a societal trend. And secondly, we uh uh also had a decision we didn't expect at all in the real estate uh business. And and and those kind of things can change values, and courts can change values. And it's a lot easier to make those decisions when you just own marketable securities than when you own businesses. uh and I've made plenty of those decisions as I've watched what have happened in various industries and companies and over 70 years, but uh Greg made the decision, which was fine with us, to get out while and he had no knowledge of what was going to be happening in either the real estate field or the utility field, and uh uh we would we We're not in the mood to sell any business, but but Berkshire Hathaway Energy is worth considerably less money than it was two years ago based on societal factors. And that happens in some of our businesses. It certainly happened to our textile business, and it's it's happened. It's the public utility business is not as good a business as it was a couple years ago. And uh if if anybody doesn't believe that they can look at Hawaiian Electric and they look and look at the Edison in the current wildfires situation in California, and and uh there's societal trend trends that are uh

Oh, I just got a note here on my monitor that says the books are now sold out. So uh you have to spend your money on other things. Here's fudge. This is what I'm eating, something. Uh but that's the explanation that values change, and they don't always change upward. And uh when we made the deal with with Greg, we would have would have been happy to buy out uh the Scott family at that price. And when we made a deal with the Scott company, we wouldn't have been happy to pay Greg the price that he received. But that that's like Berkshire shares. We bought in stock at X and we buy in stock at at less than X if if if conditions change poorly, and we pay over the years we pay more and more because it builds in value, but it doesn't do it in a straight line. And I would say that our enthusiasm for buying public utility companies is different than now than it would be would have been a couple years ago. That happens in other industries, too, but it's pretty dramatic in public utilities. And it's particularly dramatic in public utilities because they are going to need lots of money. So, if you're going to need lots of money, you probably ought to behave in a way that encourages people to give you lots of money. And and uh we will see where we go. It. We'd like to see public utilities do well, but we our responsibilities to the shareholders of Berkshire.

Okay. Station, station one again. Dear Warren, dear Greg, dear fellow owners, it's such a pleasure to be here. My name is Revie Panida. I was born in communist Albania, but I'm now teaching economics in London, England. The wonderful writing of Warren and Charlie has significantly shaped my thinking and teaching. I thank you both very much for the many insights over the years. Warren has often written about the importance of Berkshire's earning power to owners. My question is, what was in your estimate Berkshire's earning power in the latest fiscal year? It would be great if you can comment on any significant items that either increased or decreased the earning power as compared to reported net uh income measures for Berkshire. Thank you.

Yeah. Well, I think our underlying earning power was affected negatively here a while back by what happened in the utility field. I think that our earning power was not is not enlarged by any large acquisitions that come along, but they come along periodically. So we will see something at some point that that uh well could be you know on the one that was 10 billion we would have added to earning power. I mean, why else would we do it? Uh uh so that's that's very uh situational, and of course, it depends so much on what the general market is doing and what interest rates are doing and what psychology is doing. We will make our best deals when people are the most pessimistic. You know that's been true ever since I was 1930, born in 1930 when I was born, and things got much more attractive over the next two years, and apparently I didn't do anything about it there, but uh you know that was the opportunity of a lifetime, and and I blew it by you know worrying about the kid in the next crib or something, but uh uh over my lifetime, you know, I've had fabulous opportunities sometimes, and and they happen because humans are human, and uh I don't you know I'm fearful of all kinds of things. I don't want to try and you know be one of the lenders and walk on a tiny strip between couple of twin towers or something or whatever it may be. But I don't get I don't I I I just I I don't get fearful by things that that other people get are afraid of in in in the financial in a financial way that uh you know the idea that if Berkshire went let's say Berkshire went down 50% uh next week, I would regard that as a fantastic opportunity, and and it wouldn't bother me in the least. And and most people aren't; they just react differently. Uh and so it doesn't it's not that I don't have emotions, but I don't have emotions about the prices of stocks. I mean, I actually those decisions get all the way to my brain whereas emotions can get bogged down some other place. So uh uh Berkshire will increase its earning power over time as we retain money. I mean, we we are doing things, making decisions every day. People are working. We're retaining earnings. We we will build the earning power, but it won't be coming in in any even stream, and it certainly won't be matched dollar for dollar on either the upside or the downside and market prices, and but that's what makes it a good business. You know the investment business is that everything isn't properly appraised, and and the sillier other people get the better your opportunities get.

Okay, Becky, this question comes from Achie Patel, and it's about the big-cap technology stocks. In the 2017 annual meeting, you said, "Warren, you really don't need any money to run these companies," and referred to them as ideal businesses, referring to the big tech companies, Apple, Alphabet, Microsoft, and Amazon. With all of those companies now announcing massive capital investment endeavors and a around AI ambitions, have you rethought the above comment just in terms of them being asset-light and what you think of them as a result?

Well, it's always better to make a lot of money without putting up anything uh than it is to make a lot of money by putting up a lot of money. And so a business that takes no capital to speak of—Coca-Cola—it the finished product which has gone through bottling companies and everything that takes a lot of capital, but in terms of the selling the syrup or the concentrate that goes to it doesn't take a lot of capital. So, one is a fabulous business, and one is a, you know, it depends where it is and everything like that. Coca-Cola is popular everywhere, but some places it I mean, if you're in the bottling business, it costs real money. You have real trucks out there, and you have all kinds of machinery and and and you have capital expenditures coming up, and you know we've got businesses that take very little capital that make high re really high returns on capital, and and the ones the politicians talk about as making high returns actually aren't making high returns usually in terms of capital. Uh Uh insurance, property-casual insurance is kind of a rare business because you need capital as a guarantee fund that you will keep your promises, but you can use it to buy other low-intensive capital businesses. I mean, you can you can buy a whole you can buy Apple and have it support that business. So, uh, that can be a pretty good business, and it's one of the reasons we've done well over time. Uh, but, uh, [Music] the well, it'll be interesting to see how much capital intensity there. Certainly, there's more capital intensity going on with the Magnificent Seven than there were was a few years ago. I mean, basically Apple uh has not really needed any any capital over the years, and it's repurchased shares—that a dramatic amount of reduction—whether that world is the same in the future or not is something Hollywood's answer was always to get their their money from other people to put up the capital—it uh a lot of people have gotten very rich in the country by essentially figuring out how out how to get others to put up the capital. Uh and that's what people do in the in the money management business, and they get very very rich because they they get an override on other people's capital. Uh and incidentally, if if all of you were paying 1% for investment management fees at Berkshire last year, you would have paid $8 billion uh for managing and and you really wouldn't have had to do it. But uh you know investment management is a very good game cuz other people put up the capital, and you you charge them for the capital whether they do well or not, and then you charge them a lot more if they do well. I mean it uh it it uh it's uh it's a well-designed business for the people who practice it uh and who can blame them. I mean that's that is capitalism, but uh and I I saw that in operation when I was working at Salomon, but I didn't need to see it. I I I knew what existed anyway. The trick in life is to get somebody else's capital and get an override on it. Uh Charlie and I decided it wasn't too elegant a business after a while. We we weren't we were not criticizing the efficacy of it. We were just it just didn't appeal to us after a while. I did it for 12 years though or something like that. Not really the the one difference that Charlie and I did from other people is we put all our own money in into it. So, so we really we did share the losses in with our own capital, but we got an override on other people's capital, and that's been people have made advances where they get the override on other people's capital without putting up any of their own capital to speak of. And that's that's a very good business. But uh it it it leads it it can lead to a lot of abuse.

Greg, you've watched capital management in the United States, and would you say that Canada's behind or ahead of in this respect?

Well, I think when it comes to their capital system, Warren, it it it is very comparable. There's no question. Other than as as we know, I mean, I think the US as far as having uh a capitalist system, it would it would be tough to be touched by uh any country. And I think when I think of Canada, there's just certain responsibilities or the or obligations that the government wants to take on and aren't going to leave with the public sector. And that's just a a decision that's made by society or by the by the Canadian people, or if you look at another country, Australia, wherever it may be. But so there's it's different. But when you think when I think of capitalism, that that drive is there and and and and the desire to you know allocate capital properly, it's very similar; it it's produced wonders in the United States if you think about it, but uh originally uh with the Rockefellers and Kennedys and and and Carnegies and all they actually put up money to build steel mills, you know, whatever it may have been, with the with Ford refineries and pipelines and all that sort of thing, they they put up money to do it. Now, the trick is to use other people's money basically. And and uh and you know you can't you can't blame human beings for behaving like humans, but you should be aware of what their motivations are. It's a capitalism in the United States has succeeded like nothing you've ever seen. But it has the what it is is it's a combination of this magnificent cathedral which has produced an economy like nothing the world's ever seen, and then it's got this massive casino attached. So you got the cathedral and the casino, and in the casino everybody's having a good time, and there's lots of money changing hands and everything, but the cathedral is what got to make sure the cathedral gets gets fed too because the temptation and the temptation's very high now is to go over to the casino where people say, you know, "We've got magic boxes and all kinds of things that'll do wonderful things for you," and that's where people are happiest. That's where you get the most promises to you. That's where the most money is for the people that are pushing things. And uh you know the balance between the capital, the casino, and the uh and the cathedral or it's very important that that uh the United States in the next hundred years make sure that the cathedral is not overtaken by the casino cuz people really like to go to casinos, and it's just so much more fun. And they they bring bells and when you win and you know they they bring you drinks and everything else, and and uh uh it's it's designed to move money from one pocket to another. But um and in the cathedrals they basically are designing things that will be be producing goods and services for 300 and some million people like it's.

Never been done before. In in in history. It uh it's an interesting system we developed, but it's worked. It it it dispenses rewards in what seems like a terribly capricious manner. I mean, it the idea that people get what they deserve in life, and it it's hard to make that argument. Uh uh but if you argue with it, any other system where it seems to work better, the answer is we haven't found one. So I'll leave it to the next generation to to send me the answer, and then by Ouija board or whatever works. Okay.

Station two. Hi, my name is Patrick Nester. I am 13 years old and from Tampa, Florida. I'm here with my brother John, who's 15, and my dad. Thank you for hosting this meeting. This is my first ever shareholder meeting. My question is, what high school class or activity helped influence you to who you are today as the greatest investor of investor of all time?

Well, that's a good question. Uh the the teachers you get in your life have this incredible impression on you, and and a lot of it are the formal teachers you have, but some are informal teachers too. I mean, I've learned from certain employers, you know, so much uh you really hope you're learning from everybody you find who's well-intentioned and has had a lot of experience in. And I I had a lot of good luck in that. But I would I would say that uh what what well where I was really lucky was my dad was in the investment business. So I would go down on Saturday and I'd wait for him to go to lunch with, and I'd read the books that were around there that nobody else ever read. And uh uh and they just they talked to me. Numbers talk to me. Uh and uh uh I could never get my fill of them, and then I discovered the public library and I read every book there was on investments, literally in the Elmo public library at 19th and uh uh you know I I enjoyed learning about that. Unlike Charlie, if Charlie was reading about electricity, he would want to have known everything that Thomas Edison knew and more and and goes through the same thought processes and understand how everything worked. I didn't care whether how it worked. I just cared whether it worked. And that's a limitation. I'm I'm I'm confessing here. I'm not bragging. Uh uh but uh you know the as as Charlie would say, I mean people would always say if you could only have lunch with one person living or dead, who would it be, and Charlie said I've already had lunch with all of them because I've read all their books, you know, basically, and and so and he really did it. I think having curiosity and and actually finding sympathetic teachers is very useful. I I I ran into a couple of teachers that uh both in high school and college. In fact, I would say that I went to three different higher, you know, three different universities, and I went to high school in Washington, and at each place I found about two or three really outstanding people and uh and I just spent my time with them and didn't pay much attention to the other classes and uh and I was lucky to find something that that really fit me very early uh on. If my ambition had been to become a ventriloquist or you know whatever the hell it might have been, and it wouldn't have worked, you know, I I spent hours and hours and hours, and I wouldn't have been any good when I got through, so I don't believe that I think there was that book that talked about spending 10,000 hours at something. I could spend 10,000 hours at tap dancing and and and you'd throw up if you watched me, you know, but but if I spent if I spent 10,000 hours reading Ben Graham, I would I would be damn smarter when I got through. So minds are really really different. I watch great bridge players and I watch great physicians, great I mean people really really really have different talents and uh you know I don't know I think you're supposed to have 88 billion cells in your brain. I'm not sure that all of mine are flashing bright lights, but but you are different than anybody else. That's what my dad always used to to tell me that uh essentially that you know you're something different. It may not be good at the moment, but but uh you you find your own you find your own path, and you will you will find the people in schooling that that want to talk to you, people that teach in general. They love having uh a young student who's actually really interested in the subject, and they'll spend extra time with you. They'll do all kinds of things, that and I I ran into that. I had Graham and Dodd at at uh Columbia. Well, Dave Dodd treated me like a son basically. And uh uh but I was interested, excuse me, I was interested in what they were saying, and and they found it kind of entertaining that I was so interested and uh so I would just I would I I would look around, or do you know what really fascinates you? I wouldn't try and be somebody else. And then I would um you you'll find the teachers uh out of school and and you'll find some outstanding people that that are teachers. I' I've had at least 10 people that have had huge impacts on my life, and every one of them is positive, you know, because I got to select in a sense, and and uh and a a number of people really like helping younger people, you know. I I found that in school, and probably helps to look a little bit lost and all that like you need help. Uh but I I uh I would say my school experiences were good, but were really very good, but I attribute it much more to the individual than to the institutions. Okay, I've already told you more than I know, so we'll go on to uh Becky, you're next.

This question comes from Scott Williams in Portland, Oregon. He said, "Do you think the net benefit of Doge will be positive or negative for the long-term health of the United States?"

Well, why don't you give me a hard one? I think that I think that bureaucracy is something that is amazingly prevalent and contagious even in our capital system, and that big corporations, you know, overwhelmingly most of them look like they could be run better. I'm sure Berkshire does in many way many respects, and uh it it uh you know and government is the ultimate, so it it it it really doesn't have any checks on it. Uh and that's why it scares you to some extent about uh about uh what the future of the currency will be because they can print currency, and and if you have people that get elected by promising people things, and that doesn't mean that that they aren't sincere about all kinds of items, but there's no politician that says to anybody that at least if they have money that you know I really think you have bad breath, and if you don't mind would you step over away from me, it just doesn't happen, they uh and so I I think the problem of how you control revenue and expenses in government is the one that is never fully solved and has has really hurt dramatically certain many civilizations, and I don't think we're immune from it, and we've come close to it. Uh but if you tell me how in in in democracy you go in and really change things, you know, we're we're operating at a fiscal deficit now that is unsustainable over a very long period of time. We don't know whether that means 2 years or 20 years, that because there's never been a country like the United States, but uh you know that if something can't go on forever, it will end, the quote Herbert Stein, famous uh economist, and uh we are doing something that is unsustainable, and and it has the it has the aspect to it that it gets uncontrollable, able to at a certain point. I mean, essentially, you just give up on it, and uh Paul Volcker, you know, kept that from happening in the United States. Uh but we came close. We've come close multiple times, and uh you know the we've still had very substantial inflation in the United States, but it's never been runaway yet. And and that's not something you want to try and experiment with because it feeds on itself. So I I wouldn't want the job of of trying to correct what's going on in revenue in the expenditures of the United States with roughly a 7% gap when probably a 3% gap is sustainable, and then the further away you get from that the more you get to where the uncontrollable begins, and Uh, I um I I think that it's it's a job I don't want, but it's a job I think should be done, and Congress does not seem good at doing it. Well, it sounds like you should quit while I'm ahead. It it's it's and well we've got a lot of problems always as a country, but but this is one we bring on ourselves. I mean it it we have a revenue stream, a capital producing stream, a brains producing machine like the world has never seen. And if you picked a way to screw it up, it would involve the currency. And and that's happened a lot of places. And and the incentives plus the checks. Uh well, there aren't any there aren't any real checks. In theory, you would make it so there was substantial downside for the anybody that screwed things up. But but there isn't downside, there's upside. So it uh it's the the problem of the most successful company in the history of the country, in the history of the world. And uh at this point, we got a little room to go in in solving. And then with that, I'll shut up and go on to station three.

Hello Mr. Buffett. My name is Saskia from Gon Germany, and first of all I want to thank you because you made such a great impact in my life and the life the people I love, and that's priceless.

Well, thank you.

Imagine it's 1776 and you're sitting alongside Benjamin Franklin helping to shape the foundation of a new nation. What core economic principles would you advocate for building a far fair, resilient and opportunity-driven capitalism society? One that supports longtime prosperity for future generations.

Well, I I probably that's a good question, but I would probably say to Ben Franklin, you just keep thinking and don't talk to me because you'll you'll come up with some better ideas than I will. He was, you know, incredibly remarkable person. I mean that he would say he's almost probably the last person to almost have a grasp of every every aspect of of uh of activity in the country. He he invented all kinds of things, and he incidentally we were talking about uh power of compound interest and that sort of thing. He he left a will that that left a sum of money to Philadelphia and another sum to Boston that would serve as a example for a couple hundred years, you know, of the power of compounding and all all kinds of things. I he he was so far ahead of his time that that the best thing I could do if I was under that tree with him was be to to get out get out of his way and let him just keep thinking. Uh but uh it it he saw the problems that success could bring to a society as well as other problems. I mean more immediate problems that that uh uh in all kinds of fields, but the problems of how how to cause how to take 8 billion people cuz there's no way we can separate ourselves from the rest of the world. We can be an example to the rest of the world, and I think it it behooves us since we have had all this good fortune in this country, and we do have a pretty good system. I don't think it I don't think you get I don't think you get very far by lecturing the world on how you're the the one that should tell them what they should do with our lives. I think I I think you get a certain amount of resentment when just a few hundred years ago uh a whole different group of countries were running the world and and now you start giving them advice and it I think it's a it's a real mistake in communication or persuasion to uh to lecture a bunch of people who you've just won the game. I mean that's uh but anyway uh I I would say that I would advise Ben to figure out how to win the game and keep a certain amount of humility at the same time. And uh I would tell him to try and design a system that doesn't invent too many things that can destroy the planet, uh you know that become uncontrollable once you get them out there. There was no alternative to us developing the atom bomb, but but but the expansion of the number of people that have the ability from one to eight and and nine probably pretty soon with Iran. I mean that that's a mistake that society just could not afford to make. I mean solving the problem with nine variables instead of simply one. Now it's totally understandable. My dad was in Congress when when the atom bomb was uh first used. It's amazing how how uh uh Sam Rayburn kept the House of Representatives uninformed because they they're supposed to appropriate all the money and had 435 congressmen there and they had no idea they were appropriating money for for uh Los Alamos or what was going on in Chicago or what was going on in at uh Tennessee. But anyway, uh uh we we we do have a society that is far beyond anything that Ben Franklin dreamt of. It's achieved some of the or is achieving it's moving toward in the right direction toward solving some problems where we made kind of broad declarations about all men being created equal and and etc. And then we did some of the things we did, but generally speaking we moved in the right direction. Uh but we face problems that I don't know what how how Ben Franklin would would uh uh attack the problem of of what you do once you get weapons of mass destruction in many hands. And when you essentially look at the world as something where there are winners and losers and that the winners are, you know, humiliate the losers and do all kinds of things. I it's but I'll I'll let the people are a lot younger to figure out the answers on that. But it it's still the most wonderful. There's never been anything you could dream like what has happened in the United States. So we still it's it's the best place and the best time to be alive by by miles in the street. Just think of a couple hundred years ago and somebody, you know, yanking out a few of your teeth and pouring whiskey down you doing I mean the subsistence and and particularly in this Midwest. Just imagine waiting till the Missouri froze over every year just to see whether you get your wagon across and maybe have a pregnant woman in the back, you know, when it is just amazing what has happened of a positive nature during my lifetime, and then the question is is how do you how do you keep it and how do you improve it and uh uh I I I do think that fundamental to all of it though is having a uh is having a currency that that does not get debased, what that does to the stability of a society where all the people that trust their government get screwed and all the people that figure out ways to profit off of it become rich or richer. I I I I don't think you want a society that operates in that manner. So anyway, [Applause] Let's see. That was section three. So, we're going to Becky. Is that right?

Yep. That's right.

Um, Greg, this question is for you. It comes from a shareholder named Jay Milroy, uh, who writes, "Mr. Buffett has a hands-off approach to managing the operating subsidiaries. How would you describe your approach?"

Better. Well, we've got our managers over there, and it I I would say going back to 2018, it's been a it's been very fortunate to be in this role because one, I had to learn a lot of the businesses, and there's no question as uh Warren bought the businesses, had that general knowledge. I absolutely had to engage with each of them, and they've been great in uh sharing their their business models, their approach, their thoughts around where the risks and opportunities are, and I think as we went through that, there's no question um I had questions and wanted to engage with them, and Warren talks about the curiosity being important as you go through things. That would be my style to have questions and comments around their business, their frameworks. Um at the same time, they have great businesses and and they run them very autonomously, and that that remains in place. But if there's opportunities to see where uh maybe seen something in another business or an opportunity I may see in their industry, we're going to discuss it and see if that's uh something we should pursue, or are we properly addressing the risk. And I found all our managers to be absolutely engaging on that and and and want to have those dialogues. And I'd say that's a reflection of of my approach. I'd also say that um when you think of our managers, again, very autonomous. They they run their businesses. They know it better than I ever will. But if I see an opportunity that it's well worth their time to talk to another one of our managers, if it's Geico and they've gone through a technology transformation, um they're not by themselves that need to be thinking that way. We want to make sure the right folks are talking and figuring out how we can benefit from the prior experiences. So, it's um I would say more active uh but it hopefully in a very positive way, and they and we got an exceptional group. So, it's worked out exceptionally well as uh as I've gone through that period of time. It's working way better with Greg than with me because uh you know I I just um I didn't want to work as hard as he worked and and and I could get away with it because uh we've got a basically good business, very good business. And uh and I wasn't in danger of you firing me by virtue of both ownership and the fact that we would do pretty well. Uh but uh the fact that you can do pretty well doesn't mean you couldn't do better. And and and Greg can do better at many things. Many people want to be managed, need help in being managed. Some don't. Some you just leave alone. Uh you know, we've had managers it would have been crazy to uh started giving instructions to cuz they just quit. And and I wouldn't blame him cuz I'd be the same type myself. But uh a lot of people I mean people really do welcome direction and help and and and uh you know and particularly when they're getting it from somebody like Greg that really lives the life himself and doesn't just come down on from a high and say you know here's what you do while I do something else you know and a manager that behaves differently than than what he's asking asking uh the people beneath them to behave. It it just doesn't work over time. And uh people want a manager that they that they admire, and they're not going to admire them if those people profess to behave in one manner and behave in another manner. It's easier. This is a sad thing, but it's it's easier for an organization to see its quality move downward than it is upward. I mean, it it if if the boss behaves badly, uh it causes everybody to to behave. I mean, it it it that is really catching. It's not as catching on the way in upper management. But if the manager is doing a lot of little things to grease his own situation, pretty soon, let's say you're running a retail establishment. Pretty soon all the employees are a lot of the employees are telling their friends that they they get a discount you know with the retail operation and if they want if they want if their friend wants something they'll put it on their account and then get the discount. Once you start deviating downward it is really contagious and it is hard to rebuild. So, you really need someone that that uh behaves well on top and is not playing games for their own benefit. And and we get a lot of managers that bend over backwards not to do that sort of thing. And then we get a few that bend over forwards. And uh and if you get enough companies, you're going to get a lot of different forms of behavior. And Greg does something about it, and I I've generally been laxed in doing something about it, but he's done a way better job as that than I have. Okay, station four.

Hello, Mr. Buffett and Mr. Abel. My name is Kansas Lommire. I am a junior at Elkhorn South High School and was born and raised in Omaha. My question is directed to Greg Abel. Berkshire Hathaway is the second largest utility provider in the United States, and a 2025 Reuters investigation found that its coal fleet is the dirtiest in the nation. There is currently no concrete plan to retire coal and fully transition to renewable energy. I'm 17 years old. Considering that, what do you have to say to young people like me who will live with the consequences of climate change caused by companies like Berkshire?

[Music] [Applause]

Thank you for your your your both your question and your comments because it is it is important to to understand uh Berkshire Hathaway Energy, but also um how they operate and and maybe using Iowa at least as a starting example because I think that was one of the uh states cited in the report. One of the important things that I'd say early in us acquiring our energy companies and I go back to when we acquired MidAmerican. We acquired it in uh 1999. Berkshire purchased uh MidAmerican in 2000. Well, one thing that became very clear to uh myself and our teams was that what we do within our utilities is really driven in two fronts. One, we absolutely have to meet the requirements and the law that's laid out federally, but most importantly, we had to recognize we implement public policy across these states. And that was an interesting conversation when I go back to to Iowa. And again, the report cited that as a a significant problem. Um it was early in the 2000s when for the first time in Iowa we were going to as a utility be short of power. So, we didn't have the energy and we entered into a a significant discussion with our governor at the time and and really sat down and said, "Where do you want us to go as uh as MidAmerican and what resources do you want as as a state?" And at that time, we were predominantly a coal-based state. Um and and we recognized that uh obviously and and fundamentally personally viewed it as a risk, but we we needed to have that conversation with our state and as to how we would manage that going forward. The interesting thing was that um as we had that conversation in uh the early 2000s again with the leadership of our state, it was clearly decided we wanted to continue to be long power, so i.e., not be short for our customers. We discussed the type of resource, and I I remember uh a very clear conversation around we wanted to stay balanced across a variety of energy sources, and and at that time it was really coal and natural gas, and at that time we made the decision to build the largest uh wind project in the in the US in Iowa. So we undertook an effort to build three resources, a a coal plant, a gas plant, and a uh what was the first uh wind project we owned in MidAmerican, and again it was very consistent with what the state wanted. But we also laid some important groundwork there because we started to define the importance of uh renewable energy, non-carbon resources, but it has to be consistent with what the state wanted. And we've gone on over the since that period of time um to deploy $16 billion into Iowa associated with renewable energy. Again, very consistent with what our state wanted us to do, i.e., the underlying policy. We don't get to make that decision and just spend 16 billion. Uh it's done in conjunction with our governors, our legislators, our regulators. And at the same time, um we've had the opportunity to retire five of the 10 coal units. Now, as the report highlighted, I I understand people would like those other five coal units retired at this time, but to think we deployed 16 billion to retire five and and it's a very good outcome for our customers. We've been able to maintain our rates. They're some of the lowest.

In the country. So, it's been done very efficiently. But the reality is we still need those five coal units to keep the system stable. Uh, we cannot have a Spain-Portugal situation. So we absolutely respect the input. We absolutely respect the process and will continue to work with each of our states to identify the path they would like to chart, and we work hard to ensure, you know, there's good balanced outcomes because we recognize, uh, um, the challenges they're associated with, um, others' other folks' desires. So I think you'll continue to see our utilities implement policy consistent with, uh, with the needs of, of their stakeholders or customers and at the same time always respecting what, uh, what's required by any, any of the federal standards. So thank you for your, for your comments.

Okay, 31. Let's see. Becky, uh, this question comes from Billy D. Ross. He writes, "Mr. Buffett, as a nurse from New York State, I've spent years struggling to secure good health insurance for myself, even while working on the front lines to save lives. In New York, accessing insurance means navigating a confusing state-run system that feels like it's designed to overwhelm. I'm curious, what ultimately led to the end of your healthcare venture with JP Morgan and Amazon? And given your commitment to value and long-term thinking, would you ever consider taking another look at health insurance reform in the U.S.?"

Yeah, we're, we're spending close, it's hard to get the precise figure, but close to 20% of GDP on health. And if you go back to 1960, there were a number of countries that were each spending around 5%. And, uh, then they, the lines began to diverge dramatically. But the mathematical, uh, fact that there are only 100 percentage points in, in the equation didn't change. So, uh, we tried that, uh, experiment with JP Morgan and Amazon, and, and, uh, we had three people that didn't think they knew the answer and, uh, but thought that, in my case I use the term, that that it was a tapeworm in the economy, and we also found out that, uh, that the tapeworm was alive in every, in every part of the country. I mean, the, the hospitals liked it. The hospitals had prominent people working with people, people generally liked their doctor, didn't like the, but didn't like the system. I mean, all kinds of things, but in the end, uh, JP Morgan and Amazon and Berkshire were not going to have any effect on changing that 20%. Now that 20%, there are only 100 percentage points, uh, available, and when other countries spend six or 7% and perhaps use our system to their advantage, which is also very true, uh, you know, that is an enormous percentage of, of an economy, and, uh, we simply, that it was too entrenched, uh, to really do much in the way of change. And, uh, we spent some money on it, and we did some work, and we learned a good bit about our own systems, and we saw the degree to which the present system was ingrained in so many people's, you know, whether the health care providers, whether everybody, and these aren't evil people, I mean, they're just, they're just going about something and trying to, trying to save lives. But, but, uh, we found that whether it was in Canada or France or Britain or wherever it might be, that if you looked at our costs that they were just far higher, and to some extent we were subsidizing the rest of the world, and people would come to the United States to do the really unusual or challenging, uh, aspects, health in terms of operations and that sort of thing. Uh, but we, we made no progress and, uh, uh, there comes a point where the government's, you know, in, I mean, it's so involved in the situation, and health is so important to most, to everybody, and, uh, uh, we couldn't, we, we, uh, we as I said to, uh, Jamie and Jeff, I said, well, the tapeworm won, and, uh, uh, there are problems of society when you get 20% of your GDP going into a given industry, the, the degree of enthusiasm for changing that industry, the political power that the industry will have, and that doesn't mean they're evil, it's, and, and you know, everybody, they just end up there, and, uh, uh, so I don't know the, I, we, we came to the conclusion we didn't know the answer, three of us, and, uh, uh, we had the money to do it, and we didn't know how to change how 330 million people felt about their doctor, felt about our healthcare, what they felt entitled to, and you know, and it's, uh, it, it, it won't change by itself, and, uh, government is the only one that can change it, and the only people in government can change it are getting a majority of 435 people and 100 people, and, and my dad lost one election in his life in 1948. And he, he, he was a very strong Republican, and in 1950 he went back and beat the guy that beat him in 1948, and he got the doctors behind him, and, and, uh, uh, he did very, you know, they're very well, and they believe 100% in what they're doing. They're helping people every day. And during the pandemic, the sacrifices made by people, save other people. Just incredible. Can you imagine working in, in something where they're bringing in people that are, you know, going to die by the dozens and dozens and dozens, and you try to somehow keep your own morale up and keep working with them. So, you can't argue about the importance of it. But our costs are so different than any, c country in the world that it's a, it is just, it's a huge element, and we're a very rich country. So we can do other, we can do things other countries can't do. And through our elected representatives and a whole variety of things over time, we've developed a system that is enormously resistant to any kind of major, major change, and it's important in every community that it's in. So I wish we had an answer for you, but, but, uh, uh, I was somewhat pessimistic going in. I was a little more pessimistic when we came out, but I'm, I'm glad, I'm glad we did what we did, and, and we learned something about our own failings, uh, in the process. So, Berkshire in effect got his money's worth, but we didn't kill the tapeworm.

Okay. Trying to change things in government is, it's an interesting proposition in the country because, uh, uh, you get self-selection in terms of the people that go into government and continue in it, and to some extent they keep, they have to make decisions that they don't like as they go along, and they learn to accept them or, or rationalize them or whatever, whatever it may be, but it's still the best, you know, this country's worked out better than any country in the world. So, it, uh, you, you can't argue it was a failure, but you can argue that there is, that there are certain problems that are terribly tough to figure out ways to solve. And of course, one of them gets back to the fiscal problem I mentioned before because it's, it's easy to spend money, and it's hard to cut people's receipts. And, uh, and if you get elected, you know, you are going to, you're going to say to yourself, well, I can do more good if I stay in than if I really vote my conscience on this sort of thing. So you give away a little bit here and a little bit there and a little bit there, and finally you don't recognize yourself in the mirror anymore, and, and, uh, that's, I grew up in a political family, but, but, and I watched, I watched how people behaved, and, and, and they behaved like human beings, which is what you have to expect, and I behave like human beings. Um, uh, we still manage to keep moving forward in a dramatic way. It's so much better to live here than it was 100 years ago or 200 years ago. It's dramatic. So you can't say the system's a failure, but you can say that it is very difficult to make major changes in it.

Okay. Station five. Hi, Warren. My name is Pig Huang Chen. I'm from Taiwan. This is my seventh time here. First of all, I want to thank you, Warren, for your generosity of sharing your wisdom and lessons. You changed my life, and you are my role model and my hero. And my question is, Warren, you mentioned that Mr. Apple will be in charge of capital allocation in the future, and I'd like to know your perspective on, is it easier for a business operator to be an investor or for an investor to be a business operator? Thank you.

No, that's a good question. I see we call him Mr. Apple even. Thank you. And I'll, you'll take it, and, uh, uh, it's a lot tougher to be an operator. I mean, it, it is, it's easier to sit in a room like I do and play around with money. Uh, it's just an easier life. Uh, that doesn't mean it's a more admirable life. It doesn't, but it's been actually been a pleasant life for me. So, I, I, I don't complain to the least. And, and I, and I've, I've been able to choose my friends, which has made an enormous, uh, difference in my life. I've never had to work for anybody that I really didn't admire. I mean, how that's a luxury in life. I had five different people I worked for, and, uh, you know, I just, they were fantastic, whether it was the manager of the local Pennies, which is located, well, it used to be located a couple miles from here, and, uh, newspaper managers, everything, they, I've never been really disappointed by any teacher I've had, so, uh, but I would, I have to admit that, that, uh, I have been able to choose what I do with my day to an extraordinary degree compared to, to be a business operator, and, and in many cases, uh, I wouldn't like to compete to be a top-notch business operator in terms of some of, some of the, some of the behavior that would might be forced upon me. I, I am the master. I mean, I'm, I'm, I've found myself in this position where I can, I can run the kind of company I want to run. And, and that, that, that's an extraordinary luxury. And with it, with that, I should say that I'm getting a, a section that says, "Five-minute warning! Five-minute warning!" So I would now like to turn to a subject that I want to discuss with you a few minutes, and then when I'm through discussing this, I'll let Becky ask me a question or two, which may want, you may want some elaborate questions to come to you as I, I make these comments.

Uh, tomorrow we're having a board meeting of Berkshire, and, uh, we have 11 directors. Two of the directors who are my children, uh, Howie and Susie, know of what I'm going to talk about there. The rest of them, this will come as news to. Uh, but I think, it, it's, uh, the time has arrived where Greg should become the chief executive officer of the company at year's end. And I want to spring that on the directors effectively and give that as my recommendation. Let them have the time to think about what questions or what structures or anything that they want, and then the meeting following that, uh, which will come in a few months, uh, we'll take action on whatever the view is of the 11 directors, uh, I, I think they'll be unanimously in favor of it. And, uh, that would mean that at year's end Greg would be the chief executive or officer of Berkshire. And, uh, um, I would still hang around and could conceivably be useful in a few cases, did. But the final word would be what Greg said, in operations, in capital deployment, whatever it might be. I could be helpful, I believe, in that, in certain respects if we ran into periods of great opportunity or anything. Uh, I, I, I think that Berkshire has a special reputation that when there's times of trouble for the government that we are an asset and not a liability, which is a position that's very hard to have because usually the, the, um, the public and, and, and government get very negative on, on business if there's a time like that. But so I think I could, there might be a time when I, I'd be hopeful. But Greg would have the tickets, and, uh, uh, and he would make, like I said, whether it's acquisitions. Uh, I think the board would be more welcome to giving him more authority on large acquisitions probably if they knew I was around. Uh, but Greg would be the chief executive, period. And, uh, like I say, the plan is to, um, and Greg doesn't know anything about this until what he's hearing right now, but that, uh, the, uh, uh, the, the board will be able to ask me questions tomorrow as to a little more of the specifics, of, of what they should be thinking and all that, but they, they'll, they'll, they'll digest it, and, and then at the next board meeting after that, uh, if we, as I would guess we would, if they act, then obviously we, we have something to announce to the world as a material change in Berkshire, and we'll go forward with that operation, and, and, uh, uh, I will play with a Ouija board or whatever that comes out in terms of doing things, but, but I will not, I have no intention, zero, of selling one share of Berkshire, halfway, it'll get given away gradually, really now, it just [Music] Thank you. Heat. Heat. Hello. I, okay, drink your Coke and calm down. The, I would, I would say I would add this, the, uh, the decision to keep every share is an economic decision because I think the prospects of Berkshire will be better under Greg's management than than mine, and, and, uh, but you know, I will, I will come in, and, and, and there may come a time when we get a chance to invest a lot of money, and, and, uh, and if that time comes, I think it may be helpful with the board, the fact that they know I've got all my money in the, in the company, and that, that I think it's smart, and I've seen what Greg's done. So, uh, that's the news hook for the day, folks, and thanks for coming. Yeah. Yeah. The, in the [Applause] the enthusiasm shown by that response could be interpreted in two ways, but I'll take the surprise. Thank you. Yep.

Okay. There you have it. Another Berkshire Hathaway annual meeting in the books, in an extraordinary one. This meeting just ended with a bang with Warren Buffett suggesting to the Berkshire board that Greg Abel become the CEO at year's end. This was Warren Buffett's 60th annual meeting as CEO. Uh, there was some anticipation at some point a transition would happen. Greg Abel was always, uh, the heir apparent and the designated, uh, successor, but it is formalized here. Uh, and Warren Buffett also saying that, uh, he would be around to help, especially if there were any big consequential deals that might come around. Well, of course, the entire hall, including Greg Abel, was, uh, was surprised by this. Let's listen to, uh, to how he delivered that news. "Greg should become the chief executive officer of the company at year's end, and I want to spring that on the directors effectively and then give that as my recommendation. Let them have the time to think about what questions or what structures or anything that they want, and then the meeting following that, uh, which will come in a few months, uh, we'll take action on whatever the view is of the 11 directors, uh, I, I think they'll be unanimously in favor of it. And, uh, that would mean that at year's end Greg would be the chief executive or officer of Berkshire." And this is what it looked and sounded like in the hall as the shareholders absorbed, uh, that blockbuster news. [Applause] It just, heat, heat. Thank you. That was the response. Of course, uh, Mr. Buffett, always, uh, being self-deprecating, was quick with an equip, and he said, of course, that long ovation, uh, once he said he would be leaving as CEO could be interpreted in two different ways, but he decided to take the more positive implications there. Again, uh, Warren Buffett saying he, uh, he proposes he will step aside as CEO, Greg Abel will take over that role. Abel already has been handling a little more of the day-to-day of the capital allocation responsibilities, which of course Buffett, uh, there had, and he said, you know, as, as the continuing major owner of Berkshire Hathaway, uh, perhaps the board would like him in there if there was some large transaction that came around. Um, Buffett also saying he had no plans to sell a single share of Berkshire Hathaway. Of course, there's a long-standing plan for him to, uh, over time give away his holdings in the company, but he said he will not sell it. He also said that that was an economic decision to hold on to the stock because he says that the company he expects will perform even better under Mr. Abel. So that has been essentially a theme for, uh, multiple meetings, but especially this one where Warren Buffett, uh, in, in many ways looking to turn the spotlight, uh, aside and, uh, and have Abel, uh, take over there. So again, after his 60th annual meeting, and look, a lot of shareholders have been, uh, in some respects, gearing up for the possibility that this might come, that in fact Warren Buffett might decide exactly how this transition, uh, would be handled, and maybe it would come sooner than later. Of course, the company stockpiling all this cash and, and many other ways to, to get around this, this huge story. Becky Quick is back with me. I, I just caught up with both Warren Buffett and Greg Abel behind the stage. Just ask a couple of questions about this. U, Greg looked pretty shocked. This is the first he's heard about it. They have not had conversations with this about this. Um, and so I asked them very quickly, you know, weren't, weren't said in the meeting that he'd be hanging around. I asked in what capacity, what does that mean? Would he be chairman? Um, the two of them talked for a minute standing there and said that they're going to discuss that with the board tomorrow. The eventual plan upon Mr. Buffett's death, this is what the two of them just said, is that Howard Buffett will become the non-executive chairman of the company. As of January 1st, I don't know if that means that Greg will be chairman and CEO or if Greg will be CEO. And I think those are details the two of them have to discuss. Yeah, I guess ultimately the board has to discuss this tomorrow. Um, again, I think they would give Warren Buffett a lot of leeway to whatever would defer to whatever he said. I asked Warren if he's still going to be going into the office every day, and he said, "Yeah, probably." That's his plan. I asked Greg if the office would be moving because Greg's based in Iowa, not here. And, uh, Greg said, "No, the office will always be in Omaha. So, the office will be here no matter what." Warren's still planning on coming to work every day, and as you heard him tell the crowd, he hopes that he can be useful and help out in times of need. Um, I think this has been a transition that's been such a long time in the making. I don't know that anybody was expecting this now, including Greg, including the board. Yeah. I mean, Buffett himself said that only his children, of among the board members, were, were aware that this was coming, right? Um, look, this does create some questions about what happens with capital allocation in particular because, uh, last year at the meeting, Warren was asked what the role of Ted and Todd would be, how those things would come. Yes. And, and, and his announcement was that it would be Greg's decision. Ted and Todd who run part of the investment portfolio, right? Who run a big part of the investment portfolio right now. I mean, if you think about it, there are some complicating factors. Uh, Berkshire is a huge company. Being an involved operator is no small task. And as Warren said, Greg is a much more involved operator. He does 60 operating companies or so. Walks the walk with these companies, checks in with all of them, knows what's coming along the way. Uh, you also have the capital allocation plans. Now, I'd always thought of capital allocation as being, you know, for the most part, either acquisitions or going into stocks. Today they talked about a different plan with capital allocation too, and that would be to lay out massive amounts of money for big in infrastructure builds too. So you know, you can kind of mix all of those in if there's a need for more electrical systems and grids as you see the country's needs changing, if there's big ways to do some of those things too. Uh, but you have that, and then you have the insurance companies, and you know, Ajit Jain is here running the insurance companies. Yeah. A lot of big jobs that take a lot of people to fill for sure, and you wonder how or if any of those things will change or if all of those people will continue to come do the jobs they're doing at this point too. Look, I mean, the theme for so long, uh, I would argue that that Buffett tried to underscore is that the principles that he's run this company with and the culture and just the general approach to taking care of capital is is built to persist. It's not something that will come and go with him. That remains to be seen. Remains to be seen how investors will think about that. Um, you know, there was an answer before this news that Greg Abel gave about his thoughts on capital. Yeah, that was the first question when we came back. It's a decent question. It's one that several shareholders wrote in with questions about it. Now, look, um, with the analyst that we were here with, the investor we were with, uh, David Samra, David who just pointed out, look, Greg does have some chops with capital allocation too. Was so closely involved with the investment in the five Japanese, sure, trading, trading house companies, and you know, he's been involved in a lot of different things along the way, but this is a big shift, we've been gradually led, led down this path, and Mr. Mr. Buffett doesn't sound like he's going anywhere in terms of still going to the office every day and still holding a huge portion of the voting shares and the equity and saying, look, he thinks the company's going to be worth more, and he'll be there to back him up, not, not just with shareholders and outsiders, with the board too, for sure. Um, no, it all, uh, pretty fascinating. I mean, he didn't pose it as a question like, "Greg, you want the job?" I mean, it was just a, a foregone conclusion that we're just going to flip the switch as we've planned, you know, all along, right? Um, yeah, quite remarkable. Um, I mean, that that idea too, though, he, he twice came back to the idea like, look, if there were some kind of big complicated transaction, if we're going to make a big investment, maybe the board would want me there since I've been there and I own a big chunk of the company. Um, obviously flagging that that that will be a measure of continuity. Look, a lot of times over the years Warren Buffett has gotten calls, new game. Now, I, I guess my question would be if I had the chance to ask, um, how many of those calls are already going to Greg? How many of those queries already go to Greg? That's right. And this seems like that's part of the baton handing too. I'm here if somebody needs, if knows me better and maybe wants to start here and maybe we go through, and many times it was, you know, we have a problem, we have a crisis, can you help? Not just you want the opportunity, and, and that is a real issue in terms of whether, look, part of the story with Berkshire has been the preferred buyer of high-quality companies and assets when a family is ready to sell, when, when some other investors are ready to sell. Does that transfer to a new, new CEO or is it just the prestige of selling to Warren Buffett who decided he wanted to buy your business? Uh, because it was like the good house, it was the good housekeeping sign of, seal of approval to have that going, better deals because of, and would shore up other market, uh, players who might have been trying to take advantage of rumors or weakness in a stock at any point in time too. Uh, Berkshire board member Ron Olsen is here with us right now, joins us on set to talk about this. Uh, Ron, you were, I'm guessing one of the many board members who didn't know about this. What do you think of this announcement? "It surprised me, but it impresses me. Warren, uh, has lived a life full of surprises." Very few of his

Decisions have been anything other than sensational. Um, I am very anxious to see Warren become the Charlie Munger for Greg Abel. Yeah, he's had a lot of practice watching Charlie. I don't know if he can get the “nothing to add,” but uh, Greg is ready. I have no doubt about that. We've known it for a long time.

People don't recognize that, since 2018, he has been learning the businesses that we have outside of the insurance business, but he's also had plenty of time talking to Ajit, talking to the various heads of our insurance businesses. So he is—he's the businesses he will manage, and Warren will say it better than him.

And um, with regard to acquisitions, people worry about that. No worry. I mean, if you looked at Berkshire Hathaway Energy 10 years ago and looked at it today, or take it back to its beginning, Greg has been instrumental in making acquisitions for a long time. He can do it all. His humility comes through. His honesty comes through. No one has to question what he said. That is very important for young people to learn: hard work. I could go on, but you—you’ve heard me before.

Let me—let me ask a question. Um, Warren said that he’s not selling a—a single share of Berkshire, and in large part that’s because he thinks it’s going to be more valuable under Greg’s leadership. Are you selling any of your shares? Not a way. And Berkshire will be the last thing I sell to put bread on the table. And it—um—and as I’m sure you appreciate, the Olson family wealth, to the extent it exists—nothing like the Buffett family—but it’s Berkshire Hathaway, and it’s not just out of good feelings for the company or Warren; it’s—it’s a sensible investment. Greg knows how to allocate capital; he knows how to run businesses. He’s got unbelievable strategic ability. I’ve been around him now enough, in situations where I’m deeply into it, to watch him make decisive calls in tough situations and do it in a strategic, thoughtful way.

Warren said that um, you know, at the meeting, the board will have a chance to ask him questions and get the details straight. What questions would you first have for him? What questions would I have? Well, I—the first question I have when I usually see him: How’s that kid of yours doing on the ice? He is—Greg was not kidding when he said he wanted to be known as a great hockey coach for the kids in the demo neighborhood. He’s been that. Um, to be serious about it, I—I—I want him to feel like there are others there that want him to succeed even more than he wants to succeed. And I would ask him about who else besides Warren do you think you need for a consigliary? Yeah. Yeah. Who’s going to be your—the person who can tell you no, which is not, you know, telling Warren no. I’ve had to do it a few times. Charlie did it many times. Uh, and at the same time, be able to lead with a positive, uh, creative spirit. He—and I think he can do that. But I want him to be supported, and I think he will want to be supported, and every great CEO that I know has had his or her consigliary. I—I mean, I would imagine that that person is Warren Buffett for the foreseeable future. That’s—that’s it. I mean, he is, as I said, I think the first thing I said was, you know, he’s going to be the Charlie Munger for—for Greg, and uh, that’s great.

Who—who else is—is Greg close to? Are there people that you know within the business that he relies on? Yes, I—I mean, he—he relies on uh, a number of people. Certainly Scott Thon, uh, that heads the day-to-day—the running the business of Berkshire Hathaway Energy, but I think he will—and you got to talk to Greg. I guess I would ask him another question: Who do you want to bring in to your inner circle? Should we be adding a—uh—attorney general? I mean a general counsel? Should we be adding any people to the corporate staff that Warren has, as you know, um, limited to a—a great extent? Warren relied on Charlie, a little bit on others like myself, but I got a feeling Greg’s going to want to have his own general counsel who could become his consigliary, or, you know, he’s certainly going to need, at some point in time, the great Mark Hamburg is going to step aside. Mark Hamburg. I mean, people do not understand how vital he has been to the success of Berkshire Hathaway. He has been not only the CFO, he’s operated as a general counsel. I’ve talked to him as if he was a general counsel. He knows every business probably even better than Greg. I mean, he—it’s unbelievable. So, there are going to be people that I know Greg will need to have—him to have help from them, and um, he’s going to have to add some people. Yeah. I mean, they’ve got seven months to think about this, to get through to the end of the year, um, and go through it.

Um, how do you think the board will feel—felt about hearing—other board members felt about hearing this news? I mean, you were sitting with everyone there. What was kind of the general read? Well, I wasn’t actually sitting there when that announcement was made. I had started my way across—talk to us right here. And I’m glad I did, or I might have gotten here about 3:30. But, uh, you know, I—I—I don’t have a feel for that. But I think people were surprised but were ready for the decision uh, to be made. And yeah. Yeah. The assumption on the board would have been, if Warren so chooses, then that’s it. You’re not going to say reconsider. We—the board had made the decision about Greg being the successor years ago, and you all will remember the one and only board—I mean annual meeting held outside Omaha in our law office in LA, and Charlie let it slip. It wasn’t a decision made the day before; Charlie’s let it slip; it had been made before that, and we’ve become increasingly comfortable with that judgment. I think that was 2021, and you guys had made that decision years before. Yeah. So it—and whatever caused us to make that judgment then is even more so today. So we feel good, and I think that would be the general feeling of everybody on the board without question.

Um, Ron, the—the age limit on the—the board, um, which we would have started with had it not been for this news. Um, you’re ending your time on the board as well and going around. Um, how did you all get to that decision? What did you think about it? Well, it—it was a decision that Warren hinted at it. I think there was a time when there were five members of the board that were 90 and over. They were iconic leaders of the—of industry, incredible people, every one of them. Uh, you didn’t want to let go of a person like that. There are very few people like that in life. And I don’t put myself in that category. I think that getting new blood periodically in any institution is useful, even in Berkshire. Uh, so to me it is a sensible thing to have some kind of turnover at some point, and that doesn’t mean everybody gets to stay in there till they’re 80. No. Uh, there may be reasons to make changes before that. Uh, but having an endgame that you don’t have to explain, I think is useful. And frankly, I’ve been in a situation on another board that I was on where, well, you need an exception here. We’ll change the bylaw and make a new exception. So, let’s try this for a while and see how it goes. I think it’s a positive thing. Yes, I’m the only one affected, but uh, that actually made it a good time to—Warren kind of put himself in the same camera. Well, the first one affected, right? It’s not necessarily.

Um, in terms of how we should start to think about—we were talking a little bit about capital allocation under Greg, of course, he got responsibility for that uh, last year. Does it imply a—a further deemphasis of the investing in public equities, the stock-picking part of what Berkshire Hathaway has become? No, I don’t think so, as both he and Warren have said, Warren in his letter and I think Greg today, we’d prefer to buy 100% of a great company at a fair price, as Charlie used to say. U—and that will be the objective when and if the opportunity presents itself. But in the meantime, an alternative will be to buy a portion of a company. And Greg has thoughts about that, just as Warren does. And as you all have said, Warren’s going to be available to talk about him. Warren reads, I mean, what? He’s not going to change what he reads. He just reads all the time, and he’s going to have ideas about companies and he’ll share them with—with Greg for sure.

One of the things that Warren talked about in the afternoon was—or I can’t even remember which part of the session it was, but one of the things he talked about was this idea that it’s okay to not swing very often. Not to take many swings at this. There’s been pressure that has built up pretty—pretty significantly to—what is Berkshire doing with all this cash? Which is now north of $340 billion based on the numbers we got this morning. And that pressure has been something that Warren Buffett probably uniquely has been able to put off. And he explained it very well today. Just this idea that we don’t want to be doing stupid things. Greg added, “This is a financial asset to us to have this flexibility and the ability to jump in in times of need.” Will Greg be able to have the same patience? Not—not internally. Externally there will be more calls probably than there would have been for Warren Buffett. There were a lot coming for Warren Buffett at this point. That—I—I think your interpretation is correct, and it could be uh, seen in the questions that you had gotten for this session. I mean, people ask the same question about what in the hell are you going to do with that 300 plus billion dollars? Uh, that’s—that is a pressure, but Warren has withstood it. I think Greg will withstand it to the extent that it’s necessary. There are opportunities that—and Warren pointed out we’ve done pretty well with the Treasury bills and during a good part of this period of time, maybe not quite as well now as at other times, but I mean, it—it has been a great play. And at the same time, you know, we’re looking at various things all the time. I mean, they pointed out the Japanese investments. There are other opportunities related to those that we already have and invested in—in portions of a business. Um, so I don’t doubt that there will be some diminishing of it, but of the 340 billion, but there’s going to be a lot held waiting for those special opportunities that Warren has uniquely waited for in the past. And Greg’s got that message. I think he’s got the confidence to do it. Let’s wait and see.

What did Warren say in there that we’ve made our best deals when people are most pessimistic? Yeah. So, I guess people, you know, things are okay right now and most—most fearful. Yeah. You know, and that’s when he gets most uh, excited. I see it in his face when it happens, and he—he—he loved those moments, but he didn’t let those motions and that emotion overtake his judgment. And that’s the rationality that characterized him and Charlie. I know of no two people more rational than Charlie and Warren Buffett. And so I got—I think Greg’s right up there.

How—how many years have you served on the board, Ron? Well, uh, I’ve been on 28 years, and, uh, it’s been a great run. I’m leaving the board, but I’m not leaving Berkshire. I’m not leaving Warren. I’m not leaving Drake. Whatever. I’m available. I’m still working every day. That’s what I love to do. I’m not a much of a golfer. It—people ask me, why are you still at it? I got too many interesting people, and seeing problems in my life, and I—I enjoy that. So, you know, I—my life will go on. Don’t worry about me. I want to see you two once in a while. Um, but it—it—it’s been a great run. I look back, being—saying to myself, I’ve had the two greatest teachers I could possibly have: Charlie since 1967 when I first met him and uh, Warren 1969, and that’s a pretty good run with two special people, and—and Warren was very grateful today and expressed it in front of the crowds to thank you for everything you’ve done for Berkshire. It—nothing compared to what others have done, but you know, I’ve had my little roles, and it’s been, you know, sometimes just as a backboard—people talking to me and bouncing ideas—and um, but other times I kick in a little more—my—my legal background. So it’s—it’s been great. It—it—it’s been phenomenal, and it has been a pleasure and a joy to get to talk with you all these years, and like you said, you’re still going to be around and we can still do this. I wouldn’t have known you but for the luck of being on the board and getting to know Warren, and I can say that about so many people that I—that are in my life and I hope will stay in my life, and u—anyway, it—it’s been great, and it’s been wonderful having you explain so many things to us about the inner workings of all of this. So we really truly appreciate it, Ron, and we’ll continue these conversations. I—I appreciate the opportunities that you’ve given me, and—and I enjoy it. I mean, I—I—I love talking with you all. So, it’s—we’ll—we’ll find other ways to do that. We will. Even if it’s off the camera, off and on. Ron Olson. Ron, thank you very much. We appreciate it. Thank you.

All right. For those of you who are just joining us, Warren Buffett threw us all a—a huge curveball, ending this year’s annual meeting, saying that the vice chairman, Greg Abel, should become the CEO at year end. That’s his opinion of what he wants to happen. He’s going to be presenting it to the board, the board of directors, which is meeting tomorrow. But this came as a big surprise both to Abel and almost everyone on Berkshire’s board. Warren Buffett said that he had told both his daughter Susie and his son uh, Howie about these plans before. Here’s what he said: “Greg should become the chief executive officer of the company at year end. And I want to spring that on the directors effectively and get that as my recommendation. Let them have the time to think about what questions or what structures or anything that they want, and then the meeting following that uh, which will come in a few months uh, we’ll take action on whatever the view of is of the 11 directors. Uh, I—I think they’ll be unanimously in favor of it. And uh, that would mean that at year end Greg would be the chief executive officer of Berkshire.” Well, that got quite the reaction from the crowd in the center. Um, I—I’ve been here for a lot of standing ovations over the years. I’ve never seen one quite like this. Listen in and take a look at what was happening here. [Applause] You know, I—I—I caught up with Warren Buffett and Greg Abel very quickly afterwards as they were walking off. They were talking about this for the first time because he had never discussed it with Greg Abel before, and Warren again as he did on stage. Well, you could take that two ways—from the crowd clapping—this decision to hand things over like this. Again, uh, Warren Buffett said that he’d be hanging around in the auditorium when I pressed him on that as I was walking out. What’s going to happen? Hanging around in what capacity? He said, “Well, he’d still be coming into the office probably every day.” Will you be chairman? I don’t know. They’re going to have that conversation with the board tomorrow. It’s probably a conversation that Greg and Warren have had—have been having since we walked off that stage. They both reiterated that the ultimate plan is for Howie Buffett, his son, to become the non-executive chairman. Warren said that will happen upon his death. He reiterated that again. Uh, but Buffett’s plan is to continue to come into the office. He loves what he’s doing, wants to be useful, wants to be helpful, wants to be a sounding board for Greg. Again, I think probably also cover—give him cover not only from the outside and uh, from the board uh, but just give him the ability to do things the way that he wants them done. But—but he said it again, Greg will be the CEO. He will be making these decisions at this point.

Um, right now I want to bring in Congressman French Hill. He’s a Republican from Arkansas who is also the chair of the House Financial Services Committee. His son Payne Hill is also with us today. And uh, you know, let’s—let’s set this up a little bit. French, I didn’t realize until you were on set with us, maybe a month or two ago, that you’ve been coming to the Berkshire meetings for how many years? Uh, since the early 90s. Uh, Warren Buffett has been a hero of mine since I was in college. And the super investor article he wrote back in 1984 was what got me so interested in value investing and also following his work. And then when I was at the Treasury Department, I was there for the Solomon Brothers uh, escapade. And when I got out of government uh, in 1993 and went back to the private sector in investment management, it was Warren Buffett who was, you know, my role model. Uh, a man I’ve never personally met, but I’ve admired all these years. And he always loved tap dancing to work. Well, now he’s tap dancing out of work. And I—what a day. Uh, what a—what a happy day. And the board and Greg and Warren have done a magnificent job over the last decade preparing shareholders for today, and it’s great to have this young investor. Thanks for having us, and—and Payne, you come to this meeting before with your father. I don’t think you come every year. When was the last time you were here? So last time we were here was 11 years ago, and it’s safe to say that’s kind of where I caught the investing bug—watching the markets. Um, I’ve been chatting about Apple stock with my dad since I was 10 years old. So, I—I think, you know, that’s kind of where I—I started thinking about it, reading about Charlie Munger, Warren Buffett, that kind of thing. And I even did a sixth-grade uh, Power Boy project on Warren Buffett. I need to dig it up. I think it’s in like some old uh, hard drive, but um, yeah, so huge fan, and—and it—it—it’s influenced your life, too. You work at a consulting firm in Washington at this point. Yes. Yes. I work at a company called FTI Consulting. So, um, it’s been a great experience living in DC. I’m really humbled and privileged to be able to uh, watch him do what he does. But um, you know, so it’s—it’s a great—let’s talk a little bit about—Warren said that was kind of directed at Washington. There were a lot of kind of discussions around the edges on this. Uh, one would be his thoughts on the trade deficit and tariffs. Another would be his thoughts on Doge and bloat in the government bureaucracy. He came back at that a lot of ways—even—even with the idea of the US health care system—not—not being able to fix that—saying government would have to be the one who did that. What—what did you, as a sitting congressman, kind of take away from all of those thoughts? Well, I took away uh, his thoughts. He introduced the topic by talking about his 2003 balanced trade piece he did on—on import certificates and how Charlie thought it was a Rube Goldberg scheme of an idea. But his idea was that balanced trade over the years is—is a good thing. But as the reserve currency and the biggest economy in the world, you know, we’re not going to have balanced trade with every country. It’s not possible. We’re importing uh, so much. But I thought his idea that balanced trade was a theme was important. But he argued that putting punitive tariffs on people probably is not the way to do it, that using the carrot rather than the—than a full stick. And in my two years of doing it during the Bush 41 administration, it was the threat of the stick—301 sanctions on semiconductors in the 1980s, on Japanese auto imports in the 1980s—that led us to open up the market and create what I think is a pretty substantial trade partnership between Japan and the United States here 30 years later. And if you talk to the Treasury Secretary, the commerce secretary, that is the ultimate goal. Uh, more fair trade—balance where it can be balanced—and then in their view, try to bring some strategic national security manufacturing back to the US. Not a bad goal, but not in—not something that’s going to happen overnight. Uh, and the pandemic taught us that we need to have more resilient supply chains, and people are working on it. You see reductions in dependence on one—one country or one source. There’s no doubt, but it’s—it’s going to take time.

Is—is that what we’re getting right now, though, the threat of the stick or is it the actual stick? I know we’re in this weird 90-day period on hold for the most part. I think it’s created a lot of market uncertainty, and my hope is that the applying of the stick uh, will lead to negotiations that will be more—ultimately be more of a carrot and recognize that we have to have some distinctions here between a big complex situation like China versus a country that we have excellent allied terms with—Korea or Japan or the European Union uh, and have a little bit more discretion there. uh, but I’m hopeful that we can do it and do it soon because I think the market and the uncertainty is—has not been good for the economy. It’s also, of course, interesting the way uh, Warren frames things, and he likes to do this right by just sort of panning out and saying, you know, let’s appreciate what the US has built. Right. And the fact that, as he said, we’ve won—in other words, we’re kind of claiming to be taken advantage of by countries whose economies we wouldn’t trade for ours. Right. Exactly. And—and he talked about the lottery—the global lottery—where Payne Hill is the luckiest kid in America because he got—always say to him, “I want to win the lottery one day.” You already have—in the United States. I know uh, Mr. B commented on that a lot. We were—we were looking at each other, but it was—um—it is—it is still something where you want to have it as balanced as you can make it. And if you do have dumping—um—my argument’s always been, if you believe that people are dumping product into the North American uh, trade—trade arena—Mexico, Canada, the US—Mexico and Canada as our partners can stop that. We can say we don’t want dump steel entering the Mexican borders that goes into a US product. So my—my advice is we should have trade promotion authority. Uh, Joe Biden left a mess on trade; the—he allowed trade promotion authority to expire in the Congress in 2021, and we didn’t initiate any new trade agreements under Joe Biden, and we didn’t enforce the ones that even President Trump—I mean that’s a lot of Chinese goods that are coming through Mexico and getting dumped on, and so I get the point, but I would use the USMCA’s 5-year review as a chance to strengthen that, and I think that’s the way to have Canada and Mexico on our side to curtail dump products, but you think—go after that first—use some of our allies and then everybody gang up to go after China. Yeah, I do believe that you don’t—money is fungible, trade is fungible, partners are fungible, and that you win by building allies to curtail bad behavior, whether it’s in military or economic diplomacy, either one.

French, as a Republican in Congress and obviously somebody who’s hoping that a year from now we’re not looking at these same tariff situations, that we have better trade agreements as a result. Um, what—what—what has been your message back to Congress at this point or your—your message back to the administration through the commerce secretary, through the Treasury Secretary, or any other conversations you have? Well, prioritize—and it’s a different strategy. Uh, using trade to open up markets that we’ve had—

A 30-year effort to try to open up like India takes a different set of skills, steps, and abilities than just trying to bring down trade barriers with a long-standing ally with whom we have a trade arrangement.

Uh, so I think I think prioritize and get some early wins and then focus on explaining to our constituents that it's going to be a long transition to get supply chains and critical minerals and critical technologies in the US. It's just not an overnight strategy, but it's one I think that we can do, but we should do it with our partners.

And um, he didn't speak really as much as we might have thought about the broader fiscal situation, but he sometimes does as a, you know, biggest owner of treasury bills and one of the biggest corporate taxpayers. He kind of has a proprietary spot to say what he thinks the structural direction of the federal budget. Well, he made, yeah, he made two good points today beyond trade. I thought was our 7% of GDP uh deficits are unsustainable. Congress has to do something about that. It's a hard-fought uh battle in Congress to try to reduce the growth rate that's exceeds the GDP growth rate on spending. We can't do that. This has happened since the pandemic, and we need to shrink that. That's the goal. I think that Doge plays a role. Uh, Doge has is is has gotten off to a start where if you're looking for IT productivity uh solutions, it will give this will be the most informed uh FY26 appropriation process ever because of some of the Doge work in these departments. So I thought he spoke uh favorably for Doge as a concept because he says bureaucracy can choke a private company and it can choke a federal bureaucracy and he and and a great example was Geico today shrinking employment at GEICO from 50,000 to 30,000 and putting more money in technology and producing the results that a Jeep talked about.

French is the chairman of the house financial services committee; his son Payne Hill with him here too. And both of them, uh, longtime Berkshire shareholders and longtime uh visitors to this to this annual meeting. It's really great to see both of you.

Great to be with you and great and and what a great lesson Warren's done for 60 years on financial literacy for young investors like Warren and we heard from him today and that did my heart good. You saw a lot of young people that are following in your footsteps.

Yeah, I know. Really is great. We we'll see what happens. And uh, looking looking to uh hold on hold on to our shares.

Your old presentation didn't say how what happens after Buffett retires.

Oh, I uh yeah, I I can't remember past the first slide. It was so long ago, but I I remember I remember it well. Thanks for having us.

Thank you, gentlemen. We appreciate it. Uh, once again, a wild ending to Warren Buffett's 60th annual meeting announcing that Greg Abel he thinks should be Berkshire's CEO at the end of this year. It's something he's going to be recommending to the board of directors tomorrow when they meet. Obviously, this is certainly something that will reverberate through the markets uh this week. With that, we want to thank you for joining us today, Mike Sani and I, and we'd like to leave you with some of what Warren told shareholders here in Omaha. Thanks again for joining us.

The luckiest day in my life is the day I was born. You know, I was born in the United States. I was just lucky, and I was lucky to be born. I was lucky to be born white. I was all kinds of things. But it's been if you don't think the United States has changed since I was born in 1930. It's been we've gone through all kinds of things and gone through great recessions. We've gone through world wars. We've gone through the development of an atomic bomb that that uh we never dreamt of, you know, at the time I was born. I I would not get discouraged about the fact that that doesn't look like if we've solved every problem that's come along. And uh uh if I were being born today, you know, I I would just keep negotiating in the womb until they they said you can be in the United States. The world makes big big big mistakes, and surprises happen in dramatic ways. And the more sophisticated the system gets, the more the surprises can be out of right field. That's that's just that's part of the stock market, and that's what makes it a good place to to focus your efforts if you got the proper temperament for it and a terrible place to get involved if if you get frightened by markets that decline and and get excited when stock markets go up.

I don't mean to sound particularly critical. I mean, I know and and people have emotions. I don't get I I I just I I don't get fearful by things that that other people get are afraid of in in in the financial in a financial way. It's not that I don't have emotions, but I don't have emotions about the prices of stocks. I mean, I actually those decisions get all the way to my brain, whereas emotions can get bogged down some other place. I went around the groups of people who were exhibiting yesterday for an hour and a half, and these are people who are thanking me, you know, and totally enthused about coming and doing a lot of work for which they don't get paid anything extra. I don't know anything about the arrangements the individual companies make, but they they work hard and they enjoy their work. And uh, you know, you really want to work at something you enjoy. It's interesting to me that in the investment business uh uh so many people get out of it after they've made a pile of money that that uh uh it it you really want something that you'll stick around for. While I'm handing this over to Greg at uh that you know you can't even dream all the dreams that you could have about a place like Berkshire, but big thing you have to do though is always is to be sure you can play the next day. Greg should become the chief executive officer of the company at your end, and I want to spring that on the director's effectively and and get that My recommendation, let them have the time to think about what questions or what structures or anything that they want, and then the meeting following that uh which will come in a few months. Uh, we'll take action on whatever the view is of the 11 directors. Uh, I I think they'll be unanimously in favor of it. And uh, that would mean that at year end Greg would be the chief executive or officer of Berkshire.

[Music] [Music] Number one,