BERKSHIRE HATHAWAY INC.
Berkshire reported a
Buffett encourages investors to pay more attention to the conglomerate's operating earnings that exclude the investment figures. Operating earnings jumped 39% to
By that measure, Berkshire beat expectations of the three analysts surveyed by FactSet Research, who had predicted operating earnings of
As part of Buffett's stock sales, he trimmed about 13% of Berkshire's massive
As for Berkshire's core insurance businesses, the conglomerate reported a
BNSF railroad's profits dropped 8% to
Cash on hand rose to a record
“We’d love to spend it but we won’t spend it unless we’re doing something with very little risk that will make us a lot of money,” Buffett said.
THOUSANDS ATTEND ‘WOODSTOCK FOR CAPITALISTS’
Tens of thousands filled the arena eager to vacuum up tidbits of wisdom from Buffett, who famously dubbed the meeting ‘Woodstock for Capitalists.’
But a key ingredient is missing this year: It’s the first meeting since Vice Chairman
The meeting opened with a video tribute highlighting some of his best known quotes, including classic lines like “If people weren't so often wrong, we wouldn't be so rich.” The video also featured classic skits the investors made with
As the video ended, the arena erupted in a prolonged standing ovation honoring Munger, whom Buffett called “the architect of Berkshire Hathaway.”
Buffett said Munger remained curious about the world up until the end of his life at 99, attending dinner parties, meetings and regular Zoom calls.
“Like his hero
For decades, Munger and Buffett functioned as a classic comedy duo, with Buffett offering lengthy setups to Munger's witty one-liners. He once referred to unproven internet companies as “turds.”
Together, the pair transformed Berkshire from a floundering textile mill into a massive conglomerate made up of a variety of interests, from insurance companies such as Geico to BNSF railroad to several major utilities and an assortment of other companies.
Munger often summed up the key Berkshire’s success as “trying to be consistently not stupid, instead of trying to be very intelligent.” He and Buffett also were known for sticking to businesses they understood well.
“Warren always did at least 80% of the talking. But Charlie was a great foil,” said
THE NEXT GENERATION OF LEADERS
Munger's absence, however, created space for shareholders to get to know better the two executives who directly oversee Berkshire's companies:
The first time Buffett kicked a question to Abel, he mistakenly said “Charlie?” Abel shrugged off the mistake and dove into the challenges utilities face from the increased risk of wildfires and some regulators' reluctance to let them collect a reasonable profit.
Morningstar analyst
“Greg's a rock star,” said
ANYTHING AND EVERYTHING
As always, Buffett addressed a variety of topics Saturday, though he never talks politics or reveals what he is buying. The stock he has been buying over the past year will remain a secret until he's required to disclose it in filings.
He described a recent uneasy experience with artificial intelligence, saying he saw a fake image of himself delivering a message in his voice about something he said he would never say. He predicted the technology will be a boon for scammers, and he's not sure if it will do more good than harm. The fake video was so convincing Buffett said he might have sent money to himself overseas.
“It has enormous potential for good and enormous potential for harm and I just don’t know how that plays out,” he said.
On climate change, Jain said it's creating larger losses for insurance companies and driving up prices. It's hard to know if prices are increasing enough to handle the risk, but at least insurers have the opportunity to recalibrate their premiums each year, Jain said.
“We get a lot of letters from people concerned about climate change — and I don’t think they’re wrong," Buffett said. "But they don’t understand the insurance business.”
Overall, Buffett said Berkshire's system of having all the noninsurance companies report to Abel and the insurers report to Jain is working well. The 93-year-old says he hardly gets any calls from managers any more because they get more guidance from Abel and Jain.
“This place would work extremely well the next day if something happened to me,” Buffett said. ___
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