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[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 Ael is already here, the vice chairman who is the era parent. 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 Roden 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 clo 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 am Eastern. Warren Buffett, Greg Ael, and Ajit Jane 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 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 uh 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 Blumpin 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 uh we were looking for a handful of things. Uh the stock of course sitting at an all-time high. The Bshares 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 marktomarket 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, Bergkshire 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 G. Jane and Greg Ael 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 b buying or selling. One thing that is notable that we've been watching is just that cash word. Did he put any of that money to work uh, before March 31st? And the answer is no. That cash word 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 uh 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 horde that Bergkshire 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, Bergkshire'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 Bergkshire's earnings now uh with David Samur, 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%. David is also a Bergkshire 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 Bergkshire 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 Bergkshire, 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 with I which I think is reflective of what's happening with GDP generally saw nice growth in the energy business. I think Greg Ael 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 marktomarket 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 Ael and A Jane 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 business. 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 and 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 Burkshire 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 uh 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 uh 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 welltimed acquisition could could be deployed. Uh so I think that uh uh that as is always the case with Bergkshire, 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 an environment where there's any distress out in the market or there's excess uh 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 a Jeet 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 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 uh paint five gallon buckets that are available starting in miday. 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

Bergkshire Hathaway today. This flight to safety and the correlation between those assets is pretty interesting. Oh yeah. Over the last 6 months, I pointed that out yesterday. Gold and Bergkshire Hathaway shares have basically diverged from most other stocks. Yeah. I I think the differential that we showed was up 19 plus% for Bergkshire 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 Bergkshire's top five holdings according to today's report. Shares finished the week lower by about 2%. They snapped an 8-day winning streak yesterday despite beating on the top and bottom lines after the bell on Thursday. Let's bring in CBC technology correspondent Steve Kovak to discuss Apple. Hey Steve. Hey Mike. Yeah, I mean you guys were

saying the terrorists were the talk of the town out there in Omaha. They were the talk of the town in Certino 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 uh Jim Kramer 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% 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 Bergkshire's largest stake uh or has been. We don't know exactly what the latest borders. He's here um 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's he wasn't there just now. I was hoping to grab them 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 and 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, Bergkshire 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, yearover-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 Seas 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 Squishallows. There are Warren and Charlie special Squishallows that are made for Berkshire Hathaway. There's Warren Buffett getting a look at his Squishallow 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 Bergkshire 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 Kerisova. Um, but that's where things are going now. Buffett and SOA signed 20 copies to raise funds for the Steven 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 biders 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 Stalantis ended the week higher, but GM down about 4% after lowering its fullear 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 convent 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, Bergkshire 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 CO 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 1.5 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 178 a 173 last month but I think for the full year I would still guide to a 16 to 16 1.5 million sire 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 Ael 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 al 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 Rodm 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 Ael, and Ajit Jane in just a few minutes in that Q&A session. and it will last about 2 and 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 Kodic 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 u 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 Sees 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 that I I think we we've had 2200 or 2400 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. Jazz Jazz wares 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 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 Ael. He was born and bred in Canada. And we have a Jeep Jane 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. How would you stand and uh withhold the applause? It'll go to his head. Uh Susan Buffett,

we have Steve Burke, Ken Chanel, Chris Davis, Sue Decker, who's our lead director, Charlotte Gman, 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 Birkshire. Uh I think we had five that were over 90 here not so long ago, but uh but we put

in the highest uh 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 uh Ron has been on the board for 28 years and uh been associated with Charlie Mer 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 Berg 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 uh 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 the Bergkshire a lot more money than I've ever made Birkshire. I

uh credit credit should be given to him for uh 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 dies 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 Bergkshire, 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 Bergkshire, but uh what you see today uh is the product of a lot of people at Bergkshire. 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 Bergkshire 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 Sva'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 uh I met not only uh not not only Carrie's grandfather who ran an insurance company in Omaha, Bill Kaiser uh but I uh also met uh the Blumpin 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 Bergkshire 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 Bergkshire 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 the 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 30 I guess roughly 3,600 left out there today. And it's kind of a whimsical and but but accurate and uh 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 u this is a commercial place, isn't it? We are selling uh uh 20 copies that uh we sold 10 prior to the meeting. That's all we let them sell and we

raised a few hundred,000 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 sound 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,000 and I then I had him 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 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 raged in Ghana and coffee and 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 egg 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 rub too much like Rub 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 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. Uh, so [Applause] that's but don't ex don't expect my import certificate idea to go to up down there with Adam Smith's wealth of visions or anything. Okay. Uh, let's go to area one. Mr. Buffett, uh, Mr. Ael, and Mr. Jane. Good morning. Uh, I'm St. J. I'm from Hong Kong. Mr. Buffett and Mr. Monga 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 is planned rate hike deter you from further investing 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 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 like 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 asked 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 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 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 uh very little and but he is I how many times do you think you've met with representatives of one company 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 uh 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 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 Bergkshire 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 Bergkshire 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 Birksher's balance sheet for a smooth smoother leadership transition, providing Greg Ael 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 training 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. Ajet 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. 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 Birkshshire

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 Bergkshire 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 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 Zackorf 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 A. 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 Bergkshire 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 gamecher 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 G. So if you gave me a choice that uh 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 gene 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 Birkshshire Hathway owns, there was one that you acquired, the Chicago based company Portillos 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 Marman 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 Portillos 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 Marman for example, Marman itself owns over a hundred companies and uh yeah it uh it was the creature of it was created by Jay Pritsker 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 birker within Bergkshire and uh uh we found we found that that's working

uh very good as arrangement. It it was interesting Jay Pritsker was a uh uh remarkable manager and there's various branches of the Pritsker family. So the you'll uh it's it's really goes back to a pritker before J and so on. But in in 19 54 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 JK 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 Coco. And then Coco 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 coco because things are going on in West Africa that that make

uh cocoa prices go up dramatically. In any event, Jay Pritsker 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 Pritsker and nobody had showed up at the meeting and it was kind of a crummy building they had but they had a lot of coco 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

Marman. and Marman 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 Pet Peter Eastwood who runs uh one of our Berkshire subsidiaries and does a great job of running it uh tracked down that Portello'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 Tennifly, 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 stepg granddaughter of

Ben Rosner, a manager of ours. And in 1966, I got a call from a fellow named Fel Steiner in New York, and he said, "I I represent uh Mrs. Annenburgg." Uh, and there were there were actually nine Anenburgg sisters, I believe, before Warenberg 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 was a marvelous guy.

Never met him since, but uh he was handling things for Mrs. Uh well, ace a a Simon, but she her name was Annabberg 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 a 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 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 turn 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 and 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 catchup. Secondly, in terms of matching rate to risk, there again, I think we have caught up with our competitors and we 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 focused competitor. So much so in the last seven quarters, Geico has shown a combined ratio that has a eight in front of it. And I never thought I'd live to see the day when anyone could have a combined ratio at it so low as it is right now. So I think Geico has done a great job. uh it's 80 combined translates to the the largest profit anyone is making on the underwriting side in the personal automobile business. So you know we've achieved a lot 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 catchup there. Not catchup but we ought to be in a state of readiness. So I think Geico is in a 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 a GEICO. 50 million. 50 50 uh we now own 100% but 50% of two 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 businesses. 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,000 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 uh Geico is a fascinating story. And about three times over the years, the company is 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 Ror Davidson and Lauren Murdavid Davidson in in January of 1950 was the only person in the ing 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 Lero Normer Davidson did wonderful things for me you you

get a 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 Bergkshire. You know, if you take Tom Murphy and Sandy Goddisman and Walder 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 it to get a chance to talk to Lauren Davidson on a Saturday afternoon, you just listen carefully. Uh and that comes in the uh in the category of turn every page. You know, some of them you want to turn pretty fast, but but uh 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 uh we've got an ability to do things that nobody else can do, which is hard to get in 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 uh 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 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 Chuju 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 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 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've 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 Bergkshire for Warren it's now 25 plus years had the opportunity to be part of Bergkshire 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 Bergkshire 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 made 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 of 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 uh 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 the number will turn out to be what it'll be what counts as 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 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 know they know know they uh 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's not a 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 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 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 businessfriendly 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 four 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 uh 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 riskreward 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 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 Bergkshire 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 Birkshire. 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 young 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 Burkshire, 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 Bergkshire 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 Bergkshire'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 Bergkshire 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 Bergkshire that Bergkshire 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 uh 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, thousand 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 a 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 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 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 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 the 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 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 fivem 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 100year 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 taxion 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 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 Bergkshire 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 Bart. 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 a 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 stay 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 miday. 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. V 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 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. V 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 Bergkshire 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, Joannne'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 SKs to the offering being manufactured there just to be supportive of Canadian retailers. All right, so that's what you're hearing from the Bergkshire 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 Bergkshire 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 through2 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 through2 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 Win. 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 want to thank you for being with us today and for me again a remembrance for Ela Win. 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 Bergkshire 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 Ael and about um his potential succession of Warren Buffett leading Brookshire Hathway. 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 accidental petroleum has been answered yet um or asked or answered yet. Vicky Hall, the CEO of accidental 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 accidental. 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 Brookshire. 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 Ael. 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 Bergkshire's ownership of the hot dog chain in Chicago, Portillos. 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 Bergkshire 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 cran becoming Kather 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. Uh, and I and that goes to family, friends, and just being involved with uh the kids I coach in hockey or baseball or whatever it may be. I think we've got a a great opportunity to give back to them at uh a very young age. So, uh obviously those would be um how I'd want to be remembered and hopefully that'll be uh uh many many years from now. But uh but and I I love thinking of Warren truly as a teacher and and 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 US and each one's uh truly a truly a learning moment. Um I I'll maybe go back to the very first meeting with Warren uh and because it still stands out in my mind. Obviously it was incredible opportunity. We Warren was um buying or uh acquiring Mid-Americ Energy Holdings Company at that time or or or thinking about it and we had the I

had the opportunity uh with my partners to go over there on a a Saturday morning and we're discussing the the business and Warren had the financial statements in front of them and uh like anybody I I was sort of expecting a 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 they use them to match

certain positions and they they're never matched perfectly, but you do have them and we're required in the regulated business. But I 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 under understand it. And it wasn't that big of a position, but it was absolutely one of the risks he was concerned uh about as he was acquiring uh Mid-Americ and obviously in light of Enron and everything that gone on. It was a very pertinent question. And then the followup to

that was then there's a an energy crisis in the US uh around electricity and natural gas and a variety of folks were were making significant sums of money. This is a year 18 months later. And Warren's follow-up question couple 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 you know do we have are are 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 uh 6 months ago because all those derivatives were truly to support our business and weren't speculative. So just just that focus on understanding the business of what he was acquiring, understanding uh the risks around it uh still stand out in my mind. Warren, yeah, it's 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 uh uh Wall Street really doesn't pay much attention to balance sheets, but I I like to look at balance sheets over

an 8 or 10 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 than you can with the income statement. And uh I mean neither one gives you the total answer on anything, but but you you still ought to you ought to understand what the figures are 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 I mean there's

just a lot to be learned and and you do learn more you learn more from u from balance sheets in my view than most people give them credit for uh in in terms of uh I really haven't I'm not worried about being remembered about people people don't remember well they don't remember enough about Katherine Graham for example, in in terms of this story that shaped America in many ways, certainly it had just all kinds of impact. And I I think I mean history is so fascinating and uh Charlie was probably the best person you could

imagine in what he learned. Charlie was never satisfied with uh 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 and 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. uh he was he was a remarkable uh teacher and uh but so so were those other fellows I mentioned. Uh uh I've had a 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. Uh, 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 10 years after taking over as CEO, Greg will be tasked with allocating more capital during that time than

Bergkshire 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. Uh no it's uh but very fortunate when you think of Bergkshire again and we've we've talked about this where we start from and I I'll I'll clearly touch on the uh investment and the related investment allocation but we start from a great great place where we've got a a great culture within the business. We have values that we as a management team

and and and really um as defined by Warren and and those Charlie and and everybody associated with the business, we've got great values that really set Birkshop Bergkshire up well for the for the future. And obviously as we deploy capital uh and allocate capital it's critical to Berkshire as we go forward and equally it's around uh managing risk but when I think of our our our values there are a couple that are absolutely uh critical. uh one will maintain the reputation of of Berkshire and and that of our our company and and I view that

in investing or how we operate things uh across each of our businesses that will always be a priority and something that will will ensure is in the forefront of our minds. I think equally as we then look at our 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 we've got a significant set of cash right now, but it it's an enormous asset to have that and that will continue to

be a philosophy. Yes, when we can deploy it uh 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 and at the same and and and not be dependent on anybody. So again that will be an uh an investment philosophy. We will remain Birkshire and we will never be dependent on a bank or some other party for Berkshire to be uh successful. I would thank you. I would then move to um to touch on allocation of capital

be absolutely critical but with that comes uh management of risk and and understanding risk and that falls upon uh 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 a 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 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 uh currently and and and for the past 60 years. We'll start by looking at those opportunities uh within our business and by that I mean within our insurance non-insurance businesses. Are they are they properly capitalized and have the opportunity to manage their business and

that uh that will continue to exist. They'll operate in an autonomous way but in the end Bergkshire still manages the capital that will go into that those businesses or what potentially will come out of those uh 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 10 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 uh of companies through the equity. But as Warren's always highlighted and again this will be our approach to to how we think around those companies though we we own a piece of a company. We own a a piece of that uh cash flow. We own a piece of their balance sheet. It's not just a 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. Um it's again understanding what be it the 100% company or the 1% company you 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 5 years from now 10 years from now 20 years from now if if we don't have a view of that um 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 it's really the investment philosophy and and and how we how Warren and and the team have allocated capital for the p past 60 years. you know, really the the it it will not change and it's it's it's the approach we'll take as we go forward. Warren, yeah, I and I don't want to go on too long on this, but but sorry I covered it. No, no, no. But this is this is important because the uh you know it's it's very

obvious um that the country for example needs uh an incredible improvement rethinking redirection even to some extent uh in the grid. I mean, we we've out outgrown uh 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 48 or 50 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 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 knowhow in in in in the whole generation uh and and transmission uh arena. uh the country is going to need it. Uh but we have to figure out a

way uh that makes sense from the standpoint of the government since from the standpoint of the public and from the standpoint of Birkshire 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 but that is a 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 you know they're get they're getting paid for just assembling stuff but it it it's it that's not the way to handle it. The

way the way to handle it is to have some kind of a a government private industry cooperation similar to what you do in in a war. And uh and I don't think when they were doing the highway system, I don't think that the government set up his own guys that were going to pour a whole cement or anything like that, but they you you needed a cooperation and and and we're at that point, I think, and uh in in terms of energy, but uh I don't think 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 in the electric industry or the energy space. We obviously know that well with our with our existing business and the capital required to meet the long-term needs of of of what's um uh currently uh projected as demand is enormous and and we as Bergkshire will be in a good position to

um help address those needs. But the the model around it and the risks that need to be addressed to deploy that type of capital will be 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 48 or 50 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' taken a vote on the, you know,

the interstate highway system, it had it it would have been slown slowed down to an incredible degree. So the question is how to use these strengths that this country has to actually turn it in to what it should be capable of while still preserving you know a republic with 48 and connected in a couple unconnected states and and it it is it'll be interesting to see what happens but we do have capital and we actually have some knowledge that that uh very few very few places have. I mean, we we we know what the game's

about. But uh putting together that energy uh with knowledge and with capital and everything is it's just not easy. Uh and it should be something that we're capable of in the country. But but the country was not designed for having in a certain way. It was not designed for having 48 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 during peace time, it's something it's it's a it's a different problem. That's going to be one for the next generation. But I'm

just it it's important. Okay. Station 10. Um, good morning Mr. Buffett and Mr. Abal. I'm Durkas Tang. I'm 14 years old. My father U Mo Tang MGRT CEO brought me here for two consecutive years and I promise I will come back um every year since I queue up at 2 in the morning every meeting you hold. My dad owned um BRKA shares and he said I need to work hard to earn my piece of BRKB. We are both um are 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 Apple 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. Uh my final words. Uh finally, Mr. Buffett. Uh I learned a lot from this meeting and of course I will come uh here every year and I wish you can attend as many as possible as you and Mr. Char 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 all together like you said. Thank you. Okay. Thank you. Yes. Uh well I think uh your dad your dad said it best. um he highlighted that to become part of uh uh Bergkshire to own some Berkshire shares you're going to have to work hard and I think uh hard work takes all of us a long ways in life and and I would never diminish that you know there's a lot of things that

matter in life but if you start with a great uh work ethic and have that attitude that you're you want to contribute you're going to go a long ways in life and and that'll and and you'll 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 uh we we truly uh look forward to the day you're part of Bergkshire. Thank you. Yeah. Keep keep a lot of curiosity and read a lot as Charlie would say. Okay,

Becky. Uh, 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 uh uh we've we we made some mistakes in the past when we bought Pacific Corp. in 200 what five um yes Warner Scott and and David Sol and myself three guys who who capitalists at heart and had had uh but we're dealing with our own money but we uh we made a mistake by

not carving it up into the seven states that we were buying and uh it came it came with an aggregation uh where it wasn't state by state and we we kept the same the same structure and that was a that was a big mistake. Uh there are well every part of the country is going to need electricity and there are going to be places where 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 uh uh those are the

facts as they stand now I would say Greg. Yeah, the the reality the risk around the wildfires i.e. that do the wildfires occur are they're not going away and 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 the 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 uh our teams in the in the

west, but we really are approaching it across all our energy infrastructure because the the reality is the wildfires have now occurred in uh Texas. They've had a variety of them throughout the US and 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 um 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

uh we start with the operational folk uh 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 uh or or significant events occurring uh west. But when we have those, we've gotten very very good at saying, okay, we have to manage the system differently. will 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. Uh because our 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 and have a system deenergized. And after those events and as we um really looked at how we're going to move forward in in managing the the assets and reducing that risk, we we have clearly recognized

as as a team that we have to deenergize those assets. So now as we get fires encroaching at a certain uh 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 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 uh 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 risk if you shut down your system, a hospital gets shut down, somebody dies? we're we we've uh 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 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 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. Uh 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 uh 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 risk we took on or 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 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 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 problem. Yeah. There's some there's some problems that can't be solved and we we shouldn't be in the business of taking your money, investors money and and and tackling things that we don't know the solution for. And um uh there's you can present the arguments, but it's a political decision when you are dealing with states or the federal government. And uh uh 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 uh if you don't hold the pen in the end, uh you know, we don't have any business taking your money and uh doing dumb things with us and and we can do our best to explain what the intelligent things are, but uh it's your money and uh uh so it's it's very hard to tell how to to handle the questions of politically determined decisions that are going to go to court in many cases. But you know that that it just doesn't it doesn't make sense. We 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 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 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 won 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 Polish Jew who survived Ashvbitz 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 would

hide you was the best test of life well lived. Well, I believe that the 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 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 that 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 Bergkshire 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 Bergkshire. 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 Bergkshire acquire 100% of BAG. Um, it was done in two steps. One, in late 2022, 1% was purchased from Greg Ael for $870 million, implying a valuation of BHE of $87 billion. And then two, in 2024, the remaining 8% 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 Court and decisions that are made, but we also know that that certain of the attitudes demonstrated uh by that particular example have got analoges 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 out 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 Birkshire 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 and 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 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 happy to buy out uh 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 Bergkshire shares. We bought in stock at X and we buy in stock at at less than X

if if if conditions change poor 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 Burggerway. 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 Bergkshire's earning power to owners. My question is, what was in your estimate Burks'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 Ber. 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 Bergkshire went let's say Bergkshire 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 virture 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 with 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 um 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. Cocoa is popular every place, but some places it I mean, if you're in the bottling business, it cost 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 business. 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 7 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 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 welldesigned 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 Solomon 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 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 Rockerfellers and Kennedy and and and Carnegies and all they actually put up money to build steel mill you know, whatever it may have been with the with Roger 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 be 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 promise 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 capriccious 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 influences you to who you are today as the greatest investor of investor of all time? Well, that's good question. uh the the teachers you get in your life have this incredible impression and 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 I 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 a 10 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 Colombia. Well, Dave Do 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 Bergkshire 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 Vulker, 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 run away 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

ch. 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 Mr. Buffett. 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 opportunitydriven 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 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 Rayurn 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 achieve 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's 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 a c 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. Ael. My name is Kansas Lommire. I am a junior at

Elkrin South High School and was born and raised in Omaha. My question is directed to Greg Ael. Birkshshire Hathaway is the second largest utility provider in the United States and a 2025 Reuters investigation found that is the coal fleet is the dirtiest in the nation. There is currently no concrete plans 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 con by companies like Birkshshire? [Music] [Applause] Thank you for your your

your both your question and your comments because it is it is important to to understand uh St. Berkshire Hathway 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 Mid American. We acquired it in uh 1999. Berkshire purchased uh Mid-Americ 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 Mid-American 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 Mid-Americ 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 the 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 US? 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 Bergkshire 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 uh 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 healthc care 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 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

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 Gu. 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 lesson. 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 business operator to be an investor or for 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. 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' 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, exclamation point, five minute warning, exclamation point. 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 Bergkshire 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 your 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 end Greg would be the chief executive or officer of Bergkshire. 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 Ber 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 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 Kate 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 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 and perure and we'll go forward. with that operation and and uh uh I will play with a Ouija board or whatever and that comes out in terms of doing things but

but I will not I have no intention zero of selling one share of perure halfway it'll get given away gradually really now it 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 Bergshire will be better under management than than mine and and uh 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 a 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 Ael 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 Ael was always uh the air parent 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 Ael 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 your 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 end Greg would be the chief executive or officer of Bergkshire. 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 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 Ael will take over that role Ael 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 Bergkshire 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. Ael. 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 g 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 uh this huge story. Becky Quick is back with me. I I just caught up with both Warren Buffett and Greg Agel 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 read a big part of the investment portfolio right now. I mean, if you think

about it, there are some complicating factors. Uh Bergkshire 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 Ajet Jane 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 Ael 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 C 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 Bergkshire has been the preferred buyer of highquality companies and assets when a family is ready to sell when when some other investors 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 uh seal of approval to

have that going better deals because of and would shore up other markets u players who might have been trying to take advantage of rumors or weakness in a stock at any point in time too. U Bergkshire 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 Ael. 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 is very important for the 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 Bergkshire, 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 Bergkshire will be the last thing I sell to put bread on the table. and it um and as I'm sure you appreciate the Olsen 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 de mo 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 one 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 conigliary. 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 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 u a number of people. Certainly Scott Thome uh that heads the daytoday 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 in to a a great extent. Warren relied on Charlie a little bit on others like myself, but I got a feeling Gray's going to want to have his own general counsel who could become his consiguary 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 Birkshire 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 Bergkshire. 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 a 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 stockpicking part of what Bergkshire 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 on this. There's been pressure that has built up pretty pretty significantly to what is Bergkshire 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 withtood 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 run? 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 Bergkshire. 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 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 Olsson. 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 Ael, 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 Bergkshire'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 or officer of Bergkshire. 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 Ael 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 Ael 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 uh 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 Bergkshire 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 pay 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 Mugger, 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 uh 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 90day 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 Pain 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 um money is funible, trade is funible, partners are funible, 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 uh 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 u longtime Bergkshire 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 Ael he thinks should be Bergkshire'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 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. 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 Bergkshire 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 Bergkshire. [Music] [Music] Number one,