Berkshire Hathaway Annual Meeting 2024: With Greg, Ajit in control, Warren Buffett hopes to be back next year

Warren Buffett drew huge applause as Berkshire Hathaway’s AGM ended. “If you are lucky, ensure a bunch of other people are lucky too. I hope you come next year and I hope I come too,” said Buffett.

"I enjoy managing money for people who trust me. It is a good feeling to be trusted. Charlie felt the same way," says Warren Buffett.

“US debt will be acceptable, but we need to see if inflation is let loose in an unsustainable manner. Volcker was the man for the crisis. It wasn't the quantity that was offered that was the threat, it was the fiscal deficit. The focus is on the Fed but the fiscal deficit should be focused on. Powell doesn't control fiscal policy but that is where the trouble will be,” says Warren Buffett.

“Anything that’s labour-intensive. It can create an enormous amount of leisure time. AI is profound. That’s what makes it a Genie. Our businesses will figure things out,” says Buffett.

“I revise my will every 3 years or so when I get little thoughts from time to time. The one thing I haven’t changed is that my wife gets left a huge amount of money. It won’t make one bit of difference to her whether she beats the S&P 500 or anything else. All I want to leave is plenty of money that will take care of way beyond what she'll ever spend, and at the same time give her as much peace of time as possible, so that she doesn’t have to worry about beating the S&P 500. The main thing is that she feels that she’s in a financial position that she doesn’t even need to think about it,” says Warren Buffett.

"I think higher taxes are likely. They may decide that someday they don’t want the fiscal deficit to be this large because that has some important consequences. So they may not want to decrease spending and they may decide they’ll take a larger percentage of what we own, and we’ll pay it," Warren Buffett said.

“There is a special place for someone who continues to love you even if you are breaking the rules. You have to have the right heroes and it is not what they have accomplished but based on what you want to become,” says Warren Buffet.

Greg Abel says freight rail giant BNSF railroad is working to get its cost structure under control, but it will take time.

“You have to be in love with the subject, you can't be in love with just the money. The human brain works best when it finds what it is suited for,” says Warren Buffett.

"It was 100 percent my decision and we sold it all and we lost quite a bit of money. And that happens in this business," Buffett.

With Apple CEO Tim Cook sitting among the attendees, Buffett said that following Steve Jobs, Cook was "the perfect partner to serve sequentially."

"iPhone is one of the greatest products, and it may be the greatest product, of all time," he added.

"The decision process is really quite interesting. Charlie and I made decisions extremely fast, but in effect years of thinking about the parameters that would enable us to make a quick decision. One thing that Charlie and I learned a lot about was consumer behaviour," says Warren Buffett,

There are various reasons to exit positions: one is when you need money, though that doesn’t happen very often with us. It used to happen on every decision when I was 20 years old, says Buffett.

“There have been times when I have been awash with opportunities that I could have invested everything by the nightfall, and there are other times when the year goes… when we haven’t seen anything that makes the needle move. Now, we have made small acquisitions during the year.” Buffett said that sometimes he and Greg Abel look at acquisitions themselves where they think the managers don’t necessarily have the same equations in mind. “We never regret missing something that we didn’t understand.”

“Greg understands businesses extremely well and if you understand businesses, you understand common stocks. The responsibility should lie with Greg Abel and whatever the CEO decides, that's for him to decide when he is running the money,” says Warren Buffett.

“The capital allocation policies followed by Berkshire will be sustained after Warren Buffett. We want to maintain the fortress of capital to act when the opportunity presents itself and protect our shareholders,” adds Greg Abel.

Post lunch, Warren Buffett opens by applauding philanthropic work done by prominent American families' including the Walton Family and many BRK shareholders, who have donated a substantial sum to philanthropy.

Warren Buffett and team ended the morning question-and-answer session at Berkshire’s annual meeting to break for lunch.

Just before breaking for lunch, Warren Buffett applauded Carol Loomis, who continues to edit the Berkshire Hathaway Annual Report at the age of 95. "Never took an accounting course and ended up as the best business writer in the United States," says Warren Buffett.

“'Mass adoption' of zero-emission vehicles has been a moving target. I don't think we bring any special talent to that field. I would certainly not know how to pick the winners,” says Warren Buffett.

“Anything that reduces accidents is going to reduce costs but that’s been harder to do. If it really happens, the prices would come down. Insurance always looks easier than it is, but it’s fun because you get the money at the start and then you find out if you’ve done something stupid later on. If accidents are reduced by 50 percent it’s going to be good for society, and it’s going to be bad for insurance companies’ volumes. But good for the society is what we are looking for,” says Warren Buffett.

“While accidents have reduced, the cost of accidents has gone up. Automation just shifts the expense from the operator to the insurer,” added Ajit Jain.

“The right CEO can make a good business great. If we had Tom Murphy run the textile business, it would still fail. I learnt by watching him operate,” says Warren Buffett.

“From my perspective, the transition has worked out very very well. But, the credit really goes to how Warren has handled the situation. After the transition was announced, a lot of the operating managers were used to calling Warren directly on some issue or the other. After the transition when they would continue to do so, Warren would very skillfully in his manner handle them, such that he would not answer what they were looking for, but at the same time would make them feel good and sort of told them he enjoyed hearing from them and talking to them. As a result, the transition took place, people got the message and were very responsive to it, and it’s a non-issue as far as today is concerned,” says Ajit Jain.

“There may be an unexplored unattended opportunity but the question is whether BRK has some kind of advantage compared to people who get paid for assets managed and who make money on how they buy rather than what they buy,” says Waren Buffett.

Warren Buffett said renewable energy is of interest, but it needs time to be developed. There are certain things that just take a certain amount of time. My daughter hates it when I use this example, but it’s really true that you can’t create a baby in one month by getting nine women pregnant,” says Buffett.

“They (operating executives) overwhelmingly prefer to talk to Greg or Ajit. That’s understandable because I don’t really do much and I don’t operate at the same level of efficiency as I did 30 or 40 years ago. I don’t know the managers as well as when we were smaller. And when you have got someone like Greg or Ajit, why settle for me? It’s worked out extremely well. Greg sees more of them, understands more about their problems and gives them suggestions. Nobody has more wisdom about insurance than Ajit. The number of calls that I get from operating managers is awfully close to zero -- Greg is handling those,” says Warren Buffett.

“The opportunity in the US is limitless. What has happened in the last 200 years is remarkable & if you get lucky like Charlie & I, you will find your interest. Find the person with whom you would like to spend your life with. Sometimes you get lucky, sometimes you make mistakes,” says Warren Buffett.

“Charlie was a lot broader, we had much fun with things that failed as we had to work our way out. It is more fun to dig your way out of the foxhole. Charlie never did a day of voluntary exercise, he always said, tell me where I am going to die and I will never go there. But Charlie went everywhere with his mind, he was at his peak at 99. He always said what he wanted to say. Calling him was always fun & we kept learning,” says Warren Buffett.

“Our contractual liabilities are limited to a year and that gives us the ability to reprice every year. The regulators don't make it for us, but they are waking up to the fact that insurance carriers need to make a decent return on their capital,” says Ajit Jain.

Berkshire needs legislative and regulatory reforms across states served by PacifiCorp to justify capital deployment, says Greg Abel.

Buffett said Geico needed to do a better job matching rates to risk, but that its CEO Todd Combs had made "a lot of progress."

"I don’t know anything about AI. I don’t deny its existence or importance. We let the genie out of the bottle when we developed nuclear weapons. That genie has been doing terrible things lately, and the power of the genie scares the hell out of me, and I don’t know any way to get the genie back into the bottle. AI is somewhat similar. It’s way out of the bottle," says Buffett.

Warren Buffett finds his bet in Japanese trading houses “compelling,” but said he finds investments in other countries unlikely. It’s “unlikely we will make any large commitments in other countries,” he added.

Warren tosses the question on utilities to Greg and mistakenly addresses him as Charlie. "Old habits die hard"

“Our primary investments will always be in the United States. The companies we invest in the United States do business around the world. Such as Coca Cola -- they are the preferred soft drink in 170 or 180 out of 200 countries," says Buffett.

"Sometimes we did things that were big mistakes; but we never got close to fatal mistakes. And every now and then we did something that really works," says Buffett.

"Unless something that drastically changes in (their) capital allocation, we will continue to have Apple," says Buffett.

"When we look at Coke, Amex, Apple we make no attempt to predict the stock, we look at them as businesses," says Buffett.

"People who have checked the stock price daily have not made the money. People who have forgotten about it have made money over the years," says Buffett.

"We are retaining $37 billion from last year of earnings. The goal of Berkshire Hathaway is to increase the operating earnings and decrease the shares outstanding. It’s that simple to describe; not so simple to pull off necessarily," says Buffett.

"Expect earnings to go up moderately as BRK is adding 37 billion of operating earnings every year. Berkshire earns roughly 100 million dollars every day," says Warren Buffett.

It’s quite an improvement from last year; but, we would expect our earnings to go up modestly from year to year.

Berkshire Hathaway Inc. posted a record quarterly profit on Saturday, boosted by strength in its insurance operations, and appears to have sold a significant number of Apple shares as its cash stake swelled to $189 billion. The size of Berkshire’s stake in Apple stake fell 22% to $135.4 billion as of March 31 from $174.3 billion at the end of 2023, even though the iPhone maker’s share price fell just 11% in the quarter. Read the full story

Around 70,000 to 80,000 people from all over the world gather at CHI Health Center, Omaha, US, where the BRK annual meeting is hosted every year. With over 20,000 square feet of showroom space and more than 50,000 items of inventory, the exhibit hall at the CHI features goodies from various Berkshire holding companies.