QuestionerGreg, first of all, thank you for having us here at um what is the first meeting of the new Berkhire? Um first time in 60 years that they have a new CEO who's heading up this meeting. What what what is this like for you? You've been doing this for so long, but what is this like for you this first time out?
Greg AbelWell, thank you for being here and and and we're so excited to be here in Omaha. So, it is a great tradition and
Questioneryes, first time in 60 years. Um,
Greg Abelfortunately Warren will be a part of it and and we're excited by that and and what I really want to communicate to we have our owners here and these couple days are and especially on Saturday it's owner's day. It's their day. So, I just want them to really know that Warren Warren brought this amazing commitment to Berkshire and deep understanding and and I want them to know that remains
Greg Abeland I want them to know that remains that there's a team, myself included, that are absolutely committed and have a deep understanding of Berkhire and we bring that same passion every day.
QuestionerWhat's going to be different at the meeting this year? Anything or is it there?
Greg Abelthere's some some just evolution as you as I think um hopefully our our owner shareholders enjoy.
QuestionerSo one of the things we'll be doing is introducing some other managers.
Greg AbelYeah. And that was very purposeful because we have a when you walk around here and all these businesses we have exceptional leadership in the businesses and we very much operate it where this ownership mentality it's their businesses but what we want is to on stage let all the owners all the shareholders those watching CNBC start to see the depth of management in Berkhire. How did you pick the
QuestionerBerkshire. How did you pick the managers and and I I understand Adam because he's obviously in this new management role. Katie Farmer is going to be on stage too. What what made you get to those people that you' be bringing up?
Greg AbelSo it started with the thought that um on the insurance side we have a
QuestionerYep. But even even someday we'll we'll add an insurance manager and things like that because the idea was if if you think of start with insurance um there's no one better and and the world needs to hear him and see him but equally we have a deep team there
Greg Abeland that's something I've been so excited by. uh when Warren made the announcement last May as we all know the first thing he did was pull together the senior team from the senior leaders on the insurance side and it was a small meeting in Omaha Warren Iet and and say five other of the senior leaders in
Questionerfive other of the senior leaders in insurance but Warren was very open about
Greg Abelokay this is our new team uh I was the first I've got a lot to understand and learn I had some knowledge on from spending a lot of time with the jeet and being on certain boards but that It was really exciting and to see the depth of that team was was uh oh just it felt really good to know who was behind a and then so we've I had that opportunity and then when it came time on the non-insurance um really focused on one Adam and as much in that he brings a wealth of experience from nets
Questionerand he's remaining our CEO there because uh we still want him to have his fingerprints on it. Um, but he's got an exceptional team. But as he took on the 32 teams, as you've already highlighted, that was a logical outcome. Katie is our largest non-insurance uh business. So,
Greg Abellargest non-insurance uh business. So, it was logical to introduce her. She was logical to introduce her. She was logical to introduce her. She runs uh an amazing business. uh 175 trains moving a day across 32,000 miles, 32,500 operationally and uh and and serving many many different types of customers from agriculture to um moving the inter modal traffic we do. So, she's got a breadth of responsibilities and I just wanted the our shareholders to meet them and hear what they do every day.
QuestionerI I know it's right ahead of earnings, so you're in a quiet period. There's some things you can't say. Um, but how has the war in the Middle East, higher energy prices impacted the company? How do you deal with it?
OtherYeah, I mean, fortunately, we do have a team and teams. It can be a variety of things that surface daily, quarterly, in an annual basis. Uh, always very proud of them. I mean, it's heads down and we're going to work our way through this.
Othergoing to work our way through this.
OtherSo, you're right with energy costs going up. For example, if you think of our chemical businesses,
Otheruh we have we have uh Liz Resol, we have we just completed the Oxycam transaction on January 2nd. We closed that. Uh and then we have a third one called LSPI and I like to think of them as our our chemical group. Their inputs went up immediately. Mhm.
OtherNow, that takes time for us to catch up on pricing because we have customer contracts and they do reset and it's a it's a bounce and on the back end they'll be a little slower to correct. So, it's a uh there's a way to adjust for price appropriately and and fairly for both the customer and us, but that takes time. So, I would say the biggest thing is we see im some immediate increase in the input costs across certain businesses.
QuestionerOkay. Um, back to Adam, you know, people
QuestionerOkay. Um, back to Adam, you know, people wonder who your sounding board is. Warren had Charlie, Warren had you. Who do you get to talk to to kind of bounce ideas off of or be a studying force when you got questions yourself?
Greg AbelYeah. So, number one, very fortunate that Warren still comes into the office every day and he's a great sounding board. I mean that that's really there's a lot of collaboration now and there's always been but I'm going to call them or I'm in Omaha uh a few days a week and then I'm on the road like I've always been meeting with our other businesses or looking at certain opportunities but when I'm here it's a discussion around uh what we're seeing him and I how do things feel what do I see as opportunities what's he seeing as an opportunity and so one accept exceptional sounding board. Um there's no question I talked to Adam uh not just
Greg Abelno question I talked to Adam uh not just about his businesses but what are we seeing again where are potential opportunities and I've really tried to have that type of engagement for a number of years with our non-insurance operations but if you go to our uh top businesses they're very senior business leaders in themselves and I I greatly value hearing what they're seeing what are they hearing from their suppliers what are they hearing from their customers
QuestionerYeah, >> because it has a uh so so it's just gaining gathering that knowledge is sort of on a a continual basis from a a broader breath than say just a Charlie. But that would be uh I'm fortunate to have that that broader group.
Questioner>> You wrote in the annual letter um which by the way was really comprehensive had a ton of information I think updating people about where things stand as the
Questionerpeople about where things stand as the company, what you would want to know if you're an owner in the company. But you wrote in it that your job is primarily one of risk management to kind of see around corners.
QuestionerHow do you do that? Because when I think risk management, I always think uh Jamie Diamond or somebody who's really involved with financials, but you know, you're right. There's a lot of things you have to know in every one of these businesses. How do you stay on top of that?
Greg AbelYeah. So one fortunately having uh run the non- insurance operations um for eight years
Questionerand know those leaders well
Greg Abelwe always start discussing what the challenges are what what's the risk today but more importantly what's the risk 5 years 10 years from now what what what's worrying them how is their customer changing
Questioneruh and uh that's a constant dialogue so
Questioneruh and uh that's a constant dialogue so but but there's broader risks that you start to see surface and then when I was with the insurance team. That first meeting was all a discussion around risk.
Greg AbelYes, we have to get pricing right to the risk, but what are the risks and not the risk that year, what are we seeing the risk five and 10 years from now? And if you go to insurance, for example, and it's a risk in a lot of our businesses, for example, inflation.
QuestionerYeah.
Greg AbelSo, we're very aware of that. We're watching it across our businesses. We want to understand what what it does to our business is. but business as a whole in Berkshire. Um and uh and then it goes from there.
QuestionerInflation's been stubborn even before um the war with Iran. Now you have more inflation. How or when does that become a problem that you worry about?
Greg AbelWell, I think I think we worry um listen
QuestionerWell, I think I think we worry um listen at these levels and the 2% goal and we're at three and potentially creeping up a bit. Uh we'd prefer to clearly see it at the two as would
Questionerthe American consumer in every business. Um but the reality is there's going to be some it's all manageable at this level.
QuestionerBut we all know what's happened to countries when it gets uh at the extreme levels
Questionerand postco we hit some pretty high levels when we're at that 8 to 9% level. That's pretty alarming and it adjusted down. So if it gets to levels and then it continues to compound, it gets very scary at those type of levels.
QuestionerYeah. All right. Let's talk a little bit about um the portfolio and you addressed this in the letter as well. You said that of the $300 billion stock portfolio, right?
QuestionerUm look about 200 billion of it is is stuff that's pretty steady and pretty
Questionerstuff that's pretty steady and pretty stayed. Four big stocks, I think it was >> Apple, MX, Coca-Cola, and Moody's. And >> Apple, MX, Coca-Cola, and Moody's. And >> Apple, MX, Coca-Cola, and Moody's. And then you had the Japanese trading houses then you had the Japanese trading houses then you had the Japanese trading houses that were there. And part of the reason that were there. And part of the reason that were there. And part of the reason you said this is because you understand you said this is because you understand you said this is because you understand the business and you know the leaders the business and you know the leaders the business and you know the leaders very well. The leaders of two of those very well. The leaders of two of those very well. The leaders of two of those companies are stepping down, Tim Cook companies are stepping down, Tim Cook companies are stepping down, Tim Cook and James Quincy from Apple and and James Quincy from Apple and and James Quincy from Apple and Coca-Cola respectively. Have you met Coca-Cola respectively. Have you met Coca-Cola respectively. Have you met with the new CEOs? Uh have you spoken with the new CEOs? Uh have you spoken with the new CEOs? Uh have you spoken with them and do you feel good about with them and do you feel good about with them and do you feel good about where things stand with those two big where things stand with those two big where things stand with those two big investments?
WarrenSo those are uh um I we will be meeting with the leaders in fact will be meeting with the leaders in fact will be meeting with the leaders in fact in this coming week with both of them in this coming week with both of them in this coming week with both of them the incoming and unfortunately they the incoming and unfortunately they the incoming and unfortunately they changed but that happens and but what we changed but that happens and but what we changed but that happens and but what we what we do believe in and I believe what we do believe in and I believe what we do believe in and I believe that's what we had we we know the that's what we had we we know the that's what we had we we know the quality of those leadersh quality of those leadersh quality of those leadersh
Other>> we know the quality of the businesses
Greg Abelwe know the quality of the businesses the the boards are exceptional they're going to have thought this through very clearly and have the right leader and and time always tells But the reality is we're excited by the leaders coming in and very supportive of what the prior two leaders have done. It's it's remarkable what they've done with those two businesses.
Becky QuickYeah. It's kind of surprising because we've heard of so many CEOs who have stepped down that have been really young. James Quincy's only 60.
Greg AbelI know
Becky Quickhe's younger than you are.
Greg AbelYeah, I know he's younger. I know. I reminded him of that when he told me he was going to step down. I said, "You've got more years in. Come on." Right.
Becky QuickBut the reality is we all have our own timelines.
Greg AbelYeah. Tim Cook's less than two years older than you are, but it I and I know you addressed this in the letter, too,
Questioneryou addressed this in the letter, too, but how long do you see yourself doing this? What's what's your runway?
Greg AbelYeah, my runway is really long. I I love doing this and that like Warren, we're passionate and as I said right from the get-go, I want our shareholders to know there's absolute commitment and passion and I have a great family and I prioritize my family and I prioritize Berkshire and I know how to find the balance.
QuestionerYeah. And and with those two things, I'm really happy. Do I have time for f uh friends and the odd activity? Sure. Uh but it's when you know how to at least I believe that when you can find that right balance, it's perfect. And so I don't I I wouldn't when I said 20 years in the letter.
QuestionerYeah.
Greg AbelThat would not surprise me. But that's up to our board obviously and we and our shareholders and we have to be doing a
Greg Abelshareholders and we have to be doing a great job. But I love Berkhire and I I see myself in this role for a long time.
QuestionerThat's great. One more point. In the letter, you talked about an issue that had happened with Pilot where you all bought into Pilot in 2017. You didn't get to really fully manage the place until 2023. You said that's not a mistake that we'll make again. What other mistakes have you learned from? Because you're new to the CEO role, but you've been doing this a long time.
Greg AbelYeah. Yeah. And on that one, I want to because it because it was a mistake we made for sure. not not that pilot um made any mistakes or it was their problem. We just recognized that um we needed short-term and long-term objectives aligned
Questionerif we're going to enter into a transaction where there's a period of time.
Greg AbelOkay, it was really that simple. And I didn't
Greg Abelit was really that simple. And I didn't see that alignment. I think we talked earlier, we're working hard to improve the customer service side on pilot. We just always want those objectives aligned when we're entering into a transaction.
QuestionerMeaning making sure that you're continuing to invest in the business and it makes sense.
Greg AbelCorrect. In the right way.
QuestionerSo then um the things I uh over the years I mean I was fortunate all the way back to uh 1996 I went to the UK as a CEO of our utility business there.
Greg AbelLarger than utility I across across the river in Iowa. We had 1.3 million customers. We drew it to two. But th that was a big learning moment um for myself. But probably the first thing there for example was recognizing uh when we needed to make changes we should make the changes and uh there we recognized that environment within the business was changing very quickly. It
Greg Abelbusiness was changing very quickly. It was going from being a heavily regulated business to an unregulated business. So we needed skill sets that we probably didn't bring into the business quick enough. So forever I watch how the businesses are evolving. Yes, we've got great teams, but how do we supplement it and make sure they're successful?
QuestionerThat was a a great lesson very early in my career.
QuestionerThat's great. Um, Greg, we're excited to see what happens this weekend. I want to thank you for your time ahead of this.
Greg AbelWell, thank you for being here. I look forward to the the questions on Saturday. It's always a a great opportunity all that gets submitted into you and then obviously receiving them from our our shareholders and owners. So,
Questionerthank you. We look forward to a great Saturday.
QuestionerThank you, Greg. Thank you. Appreciate it.