WarrenTomorrow we're having a board meeting of Berkshire, and we have 11 directors, two of the directors, who are my children, Howie and Susie know of what I'm going to talk about there. The rest of them this will come as news, too. But I think it's the time has arrived where Greg should become the chief executive officer of the company at year end. And I want to spring that on the directors effectively and give that, it's my recommendation. Let them have the time to think about what questions or what structures or anything that we want. And then there's a meeting following that. That few months will take action. The view of the 11 directors, I think they'll be unanimously in favor of it. And that would mean that at year end, it would be the chief executive or officer of, I would still, well, then could conceive it would be useful in a few cases. 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. I think that sure has a special reputation that when there's times of trouble for the government, that we are an asset on not a liability, which is a position that's very hard to have because usually the public and government get very negative on business if there's a time like that. But so I think I could, there might be a time without, I'd be helpful, but Greg would have the tickets and, and he would make, like I said, whether it's acquisitions, board would be more welcome him more authority on large acquisitions, probably if they knew I was around, uh, chief executive period. And, uh, like I say, the plan is to, uh, there's no anything about this until what he's hearing right now, but that the, uh, be able to ask me questions tomorrow as then a little more of the specifics of what they should be thinking and all of that. zero of selling one share of Berkshire a half the way, it'll get given away, it'll get given away, gradually, it just won't, I would, okay, drink or Coke and calm down. I would say that I would add this. The decision to keep every share is an economic decision because I think the prospects of Berkshire will be better under a great advantage of them than mine that's the news hook for the day follow that and thanks for coming the end the enthusiasm shown by that I'll take a surprise thank you okay if everyone will please please take their seats
[6:57]
WarrenThis is my, this is my 60th annual meeting and it's the biggest and I think it'll be the best yet. Trade should not be a weapon. And the United States, the United States, we've won. I mean, we have become an incredibly important country starting from nothing. Two hundred fifty years ago, there's nothing been anything like it. And it's a big big mistake in my view when you have seven and a half billion people don't like you very well and you've got 300 million that are crowing in some way about how well they've done and I don't think it's right and I don't think it's wise. I do think that the more the more prosperous the rest of the world becomes, it won't be in our expense, the more prosperous will become and will then the safer will feel. and your children will feel someday.
QuestionerBand of Japan seems very determined in racing race, while Fed, ECB and other central banks are considering to cut them. Will its planned rate hike deter you from further investing Japanese stock market or even considering to realize your current profits?
Greg AbelI would say that I'll speak for Greg beyond me that I'll in the next 50 years and I'll be running things and we won't give a thought to the selling those. And I think the thing we're building with the five, five companies is one, it's been a very good investment, but we are really, as Warren touched on, we envision holding the investment for 50 years or forever, but I think we also are building relationships to do things with each of those companies. And we really do hope to do big things with them globally.
QuestionerToday, 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. Is the decision to raise cash primarily a de-risking strategy in response to high market valuations, or is it also a delirce? it also a deliberate effort to position Berkshire's balance sheet for a smoother leadership transition providing Greg Abel with maximum flexibility and a clean slate for future capital allocation decisions.
WarrenWell, I wouldn't do anything nearly so noble as to withhold investing myself just so that Greg could look good later on. If he gets any edge of what I believe, I'll resent it. So the, you know, the amount of cash we have is, we would spend, well, when we came pretty close to spending $10 billion, not that long ago, for example, we'd spend $100 billion, I mean, and those decisions are not tough to make.
[10:40]
WarrenWhen something is offered that is that makes sense to us and that we understand and 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. And every now and then you find something and occasionally, very occasionally, but it'll happen again, that I don't know when. It won't, it could be next week, it could be five years off, but it won't be 50 years off.
QuestionerOut of all the companies that Berkshire Hathaway owns, there was one that you acquired, the Chicago-based company Portillo's Hot Dogs. How did you know that this would be a good fit for the overall company's portfolio?
WarrenWell, I'll have to ask Greg about that because I don't know anything about it. So maybe he bought it what I was looking at the other one. way, but. I think I got to call a friend on this one. Yeah, I, I, I, we own a lot of companies, but I do like to think I know most of them, but the, but the, it may be a subsidiary of a subsidiary of a subsidiary in some way, but, but, but I really don't know a thing about it. I'm sorry to.
OtherA. Warren? Yep. I'm happy a friend did call. So that still works. Peter Eastwood, who runs one of our Berkshire subsidiaries and does a great job of running it, track down that Portellos is owned by a private equity firm called Berkshire Partners. So that was the basis of the question, but it's not associated with Berkshire. So we got to the bottom of that one. Yeah. Thank you, Peter.
WarrenThat's just a sample. operate around. Today, the U.S. 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 U.S. economy?
QuestionerWe'll always find all kinds of things to criticize in the country. But the luckiest day in my life is the day I was born. And, you know, 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 I'd like to say that I had something to do. You know, listen, sent messages out to my parents, for God's sake, moved to the United States before I've born or anything, and they've gone through great recessions. We've gone through World Wars. We've gone through the development of an atomic bomb. that we never dreamt of, you know, at the time I was born.
[14:03]
WarrenSo I would not get discouraged about the fact that that it doesn't look like if we solved a very problem that's come along. 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's the tendency of a government to want to be able to debate. it's currency over time is there's no system that beats that you can pick dictators you can pick representatives you can do anything but the people there will be a a push toward weaker currencies and of course that is I mentioned very briefly in the annual report that the fiscal policy is what scares me in the United States because it's it's made the way it is and it is made the way it is and And all the motivations are doing a lot of things that cause can cause trouble with money. And 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 watching what happens when people try to make sure that they aren't running fiscal risks.
Questioneryears, 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. And has this competition made it more challenging for Berkshire to find and price insurance opportunities safely and profitably today?
Ajit JainThere'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, but in the last three, four years, I don't think you've done a single deal. As long as the economy is good and credit spreads are low, they will make money, they'll make a lot of money because of leverage. However, there is always the danger that at some point the regulators might get cranky and say, you know, you're taking too much risk on behalf of your policyholders, and that could end in tears. we do not like the risk of vote 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.
QuestionerHas the recent market volatility presented Berkshire with opportunities?
WarrenWhat has happened in the last 45 days, 100 days, whatever, you want to pick up, whatever this period has been, is really nothing. There's been three times since we have.
[17:11]
Warrensince we acquired Berkshire, that Berkshire has gone down 50% in a fairly short period of the time, three different times. But the day I was born, the Dow Jones was at 240. And my first, that was August 30th, 1930. And between that and the law, it went from 240 to 41. I mean, that's... So, if people think that it made a really major change, it didn't, if it had gone up, 15% instead of down 15% people think they take that with remarkable grace. But if it makes a difference to you whether your stocks are down 15% or not, you need to get a somewhat different investment philosophy because the world is not going to adapt to you. I don't mean to sound particularly critical. I mean, I know people have emotions, but you've got to check them at the door when you. or when you invest.
WarrenGreg, this question is for you. It comes from a shareholder named Jay Milroy, who writes, Mr. Buffett has a hands-off approach to managing the operating subsidiaries. How would you describe your approach?
Greg AbelWell, we've got our managers over there, and I would say going back to 2018, it's been a, it's been very fortunate being this role because, one, I had to learn a lot of the businesses. And there's no question. And as Warren bought the businesses had that general knowledge, I absolutely had to engage with each of them and they've been great in sharing 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. I had questions and wanted to engage with them. I would say more active. But hopefully in a very positive way, and we've got an exceptional group. So it's worked out exceptionally well as I've gone through that period of time.
WarrenIt's working way better with Greg than with me because I just, I didn't want to work as hard as he works and I could get away with it because we've got to basically go to the business, very good business. And I wasn't in danger of you fire. me by virtue of ownership and the fact that we would do pretty well. But the fact that you can do pretty well doesn't mean you couldn't do better, 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. 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've generally been alone.
[20:19]
Questionerbeen laxed in doing something about it, but he's done a way better job as that than I have. Warren, you mentioned that Mr. Apple would be in charge of capital allocation in the future. And I'd like to know your perspective on is it easier for a business operator to be an investor or for an investor to be a business operator?
WarrenIt's a lot tougher to be an operator. I mean, it is, it's easier to sit in a room like I do. and play around with money. It's just an easier life. 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 don't complain at least. And I've been able to choose my friends, which has made an enormous difference in my life. I've never had to work for anybody that I've been able to choose my friends, for anybody that I really didn't admire. I mean, that's a luxury in life. I am the master. I mean, I've found myself in this position where I can run the kind of company I want to run. And that's an extraordinary luxury.