Date: May 5, 2025
I recently came home from a weekend in Omaha, attending the 60th annual shareholders meeting for Berkshire Hathaway. Charlie Munger passed away in Nov 2023 (just a month shy of turning 100), and this is the second year without Charlie on stage. Warren Buffett was joined on stage by Greg Abel (head of the Berkshire energy business, born and raised in Canada) and Ajit Jain (head of the insurance business, born and raised in India). It was a record-shattering weekend in all aspects; attendance (likely 40,000 shareholders packed the arena, line-ups, and product sales. My alarm rang at 2.45am, arrived at the arena at 3.38am, and was #10 in line on one of the 3 entrances to the arena. The same as previous years, it was a mad rush into the arena to try to snag a plum seating location (as there are no assigned seats).
As you would already have seen/heard the news, Warren (age 94) announced his retirement as CEO but will remain as Chairman. He will be succeeded by Greg Abel.
Here are some of the notes I took from the meeting which I would like to share:
- Warren: I think I’ll do something else that isn’t usually done at annual meetings. I listened to Apple’s quarterly call on Thursday afternoon – it’s the only investment quarterly call that I listen to. I’m somewhat embarrassed to say that Tim Cook has made Berkshire a lot more money than I’ve ever made Berkshire Hathaway. I knew Steve Jobs briefly, and Steve of course did things that nobody else could have done in developing Apple. Steve picked Tim to succeed him, and he really made the right decision. Steve died young as you know, and nobody but Steve could have created Apple, but nobody but Tim could have developed it as he has. So on behalf of all of Berkshire, thank you Tim.\
- Greg (on their Japanese investments): It’s too bad that Berkshire has gotten as big as it is because we love that position and I’d like it to be a lot larger. Even with the five companies being very large in Japan, we’ve got at market in the range of $20 billion invested, but I’d rather have $100 billion than $20 billion. That’s how I feel about several other investments we have. But size is an enemy of performance at Berkshire, and I don’t know any good way to solve that problem. Charlie always told me that having a few problems was good for me. The Japan investment has just been right up our alley.
- Warren (on their cash hoard of 300billion, approx. 27% of total assets): The amount of cash we have – we would spend $100 billion if something is offered that makes sense to us, that we understand, offers good value, and where we don’t worry about losing money. The problem with the investment business is that things don’t come along in an orderly fashion, and they never will. We’re running a business which is very opportunistic. Charlie always thought I did too many things. He thought if we did about five things in our lifetime, we would end up doing better than if we did 50, and that we never concentrated enough….Things get extraordinarily attractive very occasionally. The long-term trend is up. We would rather have conditions develop where we would have like $50 billion in cash rather than $335 billion in treasuries. But that’s just not the way the business works. We have made a lot of money by not wanting to be fully invested at all times. Every now and then you find something. Occasionally, very occasionally – but it’ll happen again, I don’t know when – it could be next week, it could be 5 years off, but it won’t be 50 years off – we will be bombarded with offerings that we’ll be glad we have the cash for.
- Warren (on real estate vs stocks): There’s just so much more opportunity, at least in the United States, that presents itself in the security market than in real estate.
- Warren (on the end of American exceptionalism): We’re always in the process of change, and we’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, because I was born in the United States. At that time, about 3% of all births in the world were taking place in the United States. I was just lucky, and I was lucky to be born white, among other things. If you don’t think the United States has changed since I was born in 1930, you’re not paying attention. We’ve gone through all kinds of things – great recessions, world wars, the development of the atomic bomb that we never dreamed of when I was born. So I would not get discouraged about the fact that we haven’t solved every problem that’s come along. If I were being born today, I would just keep negotiating in the womb until they said I could be in the United States. We’re all pretty lucky. We’ve got two non-United States guys here who now live in the US.
- Warren (on work): You really want to work at something you enjoy. I’ve had five bosses in life and I liked every one of them – they were all interesting. I still decided that I’d rather work for myself than anybody else. But if you find people that are wonderful to work with, that’s the place to go. I’ve told my kids basically that you don’t get lucky like I did when I found what interested me at seven or eight years of age. It could have taken a lot longer, but you want to find what you love. I’ve always told my kids that their sound isn’t my sound, but you don’t necessarily find it on the first job you take. But if you get lucky like I did, you find it when you’re very young and then you just keep doing it. Don’t worry too much about starting salaries and be very careful who you work for because you will take on the habits of the people around you. There are certain jobs you shouldn’t take.
- Warren (on wisdom of life): Well, everybody gets setbacks. Some people have particularly bad luck in that respect, and others get through with fairly minor ones. Charlie had setbacks, I had setbacks – it’s part of life, and they’re not any fun. I don’t have any great advice about having the time of your life while you’re having some major setback, but it comes with life. You certainly have a setback when you die, and everybody’s got that one guaranteed. Some 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 you’re just going to have setbacks. So I would focus on the things that have been good in your life rather than the bad things that happen, because bad things do happen. It can often be a wonderful life even with some bad breaks. So far that really hasn’t happened with me, but it’s happened with some of my friends. For 94 years I’ve been able to drink whatever I want to drink. They predict all kinds of terrible things for me, but it hasn’t happened yet. Charlie and I never really exercised that much or did anything – we were carefully preserving ourselves for these years.
- Warren Buffett (his retirement announcement): I have a five-minute warning, so I would like to turn to a subject that I want to discuss with you for a few minutes.
Tomorrow 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. The rest of them – this will come as news to them.
I think the time has arrived where Greg should become the chief executive officer of the company at year-end. 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, which will come in a few months, we’ll take action on whatever the view is of the 11 directors. I think they’ll be unanimously in favor of it.
That would mean that at year-end Greg would be the chief executive officer of Berkshire. I would still hang around and could conceivably 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 certain respects if we ran into periods of great opportunity or anything. I think that Berkshire has a special reputation that when there are times of trouble for the government, we are an asset and not a liability, which is very hard to have because usually the public and government get very negative on business if there’s a time like that.
But Greg would have the tickets. Whether it’s acquisitions – I think the board would be more welcome to giving him more authority on large acquisitions probably if they knew I was around. But Greg would be the chief executive, period.
The plan is – and Greg doesn’t know anything about this until what he’s hearing right now – that the board will be able to ask me questions tomorrow about more of the specifics of what they should be thinking about. They’ll digest it, and then at the next board meeting after that, if they act, then obviously we have something to announce to the world as a material change and we’ll go forward with that operation.
I will play with the ouija board or whatever comes out in terms of doing things. But I have no intention, zero, of selling one share of Berkshire Hathaway – it will get given away.
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 Greg’s management than mine. There may come a time when we get a chance to invest a lot of money, and if that time comes, I think it may be helpful with the Board that they know I’ve got all my money in the company and I think it’s smart. And I’ve seen what Greg has done. So that’s the news hook for the day. And thanks for coming.
The enthusiasm shown by the audience’s response can be interpreted in two ways. But I’ll take it as positive. Thank you.
Some of the Berkshire Hathaway companies that had booths on the convention floor were:
- BNSF Burlington Northern Santa Fe Railways
- Pilot travel centers (truck stops along all the US interstate highways)
- Berkshire Hathaway Energy
- Geico (stands for Government Employee Insurance Co)
- Oriental Trading (party supplies)
- Dairy Queen ($1 Dilly Bars were really popular, especially the Cherry Dilly Bars)
- SquishMallows (Jazwares) – I didn’t know what the hype was all about.
- Justin Boots, Tony Llama boots
- See’s candies
- Clayton Homes
- NetJets
- Fruit of the Loom (interesting to see shareholders stocking up on underwear!)
- Brooks athletics (the cash register lineup)
And these are some of the largest holdings of the BRK stock portfolio ~350Billion (assisted in management by Ted Weschler and Todd Combs):
- Apple (21% of portfolio)
- American Express 15%
- Coca Cola 10%
- Bank of America 10%
- Chevron 5.8%
- Occidental Petroleum 3.8%
Some of Warren Buffett’s quotes (over the years):
“Berkshire will keep moving forward powered by the array of solid businesses we now possess and the new companies we will purchase. Our ambitions have no finish line”
“Charlie was the architect of the present Berkshire, and I acted as the general contractor to carry out the day to day construction of his vision. In the physical world, great buildings are linked to their architect while those who had poured concrete or installed windows are soon forgotten. Thought I have long been in charge of the construction crew; Charlie should be forever be credited for being the architect.”
“Charlie was the one who taught me to abandon everything I learned from my hero Ben Graham, and instead focus on buying wonderful businesses at fair prices instead of fair businesses at wonderful prices”.
“It takes 20 years to build a reputation and 5 minutes to ruin it. If you think about that, you’ll do things differently.”
"Be fearful when others are greedy. Be greedy when others are fearful”
“Somebody once said that in looking for people to hire, you look for three qualities: integrity, intelligence, and energy. And if you don’t have the first, the other two will kill you. You think about it; it’s true. If you hire somebody without [integrity], you really want them to be dumb and lazy.”
“Risk comes from not knowing what you're doing”
“You never know who's swimming naked until the tide goes out.”
Some of Charlie Munger’s quotes (over the years):
"Berkshire is drowning in money – we have great businesses pounding out money. When Warren is gone, the acquisition side of Berkshire will not do as well, but the rest will do well. And the acquisition side will do just fine”
“Spend each day trying to be a little wiser than you were when you woke up. Day by day, and at the end of the day-if you live long enough-like most people, you will get out of life what you deserve.”
“How to find a good spouse? The best single way is to deserve a good spouse.”
“Develop into a lifelong self-learner through voracious reading; cultivate curiosity and strive to become a little wiser every day.”
“Remember that reputation and integrity are your most valuable assets—and can be lost in a heartbeat.”
“I think that, every time you see the word EBITDA, you should substitute the words "bullshit earnings.”