Berkshire Hathaway Annual Shareholder Meeting Notes

Jun 4, 2024

Lecture Notes - Berkshire Hathaway Annual Shareholder Meeting

Speaker Introduction

  • Greg Abel: Director.
  • Ajit Jain: Runs the insurance division.
  • Several other directors introduced, among them: Howard Buffett, Susan Buffett, Steve Burke, Ken Chenault, Chris Davis, Sue Decker, Charlotte Guyman, Tom Murphy Jr., Ron Olson, Wally Weitz, Merl Whitmer.

Acknowledgments & Announcements

  • Melissa Shapiro: Organized the event; new record for See's Candy sales (6 tons).
  • Only one book available this year: Poor Charlie's Almanack (sold 2400 copies).
  • Brad Underwood: Acknowledgment for putting together an eventful movie presentation.

Financial Results - First Quarter

  • Better than average quarter, strong insurance earnings but cannot be annualized.
  • Insurance Earnings: Impact of global storms varies; earthquake risk mentioned.
  • Investment Income: Increased due to higher yields and short-term fixed investments.
  • Railroad Earnings: Slightly down but predict modest future increase based on traffic conditions.
  • Energy Company Earnings: Better than previous year; conditions explained in the annual report.
  • Overall: Operating earnings increased, depicted on Slide 1 and 2.
    • March 31st: $182 billion in cash and treasury bills.
    • Save money and put it to productive use over time; no risk unless more valuable than cost.

Operating Strategy

  • Focus: Increase operating earnings, reduce shares, seize big opportunities.
  • Long history of retaining earnings and reinvesting for growth.
  • Growth in shareholders' equity compared to peer entities.

Audience Q&A (Selections)

Apple Investment

  • Warren Buffett: No change in views; Apple remains a key investment.
  • Approach towards stocks is as businesses; no change despite sales for cash allocation.

Future of Investments in Foreign Markets

  • China & Hong Kong: Primarily invest in USA; some exceptions like Japan and BYD with cautious outlook on entering other markets.

Sector-Specific Insights

  • Energy Sector: Focus on regulatory compact, careful with investments, wildfire insurance challenges, and potential regulatory reforms discussed.
  • Artificial Intelligence: Warren skeptical yet acknowledging potential; illustrated concern over realistic AI-generated scams.
  • Cybersecurity Insurance: Skeptical approach due to high potential aggregated risks and difficulties in conceptual cost predictions.

Climate Change Impact on Insurance

  • Ajit Jain: Climate change impacts are real; insurance prices need to adjust to new risks, particularly wildfire and flood insurance.
  • Potential profit from climate risk but with operational discipline necessary.

Leadership Transitions and Succession

  • Seamless leadership transition emphasized with Greg Abel and Ajit Jain holding key roles.
  • Trust and proper succession planning were discussed with reflections on prior managerial transitions.

Other Notable Discussions

  • Shareholder inquiries about specific regions (e.g., Canada) and industries (Insurance in Florida, Real Estate commissions) addressed with strategic viewpoints and business practices.
  • Tribute to Charlie Munger, recognition of Carol Loomis, and reflections on past partnerships and future directions.

Philanthropy Highlights

  • Mentioned Ruth Gotden’s significant charitable donation (1 billion to Albert Einstein College of Medicine).

Conclusion

  • Audience was invited to take a break and return punctually.
  • Encouraged shareholders to understand the blend of nostalgic and strategic perspectives integral to Berkshire Hathaway's success.

Emoji for Summary: 🏦