Doubling down on his words of warning Last year, Buffett told the crowd that he had recently come face-to-face with the downsides of AI. And it looked and sounded exactly like him. Someone made a fake video of Buffett, apparently convincing enough that the so-called Oracle of Omaha himself said he could imagine it enticing him to send money overseas.
The billionaire investment guru predicted that scammers will take over technology and could do more harm than society can do good.
“As someone who doesn’t understand anything about it, this has enormous potential for good and enormous potential for bad and I just don’t know how that happens,” he said.
Gains before reflections
The day started early Saturday with Berkshire Hathaway announcing a sharp drop in profits while the paper value of his investments has fallen and he reduced its Apple holdings. The company reported first-quarter profit of $12.7 billion, or $8,825 per Class A share, down 64% from $35.5 billion, or $24,377 per share of category A, a year earlier.
But Buffett encourages investors to pay more attention to the conglomerate’s operating profits from the companies it actually owns. These jumped 39% to $11.222 billion, or $7,796.47 per Class A share, thanks to the performance of insurance companies.
None of that got in the way of the fun.
Crowds flooded the arena to buy Squishmallows from Buffett and former Vice President Charlie Munger, who died last fall. The event attracts investors from all over the world and is unlike any other corporate meeting. Those who come for the first time are motivated by the urgency of getting here while Buffett, 93, is still alive.
“It’s one of the best events in the world to learn about investing. Learning from the industry gods,” said Akshay Bhansali, who spent the better part of two days traveling from India to Omaha.
A notable absence
Devotees come from around the world to suck up tidbits of wisdom from Buffett, who dubbed the meeting “Woodstock for capitalists.”
But a key ingredient was missing this year: it was the first meeting since Munger deceased.
The meeting opened with a video tribute highlighting some of his best-known quotes, including classic lines like “If people weren’t wrong so often, we wouldn’t be so rich.” The video also featured sketches the investors have done with Hollywood stars over the years, including a “Desperate Housewives” parody in which one of the women introduced Munger as her boyfriend and another in which the actress Jaimie Lee Curtis fainted in front of him.
At the end of the video, the arena erupted in a long standing ovation for Munger, whom Buffett called “the architect of Berkshire Hathaway.”
Buffett said Munger remained curious about the world until the end of his life at age 99, throwing dinner parties, meeting people and hosting events regularly. Zoom calls.
“Like his hero Ben Franklin, Charlie wanted to understand everything,” Buffett said.
For decades, Munger and Buffett functioned as a classic comedy duo, with Buffett providing lengthy set-ups to Munger’s witty one-liners. He once called unproven Internet companies “dung.”
Together, the two men transformed Berkshire from a struggling textile mill into a massive conglomerate made up of a variety of interests, from insurance companies such as Geico to the BNSF railroad to several major utilities and a assortment of other companies.
Munger has often summarized the key to Berkshire’s success as “trying not to be systematically stupid, instead of trying to be very smart.” He and Buffett were also known for sticking to businesses they understood well.
“Warren has always spoken at least 80%. But Charlie has been a great foil,” said Stansberry Research analyst Whitney Tilson, who was looking forward to his 27th consecutive meeting.
Next generation leaders
Munger’s absence, however, allowed shareholders to get to know the two executives who directly oversee Berkshire’s companies: Ajit Jain, who manages the insurance units; and Abel, who takes care of everything else and who has been named Buffett’s successor. The two shared the main stage with Buffett this year.
The first time Buffett asked Abel a question, he mistakenly said “Charlie?” Abel shrugged off that mistake and dove into the challenges utilities face from the increased risk of wildfires and the reluctance of some regulators to let them collect a reasonable profit.
Morningstar analyst Greggory Warren said he thought Abel spoke out more Saturday and let shareholders see some of his brilliance. Berkshire Executives talk about.
Abel offered a variation of the classic Munger phrase “I have nothing to add” by often beginning his responses Saturday by saying “The only thing I would add.”
“Greg is a rock star,” said Chris Bloomstran, president of Semper Augustus Investments Group. “The bench is deep. He won’t have the same humor during the meeting. But I think we all come here to get a reminder every year to be rational.
A look to the future
Buffett has made it clear that Abel will be Berkshire’s next CEO, but he said Saturday that he had changed his mind about how the company’s investment portfolio should be managed. He previously said that responsibility would fall to two investment managers who now manage small parts of the portfolio. On Saturday, Buffett approved Abel for the position, as well as overseeing operational activities and any acquisitions.
“He understands business extremely well. and if you understand business, you understand common stock,” Buffett said. Ultimately it will be up to the board to decide, but the billionaire said it could come back to haunt them if they try to do it differently.
Overall, Buffett said Berkshire’s system of all non-insurer companies reporting to Abel and insurers reporting to Jain works well. He himself hardly receives any calls from managers anymore because they receive more advice from Abel and Jain.
“This place would do extremely well the next day if something happened to me,” Buffett said.
Still, the best applause line of the day was Buffett’s closing remark: “I not only hope you come next year, but I hope I come next year.” »
