I'm Warren Buffett, and that's me with Charlie in an unscripted and spontaneous photo taken in Savannah, Georgia, early in 1982. Our wives could tell us apart, as long as we wore name tags. When Charlie and I first met in 1959, it was as twins who had been separated at birth were reunited. But there were a few important differences between Charlie and me that many people missed. Let me elaborate. For one thing, I was only interested in whether things worked. Charlie wanted to know how things worked. I would turn on a switch, and if the TV or light bulb went on, could not care less about what had caused that miracle. Charlie, however, would want to understand every aspect of how the generator worked, how electricity traveled to his home, the merits of AC versus DC, whatever. You could say that Charlie understood electricity better than Thomas Edison ever did. Like his hero, Ben Franklin, Charlie wanted to understand everything, and he pretty well succeeded. Additionally, Charlie liked to design things. When we met in 1959, he was designing and building the house in which he lived throughout his life. He once wanted to design a home for me in Santa Barbara on a piece of property Berkshire inherited. Fat chance. In 1958, I bought the house I now live in, but I would have been happy with any of 100 or more houses, as long as it was in the general neighborhood of where I was then renting. Of course, I wanted my wife to like it, and I wanted it to have room for four or five kids, but what it looked like inside - outside was irrelevant. The difference, of course, was of supreme importance to Berkshire. Charlie's architectural thoughts led to the Berkshire Hathaway of today. Some of you may be surprised that Charlie first became a director of Berkshire in 1978. Through a small partnership, I had bought control of Berkshire early in 1965. Charlie then didn't have a penny invested in Berkshire, but he immediately told me my purchase was just plain dumb, which it was. Charlie then did for me what needed to be done to correct my error, and over time, we worked together to achieve his vision. Berkshire has become a great company with a unique group of owners. The directors of Berkshire are the trustees of the structure Charlie designed that lives beyond his lifetime and will live far beyond mine. I'm now going to introduce these directors and give you a short first quarter report and the outlook for the company. After that, we will take your questions. Please turn up the lights, and I hope you'll join me in applauding Charlie Munger, the architect of Berkshire. Yeah, don't wear out all your clapping on Charlie. I mean, we have, first of all, Greg Abel, a director, and Ajit Jain, sitting next to him, in front of insurance. Moving then to this back of this first section, if each of the directors there would remain standing until we finish, we'll go alphabetically down the line, and we've got Howard Buffett. We have Susan Buffett, Steve Burke, Ken Chenault, Chris Davis, Sue Decker, Charlotte Guyman, Tom Murphy Jr., Ron Olson, Wally Weitz, and Meryl Witmer. Okay. There are two people I would like to thank, and then we'll get on to the brief description of the first quarter. First of all, I'd like to thank Melissa Shapiro, who put this whole event together. You can't imagine the work that goes into it, but she just reported to me that we set a new record for See's Candies. I think they brought along 6 tons, and they will sell out. And one thing I do wanna mention, we have only one book at the bookstore, at the Bookworm, this year. Normally, we have about 25, but we have Poor Charlie's Almanack, fourth edition, and I think we sold about 2,400 of them yesterday, and that will be the only book. Next year, we'll go back to having our usual selection, but we thought we would just turn it over to Charlie this year. And then I would like to introduce one further person, and that's the person who put that movie together. You can't imagine the amount of work it is because, for example, on those scenes that we've used from the past, if they involved Hollywood stars or various people, we needed to get permission all over again to show it because we told them originally we would only show it within the confines of our auditorium here, and, of course, it went out on CNBC, and you just can't imagine how much effort, but also the great cooperation we got from all those Desperate Housewives and Jamie Lee Curtis. And with the Desperate Housewives, we had to get Disney's okay, and that was easy to get. But running down five Desperate Housewives, that one came in toward the end. But we... That—The job of putting this together has been handled by the same fellow that handles us, been doing these for years and years and years and years, and I just would appreciate it if you could just put the spotlight on Brett Underwood for just a minute. Okay. We put out some results for the first quarter this morning at 7:00 A.M. our time, and some few sharp-eyed analysts and press people already picked up one or two items from it, which I'm sure we'll get some questions on later. But if we could start out with slide number 1, which should be showing now. You'll see that in the first quarter, the way... We talk about operating earnings at Berkshire. We've explained that many times. This is why we think these figures that we give you are the most descriptive of what's really going on in the business and take out the wild swings in the market that otherwise just you know and that was reporting big earnings one quarter and big losses another quarter. We pay no attention to those at Berkshire, but you will see that we had a better-than-average quarter. Ajit Jain wants me to point out to everyone that you cannot take the insurance earnings of the first quarter and multiply by four. It just doesn't work that way in insurance, and while we insure storms around the world, the major storms, for example, that would affect our earnings would be probably number one would be something that went along the... That came in at the wrong place from our standpoint, and then just kept going up the East Coast, and that's our number one risk as we evaluate things. But we're in all kinds of risks. There can be an earthquake tomorrow. There can be an earthquake ten years from now, and there can—You know, we're in that sort of business, but the first quarter does hit the... Should be our best quarter. Certainly shouldn't be our worst quarter. The most likely quarter to be the worst quarter is the third quarter, but anything can happen in insurance. But fortunately, nothing much happened in insurance during the first quarter. So we had much improved earnings in insurance underwriting, and then our investment income was almost bound to... Well, it was almost certain to increase, and I said that in the annual report because yields are so much higher than they were last year, and we have a lot of fixed short-term investments that are very responsive to the changes in interest rates. So that figure is up substantially, and I can predict that that one will be up for the year. We've got more money to invest, as we'll get to in a minute, and that's fairly predictable. So that number will be up. When you get into the railroad, the railroad earnings were down modestly and, but we should, not immediately, but we should be earning somewhat more money than we are earning under present traffic conditions. And then traffic conditions can also hit the earnings, it's the potential earnings of the railroad. And if you want, every Wednesday you can get car loadings from the previous week, and I'll regard those a little deranged if you do get them, but I get them every week. They're available, and you'll see that car loadings have been running for the industry, have been running down modestly. And in the energy company, we had better earnings, but our earnings were distorted. Well, they were affected by conditions that I wrote about in the annual report, and we'll undoubtedly discuss more this morning. But off a low base of last year, they were up somewhat. And so you get down to the final figure, and $11.2 billion is quite an improvement from last year. But we would expect our earnings should go up modestly from year to year, because after all, we're, we're, we're retaining, like, $37 billion last year of earnings. So if we put $37 billion more, and you left it with us, we should do something that's satisfactory. And the goal of Berkshire, economic goal, is to increase the operating earnings and decrease the shares outstanding. It's that simple to describe. It's not quite so simple to pull off necessarily, but that, that's what we're attempting to do. And if we'll turn to slide two, please. I've got the history, and I just picked the pre-pandemic year of when we hit $24 billion, and then we fell off in the first year of the pandemic. Then, as you see, we've moved up from $27 billion to $30 billion- $37 billion. Interesting thing about these earnings is they're after depreciation and amortization and taxes and all that sort of thing. So you can figure that essentially, Berkshire has a little over $100 million per day, including weekends and holidays, coming in to deploy. We've said a lot many times that we're attempting to deploy that money, but we have that responsibility. Sometimes, if you'll turn to the next page, well, you'll see how that's built up the shareholders' equity. So that Berkshire had at March 31st, $574 billion, and through retaining earnings, and we've been retaining earnings ever since we took control of Berkshire Hathaway, except one day, as I remember, I think it was maybe 1968 or 1969. The directors declared a $10-cent a share dividend, and I think I must have been in the restroom or something at the time. So if you leave out that period of madness, we've been retaining—we've been saving your money, putting it to work. And sometimes we've done things that were big mistakes and... but never, we never get close to fatal mistakes, and every now and then, we do something that really works. As Charlie had pointed out in the past, you know, it's really—there's probably been 6-12, over 57 or 58 or whatever it would be, really important, big decisions, and there's been nothing close to fatal. So that continues to be the guideline, and we have accumulated $571 billion, and I couldn't help but look at who's second. And JPMorgan had $327 billion at year-end, and they're up to $338, I believe, at end of the quarter. But they pay significant dividends. They repurchase shares. They've got a business that earns better returns on equity, but they don't pull it, and they shouldn't. They don't pull it back exactly like we have. And it—this does show what can be done, really without any miracles, if you, if you save money, over time. And, we have a group of shareholders. We had a group of partners, originally, Charlie and I did, that wanted to save money, and, left their money with, like, in that film you just saw, you saw Eddie and Dorothy Davis. And, the Davis family, and the children, and the grandchildren, periodically did some other things with the money, but they also basically left it with us, and, and we were a savings vehicle, and, they were able to do—live very well. But they weren't trying to live like the kings and queens of earlier capitalism, and used to build the houses in New England and, you know, have a servant but standing behind everybody eating and all that sort of thing. So we've had very few, what I would call, "Look at me," type people that are attracted. There's nothing wrong with it, but they just go someplace else, and they are spending sort of unbelievable sums after a while, by the standards of the past. And our people, nobody... We've had nobody that's a miser or a hoarder or anything like that in our group. They live very well. But the math of compounding and a long, long runway have done wonders, and we will talk a little later. Right before lunch, we'll give an illustration of that, of what can be done with that sort of philosophy. So, our cash and Treasury bills were $182 billion at the quarter end, and I think it's a fair assumption that they brought probably about $200 billion at the end of this quarter. We'd love to spend it, but we won't spend it unless we think we're doing something that has very little risk and can make us a lot of money, and our stock is at a level where it's adds slightly to value when we buy in shares, but we would really buy it in a big way, except you can't buy it in a big way because people don't want to sell it in a big way. But under certain market conditions, we could deploy quite a bit of money in repurchases. And as you'll see on the final slide, we have bought in in the last five years. We can't buy it in like a great many other companies because it just doesn't trade that way. The volume isn't the same because we have investors, and the investors, the people in this room, really, they don't think about selling. They probably would hope many of you don't even check the price daily or weekly. You know, the people who check the price daily have not made the money that the people who've forgotten about it basically have over the years. And that's sort of the story of Berkshire. We'll try to increase operating earnings, and we will try to reduce shares when it makes sense to do so, and we will hope for an occasional big opportunity, and we're quite satisfied with the position we're in. So with that background, I think we'll turn it over to Becky Quick, and we will alternate questions between Becky and those of you in the audience. Becky, you wanna start with the first question? Sure. Thanks, Warren. Let's start, just given what you mentioned, there was some news that came out in the 10-Q this morning. It shows that Berkshire sold another 115 million shares of Apple in this last quarter. That's Berkshire's largest holding. And I think in that vein, we'll start with a question from Sherman Lam. He is a 27-year-old Berkshire Hathaway Class B shareholder from Malaysia, and he asks: "Last year, you mentioned Coca-Cola and American Express being Berkshire's two long-duration, partial ownership positions, and you spent some time talking about the virtues of both these wonderful businesses in your recent shareholder letter. I noticed that you have excluded Apple from this group of businesses. Have you or your investment manager's views of the economics of Apple's business or its attractiveness as an investment changed since Berkshire first invested in 2016? No, I would, the... But we have sold shares, and I would say that at the end of the year, I would think it extremely likely that Apple is the largest common stock holding we have. Now, one interesting thing is that Charlie and I looked at common stocks or marketable equities or the things that people love to look at as being businesses. And so when we, when we own a Dairy Queen or we own whatever it may be, we look at that as a business. And when we own Coca-Cola, or American Express or Apple, we look at that as a business. Now, we can buy really wonderful companies in the market. As businesses, we can't buy all of them, I mean, all of the, the shares. We can't buy 90% or 80% or anything like that. But when we look at Coca-Cola and American Express and Apple, we look at them as businesses. Now, there's differences in tax factors, there's difference in manager responsibility, a whole bunch of things, but in terms of deploying your money, we always look at every stock as a business, and we don't—we have no way, no attempt made to predict markets. We have no attempt made to pick stocks. I went through many, many years doing the wrong thing. I got interested in stocks very early, and I was fascinated by them, and, and it, I wasn't wasting my time 'cause I was reading every book possible and everything else. But finally, I picked up a copy of The Intelligent Investor in Lincoln, and there was a few sentences in there that said much more eloquently than I can say it, but if you look at stocks as a business and treat the market as something that doesn't tell you, isn't there to instruct you, but it's there to serve you, you'll do a lot better over time than if you try to take charts and listen to people talk about moving averages and look at the Fed pronouncements and all of that sort of thing. And so that made a lot of sense to me then, and the way I've been allowed to deploy it, Charlie and I talked about this, of course, constantly. It's changed over the years as the amount of capital we have and the kind of... It's changed and all of that, but the basic principle was laid out by Ben Graham in that book, which I picked up for a couple of dollars, and which basically said to me, "You've been wasting your time now, but maybe you can use what you've learned or been reading about and put it to better use." And then Charlie came along and told me how to put it to even better use, and that's sort of the story of why we own American Express, which is a wonderful business. We own Coca-Cola, which is a wonderful business, and we own Apple, which is an even better business. But and we will own, unless something really extraordinary happens, we will own Apple and American Express and Coca-Cola when Greg takes over this place. It's such a simple approach that it's almost deceptive. Most things, if you keep working harder and harder at it, you know, you learn a little more math or you learn a little more physics, but investments, you don't really have to do that. You really have to have your mind set properly. We will end up, unless something dramatically happens that really changes capital allocation, a strategy, and we will have Apple as our largest investment. But I don't mind at all, under current conditions, building the cash position. I think, when I look at the alternative of what's available in the equity markets, and I look at the composition of what's going on in the world, we find it quite attractive. One thing that may surprise you. Almost everybody I know pays a lot more attention to not paying taxes than I think they should. We don't mind paying taxes at Berkshire, and we are paying a 21% federal rate on the gains we're taking in Apple. And that rate was 35% not that long ago, and it's been 52% in the past when I've been operating. And the government owns. The federal government owns a part of the earnings of the business we make. They don't own the assets, but they own a percentage of the earnings, and they can change that percentage any year, and the percentage that they've decreed currently is 21%. I would say with the present fiscal policies, I think that something has to give, and I think that higher taxes are quite likely. If the government wants to take a greater share of your income or mine or Berkshire's, they can do it. They may decide that someday they don't want the fiscal deficit to be this large because that has some important consequences, and they may not want to decrease spending a lot, and they may decide they'll take a larger percentage of what we earn, and we'll pay it. We always hope at Berkshire to pay substantial federal income taxes. We think it's appropriate that a company, a country that's been as generous to our owners. It's been the place—I was lucky, Berkshire was lucky it was here, and if we send in a check like we did last year, we sent in over $5 billion to the US federal government, and if 800 other companies had done the same thing, no other person in the United States would have had to pay a dime of federal taxes or other income taxes. No Social Security taxes, no estate taxes, no, it's all been down the line. Now, that's, I would like to—I hope things develop well enough with Berkshire that we stay we're in the 800 club when... and maybe even move up a few notches. It doesn't bother me in the least to write that check, and I would really hope with all that America has done for all of you, it shouldn't bother you that we do it. And if I'm doing it at 21% this year, and we're doing it at a higher percentage later on, I don't think you'll actually mind the fact that we sold a little Apple this year. Okay, let's go to section one. Hi, Mr. Buffett. This is Matthew Lai from China, Hong Kong. I'm running my last listed company called FWD, FWD, and we are so grateful that to learn from you, and you really inspire us. My question is, besides the electrical car company, BYD, under what circumstances you will reinvest and reconsider to invest Hong Kong and China company? Thank you. Yeah. Well, our primary investments will always be in the United States. We do think it. Now, the companies we invest in, in the United States, American Express does business around the world, and no company hardly does business around the world like Coca-Cola. I mean, they're, they are the preferred soft drink, you know, in something maybe like 170 or 180 out of 200 countries. Those are rough approximations from a few years back, probably, but that degree of acceptance worldwide is, I think it's almost unmatched. I can't really think of any company that has it. American Express has a position in the credit card deal, which I think is extremely strong. Part of that was one of the directors that I introduced a few minutes ago, Ken Chenault. But it has strengthened dramatically over the last 20 years for a lot of reasons. So the BYD investment was a... And well, we made the commitment in Japan, which I did five years ago, and that was just overwhelmingly compelling. It was extraordinarily compelling, and we bought it as fast as we could, and we spent a year, and you know, we got a few percent of our assets in five very big companies, but that's the problem with being our size. But you won't find us making a lot of investments outside the United States, although we're participating through these other companies in the world economy. But I understand the United States rules, weaknesses, strengths, whatever it may be. I don't have the same feeling for economies generally out around the world. I don't pick up on other cultures extremely well, and the lucky thing is I don't have to because, you know, I don't live in some tiny little country that just doesn't have a big economy, but we have, I mean, an economy already that has, you know... After starting out with 0.5% of the world's population, has ended up with well over 20% of the world's output in an amazingly short period of time. So, we will be American-oriented. I mean, if we do something really big, it's extremely likely to be in the United States. Charlie, in all those years, there's only two times he's told me that, you know, "This one is really-"... would always go along with me and, you know, say, "Well," when I was suggesting something, he'd say, "Well, this is really not that great, but it's probably the best you'll come up with, so I'll go along with the idea." But Charlie twice has pounded the table with me and just said, you know, "Buy, buy, buy." And BYD was one of them, and Costco was the other. And we bought a certain amount of Costco, and we bought quite a bit of BYD. But looking back, he already was as aggressive, but I should have been more aggressive in Costco. It wasn't fatal that we weren't, but he was right, big time in both companies. And I'm aware of what goes on in most markets, but I think it's unlikely that we make any large commitments in almost any country you can name. Although, you know, we don't rule it out entirely, and I feel extremely good about our Japanese position, and we'll have that. I don't know how many years. Greg will be sitting with that at some point, and we couldn't be happier with that. But you really have to... We really have a different outlook in looking at... Well, we look at your money, which we couldn't bear to lose, and we feel that we, we're very less likely to make any truly major mistakes in the United States than in many other countries. Okay, Becky. This next question comes from Stanley Holmes, who is a Berkshire shareholder from Salt Lake City. He asks: In his 2024 annual letter to shareholders, Chairman Buffett noted the severe earnings disappointment experienced at Berkshire Hathaway Energy last year and expressed concern about earnings and asset values in the utility industry. Recognizing that investors are worried about climate change-related expenses and that new uncertainties cloud the regulatory environment, the chairman suggested that some jurisdictions may adopt the public power model. There are now signs that policymakers in Utah, stating, citing state sovereignty, may already be poised to move in that direction. The Utah legislature recently mandated the state's right to serve as sole purchaser of energy from an in-state power plant and under some circumstances, purchase the power plant before it can be retired. The state utility regulator will be legally bound to prioritize public purchases of power and facilities that could include assets owned by Berkshire Hathaway Energy's PacifiCorp utility, Rocky Mountain Power. Will Berkshire, through BHE, continue to invest resources in jurisdictions where corporate assets may be subject to confiscatory state policies and actions? And how is Berkshire Hathaway Energy working with officials in Utah to minimize potential corporate losses, if and when state control is asserted over its electrical utility sector? Yeah. I will let Greg join with me in the answer on this, but I would say our feeling is that Utah is actually very likely to treat us fairly, whether the action is in granting appropriate rates that give us the return we expected, generally expected in terms of our own properties, or if they decide for some reason to go to public power, I think they would compensate us fairly. In the 1930s, George Norris, a senator from Nebraska, just turned Nebraska into a public power state, and our experience in Iowa would indicate that free enterprise has its role and that we can run a privately owned utility company that will be more efficient for society than at least in most states, people can do with public power. But what has happened is that there's gonna be enormous amounts of money, enormous amounts of money spent on power. And we've been. We're. If you're going to do it with private owners, there's nobody better situated than Berkshire to satisfy the portion, but a large portion of the needs of the country, and we will do it at a rate of return that is not... You know, it's not designed to make us rich or anything like that. It's a sensible rate of return, but we won't do it if we think we're not gonna get any return. It'd be kind of crazy. And we've seen actions in a few states where some of the costs associated with climate change are not being regarded as costs that the utility shouldn't incur. Well, believe me, if it was publicly owned, they would have incurred it, too. But we will, we'll do what society tells us, and we have got the money, and we've got the knowledge to participate big in something that is enormously important for the country. But we're not going to. We're not gonna, we're not going to throw good money after bad and feel. I don't worry about. My understanding is, and Greg can elaborate on this now immediately, but I don't regard Utah as being unfriendly to the idea of utilities being treated fairly. Charlie? Charlie, I'm so used to. I had actually checked myself a couple of times already, but not. I'll slip, I'll slip again. That's a great honor, Warren. Yeah, well, Warren, you touched on it initially in your letter, relative to the challenges in the industry, and then you've just alluded to the significant investment that has to go into the energy indust ry, the utility sector, for many years to come. And I think if we start there, if I think of our different utilities, and we'll definitely come to Utah and PacifiCorp. But if you look at the underlying demand that is building in each of those utilities and the amount of dollars that are going to have to go in to meet that demand, it's absolutely incredible. So when you raised it in your letter, it's a really important issue. We have to have a regulatory compact that works between... If it's a public utility, it has to work in concert with the state, Utah being an example, or it ultimately becomes potentially a public power entity. So just to set the frame a little bit, if I think of Iowa, which you mentioned, and the underlying, we've made substantial investments there. It's been very consistent with both the public policy that the state and legislature wanted, and they enacted very specific laws to encourage that. But that utility is more than 100 years old right now. And if we look at the demand that's in place for MidAmerican Iowa, Iowa utility over the next, say, into the mid-2030s, associated with AI and the data centers, that demand doubles in that short period of time. That happened and it took 100 years plus to get where we are today, and now it's going to double. That will require substantial amounts of capital from MidAmerican and its shareholders. How that will function is if we have a proper regulatory compact in place, which you've highlighted. If we then go to, say, Nevada, where we own two utilities there and cover the lion's share in Nevada. If you go over a similar time frame, and you look at the underlying demand in that utility and say, go into the late 2030s, it triples the underlying demand, and billions and billions of dollars have to be put in. Our rate base will literally go from, it's not a modest level now, but you're talking, probably an incremental $6 billion-$10 billion at least of rate base going into that type of entity, which requires, again, alignment with the state and their policies and a proper recovery of our underlying both capital and a return on capital. So when we come to the wildfires, that's been a substantial challenge because it's the first time there's been a lot of discussion around one of our utilities. One experienced significant losses associated with the wildfires. What portion of those costs will be recovered? And that's really the dialogue we're in, and does that properly, properly work? When I think of the wildfires, where there's been many claims and a recent additional claim last week for $30 billion, and it's we don't take that lightly, but it is an incremental claim to an already existing lawsuit that's in place. When I think of PacifiCorp, we're in a place where, first and foremost, all the litigation will be challenged because the basis for it, at least we believe there's places where it's unfounded, and we'll continue to challenge it. It will take many years to be resolved, as Warren highlighted in the letter. But if you think of PacifiCorp, and the litigation there, number one, how we think and operate those assets have to change. We, we have worked with the states across all our states for many years, with the fundamental goal to be to keep the power on. And our, our teams and our employees worked incredibly hard to keep the power on day in, day out, through storms, unfortunately, through the 2020 fires. The instincts were not to turn off the power. The instinct was to keep the power on, to keep hospitals, fire stations responding and, it, it's not in their mind to, or at least culturally, it wasn't in our minds to de-energize. So the first thing we had to do was step back and say, "We've got to fundamentally change the culture, not just at PacifiCorp, but across all our utilities." The first thing we have to recognize is that there's now going to be situations where we prioritize de-energizing the assets, and that's completely different than how we've operated those assets, as I've highlighted, for 100+ years. So we start with the culture. We had to change that. The second thing is we've now changed our operating systems so that we can turn off the power very quickly if there's a fire that's encroaching. We will turn off our systems now, and we'll go. The minute the conditions are safe again, we'll re-energize it, but we've had to do that. And then the third thing is continuing to invest in a way that allows us to try to minimize the risk of the fire. But when you get back to Utah and PacifiCorp, the challenge we do have is within PacifiCorp, as we go through both litigation and through continuing to operate that entity, it generates a certain amount of capital and profits that will remain in that entity and being reinvested back into that business. But fundamentally, as we go forward, we need both legislative and regulatory reform across the PacifiCorp states if we're going to deploy incremental capital, make incremental contributions into that business. As Warren said, we don't want to throw good capital after bad capital. So we'll be very disciplined there. But the reality is, there are opportunities to both solve the legislative and regulatory solutions. And the best example we actually have, and I think it's the gold standard across the country, is Utah. So as Warren touched on, it's a state we're happy we're investing in. It is part of PacifiCorp, so there's a certain amount of balance there as to how we do it. But in the last legislative session that existed, Utah actually passed a bill that does a couple of very important things. One, it caps non-economic damages on wildfire claims. So if you go back to the wildfires we have in Oregon, and the claims you're hearing filed for, there's economic damages associated with them, and those harms should receive the economic damages associated with that. But unfortunately, and even though there's legislature and case law in Oregon that says wildfire non-economic damages should not be awarded, there's very substantial non-economic damages being awarded there. Utah took a very proactive position to say, "We will cap those non-economic damages," and it creates an environment. Again, it's back to that, is there an environment where you want to invest in? Yes. And then incrementally, they've created a very substantial fund. It's literally called the Wildfire Fund for fires in Utah, that will help facilitate both liquidity and the ability to resolve the situation. So Utah, we believe, including the legislation that a lot of other things came out of it, is the actual gold standard as we go forward. So very important issue for Berkshire Hathaway Energy, but at the same time, it is a PacifiCorp issue. The risk of regulatory compacts not being respected, a much broader one that we'll always evaluate and be careful how we deploy our capital, but both PacifiCorp will manage through it, and I see other very good and significant opportunities in PacifiCorp, I mean, in Berkshire Hathaway Energy. The return on equity investment, it's been promulgated and achieved over the years, has been, particularly in recent years, well below the return on equity that has been achieved by American industry generally. And so, whether you earn X or X + 0.5% or X - 0.5%, that differs by state, and some states are more attractive than others. But whether you earn X or go broke is not an equation that works. And, you know, we won't put our shareholders' money. They didn't give it to us to lose it all, and we might like it if it's better when it's X + 0.5% than X - 0.5%. But the electric utility industry will never be as good as, I mean, just remotely as good as, you know, the kind of businesses we own in other arenas. I mean, you look at the return on tangible equity at, at Coca-Cola or American Express or, and to really top it off, Apple. It, it's just, it's, you know, it, it's just a whole different game. But in utilities, the trade has been, and the, the, the compact has been that you get a modest return, and, climate change comes along, and it causes way more fires, that's just the cost of doing business. And it doesn't mean that we can't do things to mitigate, fires in the future, and you can make different policies on when you turn off the lights. But somebody's going to put up many, many hundreds of billions, maybe in the trillions, and climate change enters into that. It can be done through public power, or it can be done through private enterprise to quite a degree. We would certainly be good for $100 billion or more, but we're not going to throw good money after bad. Okay, let's do station four. Hi, I'm Joe, visiting from San Francisco. How do you think about the role of technological advances, especially generative AI, on more traditional industries? Thank you. Yeah. I made a mistake in calling on four, but I'll get back to two later on. I don't know anything about AI. But that doesn't mean I deny its existence or importance or anything of the sort. And last year, I said, you know, that we let a genie out of a bottle when we developed nuclear weapons, and that genie has been doing some terrible things lately. And the power of that genie, you know, scares the hell out of me. And other than that, I don't know any way to get the genie back in the bottle, and AI is somewhat similar. It's out, it's part way out of the bottle, and, and, it's enormously important, and it's gonna be done by somebody. So, we may wish we'd never seen that genie, or it may do wonderful things, and I'm certainly not the person that can evaluate that. And I probably wouldn't have been the person that could have evaluated it during World War II, whether we tested a 20,000-ton bomb that we felt was absolutely necessary for the, for the United States and would actually save lives in the long run. But where we also had Edward Teller, I think it was, it was on a parallel with Einstein in terms of saying, "You may, with this test, ignite the atmosphere in such a way that civilization doesn't continue." And we decided to let the genie out of the bottle, and it accomplished the immediate objective, but whether, whether it's going to change the future of society, we will find out later. Now, AI, I had one experience that does make me a little nervous, and I'll just explain it. That very, very recently, fairly recently, I, I saw a, an image in front of my eyes on the screen, and it was, it was me, and it was my voice, and wearing the kind of clothes I wear, and my wife or my daughter wouldn't have been able to detect any difference, and it was delivering a message that in no way came from me. So it—when you think of the potential for scamming people, if you can reproduce images that I can't even tell, that say, "I need money," you know, you know, "It's your daughter. I've just had a car crash. I need $50,000 wired." I mean, scamming has always been part of the American scene, but this would make me, if I was interested in investing in scamming, it's gonna be the growth industry of all time, and it's enabled in a way... Now, maybe, you know, obviously, AI has potential for good things, too, but I don't know how you-- Based on the one I saw recently, I practically would send it, send money to myself over in some crazy country. So, I don't have any advice on how the world handles it because I don't think we know how to handle what we did with the nuclear genie. But I do think, as someone who doesn't understand a damn thing about it, that it is, it has enormous potential for good and enormous potential for harm, and I just don't know how that plays out. I'd like to mention to Becky that Ajit will not be participating in the afternoon session. So if you could focus on any... If there are insurance questions you want to ask, that'd be a good one. Yeah. This next question is for both Warren and Ajit. It's from Ben Knoll, who's a Minneapolis shareholder, who's been a shareholder since 1995, and he says: "In an interview this past year, Todd Combs said that in first meeting you in 2010, he told you GEICO is better at marketing and branding, but Progressive is a data company, and data is going to win in the long run. But it appears you did not prioritize data analytics at GEICO until a decade later when you made Todd CEO. As business units like GEICO age and need new strategic direction, I wonder if Berkshire's hands-off management approach is a source of vulnerability. Will you please review your thinking on changes made at GEICO and explain how Berkshire is structured to react if the Berkshire CEO sees that a business unit is strategically off track? And Ajit, I hope you will continue to update us on yours and Todd's progress at remedying the data analytics shortcomings at GEICO. Ajit, would you like to? Yeah. As Warren has pointed out in the past, one of the, one of the drawbacks that GEICO is faced with, it hasn't been doing as good a job as matching rate with risk and segmenting and pricing the product based on the risk characteristics. This has been a disadvantage at GEICO for a, a few years now. We are trying to still play catch up. Technology is something that is unfortunately a bottleneck, but there again, we are making progress. And equally importantly, we have hired people who are much better than what they inherited in terms of data analytics and pricing and slicing data. So yes, I recognize we are still behind. We're taking steps to bridge the gap, and hopefully by, certainly by the end of 2025, we should be able to be along with the best of players when it comes to data analytics, whether it's pricing, whether it's claims, or any other factor that drives the economics of the insurance business. I would add that equating rate with risk obviously is important in every line of insurance business. I mean, that's what you're involved with, with this, deciding whether a given rate offers us the chance or the probability that we will make a little money on it, and that sometimes we're only risking losing a little, and sometimes we're risking losing huge amounts. But GEICO and Progressive has done a better job than in that recently. But our fundamental advantage at GEICO, of course, is that we have lower costs than virtually anybody, and that cost advantage has been dramatic. We've driven our underwriting expense ratio below 10%, and there's... Well, there's just very, very, very few companies that can compete with that. It isn't, it's not in the least a survival question, and it isn't even exactly a profitability thing, but, you know, we would rather have 10% of the market than a half of 10%. But we roughly, I think in the month of March, we were just, we didn't lose policyholders, and we got 16 million or whatever it is of them, and we've got the lowest cost operation. So it's not a threat. It's not remotely a threat to survival. It's not a threat to even profitability, but on the other hand, we would like to be growing with something that is the best model around in the insurance business of delivering at a low cost, and we now have a recognition that we didn't have back when Leo Goodwin started in 1936. But the same principle that worked then is that if you can offer somebody a good product cheaper than the other guy and everybody pretty has to buy it, and it's a big business, you know, it's very attractive to be in. And GEICO is a very attractive business and has got its lowest cost thing, and it does have to do a better job of matching rate to risk. But our low costs have masked the fact that for a while, we could do without progressing as much as we should have in the matching of rate to risk. And now, Todd has been working intensively at that, and he's made a lot of progress, but there's still work to be done. But in the meantime, we're not gonna shrink, and we should make better underwriting profits than most companies in the auto insurance business. Okay, I'm gonna back up and go to... I think I left station two out of it earlier, so do we have somebody there? Yeah. Good morning. My name is Sebastian Sartor. I'm from Munich, Germany. Berkshire Hathaway is very respected in this company in Germany. And my question is, who are your most trusted advisors today? Is it Ted and Todd? Is it Greg and Ajit? Is it your wife, your children, and what do you value about them? Thank you. Well, it depends whether they're advising me on money or on other things. I trust my children and my wife totally, but that doesn't mean I ask them what stocks to buy. In terms of managing money, there wasn't anybody better in the world to talk to for, you know, many, many decades than Charlie. And that doesn't mean I didn't talk to other people, but if I didn't think I could do it myself, I wouldn't have done it. I mean, so I, to some extent, talk to myself on investments. And I think my children have gotten a whole lot wiser over the years, and so I listen to them on a lot of things. I'll listen to my daughter on who to vote for locally, 'cause she knows a lot more about that than I do. And I'll listen to my wife on a lot of things, and I won't get into details. So it is important. If you don't live a life where you surround yourself and limit yourself to people you trust, it won't be much fun. I mean, I literally have been in the position ever since I was in my twenties of being able to have people I trusted around me, and I've made mistakes occasionally, but they filter out over time. You learn. And when I found Charlie, for example, in all kinds of matters, not just investment, you know, I knew I'd have somebody that... Well, I'll put it this way. Think, you can think about this. Charlie, in all the years we worked together, not only never once lied to me, ever, but he didn't even shape things so that he told half-lies or quarter lies to sort of stack the deck in the direction he wanted to go. He was. He absolutely considered it a total of utmost importance that he never lied. Now, that occasionally got him in trouble at dinner parties or something if he said to the woman, "I really prefer the way you used to do your hair or the way that somebody over across the room does it." I mean, he was... But in terms of having a partner, I simply cannot think of a conversation I ever had with Charlie that in the least he misled me or shaped it his way or anything of the sort. So when you get that in your life, you know, you cherish those people, and you sort of forget about the rest. Okay. Again? This question's for Ajit. It comes from Maher Baraka. Climate change seems to be impacting the insurance industry heavily, with major players pulling out of markets like California because of wildfire and flooding risks, combined with payouts increasing. How does Mr. Jain see this risk expanding to other regions, and how has the thesis on insurance investments changed because of it? Yeah. Climate change, climate risk is certainly a factor that has come into focus in a very, very big way more recently. Now, the one thing that mitigates the problem for us, especially in some of the reinsurance operations we are in, is our contractual liabilities are limited to a year in most cases. So as a result of which, at the end of a year, we get the opportunity to reprice, including the decision to get out of the business altogether if we don't like the pricing in the business. But the fact that we are making bets that tie us down to one year at a time certainly makes it possible for us to stay in the business longer term than we might have otherwise. Because of climate change, clearly prices need to go up. It is difficult to be very scientific about how much the prices need to go up. They need to go up a lot, and we keep increasing prices and hope we stay ahead of the curve, but that doesn't happen in all cases. The regulators don't make it any easier by tying our feet to the ground and making it difficult for us to withdraw from certain territories or to make dramatic changes in the pricing of certain products. As a result of which, a number of insurance carriers, including ourselves, have decided to not write business in certain states. I think the regulators are getting a little more realistic about the... and they are waking up to the fact that the insurance carriers need to make some kind of a return, a decent return, for us to keep deploying our capital. It's a constant battle back and forth. It's been against the capital providers these last few years, but I think we are coming back into balance. If you look at the results that have been recently announced by the insurance carriers, everyone's now making record profits. Obviously, that will not last, but certainly for the next several months, I think the insurance industry, in spite of climate change, in spite of increased risk of fires and flooding, it's going to be an okay place to be in. Yeah, climate change increases risks, and, you know, it, in the end, it makes our business bigger over time. It's, but not if we—if we misprice them, we'll also go broke. But, but we do it one year at a time, overwhelmingly, and, and I would say this: I would rather have Ajit assessing this than any thousand underwriters or insurance managers in the world. I mean, it, the factors aren't, you know—We'll take Atlantic hurricanes that, which would be our, probably our biggest risk. You know, the, it—there's no question that you can measure the temperature of the water in the Atlantic, and, and, you know what warm water does to hurricanes. But you don't know whether necessarily that's good or bad, because it may cause them to turn faster, you know? And it may change the path as well as the intensity and frequency of the losses. But we'll write it one year at a time, and we'll have Ajit underwriting it. And, you know, we don't have to tell you what's gonna happen 5 years from now or 10 years from now. And people who don't have sort of analytical insurance minds that comment on this subject really don't expand our knowledge. It's... We get a lot of letters from people that I'm sure have good IQs, but they don't really know. They don't understand the insurance business. And they're not wrong, I don't think, in my mind, about climate change. But, if there was no risk, there'd be no insurance business, and we're in the business of evaluating it, and we do it one year at a time. And there's some exceptions where you can't do it, where your decisions extend for a long time in the future, and we try to avoid those. But again, you don't need a thousand people analyzing water currents or anything. You need one very, very, very smart guy, and we've got him. Okay. Yeah. The only thing I'd add is that climate change, much like inflation, done right, can be a friend of the risk bearer. It has been for us. If you look at GEICO, it had 175,000 policies, roughly in 1950, and it was getting roughly $40 a car. So that was $7 million of volume. And, you know, now we have. We're getting over $2,000. Well, all the advances in technology and everything like that, if we'd been wedded to some formula, what we did with $40, we'd have had a terrible business. But in effect, by making the cars much safer, they've also made them much more expensive to repair, and a whole bunch of things have happened, including inflation. So now we have a $40 billion business from something that was $7 million back when I called on it. So if we'd operated in a non-inflationary world, GEICO would not be a $40 billion company. Okay, we're now finally coordinated to where station three, I believe. Hello. Hi, everyone. Hi, Warren. I'm Liam. I'm 27 from Newmarket, Ontario, Canada. I got invested in Berkshire, thanks to my dad, who brought me down to this meeting. I'm so excited to be here. Most 27-year-olds have idols who are rappers, but instead, my idols are Warren, Charlie, who we'll miss forever, and also your cousin Jimmy, who unfortunately had to go this year, too. It's been a tough year. As a Canadian, similar with Greg, I always wonder about our Canadian economy and what you think about the Canadian economy. We got some beat-down bank stocks right now, and I don't know what your opinions on are on these. And I also wonder, in your nineties, if the rumors are true and you're still able to eat McDonald's. I like fast food myself, but I always wonder, at 93, he's still able to eat those and enjoy the Coca-Cola. Thanks, Warren. Okay, well, we've got a Canadian here, so we'll let him answer the first part. And if you watch me, you'll see what I like to eat. I mean... Go to it, Greg. Okay. Yeah, well, we are fortunate to have a number of operations up in Canada. It goes across many of our operating entities, and then, as Warren touched on, all the businesses that we have a piece of that we're invested in are up in Canada. So the presence is significant. We're always looking at making incremental investments there because it's an environment we're very comfortable with. Warren touched on understanding the U.S. environment, business environment, and I would put Canada equally in that bucket that we understand it and would be comfortable. And I would say the economy moves very closely to the U.S. So the results we're seeing out of our various businesses that report both their U.S. and Canadian operations aren't drastically different. And there's a few that we're... On the energy side, for example, we make very substantial investments up there in Alberta. But again, it's very consistent with how that economy is growing, and I would see it being very consistent with what we see here.... Warren, anything to? Yeah, no, the Canadian one, it obviously there aren't as many big companies up there as there are in the United States. But when we get a—I got one from Canada just the other day that I sent over to Greg, too. That when we see anything that's suggesting an idea that's of a size that would interest here and meets other requirements, we don't have any hesitancy about putting big money in Canada. Just... And there are things we actually can do fairly well that or Canada could, you know, benefit from Berkshire's participation. We did it some years ago, not that many years ago, but there was a financial institution up there, and they had a problem, and they'd had, as I remember, 30-plus, you know, various other people that were kicking it around, and meanwhile, the place was getting close to the edge for not a fundamental problem. And Ted Weschler from our office went up there. I heard about it on a Monday or something, and Ted Weschler went up there, and we offered a solution in a couple of days to something that was getting close to the brink. So we do not feel uncomfortable in any way, shape, or form putting our money into Canada. In fact, we're actually looking at one thing now. But, you know, they still have to meet our standards in terms of what we get for our money, but they don't have a mental block. We don't have any mental blocks about that country. And of course, there's a lot of countries we don't understand at all. So Canada, it's terrific when you've got a major economy, not the size of the US, but a major economy that you absolutely feel confident about operating there. Okay, Becky? Warren, you just said that you'd rather have Ajit running risk assessment at the insurance operations than any other thousand insurance adjusters in the world. So I'd like to follow up with a question that came in from Mark Blakely in Tulsa, Oklahoma. He said: "Warren, for years, you have spoken about the incredible impact Ajit has had on Berkshire. You've often joked, if you and Ajit are in a sinking boat, and we can only save one of you, swim for-- swim to Ajit. While we often discuss plans for the next CEO of Berkshire, little is mentioned on who will one day replace Ajit. How should we think about the future of the Berkshire insurance operations, given how challenging it may be to find another Ajit?" And I'd like to hear Ajit's thoughts on this as well. Well, I would say we won't find another Ajit, but fortunately, he's a good bit younger than I am. So I hope you have to worry a little bit about me first before you start worrying about Ajit. You know, we won't find another Ajit, but we have an operation that he has created, and that at least part of it is there. There are certain parts of it that are almost impossible for competitors to imitate. And if I was in their shoes, I wouldn't try and imitate him. And so we've institutionalized some of our advantages, but Ajit is a... Well, his presence allowed us to do it, and he did it. But now we've created a structure that didn't exist when he came in 1986. Nothing close to it existed with us or with anybody else, and insurance is the most important business at Berkshire. Marketable securities are important, but they're not in the class exactly as our insurance business. And Ajit, we won't have the same business if Ajit isn't running it, but we'll have a very good business, and again, that's thanks to Ajit. You know, I'd been in the business when he came in 1986. You know, I'd first went to GEICO in 1950. We first bought National Indemnity in 1957, and it was something that we'd made quite a bit of money in the stocks of insurance companies. But we needed, we needed an Ajit, and fortunately, he came into the office on a Saturday, and he was tired of working at something where he really didn't... It, it w- it, it, it just didn't challenges his intellect, and I said, "Well, we got a lot of challenges, so you know, you know, nobody's perfect. So, so you've never seen an insurance policy or owned an insurance stock, but here are the keys," and that's worked out very well. ... Well, thank you very much, Warren. Wow! Thank you very much, everyone. But the fact of the matter is, nobody is irreplaceable, and we have Tim Cook here in the audience, I believe, who has proved that, and- Yeah has set an example for a lot of people who follow. That's a great observation. I don't, Now, having said that, I will also add that our board is conscious of the succession issue, not only at Warren's level, but also at my level. And every year, they have me sitting in front of them, answering questions and having me share my ideas with them in terms of what would happen to the operations if I get hit by a truck. We go through the various operations we have. I review with them a short list of people I think ought to be candidates for replacing me, and in addition to that, I go a step further and identify a particular individual as the person I would hand over the keys to if something were to happen to me. Obviously, that could subject to change, but we take this issue fairly seriously, and I think at the end of the day, as Tim Cook has proved to us, it'll be the biggest non-issue of the day. The Earth will still keep revolving around the axis. Okay, well, yeah, we know what we will do. We know it's a good answer, but we know it isn't. We won't have another Ajit. Station five. Hi, my name is Andrew Nicas, and I'm wondering, if you had one more day with Charlie, what would you do with him? Well, it's kind of interesting because in effect, I did have one more day. I mean, it wasn't a full day or anything, but... We alway s lived in a way where we were happy with what we were doing every day. I mean, Charlie liked learning. He liked, as I mentioned in the movie, he liked a wide variety of things, so he was much broader than I was. But I didn't have any great desire to be as broad as he was, and he didn't have any great desire to be as narrow as I. But we had a lot of fun doing anything. And, you know, we played golf together, we played tennis together. We did everything together. This you may find kind of interesting: we had as much fun, perhaps even more, to some extent, with things that failed because then we really had to work and work our way out of them. In a sense, there's more fun having somebody that's your partner in digging your way out of a foxhole than there is just sitting there and watching an idea that you got 10 years ago just continually produce more and more profit. It wasn't... You know, he really fooled me, though, on— He went to 99.9 years. I mean, if you pick two guys, you know, he never... He publicly said he never did a day of exercise except where it was required when he was in the army. So he never did a day of voluntary exercise. He never thought about what he ate. You know, we started every day, and Charlie had. He was interested in more things than I was, but we never had any doubts about the other person, period. And so if I'd had another day with him, we'd probably done the same thing we were doing the earlier days, but... And we wouldn't have wanted to know that we only had one day. That's. There's a great advantage in not knowing what day you're going to die. But and Charlie always said, you know, that "Just tell me where I'm going to die, so I'll never go there." The truth is, you know, he went everywhere with his mind, and therefore, he was not only interested in the world at 99, but the world was interested in him. It's remarkable. You know, I told him in the last few years, I'd never seen anybody that was peaking, you know, at 99, and where the world wanted to come and see him. I mean, they actually wanted to go out to 351 North June Street, and whether it was... Well, I could name a whole bunch of names, but just, I'll start with Elon Musk or, but go down the list, and they all wanted to meet Charlie, and Charlie was happy to talk with him, and I, the only person I could think of otherwise was the Dalai Lama. I don't know that they had a lot else in common, but it was he lived his life the way he wanted to, and he got to say what he wanted to say. He, like I, loved having a podium, and again, I can't remember any time that he was mad at me or I was mad at him. It just didn't happen. But, and calling him was fun back when long-distance rates were high, and, and we didn't talk as often as the years, in recent years, as we used to be on daily, for long periods. And, and we did keep learning, and we liked learning together. But, you know, we tended to be a little smarter because when, as the years went by, 'cause we had mistakes, and we had other things that, well, we learned something. And, and the fact that he and I were on the same wavelength in that respect meant that, that the world was still a very interesting place to us when he got to be 99, and I got to be 93. So I don't have a perfect answer for you there, but I can tell you the ingredients that would go into, sometimes people would say to me or Charlie at one of these meetings, "You know, if you'd only have lunch with one person that and lived over the last 2,000 or so years, you know, who would you want to have it with?" Charlie says, "I've already met all of them," you know, 'cause he read all the books. I mean, he eliminated all the trouble of going to restaurants to meet him or anything like that. He just went through a book, and he'd met Ben Franklin, and he really was remarkable. He said he really had no one else to meet because he'd read all their stuff, and he liked Ben Franklin's stuff better than he liked mine. But with Ben Franklin, he just had to read about it. He didn't have to go have lunch with him or anything of the sort. But it's an interesting question. What you should probably ask yourself is that, who do you feel that you'd wanna start spending the last day of your life with? And then figure out a way to start meeting them or tomorrow, and meet them as often as you can. 'Cause why wait until the last day? But don't bother with the others. Okay, Becky? This question comes from Carol De Gend in Switzerland in Europe, and this is for both Mr. Buffett and Mr. Jain. As political instability in the world is growing with the rise in the number of armed conflicts and trade tension, there is also increasing risk of cyberattacks. What are your views on cybersecurity insurance? Asking this question in general for retail, small businesses, and large companies, including critical key infrastructure such as power plants, harbors, airports, nuclear plants, et cetera. Do you see a potential for profit-making in cybersecurity insurances, and what are the key challenges? Okay, let me start. Cyber insurance has become a very fashionable product these days. Over these last few years, it is at least a $10 billion market right now globally, and profitability has also been fairly high. I think profitability is at least 20% of the total premium has ended up as profit in the pockets of the insurance bearers. Now, having said that, we at Berkshire tend to be very, very careful when it comes to taking on cyber insurance liabilities. Actually, for two reasons. One is, it's very difficult to know what is the quantum of losses that can be subject to a single occurrence. And the aggregation potential of cyber losses, especially if some cloud operation comes to a standstill, you know, that aggregation potential can be huge, and not being able to have a worst-case cap on it is what scares us. Secondly, it's also very difficult to have some sense of what the, what we call loss cost or the cost of goods sold could potentially be. It's not just for a single loss, but for losses across over time. They have been fairly well contained. Out of $100 cents of the dollar, the premium losses over the last four, five years, I think, have not been beyond $40 cents on the dollar, leaving a decent profit margin. But having said that, there's not enough data to be able to hang your hat on and say what your true loss cost is. So in our insurance operations, I have told the people running the operations I've discouraged them from writing cyber insurance. To the extent they need to write it so as to satisfy certain client needs, I have told them, "No matter how much you charge, you should tell yourself that each time you write a cyber insurance policy, you're losing money. We can argue about how much money you're losing, but the mindset should be, you're not making money on it, you're losing money, and then we should go from there." So it is, it's projected to be a huge business. My guess is at some point it might become a huge business, but it might be associated with huge losses, and our approach is to sort of stay away from it right now until we can have access to some meaningful data and hang our hat on data. Well, you've just made, you've just heard why Ajit is invaluable because that, when you insure something, you really want to think of what—how much can you lose? And the question... I remember the first time it happened, I think, in 1968, when there were the riots in various cities, because I think it was the Bobby Kennedy death that set it off or the Martin Luther King death. I'm not sure which one. But in any event, when you write a policy, you have a limit in that policy. But the question is, what is one event? So if somebody is assassinated in some town, and that causes losses at thousands of businesses all over the country, if you've written all those thousands of policies, do you have one event or do you have a thousand events? And there's no place where that kind of a dilemma enters into more than cyber. 'Cause if you think about it, you know, let's say you're writing $10 million of limit per risk, and you decide that's fine, and you're—if you lose $10 million, you know, for some event, you can take it. But the problem is, if that one event turns out to affect 1,000 policies, and somehow they're all linked together in some way, and the courts decide that way, you've written something that in no way we're getting the proper price for and could break the company. And I will tell you that most people want to be in anything that's fashionable when they write insurance, and cyber's an easy issue, and you can write a lot of it. And the agents like it. You know, they're getting a commission on every policy they write, and you've got to have somebody in charge of things that understands that you may get an aggregation of risk that you never dreamt of, and it may be worse than some earthquake happening someplace just because you have a whole bunch of policies with a $1 million limit. And I would say that human nature is such that most insurance companies will get very excited, and their agents will get very excited, and it's very fashionable, and it's kind of interesting. And as Charlie would say, "It may be rat poison." Okay, well, that's cheerful. We will go to station six. Good morning. This question is for Warren Buffett and Greg Abel. My name is Maria Prentiss. I am a retiree from Las Vegas, Nevada. I am here today as a member of CHISPA Nevada, a group developed by Latin leaders for environmental justice. I am also here representing many Latin families in Nevada who are struggling to pay their utility bills and want access to affordable, clean electricity. I want to ask today, why is NV Energy, which is owned by Berkshire Hathaway, building new gas plants instead of investing in solar energy with Nevada, one of the sunniest states in the country? Can I expect to see future leadership take dangerous investments in fossil fuels more seriously? Thank you. And thank you, Maria. Greg, you want to? Sure. Thank you. So as we touched on with NV Energy even earlier, there's a lot going on there. And when I think of, there's no question solar is a great opportunity for NV Energy, and we'll continue to utilize it as a resource and continue to invest in it, in that utility and the other utility we have in Nevada. We're also at a point where when you think of a transition that's going on within the energy sector, we are transitioning from carbon resources to renewable resources, as was noted, but it will not occur overnight. That transition will take many years, and as we use, be it renewable resources such as solar or wind, they are intermittent, and we do try to combine it with batteries, but it at this point in time, we cannot transition completely away from the carbon resources. So if I think of Nevada, in the next two years. Our last two coal units are, actually, in the next year, our last two coal units will retire, but we are replacing them with a new gas unit, which is truly needed to make sure that system remains reliable and available to our customers. And that's done in conjunction with our with the state representatives and our regulatory agencies to make sure we can serve those customers every day and every minute. We have great examples in Iowa, where at times, 100% of our energy comes from wind, and we're thrilled with that. And I believe we hit that, for example, on Earth Day. We had enough wind that we could meet the demand of that state. But the next day, if the wind's not blowing, we need our gas resources, our gas plants, to fill that gap. And really, that's the situation we still have in Nevada. So we'll continue the transition to renewable resources, be it solar in Nevada and wind in other areas, combined with batteries. But for the foreseeable future, we do see gas being a very important resource to help maintain reliability and meet our customer needs, and to meet it in an affordable way is also an important piece of that. Thank you for your comments. Yeah, and if we've got the capital to do whatever makes the most sense in a place like Nevada, I don't know, each state calls their ruling commission something different, but they probably call it the Public Service Commission or something like that. And they're making the decision as to what they think can and should be done, in terms of getting from where a vastly complicated utility business moves towards something different without messing things up in the meantime and, you know, having the lights go off. I think they would probably agree with you very much, Maria, that they, what they, where they want to get, but they can't, they can't do it tomorrow, you know, you know, because the intermittent problems, and their job is to make sure the lights stay on, and their job is also to move toward better sources. But solar will never be the only source of electricity because it... Well, Greg may know more about this, but barring some real breakthroughs in storage and that sort of thing. Right. Yeah. Yeah, generally, a battery right now, to do it in an economical way is a four-hour battery. And when you think of the time without the sun being available, that's a challenge. Now, there's a lot of technology advancements, and that's stretching out, and you throw dollars at a lot of things, you can accomplish things. But the reality is that's a careful balance of the reliability and also balancing, as it was noted, the rates do matter and how much customers are paying. So a delicate balance of both delivering reliability but doing it in an affordable way. Yeah. My friend Bill Gates said, "Well, he's working on shortening up that, or lengthening the time the battery works on." And so you've got some very smart people working on it, but it isn't something that you actually do overnight. And, and, I can understand why people want it done overnight, but it, it is going to take a lot of money. It's gonna take a lot of good ideas and smart people like Bill and Greg, not me. I don't, I don't understand why the damn lights go on when I even turn a switch. But those, those fellows really do know, and there's plenty of them working on it, and we got plenty of money to implement it. But there are, there are certain things that, that just take a certain amount of, time. My daughter hates it when I use this example, but it's really true that you can't create a baby in one month by getting nine women pregnant. I mean, You know, you may want a baby, but... So there are certain laws of nature that you have to work with. Mm-hmm. Okay, Becky. This question comes from Rich McCloskey in Dunedin, Florida. He says, "Warren and Ajit, would you let us know what you think about the car and property insurance situation in Florida? As a resident, both seem out of control. Since the Florida market seems to be so mismanaged, is this an opportunity for Berkshire? Yeah. The Florida market, both for auto insurance and for homeowners insurance, has had a few tough years. The two problems we face in Florida and all the risk bearers face in Florida, one is the lawyers and the amount of corruption that takes place in the Florida market is keeps skyrocketing, making it difficult for us to price price the product and make a profit. And secondly, the amount of activity in terms of storms, both the frequency and the severity, is also so severe that the losses in Florida tend to make it very difficult for a risk bearer to make money. Having said that, we've fortunately had a very good run at Florida last year. We increased our exposure in Florida, as we talked about last year, and fortunately, nothing bad happened. So a lot of our premiums that were in the top line flowed straight to the bottom line. Florida is a large market. Florida is a market that's subsidized by the rest of the country. I don't think that's gonna stand the test of time. The Florida market, the legislators are trying to improve it. They have passed law that is bringing down the amount of fraud that takes place in Florida, and I hope Florida will be a fairly buoyant insurance market. Because at the end of the day, they do believe in the free market more than some of the other states that have a insurance crisis, like California and New York. So yes, Florida has a problem. Prices will go up fairly substantially, but at the end of the day, I think we'll achieve a degree of balance so that the risk bearers can make a decent profit and will be deploying capital out there. Okay, station seven, please. Hi, Warren. My name is Christine Hoang- Garcia, and I'm from Agoura Hills, California. Thank you for being an excellent teacher and imparting your wisdom to us throughout the years. What advice would you like to share today that you believe everyone needs to hear? Well, too bad you didn't add, you added that what the rest of us would like to hear. I would say that, if, if I had one piece of advice, I would try to. Well, and you're lucky you live in this country because it, just to start with, because you've got opportunities here that wouldn't exist in much of the world. But I would like you to really sort of use Charlie's advice of thinking how you would like your obituary to read, and then start selecting the educational paths, the social paths, you know, the whatever may fit your particular situation in terms of associating. And perhaps, certainly in my day, it would have been marrying the person that would best help you do that. Well, Charlie would say you are offering some similar benefit to the partner. And, you know, the, the opportunity in this country is, you know, is, is basically limitless. That, when you think of going back not that many centuries, you know, if you were gonna be a shepherd or something like that, you know, 100 years from now, you're gonna, you know, your grandson was a granddaughter was gonna be a shepherd. I mean, nothing, nothing really happened. And what has happened in the last 200 years with the combination of the Industrial Revolution and... Whether, whether it's science or education or health or, you know, you name it, we are so lucky to be born when we were, the people in this room, and, and many of us were lucky enough to be born in the United States as well. That, you know, you, you've had the, you're entering the best world that's ever existed, and you wanna find the people to share it with and the activities to participate in that fit you. And if you get lucky, like Charlie and I did, you find things that interest you young. But if you don't find them right away, you keep looking. And I always tell the students to take the job you... That you, I mean, find the job that you want, would like to have if you didn't need a job. You sometimes can find that very early, and sometimes, sometimes you go through various experiences, but don't forget what you're trying, you actually are trying to do. There's no place to do it like this country. Find the person that you like to share your life with, in many cases. Then, and, you know, sometimes you get lucky and do that early, and, and sometimes you make mistakes. But, I would, I would try to run... In a very, very general way, I would try to figure out how you'd wanna look back on your life and think about yourself and, and, and start today to go on the path that leads to, to that goal, and expect, expect some, some, difficulties along the way. But if you're thinking that way, you're more likely to get there. Becky? This question comes from Axel Moerke in Hamburg, Germany. What has changed for Berkshire's operating CEOs since Greg Abel and Ajit Jain became vice chairman? For example, can and do the operating CEOs still reach out to Warren Buffett directly? Well, that's the answer might surprise you, but they overwhelmingly, the operating executives, well, they prefer to talk to Greg or to Ajit. That's understandable because I don't really do much, and I don't operate at the same level of efficiency that I would have 30 years ago or 40 years ago. I don't know the managers as well as I would have when we were smaller and when I could get more accomplished in a day than I can now. When you've got somebody like Greg and Ajit, you know, why settle for me? I mean, basically, so it's worked out extremely well. And I almost can't imagine anything working better because Greg in a year accomplishes... I mean, he sees more of them, understands more about their problems, you know, can give them suggestions. He's got incredible amounts of energy, and nobody has more wisdom than Ajit about insurance. And they've got access in the insurance to him. Now, they had it before we stuck some of those titles on in insurance, whereas with Greg, he much expanded things when he became the Vice Chairman in charge of really everything except insurance. So, he is. If you polled our managers that fall under his jurisdiction, which would be a lot of them, they would much prefer it, unless, like a few, they weren't paying as much attention to their business, and I wouldn't do anything about it, but Greg would. They still like it when he does it. He can deliver news very well to people who... You know, there'll be some people, if you have 20 children and you're very rich, you'll have some that will be go-getters anyway, and you'll have some that won't. We are a very, very rich company, and we haven't had a history of being very tough on people that coasted, and we've had some that would do that, and Greg will do something about it, and Charlie and I wouldn't have. Not because we didn't know it should be done, but because we were doing so well ourselves. It just wasn't. We didn't, we wouldn't make the effort. We didn't want to change our lives that way, plus, we slowed down in various ways, physically and everything. So, I would say that the number of calls I get from managers is essentially and awfully close to zero, and Greg is handling those. You know, I don't know quite how he does it, but we've got the right person, I can tell you that. And with Ajit, he does less physical moving, and the insurance people are more used to working with Ajit, obviously, over the years. So, I wouldn't say that changing the title really changed as much there because he was in charge of insurance anyway. So that's, you know, you can go to a business school and they can give you way better answers than I've just given you, but that's the way we do it at Berkshire. Has Ajit raised his hand? Yeah. I, if I can add a comment. From my perspective, the transition has worked out very, very well, but I think the credit really goes to how Warren has handled the situation. And what I mean by that is, after the transition was announced, and a lot of the operating managers used to be, they were used to calling Warren directly on some issue or the other. When they, after the transition, when they would continue to do so, Warren would very skillfully, in his, in his manner, handle them, such that he would not answer what they were looking for, but at the same time, made them feel good and told them that he sort of enjoyed hearing from them and talking to them. So as a result of which, you know, the transition took place, people got the message. They got the message, and were very responsive to it, and it's a non-issue as far as today is concerned. Ajit, I'd probably add... Yeah. Ajit, the only thing I would add is we do have an exceptional set of managers across both the, non-insurance and insurance, and yes, Warren made it incredibly easy, but so did they. It, it was a very easy transition 'cause they care deeply about Berkshire, they care deeply about the culture, and they very much wanted it to be a, a success, and we're fortunate to have, those managers in insurance and non-insurance. So thank you. Yeah, Would?... What Greg is talking about is, they really wanted more direction in, some cases than, I gave them. You know, I mean, it, I just sat there reading the Wall Street Journal or whatever, and, Greg is-- I don't... You know, one way or another, there are more than 24 hours in his day, you know? I just don't know how he covers the ground he does, but he knows more about the people. We got the same feeling in terms of judging the attractiveness of businesses and making capital decisions and that sort of thing. But he's willing to work. I mean, you know, I'm, and I couldn't get as much done anyway. You know, what I could do in a couple of hours, you know, may take eight hours now. It... I just don't read as fast and different things, but it, it's working very well, and this place, if anything happened to me, it would be working extremely well the next day. I don't get any phone calls. You could, you could actually- We can, we can rig something up, so we got some answering machine that people think I'm still around, you know, or something in terms of... So anyway, that's, that's much, much less than you'd learn in business school, but that's the way we do it at Berkshire. Okay, station eight. Dear Warren, Greg, and Ajit, thank you for having us. Your teachings have not only made us better investors, but more importantly, better people. Thank you for that. My name is Rajiv Agarwal, and I am from New Jersey. I run an India-focused fund called DoorDarshi India Fund. My question is related to India. Indian economy and Indian equities have done quite well in the last five, 10, 20 years. It is the 5th largest economy and will be the 3rd largest in the next few years. My question is: Is Berkshire actively looking for opportunities in the Indian equity market, and what will allow you to buy anything meaningful there? Thank you. Yeah, well, that's a very good question, and obviously, India, you know, I'm sure there are loads of opportunities in a place like India, and the question is, do we have any advantage in either insights into those businesses or contacts that will make possible some transaction that might where the parties in India would particularly want us to participate? I would say that that's something that a more energetic management at Berkshire could pursue, because we do have the reputation now. Berkshire is known, not like it's known in the United States, but it's known around the world, and you know, our Japanese experience has been fascinating in that respect. So there may be an unexplored or unattended to opportunity in that area. I'm not the one to do it, but that may be something that in the future it might be opportunities. There are opportunities. The question is, does Berkshire have some kind of advantage in actually pursuing those opportunities against, particularly against people that are using other people's money, that where they get paid based on on assets managed or something of sort? I mean, there are plenty of people in the game who are buying and running businesses that do not really have our philosophy. I mean, they're gonna get rich no matter what happens, and their payment may be based on how much they buy rather than what they buy. So we'll see how the next management plays the game out at Berkshire, and fortunately, you don't have too long to wait on that, generally. I feel fine, but I know a little bit about actuarial tables, and I just... Well, I would say this, that I shouldn't be taking on any four-year employment contracts like several people are doing in this world at an age where you can't be quite that sure of where you're going to be in four years. Okay. But you're dead right. You're absolutely right about you have, if you were energetic, had some way to become a buyer or a party that people particularly wanted to do business with. You know, Japan was great, and India could be great, but India and Japan aren't the same. I mean, I don't adapt myself terribly well to different cultures. And some people are really good at it, and almost anybody's better than I am, but I stumbled into one or two. But that could happen in an, you know, act two of Berkshire Hathaway. Becky? This is a question from Rafael del Pino from Spain. "Berkshire has grown tremendously, thanks to, and among other things, its architect, Mr. Munger, and you, its general contractor. We're all tremendously thankful to you for taking us along the way. We are aware that both of you and many others have spent an enormous amount of time ensuring Berkshire's culture provides a solid footing on which to grow the building. You also currently have a very talented bench of what we may label as subcontractors in Mr. Abel, Mr. Jain, Mr. Combs, and Mr. Weschler. However, for a long time, you've had the advantage that talented subcontractors have wanted to work with a once-in-a-generation architect and general contractor. How do you envision Berkshire will overcome the loss of said advantage when the contractor bench needs to be renewed again? What are potential renovation works in this great building that may necessitate a new architect? Yeah, well that's a great question, to which the-- Charlie and I obviously talked a lot about over time. And of course, we, we will not-- Berkshire, to the extent it remains the sort of entity that it is, will not need to attract people very often. It would be absolutely crazy for anybody, for our board of directors to ever pick anybody to run this business that thought you should retire at 65. It may be that they should retire the next day, you know, when you learn what they're really like managing something, or it may turn that you wanna keep them around till they, they really start being affected by old age, which hits different people at different times, but it hits everybody eventually. And so we-- it's very likely that if it's, if the directors... It's very tough because they will be acting against conventional wisdom, which is always difficult. But I think we've got the group on that, and they will not have to make a decision very often. If they pick the right CEO, that's 99% of the job of the directors. If they—the other 1% is, do you have a good method to correct it if you've made a wrong decision? And that's extremely hard to do in our present system. It's not impossible, but it's just not something that happens. It's too good a job to be a director to try and throw over somebody, particularly if you can use the money from directorships and you want to be on other boards and everything. We do not have a perfect system in terms of boards of directors at all, and it's—it doesn't operate at all. Well, I shouldn't say at all, but it doesn't operate as people may think it generally operates. So we will, you know. We've really got the problem solved for the next 20 years, unless something untoward happens. And if something untoward happens, then the directors need to find, probably within our own organization, somebody that they've got confidence in to maintain the special advantages we have over another 20 years period. It's—there are various things that are low probabilities, but you still have to think about them, and we are in that position now. Now, if you asked me whether if something happened to Greg today, everybody says, "Don't travel on the same plane." The thing to do is not travel in the same auto. Planes don't go down that often. Autos crash all the time. I've seen all these corporate policies on that, which are kinda crazy, when you think about the real risk. But in any event, Greg is going to have to tell the directors about what... If something happened tomorrow, he has to tell the directors about what should be done if anything happens to him, and, that's not an easy thing to do. And, I don't have... Well, it will be his decision, and then the directors really have to decide whether he's made the right one. But he will, he will make the right one. And what you really have to hope is that you get lucky on how long managers stick around. I mean, you might need three in a century, and you might need six or seven. But the answer is you need a little luck, and you need some break on the mortality tables. But we've got an entity that if you really aspire to be a certain kind of manager of a really large entity, there's nothing like it in the world. So, we've got something to offer the person who we want to have. You know, it's sort of like Charlie said about marrying the best person that will have you. Well, we have, we've got something that the right person would want to marry, you know, basically in terms of Berkshire. And if we get the wrong person, then the directors have to do something about it, and that probably won't happen, but it's always a contingency, or a possibility, I should say. Greg, having been put on the spot like that, you don't have to name anybody now, but, I'm sure the crowd would love it and make news. Well, the only thing I would add, Warren, is, and it's really how the comment started, was around culture. The culture we have at Berkshire, and that being our shareholders being our partners and our managers of our business having that ownership mentality, that's never gonna change, and that will attract the right managers at every level. So I think, as Warren said, we have a very special company in Berkshire, but it's that culture that makes it special, and that's not gonna change. Okay. Station nine. I'm never sure where nine is. Hi, I'm Sherman Lam, a Berkshire shareholder, and I work for a family office in Kuala Lumpur, Malaysia. Just really happy to see you, Warren, and the team. Where I come from, you're a hero, and both you and Charlie have positively transformed mine and many, many other Malaysians and Southeast Asians' lives, not only financially, but also in how we navigate our lives and relationships. Thank you very, very, very much. Well, thank you. Thank you. That makes us feel good. Question is, what have your team's greatest learnings been on business, capital allocation, stock picking, and portfolio allocation, throughout the COVID-19 pandemic period over the last five years? And Warren, I appreciate it if you can get your views as well as, your, you know, representations on Ted and Todd, as well as directly from Greg and Ajit, too, on their respective businesses. Thank you. Yeah. I don't think I want to give individual appraisals. But really what you're doing is, in terms of capital allocation, which is my job, I don't go out and sell insurance policies or anything of the sort. And you represent a group of shareholders like we do represent. We are totally clear on our mission, and, you know, it may be that other people don't agree with them, but I would say that in a great many places, I just don't agree with their mission. And I would say that, for example, anybody that wants to retire at 65 would be disqualified from being CEO of Berkshire. Then they might get retired the next day if they were the wrong person. But there's just certain things we don't want. And we're well fixed now, and that the odds are very good, but far from certainty, that that takes care of the next 20 years. Now, but you have to provide for the contingency and there are several people on the board that know what I would do on that, but it's up to Greg. But if Greg and I go at the same time, then you'll move into making another decision, and you know, there are a few people who know my thoughts on that. But they. The job of the directors is then to come up with the right CEO, and the right CEO can't make a terrible business great. Tom Murphy, who was the best. He was the best business manager I've ever known. And Tom Murphy, you know, he said, "The real key was buying the right business." And now Murph brought a million other attributes to it after that. But, you know, it— Charlie, you know, said we, you know... What was his? He had a saying on that, but basically we could have brought in Tom Murphy and told him his job was to run the textile business, and it would have done a little bit better, but it still would have failed. And one of the reasons I stuck with the textile business as long as I did was that I liked Ken Chase so much, and I thought he was a terrific guy, and he was a very good manager. If he'd been a jerk, you know, we'd have quit the textile business much faster, we'd have been better off. But so, so the answer was for him to get into the, in the TV business like Murph had done, and ad-supported, you know... Murph, Murph figured that out early, and he started with a pathetic operation, which was a VHF in Albany, New York, competing against GE and everything. And he was operating out of a home for retired nuns, and he only painted the side that faced the, faced the street. He had one car dashing around town, and he called it News Truck Number Six. But from that, he built an incredible company, and he built it because he was the best manager I've ever met. But beyond that, he was in a good business, and the key will be to find another Tom Murphy and then hand him a bunch of good businesses, and he or she will know what to do with it. Now, that's not as precise as you would get in most companies, but you really can't get more precise than that. I mean, you can have committees and management consultants and everybody, but it wasn't a management consultant that hired Tom Murphy. And I forget whether he was doing... His sales volume was a couple thousand a week at first, and then as soon as he hit, that was his goal, or he got to 2,000, he says, "Now my goal is 3,000." And he kept doing that, and he surpassed all these people like CBS and ABC that owned, had the world by the tail. And it was just a wonderful lesson in life to get just to be able to view something like that. I learned an awful lot from what he said to me, but I just learned by watching a somebody like him operate. I mean, it, it's, it's like watching a great golfer or a great- Mm. tennis player, and you, you ought to learn something about the kind of swing you're trying to develop or something of the sort. So that's not a great answer for you, but it's so far it's worked, and I think it works. I'm very sure it works with Greg, and it's up to people in the future when, you know, I'd, I'm underground or wherever they put me, to really make a decision every 20 years or something like that, on average. It's the right decision, but correct it if it turns out to be the wrong decision. That's what a board of directors is for, and and we've got the people on the board that really understand that responsibility. They take it seriously, but they don't take themselves too seriously. So therefore, they don't wanna, they don't necessarily wanna do a lot of things just to look busy. And they aren't using us as a stepping stone to get on other boards. But we've got people that really believe in what we're doing, and they're the ones that are going to have to make this place work. And if they got lucky on Greg's mortality, they'd, they can do just what Berkshire Hathaway does and go to sleep for 20 years or so, and then make another decision. And Berkshire has every tool in the world available to be what it is now and continue to be what it is now. I mean, we've gotten from $20 million of net worth to $570 billion, and, you know, we... There aren't as many things to do, but we can do a few big things better than anybody else can do, and there will be occasional times when we're the only one willing to act. And at those times, we wanna be sure that the US government thinks we're an asset to the situation and not a liability or a supplicant, you know, as the banks were, we'll say, in 2008 and 2009. They were all tarred with the same brush. But we wanna be sure that the brush that determines our future, you know, is not tarred. And I think we're in the... I don't think anybody's got a better position to do it than Berkshire. Becky? This question's from Johan Halen, who writes: "You're sitting on $168 billion of cash, which you told us today is now more than $182 billion. His questions are, one, what is Buffett waiting for? And two, why not at least deploy some of it? Well, I think that's pretty easy to answer. If I don't think anybody sitting at this table has any idea of how to use it effectively, and therefore, we don't use it, and we don't use it now at 5.4%, but we wouldn't use it if it was at 1%. Don't tell the Federal Reserve that, but we only swing at pitches we like. And if anybody tried to swing at every pitch, or felt that because they hadn't swung at a pitch for the last two pitches, they ought to swing at the third one or something like that, that it's just. It's there are times and obviously... But I would say this. I would not like to be running $10 billion now. $10 billion, I think we could. I think Charlie or I could earn high returns on because I think there are just a few things that happen on a very, very small scale. But if we had $10 billion, we wouldn't. I wouldn't basically see many more opportunities than we've found. Now, it's true that something like Japan, we could have done if the company had had $30 billion or $40 billion, and we'd have had great returns on equity. But if I saw one of those now, I'd do it for Berkshire. But you know, it isn't like I've got a hunger strike or something like that going on. It's just that they... Things aren't attractive, and, and there's, well, there are certain ways that can change, and we'll see whether they do. Okay, station ten. Mr. Buffett, this is an incredible meeting that you host every year. My name is Sean Cawley. I am a real estate agent with Berkshire Hathaway HomeServices in Arizona and California. My mother, Cindy, my brother, and my two sisters all sell real estate with Berkshire Hathaway HomeServices for many years. We love being a part of the Berkshire family, along with the 70,000 other agents that sell real estate for the company. Mr. Buffett, HomeServices of America recently settled our class action lawsuit regarding commissions for $250 million last week. This is this dollar amount is about $100 million more than Keller Williams, $166.5 million more than Anywhere Real Estate, which is Better Homes and Gardens and Coldwell Banker. As a realtor with Berkshire Hathaway HomeServices in multiple markets and a shareholder who's been coming to this meeting for 15 straight years, that's one of the reasons I got involved with real estate is because of this meeting. What are your thoughts on buying and selling a home in light of this recent settlement? And I'd maybe ask Greg and Ajit, too. Would you consider a Berkshire agent when buying your next home? Well, I don't buy them that often, as some people have noted. But, I certainly would consider them, but, I'd say the probability of that happening is low. But, and I really appreciate the fact you've joined up with us. But I'm gonna... Well, in terms of the settlement, I mean, Greg kept me informed, but he-- I turned it over 100% to him. So Greg, you want to talk about it? Sure. So thank you for, you and your family for being an agent, and working for our, for our company, Berkshire Hathaway HomeServices. I think there's a few questions in there. One, there's no question the industry will go through some transitions because of that settlement. Ours and the every other major player in the industry settled. The National Association of Realtors settled for more than $400 million. So, effectively, everybody was swept up in, in that, settlement, and it did set the grounds for the both HomeServices and for the industry to move forward. The. There's a lot of changes that happen in or are being proposed associated with that settlement. But the, the one thing that I, I think you hopefully would absolutely agree with, the, the real estate agent is still an important part of, of these transactions. It's the one time in our lives where we make these massive investments, and having that counsel and guidance is critical, and that's really what our business and those other businesses rely on. How the commission structures change and how it's negotiated, which is really what the settlement was, it was no longer that a buyer would automatically pay a commission agent to the selling agent. That now has to be negotiated. That'll impact things, but I think the realtors will continue to be a very important part of that, and I think HomeServices and the industry will remain very relevant. And then the only thing I would share with our shareholders on a broader basis is that obligation resides with HomeServices and can be met by HomeServices. That was an important condition because they were also pursuing Berkshire and Berkshire Hathaway Energy, and we said, "You can pursue us separately, but that settlement will reside with HomeServices and be an obligation of that." And they decided the ultimate settlement, and we'll go forward from there. So, Warren, any other comments? Well, yeah, I've sold two houses in the last, well, the last 93 and a fraction years. And I've bought one that I still have, but I obviously bought the other to it. And I have not negotiated down the commission, even though, well, the last one sold for $7 million or something like that. People do negotiate down commissions to some extent. But I can tell you, I've looked at the figures, and I think the system has really worked out very well. They had, you know, what they called FSBO, you know, with For Sale by Owner. So I've been involved to some degree in watching the whole system operate, and I know what our average agent makes. I know, you know, how long they work on things sometimes that don't materialize. I mean, I don't think we'll end up with a better system. But, you know, it's up to Greg and the people at HomeServices how we work it through here. But I like our agency group, and we've got a very large number of real estate agents, and I've encouraged the expansion we've done in the real estate agent real estate brokerage business. You know, it was just one or two operations when we bought Berkshire Hathaway Energy, and we, we've really built up quite a company. And I think it's a very fundamental business. You need help. 90% of the people need help, you know, in buying a home or selling one. And I've watched it operate all my life and been involved with lots of people who are into the business. And but there was a decision in court, and I told Greg to handle it whatever way he seemed best to him. And I'm quite... I'm perfectly happy with the way we've handled it. I think I'm surprised at the decision, but but it we get surprised in decisions in the insurance business lots of times. I mean, just think of the various things we've faced and, you know, when 9/11 came along, you know, we never thought something like that could happen, but it happened, and then we didn't know what was one event or more events. I mean, if they closed down the New York Stock Exchange and a bunch of brokers, well, all kinds of people lose their jobs and lose their income for a while. Is that one event or multiple events? Well, there's all kinds of things come up in business and we just play the ball wherever we find it, and I was surprised by the decision. Was it in Missouri that- Missouri, yes. Yeah. But we've gotten surprised by some other decisions, and we'll keep doing sensible things as we move forward. Greg, do you wanna... Yeah. No, I think the only thing I would add, back maybe to how the model has changed, and he asked, one, yes, we'll always, I can't speak for Ajit, but we'll always use home services agents. But, it's interesting, I have bought a home abroad 'cause I lived over in the United Kingdom, in Newcastle, running our, utility over there, and it is a completely different experience to buy a home outside of the U.S. Our agents take great responsibility for the whole transaction in the U.S. They put, as Warren said, time and capital, at risk to ensure the transaction closes. And when you do close it, they make sure what you bought, you actually—what you thought you were purchasing, you end up with. And, that's not the way it is always around the world. And there are more affordable models, but it's the old saying, "You get what you pay for." So I think our real estate agents still provide incredible value within our business, and as Warren touched on it, it'll survive. The form may be a little bit different, but there's no question it'll continue to thrive. Yeah. We still will wanna buy real estate brokerages at the right price. And I hope we're bigger in the industry 10 years from now and 20 years from now than we are currently. And I did sell a house for $7 million. I did not negotiate the 6% down, and I feel I got my money's worth and then some. And I'm cheap by nature, so it isn't I'm careless about it. I just... I got my money's worth. And so let's move on to Becky. This question is for Warren and Ajit. It's from Jeff Oyster. As a Berkshire and Tesla shareholder, I would like to hear your thoughts on the potential financial effects to GEICO, assuming Elon Musk delivers on his fully autonomous driving goal. On Tesla's most recent earnings call, Elon said, "If you've got, at scale, a statistically significant amount of data that shows conclusively that the autonomous car has, let's say, half the accident rate of a human-driven car, I think that's difficult to ano- ignore." Assuming Elon succeeds in reducing accidents by 50% versus human drivers, wouldn't auto insurance rates fall to reflect the reduced underwriting risk, thereby adversely impacting GEICO's revenues and float and perhaps margins, too? ... Well, yeah, if it—well, let's just take the extreme example. Let's say there are only gonna be three accidents in the United States next year for some crazy reason. That anything that reduces accidents is going to reduce cost, but that's been harder to do than people have done before. But obviously, if it really happens, the figures will show it, and our data will show it, and the prices will come down. I wouldn't—There have been a lot of people talk about doing that in the past. I mean, General Motors used to be very big in the insurance business, and when Uber first started, they used some firm, which now is... I think Ajit will confirm. They're close to bankruptcy now, aren't they, because of taking things out at the wrong prices? Mm-hmm. Is that true? Yep. Yep. Yep. Yeah. Yeah. Insurance always looks easier than it is, and it's so much fun because you get the money at the start, you know, and then you find out whether you've done something stupid later on. But and, you know, it's a very tempting business when somebody hands you money, and you hand them a little piece of paper. But, really knowing whether you're... I mean, if accidents get reduced 50%, it's gonna be good for society, and it's gonna be bad for insurance companies' volume. But, you know, good for society is what we're looking for. So far, this you might find kind of interesting. I mean, the number of people killed per 100 million passenger miles driven, I think it actually was in the... When I was young, it was, like, 15, but even post-World War II, it only fell to, like, seven or thereabouts. And Ralph Nader probably has done more for the American consumer than just about anybody in history because that seven or six has now come down to under two, and I don't think it would have come down that way without him. There have been some kind of fluke figures of what people did during the pandemic, which are quite interesting because they didn't drive immediately, they didn't drive as many miles, but they drove more dangerously, didn't they? Yep. Is that right, Ajit? Yep. Yeah, so the point I want to make in terms of Tesla and the fact that they feel that because of their technology, the number of accidents do come down, and that is certainly provable. But I think what needs to be factored in as well is, the repair cost of each one of these accidents has skyrocketed. So if you multiply the number of accidents times the cost of each accident, I'm not sure, that total number has come down as much as Tesla would like us to believe. Tesla has been toying with the idea of, writing insurance directly or indirectly, and so far, it hasn't really sort of been much of a success. Time will tell, but I think, you know, automation just shifts a lot of the expense from the operator to the equipment provider. Okay, we're getting close to noon, when we're going to break for lunch. I just want to tell everybody that I would appreciate it very much if they will get in their seats and be ready at 1:00 P.M. when we reconvene, because we will have another very short little movie, and we'll just have a little explanation of something that I think will be of interest, certainly of interest to me. But it... So I would like to. We will break promptly at 12:00 P.M., and I would like everybody to really make an attempt to be in their seat and quiet at 1:00 P.M. And if you can't do that, if you'll wait a few minutes and watch in the halls, all that. But we will. We do not want to be seating people and have people milling here at 1:00 P.M. And just like a play in New York or something, we'll it'll take a few minutes and only a few minutes to cover what we're going to at one o'clock. But we don't want to be seating people during that period. But now, now, let's we'll go on till twelve o'clock, and then we'll have a break until one o'clock, and we will go to station eleven. My name is Humphrey Liu, and I am from Charlottesville, Virginia. I asked a question last year and wish to pose it again. It can be considered a follow-up. There is something to be said for traditions. It is the same question, but it is a changing and different world we are in. Looking at global trends, it increasingly does seem that zero-emission vehicles may have finally reached the cusp of massive adoption. Do you see any opportunities in this space, either in specific vehicle manufacturers or in related technologies? As an addendum, I will note that Berkshire has very relevant interests in energy, Pilot Flying J, and BYD. Yeah. Thank you. Yeah. Well, I hope you're right, and massive adoption is, has been sort of a moving target so far, but I hope we get there. But Berkshire would not be. I don't think that we bring any special talent to that field. You've got vehicle manufacturers, and I would certainly not know how to pick the winners in an industry like that, but I'll be delighted if there are some winners. But don't count on us foreseeing who the winners will be, and don't count on us for predicting when something will happen. It obviously has been a moving target so far, and it is an incredible problem that society faces, and it may be that governments are not very good at solving it for a while. It's all of climate change is, it's got a terrible problem just in the fact that, you know, in the fact that the United States particularly has been the one that's caused the problem the most, and then we're asking poorer societies to say, "Well, you've got to change the way you live because we lived the way we did." And, you know, that really hasn't been settled yet. It... You know, it, it's a fascinating problem to me, but I don't have anything to add to how you really slice through the world. When I was born in 1930, there were just essentially 2 billion people in the world, population statistic. Now there's 8 billion. Now, if you'd asked anybody in 1930, if you take the 50 smartest people in the world, and you said, "What's the optimum population for the world?" When you're 93 years old, they would have not said 8 billion. There wouldn't be anybody who would have been close to it, but we did it. Now, we're reaping some of the consequences of having done that. And we got the benefits in the United States. I'm exaggerating here to some extent, but the developed world basically got it, and then we're telling a whole bunch of other people that we want them to change the way they live because of the way they lived—we lived the way they lived. So we will see what happens with it, but that's a problem that is very, very, very hard to solve among a couple hundred countries, and I really don't have anything to contribute on it. And now I've got instructions from the thing there, the monitor in front of me. I would like to introduce one person here that has... You all know because she's been here so many times, but my friend Carol Loomis, who is now—Well, she's gonna be 95 on June 25th. You can send presents care of our office. And Carol has edited the Berkshire annual report since 1977. There we are, and there are two points I'd like to mention. Every year, I give Carol a little item for a bracelet that is a replica of the front page of the report that year, and they're different colors and all of that sort of thing. And so she now has what? Since 1977, what? 47 of them, but she, I think she's put 10 on each one, but I've always wondered, you know, if she'd put them all on one arm, whether one arm would now be four or five inches longer than the other. But I'm sure she foresaw that. But I wanna reveal one other- Yeah. I wanna reveal one... Well, I wanna ask one more question while Carol was here because I'm sure almost everybody in this audience grew up like I did knowing that Ty Cobb's lifetime batting average was 367. I mean, he's the leader among everyone. And it may be that that record is never broken, and Ty Cobb 367's immortal. But Carol has a distinction that probably most of you don't know, but she dated Ty Cobb. And Carol was officed at Sixth Avenue and Fiftieth Street in the Time-Life Building, and NBC was right across the street in Rockefeller Center. The quiz shows became the hit of TV, and Carol, being the kind of person she is, walked across the street at lunchtime and went on the quiz show of the late 1950s, and they gave her the questions regarding baseball, and Carol answered them all correctly. Of course, she was encyclopedic on all kinds of things, but so she knew all the answers. She proceeded, and she was single at the time, and she proceeded back to her office at Fortune, and at some point she got a phone call from, sounded like a fairly young man in Georgia, and he said, "My uncle is Ty Cobb, and he would like to take you to lunch at 21." And so Carol went to lunch with Ty Cobb at 21, and, and I think he subsequently had one more lunch, and then she decided to call it off. But those of you who follow baseball may have noticed that in the 1990s, they found that the statistics had been faulty when Ty Cobb played, and that he actually only batted.366, that there were a couple of at-bats they didn't count. So the real question I wanna know with, from Carol, and I think she should maybe tell us, is that would she have dated Ty Cobb if she—I mean, I know she wouldn't have... I know she wouldn't have dated Ty Cobb if his batting average had been.300 or something like that. But where was the cutoff point at which she would have told Ty Cobb to stay in Atlanta and forget about coming up to New York? If anybody has a microphone, Carol would care to express herself on that question. It's the unanswered question that I've had, and all inquiring minds have had, and only she knows the answer. And she's with her daughter. She married a wonderful guy, John Lewis, and Barbara's with her. I'm sure Barbara's been always wanting to ask this question, but it's kind of tough when you're in the family, but I am sort of a non-obnoxious guy who will do it in front of a lot of people. Carol? Zero. Or, are we gonna have Barbara's guess? So either one will. She would have been happy to go either way, right? Yeah. She would have gone. So thank you. Carol. Carol is the best business writer. She comes from a town of Cole Camp, Missouri. You know, I don't know about how big it is, around 1,000 probably. She never took an accounting course, and she ended up becoming the best business writer in the United States. And, You know, she didn't wanna be an editor, actually. I mean, she could have done other things at Fortune, but she just plain liked writing business stories. And like I say, nobody came close to her, and she started from scratch. But in 1977, I asked her to edit my report, and she turned out to be just as good an editor as she was a writer, and all the way through this year, including this year, Carol has edited the Berkshire Report. And, to the extent that anybody enjoys reading them, let's give a hand to Carol. Okay, and I've been told to show a video right before you go to lunch because it's only 30-some seconds, and then we'll talk a little bit about, more about it when we come. So if we'll, dim the lights, we will, we will have... We've shown what a Berkshire shareholder, did, when she sold us $1 billion worth of stock the other day, and you'll meet somebody that I hope is... I know she is the prototype. She may have more zeros, but she's the prototype of a good many Berkshire Hathaway shareholders, and it'll be the first thing we talk about when we come back. But some of you may have noticed, whatever it was, a few weeks back, when Ruth Gottesman gave $1 billion to Albert Einstein to take care of all the... And Ruth doesn't like a lot of attention drawn to herself, but here's how they felt... at Albert Einstein when they announced that Ruth, Ruth Gottesman had just made a decision to take care of, of all the, all of the costs of education at Albert Einstein, and it's gonna be in perpetuity. So let's just show the film. I'm happy to share with you that starting in August this year, the Albert Einstein College of Medicine will be tuition-free. That's why Charlie and I have had such fun running Berkshire. She transferred $1 billion to other people. She happened to do it with Berkshire stock, and, and, you know, they offered to name, rename the school after her and everything like that, but she said, "Albert Einstein, that's a, that's a pretty good name to start with." Yeah, yeah. There's no ego involved in it. No, nothing. She just decided that, that she'd rather have 100 plus, closer to 150 eventually, of students be able to start out debt-free and, and, proceed in life. And she did it happily, and she did it without somebody asking, you know, "Name it," you know, "Put my name on four, all four sides in neon lights." And I salute her. Let's all have lunch, and we'll come back and talk a little bit more about that. Thanks. Welcome back to CNBC special coverage of the Berkshire Hathaway shareholder meeting. I'm Mike Santoli, live in Omaha, Nebraska. After taking questions for almost three hours, Warren Buffett has called a lunch break, promising to be back on stage in one hour. We have a big hour for you right here. Becky Quick is heading back over to join us, and we will also speak live with Berkshire board member Ron Olson, Hummer Winblad co-founder and managing partner, Ann Winblad, Benjamin Moore Chief Dan Calkins, and Graham Holdings CEO, Tim O'Shaughnessy. You'll also hear from other Berkshire managers and a special guest, Warren Buffett's sister, Bertie. In the morning session, Buffett, along with vice chairs Greg Abel and Ajit Jain, covered lots and lots of topics, from the rationale for the company's recent sale of Apple shares, to how high the cash pile at Berkshire will likely rise, to the need for more analytics at GEICO, and Warren's two cents on AI thrown in there as well. He also admitted that he's starting to slow down just a touch. He said, quote, "He doesn't get any phone calls anymore, and maybe it is not the time for him to take on any four-year employment contracts or other agreements." Let's start with Apple and what sounded like a rationale for why Berkshire sold a chunk of its shares: taxes. Buffett said selling shares this year, Berkshire paid a rate of 21% on the capital gains. He sounded as if he expects taxes are gonna go up because the government, of course, is not going to stop spending, but will need more money to tackle rising deficits. One thing that may surprise you. Almost everybody I know pays a lot more attention to not paying taxes than I think they should. We don't mind paying taxes at Berkshire, and we are paying a 21% federal rate on the gains we're taking in Apple. And that rate was 35% not that long ago, and it's been 52% in the past when I've been operating. And the government owns... The federal government owns a part of the earnings of the business we make. They don't own the assets, but they own a percentage of the earnings. And they can change that percentage any year, and the percentage that they've decreed currently is 21%. I would say with the present fiscal policies, I think that something has to give, and I think that higher taxes are quite likely. If the government wants to take a greater share of your income or mine or Berkshire's, they can do it. ... And just to put some numbers on that Apple sale, it was about 13% of Berkshire's holdings, something like a hundred and twenty million shares, 115 million shares. So the gain, the total proceeds, let's call it $20 billion, would've paid, you know, $5 billion-ish in 21% tax rate on that. So it seemed as if he was kind of softening perhaps the reasoning behind the Apple sale, saying there was no real fundamental change in his view of the company. He said he fully expects it to continue to be Berkshire's largest holding. He also said he didn't mind building some cash right here, and of course, there is a lot of it that had piled up, about $183 billion total at the end of the first quarter. He basically projected that it would likely get to $200 billion or so by the end of the current quarter. That's probably just, you know, as cash comes in, and he's not redeploying it very quickly, and they're earning obviously very handsome yields on that, 5%-ish. That's what I actually thought one of the strangest things was. He said that he did this because he didn't mind building up the- Yeah ... the cash hoard at this point because of the environment that's taking place, I guess, the economic environment, the stock outlook. I mean, I tried to pull a little more out of him later with another question, and he didn't bite on it, but: What are you gonna do with all that cash? Why do you need all that cash? He says he can't find good places to put it, and that makes you wonder if he thinks the entire market's overvalued. Yeah, that's the obvious inference. Although, I guess you have to think of it as, what would he put new money into that gets over that hurdle of 5% T-bills? 5.4%, yeah. And also maybe that is big enough for him to feel as if it's interesting or material to the company. Although he also said that he'd keep it in those T-bills, even if it was 1%. That is true. Don't tell the Federal Reserve. Yeah. But, you know, the hurdle is, yeah, you gotta get more than 5% that you can earn in Treasuries in a very safe environment. But I still don't have a great sense of whether he thinks the market is just overvalued or whether it's hard to do things when you're that big and you have that much cash. Yeah, he clearly doesn't mind to have the financial cushion building up. Mm-hmm. He has never minded that. I also feel as if... And he doesn't pay attention to just exactly where the stock is trading or anything- Yeah ... but it's not as if the market is penalizing Berkshire Hathaway for having $200 billion in cash. Right. Right. I mean, it's got a... You know, it's trading at a good premium to book value. The value seems to be recognized at the underlying businesses. There's nothing really impelling him to do much more. The other piece on the Apple side of it is, you know, the American Express and Coca-Cola holdings are all profit. Yeah. It's all on-paper gain. Yeah. You could, if you were selling something 'cause you think taxes are going up- You have a big tax bill. ... you'd only sell something you think you might eventually sell- Right ... and pay higher taxes on. Right. Which, you know, Apple, again, the position got very big, and the stock was up 40%+ last year. Just looking at the market, again, we'll try and get something else out of this, 'cause the shareholders don't mind to have a big cushion of cash. It's great if you can be opportunistic if there are bad things coming- Sure ... or opportunities that pop up down the road. But there are a lot of questions about dividends, too, and I think we'll- Sure ... get into that in the second part of things. It's a question that we get every single year here: "Why don't you pay a dividend? I'm retired. I don't love having to sell my shares to do some of these things. Yeah. Is there the possibility for either a regular dividend or a special dividend at some point down the road? Yeah, it's definitely a question that's gonna get louder. Obviously, people are looking toward whatever policies might change. Of course, so much of the conversation is what happens after Warren is no longer- Yeah ... in the role. And in fact, you know, I'm sure interested in your impressions of several times he's sort of gesturing toward, he's kind of slowing down a little bit. Yeah. You know, the managers seem to call Greg and Ajit more than they do him directly. Although I thought Ajit's answer was brilliant- Yeah ... in that he said, yeah, it's because Warren would talk to them and say nice things to them, but he wouldn't let them basically do a run around- Right ... which I can think of a lot of managers- That is totally true. ... that would be good news for. But he also said, "I'm no longer as efficient as I used to be. Yeah, yeah. When he had the question about, you know, investments potentially in India, he said, "I'm sure there's great things to do there. Maybe a more energetic management would find them. Yeah. So he's being self-deprecating, of course. Yeah, yeah. But I do think that that's something that is building in the conversation. Yeah. Okay, Berkshire's insurance portfolio took up a lot of the time in the morning session, and Ajit Jain, Berkshire's vice chair of insurance operations, did spend some time addressing one of GEICO's issues. That would be data analytics. This has been a disadvantage at GEICO for a few years now. We are trying to still play catch-up. Technology is something that is unfortunately a bottleneck, but there again, we are making progress. And equally importantly, we have hired people who are much better than what they inherited in terms of data analytics and pricing and slicing data. So yes, I recognize we're still behind. We're taking steps to bridge the gap, and hopefully by the, certainly by the end of 2025, we should be able to be along with the best of players when it comes to data analytics. Hi, guys. Right now, we want to bring in Berkshire Hathaway board member, Ron Olson. He is seated with us right now and ready to take some questions coming straight out of this. Ron, look, this was a pretty Berkshire-intense series of questions that shareholders sent in, just really getting to the heart of how Berkshire operates, and I think, in a post-Charlie world and eventually post-Warren, I think there were very pointed questions that came from shareholders on those questions. You're on the board. You discuss this all the time. What were you thinking? I was thinking how smart our shareholders are. Yeah. The questions were right on. I mean, these are the questions I guess I would say that the board has asked and want to ask, and they've sharpened our... Every year, the commitment of these shareholders, their ownership, adds to the value of the company, and I thought that's what came out of today's discussion. Warren and Greg and Ajit's answers have been sensational. Do we miss Charlie? Absolutely. You know, nobody's gonna have quips like that first, like the movie review. But the substance was, I think, better than ever. It was just great. Just actually, we haven't mentioned it here yet, just about the way that Warren kind of characterized this as the company that Charlie designed, he being the architect. First of all, incredibly generous- Yeah ... for somebody in Warren's position to- Yeah Essentially give that kind of credit. But I guess it also suggests, because of all the questions are about, what are you gonna do to make sure this place stays the same as it is? It shows you that, it's not like there's any big problems or challenges that the next person seems to have instead of except for preserving it. Well, I think, yes, stay the same as it is in the fundamental culture. Structure, yeah. But he also has underscored that Greg, Ajit, the next group of leaders of this company are going to be their own people, and they're going to make judgments that they have been empowered to make. And will they be different than Warren and Charlie? Perhaps. But they will all, in the end, have a base of the fundamental culture, that this is a company owned by people who have an ownership interest. It's a company that wants to be around forever, and we want to have the opportunity to take advantage of the special advantages we have, such as $180 billion of cash. I could go on and on about the culture, but these, Ajit, Greg, they own the culture as much as Warren has. Hey, Ron, one of the advantages that Berkshire has is the ability to move very quickly in times of opportunity, times of uncertainty, market displacements. And that's in large part because Warren Buffett has been able to make decisions the average CEO would not be able to make. He can choose to spend $30 billion and check with the board kind of as an afterthought. Will Greg have that ability to move so quickly in times of chaos or in times of opportunity? The board is as much aware of what Warren's ability to move quickly has made, how it's made the company unique and better. We're not going to slow that down. Decision-making. And let me say about Greg, I recently had an opportunity to work very closely with him in the very disappointing Pilot dispute that we had. This is a person who is strategic, who has the ability to make quick and solid judgments, and the board wants him to make those. You know, the unique deference the board's had to Warren is special, no doubt. And will there be changes? I don't know. You know, we will take it a step at a time. But getting in the way of quick decision? Uh-uh. And, you know, from my perspective, we want quick lawyering. We had that last deal with Alleghany put together in 10 days, and- Yeah ... that's the way Berkshire operates. It's not complicated- Yeah ... it's simple. You mentioned, you know, the deference that the board does pay to Warren. Implicitly, the investors, the shareholders, defer to Warren on capital allocation, and we were talking about the dividend situation. And of course, he's always said, "You know, we're gonna create more returns, more wealth, by me allocating that capital internally than just distributing it out as cash." Do you think that will be the case? Well- ... under the next regime? Let me say this, I think it's been the case, and I think it's been the right way to go because, frankly, as a shareholder, I'm a lot richer from that, in effect, forced savings. Going forward, will there be an opportunity to deploy the capital in a way that will continue? That'll be a judgment that Greg will make. Mm. Will there be the possibility of dividends? I don't think anybody, you know, ruled that out. Sure. Frankly, I learned something today. I had forgotten that there was one dividend payment made early on. The $0.10. Yeah. When Warren said he went to the bathroom. Right. Right. He wouldn't have made it today, I guarantee you. Yeah. You know, I think we will have opportunity, but as Warren and Charlie have demonstrated, patience is an incredible asset, and they have had it, and I think Greg will have it. He's not gonna go out and willy-nilly throw that money. Very quickly, Ron, the biggest issue probably facing Berkshire at this point, outside of any of those, is the legal liabilities associated with Berkshire Hathaway Energy. You're a lawyer, you know this stuff inside out, the legal liabilities that exist with that, and Warren really pointed it back to PacifiCorp, and what might happen in a state like California or Oregon, with regulatory overreach, potentially, or oversight and legislative changes. What are you doing on that front? Well, it's a very real risk... there are multiple causes for the great losses that are being experienced in the fires in the West, and elsewhere around the world. And there's no way, under the current system, of allocating those damages basically 100% to the utilities, that that can survive. These are issues that have to be recognized by the regulators, or there will not be investor-owned utilities, and I think that is something that I was pleased to hear a little bit more about Utah today- Yeah ... how they've recognized it. You know, the United States government recognized it when nuclear power first came into being- Mm-hmm ... and they created a special insurance for excess losses. Will that be done nationally or, perhaps state by state? You know, that's yet to be determined, but I hope we have leaders, government leaders, who recognize this is a serious issue if we want to keep the power, dependability, reliability that I think the private, investor-owned entities have had. And frankly, as Warren said, I believe, investor-owned utilities can be more efficient than government-owned utilities. But somebody's gonna have to carry it, and it can't, for long, be just the utilities. Ron Olson, Berkshire board member. Thank you, Ron. Thank you. Great to see you. Great to see you. In his 2024 annual letter, Warren Buffett described his younger sister, Birdie, as his perfect mental model when he is writing these letters. She's the reader that he pictures when he's writing to shareholders. I got a chance to sit down and speak with Birdie Buffett Elliott right here in Omaha about her big brother. He's been with me my whole life, and still is. There are not many of us in our generation left now, so that even makes it more special. But even without that, you know, he's the one that has always been there, and in a way, he's my big brother, and he's protected me or always helped me if I need it, and he's... for length of time, you know, my biggest ever, and still is, emotional support. Warren pointed out in the annual letter that you are a really smart, savvy investor, that you're somebody who reads many newspapers every day. You have an opinion about financial issues. But you're also somebody who is a very smart investor in her own right, that you've... Something like 45 years ago, you kind of decided to take all of the other things that you were trading, and what happened? You put everything into Berkshire, for the most part. Well, I figured out that Warren was better at it than I was. That was easy. I mean, it sounds so simple, but it... You know, that's just what happened. And I thought, "This is ridiculous," you know, he is so good. And it was a little... The hardest thing for me, and I think it's hard for a lot of investors, is that Berkshire Hathaway doesn't pay dividends, and I was in a place in my life where I wanted some dividends, you know? And Warren said, "Well, you just sell stock," you know. It's like, "Sell stock? You don't... No, can't sell principal," you know, whatever. I didn't say that to him, you know, 'cause I just listen and do what he tells me to do. So anyway, but once I got over that hump and realized, "Well, that's wonderful," I... You know, I can decide when I declare a dividend. I can declare one for myself, you know, in essence, by selling some stock. And, you know, that didn't stop me from doing it, but I had to get used to that emotionally, but I did pretty fast. And he said then you made that change, and then you did nothing, like the patience. Right, and there were a lot of times along the way, because I had a brokerage account, and people, you know, who were brokers or this or that, or who wanted money to start something or whatever, you know, approached me about that. But luckily, I didn't even have to think about it much. I mean, I knew I was all in with Warren, and still am, and all the way. So you and Warren have always had this wonderful relationship. He says you all have never had a fight, but he does say that there are some competitive streaks. Oh, yes, yes. What comes to mind when you think about competitive games or issues with- Well- -with Warren? Well, when we played Monopoly, I was really little, of course, and he was a little bit older. But, I, I remember this so distinctly, but I was so happy because I had this money, and I was saving up the money in little piles in front of me. But as I noticed, as the game went on, I was landing on more and more properties and then they had houses and hotels. Pretty soon, all my money was gone, and I realized too late that it was a better strategy to buy property than hoard the money. But my joke with him about that is, and we laugh about it, 'cause it, it is actually a joke, but that I trained him to be a winner. Because since he was winning all the time playing against me, that he owes his great success to the fact that I trained him to win. He loved it so much, he just kept going. That's a joke. It's good work, Birdie. Thank you so much for taking the time to talk with us. Yeah, well, it's a pleasure. And I just want to say one thing, 'cause many people ask me about Warren, you know, when they find out about him and stuff, and to me, he's always been my big brother. He's my big brother. You know, I know he's this tycoon and stuff, and I sort of know that in my head, but that has nothing to do with my reality. He's my big brother, and he's always been a wonderful big brother, and I love him, and I feel so lucky that he's my big brother. ... Again, that was Birdie just talking a little bit yesterday. She's his younger sister, she's 90 years old, and she went back and talked about how he's always they were always very competitive. She lost nearly every single time, but she's got another great story that maybe we'll talk about later or on the podcast, where she finally beat him in bridge- Oh, in bridge. A few years ago, back in the 1990s. Not just a few years ago, but back in the 1990s. And she has a very funny story about how he handled that. We'll try and get into that at some point, too. But she's the type of investor he thinks of because she moved everything 45 years ago or so into Berkshire and sat and has done nothing since. And it's that patience that you hear preached about again and again here, the willingness to do nothing and sit with what makes most investors uncomfortable and uneasy. Sure. to not be moving and not be running around. It saves you money from the tax perspective rather than jumping in and out of stocks, and that patience has been what's paid off, certainly for long-term shareholders. The fact that that's the ideal reader he has in mind when he writes his letters. Yeah ... explains why he's mostly just using that to reinforce- Yeah the message that people presumably have absorbed over the years. So I'm gonna guess maybe Buffett doesn't like to lose, Warren? I mean- Yeah. Is that gonna be the- He did not. -the punchline? He didn't behave very well. Yeah. You're right. Okay. Excellent. Well, the Monopoly stuff was great, too. Yeah. Well, we are now joined by noted tech investor, Ann Winblad. She's the co-founder of Hummer Winblad Venture Partners. Good to see you, Ann. Good to see you, too. So, you know, we were, I guess, just remarking, the morning seemed to go nice and smoothly. Warren seemed to be on his game. What were your impressions? The energy was really high in the room and in an event where you thought it might start out softer, but Warren was on his game for sure. He again was asked about AI and basically said, "I'm not really—don't really know how it works. Not an expert. Seems like it might have some dangers. Maybe it's gonna foster a new golden age of scamming," I guess. He was introduced to an AI version of himself. How are you thinking about it, though, in just in terms of the way the investment flows have been so massive, but mostly on the hardware side, at least initially, and how are you thinking about exploiting it? Well, the investments have been pretty high on the software side as well. Yeah. I mean, we have at least three to four large platform vendors that on their earnings calls, with the exception of Apple, talked about AI quite substantially, and how this wave is really important to their future products and their future customers. So we really are seeing that as part of the digital economy. This conference is. This meeting is interesting because it sort of ignores the digital economy, with the exception of Apple, which is presented to everybody as a consumer brand. That's why you're such a unique character, Ann. You've been coming to this meeting for a very long time. You're a VC investor. You look at growth stocks. You are interested in what's happening in the lands of technology, and yet you're here in this value investing bubble, and, I just wonder, having a foot in each camp, what you take out of this weekend and what you kinda think from the valley perspective at the same time? Well, I'm originally from the Midwest, born and raised in Minnesota, so I am a Midwesterner, so at my heart, I probably am a value investor. The message to take away here is that we're all playing the long game, and that's really important to consider right now in technology. When you get to Silicon Valley, you get excited about the short game. What do we do today, tomorrow? What's right in front of me? Warren talked about a couple things where the deal flow he has is enormous, and he mostly says, "No." We're in the business of saying no as well. Our job is to audition the future, and at the same time, our job is to build products that serve customers, and many of our US customers and global customers are right here at this conference. It really gives you a feel of the customer to be here, as well as this concept that is more than a concept, it's really a core strategy that we're all playing a long game. So your job, you feel like, is to say no most of the time, too. I think that's interesting, 'cause a lot of people look at what's happening in Silicon Valley and they say, "Oh, it's just buying a bunch of lottery tickets and figuring one of them will hit." You sound like you do things very differently. I think true venture capitalists really are in the long game. They really are looking for technology change. They can sit on the sidelines and not do deals. They build investors in their funds who really understand that we're really looking to build substantial companies, not to flip companies or sell them, but we're really there to build value and long-term value, and we're really part of an industry. We're a focused investor. We are only software, although software is almost a $600 billion industry in the U.S. alone, about half the size of our largest industry, banking. So it... There's a lot going on at all times, but very few choices that will turn into large companies. If the, I don't know, couple dozen companies that are represented here as Berkshire subsidiaries, if they were each a public company, and most of them could be, they would all have an AI strategy, or they would be talking about an AI strategy, or talking about how they're gonna basically be able to take advantage of it. How are you viewing that in terms of the application? Because when I said before that it's mostly on the hardware side, you know, Amazon, Microsoft, Meta- Yeah ... Google, they are absolutely more software players, but they're building data centers and they're acquiring a lot of hardware to do what they want to do. Yeah, this wave of technology, AI, is more capital intensive than the cloud, which was more capital intensive than software before it. True. So it seems that each wave is requiring more integration into hardware and semiconductor technology, NVIDIA being the benefactor first here. But it really is the software that makes it magic, and the software and the chips, and the software and the data center, and the software and those platforms. Back to what these companies are doing, and what's interesting, the discussion of GEICO just catching up on the analytics wave. It's going to be very, very challenging for companies that are behind on the previous waves to catch up here, 'cause this wave eclipses data analytics. It's not AI, it's generative AI. So we really do see fast-moving innovation here, which is an opportunity for those who can be extremely agile, have technical skills embedded in their company, really know how to integrate this into value for their company, whether it's productivity gains or new products, will end up ahead of the game. I think we're gonna actually hear what Warren had to say about AI when he was asked about it. ... If I was interested in investing in scamming, it's gonna be the growth industry of all time, and it's enabled in a way, now maybe, you know, obviously, AI has potential for good things, too. But I don't know how you... Based on the one I saw recently, I practically would send it, send money to myself over in some crazy country. I do think, as someone who doesn't understand a damn thing about it, that it is, it has enormous potential for good and enormous potential for harm, and I just don't know how that plays out. So, clearly, that's the case. Yeah. Enormous potential for good and harm. Do you feel as if there's any kind of consensus gathering about how we might manage the risks here? I think, I think that's starting to gather. It's, it's really not gonna be through regulation, 'cause that's too slow, and this is moving way too fast. But I do think we'll see more industry coherence, in this case, on this particular wave of technology, of how to limit the bad actors. 'Cause this is a powerful tool for good, as Warren said, and bad actors have caught on to digital technology some time ago, and the better tools we provide ourselves, the better tools we provide the bad actors. Even if you can control it and have industry consensus within the United States and maybe even some of the Western countries, it's a different story when you know places like China are digging into this, and maybe they have a different viewpoint of some of those things, or some of the bad actors- Yeah ... to be able to pick up on that. How do you stay ahead of it? You can't. Yeah. So this is why we also invest in security companies. So what happens in the investment strategy here is you see the p latforms first. You then see probably a couple application companies emerge, like Salesforce did in the cloud. But around it, we build the picks and shovels of security. Those are great investment opportunities for us, and we really start getting ahead of it, even at the coding level, what's embedded as companies are coding. These are the first set of companies that are being invested in, that help the software that's being developed not have malicious stuff embedded in it. But that's the only way to do it, is to use innovation to combat innovation. Anne, great to see you. Thanks a lot. Thank you. We were here on the floor of the convention hall yesterday, and it wasn't just Warren Buffett who was touring through the booths of the Berkshire companies on shareholder shopping day. We caught up not only with Warren, but also with the actor and shareholder, Bill Murray, who had a surprise role in an annual Berkshire Hathaway tradition. Every year, when March Madness comes around, we have... Everybody at Berkshire can enter a tournament to pick out, fill out their bracket. Right. The winner this year got $250,000. But it's limited to people that are on our payroll on our March 1st of the year. But this year, I invited two more people to participate in this affair, and today, I wanna report the results that Uh-oh. Oh, we got the results. We got the results. Yeah, we got the results. Here we go. Let's go to the scorecard. Yeah, open that up and hold your jersey. Hold your jersey. Let's look at the scorecard. We go to the scorecard, and there were approximately 64,000 employees at Berkshire that entered the contest, and the winner got $250,000. My name's not on it. ... Becky, I am happy to report, she finished 29,488. Wow! Wow. So she was slightly above average. Wow! But Mr. Murray, who has a son that is dynamite at UConn, and knows basketball, and all that sort of thing, but he came in 54,390. Wow! Wow. Ah. Geez. So, ah- Wait, how many- Not only was- How far did you come? I came in about where Becky was. No, he beat you both. Oh, okay. Well, I didn't wanna be beaten by a girl, right? I knew I wouldn't be beaten by Murray. They went on to talk a little bit about it. He was referencing Bill Murray's son- Yes ... Luke Murray, who's the assistant coach at UConn, which has now won the national title two years running. Yeah. They went back and forth about that, but Warren had some very nice things to say about Luke Murray. I mean, I hope Bill at least picked UConn to win- He did ... even though he didn't do well otherwise. He- No, he, he explained it. He actually had his bracket folded up- Oh, really? ... in his pocket. He's been carrying it around. It was completely creased. He explained that the reason he did so poorly is he basically didn't put in any team he didn't like. So it was the teams- Yeah ... he wanted to win, not the ones he thought would win. Yeah. But he did pick UConn. So UConn got the path to the final, but everything else- Yeah, everything else kind of went by the wayside. ... he was doing with his heart. Yeah. Yeah. Well, I have a brother who's a UConn alum, who was very thrilled with... Yeah ... with all that and with Luke Murray. All right, if you've watched the Berkshire meeting before, our next guest may be a familiar face. She's been attending this meeting since she was seven years old and asked a question here when she was just eight. Why specifically have you invested in Burlington Northern instead of buying a capital-efficient company like American Express? You're killing me, Daphne! I'm certainly glad she's not nine years old. Yeah. She's taken the mic a few times since then. CNBC producer Katie Kramer is live on the showroom floor with Daphne and her dad. Katie? ... Thanks, Mike. Yes, Daphne Kalir-Starr is here. She has been a Berkshire Hathaway shareholder for more than half of her life at this point. Daphne, tell me about your plan this morning. What time did you get here in line today? Well, we got here later than usual. Our goal is usually around, like, 12:30 P.M., but we slept in. We got here at 3:00 P.M. AM? Yeah. It was a mad dash. I think we camped out. The doors opened at seven. It was, like, four, three and a half hours. It was intense. What happens when the doors open? You went straight to a mic position. Yeah, it's a stampede. I left my backpack with my dad, and I sprinted to get seats, and then I saw the mic directly above me, and I was like, "Okay, this is it. How'd you do this year in the lottery? Where's your position? You know, I got, I got fifth speaker, and so doesn't look like it's gonna happen this year. But you not only asked a question when you were 7 years old, 8 years old, in 2018, but you've asked how many times? four? four. I've been really lucky. What's your process about how to come up with a great question? Well, I don't know about great, but I usually sift through current events. My first year, I'd had a question beforehand because I had read The Snowball, and then my dad gave me some investing lessons. But every year since, I've tried to do something topical. So this year I wanted to do something about the national debt, because it's become a really big issue now, so. Do you help Daphne at all writing the questions? I don't help in the writing. At the end, when she's done, like, she's written it out, I invite her, if she wants, to, like, to practice it once before she actually does it. 'Cause she's got... We discovered, she learned the first year that, like, there's an echo with the mic, and so it's just helpful for her to have- It really threw me off, the echo. Yeah. It's helpful for her to have practiced it once if she knows she's gonna say it, so that's, that's my role. Yeah, you're a really scary audience, too. You're, like, your hands are crossed and everything. So it's a tough job to be a shareholder. It's a tough job to do something, to do something like this when you're so young. But you're gonna come back next year, right? Uh- You'll be out there in line again? I really hope so. Yeah. Awesome. Great. Well, guys, Daphne, thank you so much, Daphne and Erez. We're at the Squishmallows booth here, which has been the other crazy line in addition to the shareholder line outside this morning. But lots of stuff to do here on the floor during lunchtime, and we'll cross our fingers for Daphne. She's at position number five- Thank you ... for mic three. We'll, maybe we'll see you next year, though. Yeah. Thank you. Thanks, guys. I'll send it back to you. Katie, thank you, and you can tell Daphne not to worry. I have seen a lot of other questions that kind of came into that same, idea. She's not the only one who's thought that this is a really rich area- Yeah ... just, the US debt and deficit. So you might get that question asked, whether or not she gets to be the one who reads it. Again, it's amazing to see Daphne here after so many years, and to be that lucky, 'cause it's not easy to get a position at the mic. No. Well, he was here at 3:00 A.M. instead of 12:30. Yeah. So that might be why. Well, the other thing I'll say is, there was a guy who, the very first question I asked was written by a shareholder who later made his way to one of the microphones and asked it, and that's the first time I've ever seen somebody- Incredible, huh? ... able to get two questions in at once. I was like, "What?" When I, when I heard the guy say his name, I'm like, "I know that name. Crack the code. Yeah. All right, joining us right now is Tim O'Shaughnessy. He's the CEO of Graham Holdings, whose operations include educational services, television broadcasting, auto dealerships, and hospitality companies. And Tim, it's great to see you today. Wonderful to be here. I know you've been coming for over a decade. I think it's even longer than that. It's been a very long time that you've been a regular visitor here. And you're somebody who is thinking of Graham Holdings as... You're trying to model it as a baby Berkshire. You like to find interesting companies that maybe other people haven't found yet. I know you take all kinds of trips to off the beaten path places to find those companies. What did you hear today, as somebody who's been here for a long time and as somebody who is trying to take that same sort of investing approach? Well, I thought there was a lot of focus on cash and the importance of making sure that the cash balance at Berkshire continues to be strong. I thought that being part of the reason for selling down some of Apple- Yeah ... was pretty fascinating. 21% tax rate versus 35% working into that. And when you look at the opportunities from the equity markets and what else is happening in the world, wanting to be more comfortable with the cash balance, I mean, that was something that stuck in pretty hard when it's already at $180 billion and- Yeah ... going to $200 billion. Yeah. You know, that's not necessarily where you would think to start. We were having a conversation about that right at the beginning of this half hour or whatever we're doing, this hour right now. To me, I thought, "Holy cow, does he see a really big potential problem coming, where he can be opportunistic, or does he think stocks are overvalued here?" I was kind of running through those scenarios in my head. What were you thinking? Those are the same scenarios that were going through my head. Yeah. It really seemed like there was an emphasis on, "You know, it's not really attractive right now, and there's a lot going on in the world that could be kind of problematic, and the opportunities set could change in a hurry, and I want to have a lot of cash to do it. A perennial theme, of course, of his remarks and before that, of Charlie's remarks, is sort of like knowing where your competence lies and staying within it. And multiple times, he sort of lets things go by and says whole parts of the world maybe are not a place where Berkshire has a particular advantage. Talked about India in particular, why Japan was an exception to that, why China maybe isn't a place that's that fruitful right now. But just more broadly, in terms of that idea of, like, having some kind of a narrow expertise and then, you know, kind of parlaying that into what comes next, how does that apply to what you do in your various verticals? Yeah, it's... You know, Warren has this idea of a too hard box, and- Mm-hmm ... and that's one that I, that I steal as well. There's a lot of things that just don't make any sense, and, and, you know, there are many people much smarter than, than the people, like me that work at Graham Holdings, and so we put a lot in the too hard box. But you know, you look at Warren's framework of, you know, insurance is narrow as a vertical, but you have to understand a lot about the world. and that building up that framework that can exist, so when you do see something that comes across, and it makes sense because it goes into your preexisting framework. You know, one of our businesses is the largest producer of fire-retardant wood in the United States. Of what wood? fire-retardant wood. Okay. It's called Hoover Treated Wood Products. It's one of those companies that's off the beaten path that you never would have thought of. But it's really important societally, and you kind of realize, well, the world isn't going to want buildings to be more combustible in the future. So that wasn't a real hard one to figure out if you could understand the business dynamics pretty well. All right, tell us about another big fat pitch, something that you felt was really in your field of expertise. Yeah, well, it's... You know, we've really gone and built some large businesses in in-home healthcare. And once again, you really had to think about, well, what does society want? Hospitals want to have post-acute care occur at home. People would rather recover at home. Yeah. Payers would rather have, you know, lower cost treatments happen at home. So if you think about those, what are those societal trends, and then how can you go build off of it? So, so we have a company at this point in time that is all about providing in-home healthcare services, whether it's with nurses, physicians, assistants, et cetera. And that's the type of thing that you can see, well, that trend probably isn't going to change, and you don't have to be you know, you don't have to be a genius to figure out that that's something that the world is going to want more of ten years from now than today. What's the company, and do you own it outright? Yeah, so we have—it's called Graham Healthcare Group, and it's in home health, hospitality, infusion services, actually, even things like in-home Botox, esthetician services. And there's a lot of things people will be willing to do at home at this point in time. Yeah. At this point, I mean, the big opportunities are usually also, though, not a secret, right? Yeah. So everyone knows kind of the demographics and, you know, even the employment trends. You look at the jobs report, every single time, it's, you know, healthcare, a big, a big hiring area. So how do you kind of, I guess, play an advantage, or maybe it's just scale? Well, I think it's thinking a little bit about the things that aren't going to change as well. You know, healthcare is 17%-18% of US GDP. It's probably going to remain that for a while, and so really just kind of figuring out where are the niches that you can understand within those big sectors is something that I think can be pretty important overall. Tim O'Shaughnessy. Tim, thank you for being with us again. Yeah, it's good to be with you. ... from Graham Holdings. Great to see you. Right here on the convention center floor, shareholders can shop from all of these Berkshire businesses that are here, that have set up camp. We've shown you a lot of booths over the last couple of days, and at the start of the morning's Q&A session, Buffett mentioned some pretty eye-popping numbers. See's Candies brought along a record 6 tons of candy. I mean, that's what he said, but I'm pretty sure the See's CEO said it was even more candy than that. I think they got those numbers wrong. I think it's quite a bit more than that, that they brought along. They do expect to sell out. The bookstore, by the way, the bookstore that's here and usually sells 20-25 different business books that are related to Berkshire Hathaway, it's only selling one book. That's Poor Charlie's Almanack, the fourth edition. Hundreds and hundreds of copies sold yesterday. They brought 5,000, and I bet they sell out of those books, too. Dairy Queen is expected to sell over 20,000 treats. We're talking Dilly Bars, I think is most of it. We've seen Dilly Bars and maybe... What else do they have down there? Maybe the- There was somebody hawking- ... Pringle ... is it called a Buster Bar or something like that? Yeah. I don't know. I don't know them. We're not the ones- When I hear about them. ... who have eaten as much of them- Yeah ... but we've been seeing them 'cause they're right next door. Yeah. I spoke with the heads of some of those companies. We got the chance to talk through some of those numbers also. Yeah. Here's what they had to say. In our categories, it's been challenging, and you know, the industries that we face, flooring, furniture, appliance, electronics, they've definitely had their challenges, and you can read all the public reports. It's just consumers having a challenge, inflation, housing's down, and so- Yeah ... you know, we just have to figure out a way to grow and to figure out a way to take share. Yeah, and I guess that's a big part of it, too. With mortgage rates so high, people don't want to move out of their homes. They want to hold onto their 3% mortgage rate. That means that people aren't moving, which would spur more buying, too. Exactly right. Exactly. There's a, you know, just traffic in general is down, and, you know, but there's always a silver lining, like this weekend at Berkshire, 'cause it gives us the opportunity to really, really do great things and give the customers great values, and, you know, it's like Christmas time and Black Friday, so this is a great week for us. What are the bright spots, just in terms of categories that customers might be more willing to buy right now? Things they maybe aren't as tapped out on. You know, appliances is doing fairly well, but again, it's driven by a replacement cycle now versus new construction. And there's certain furniture categories that are doing... Mattresses are still doing very well. But I would say in general terms, there's not any of the industries that we're in that are positive as an industry. Overall, I think the consumer is feeling healthy, but that doesn't tell the whole picture. There are certainly areas where the consumer is kind of tapped out. What are you seeing right now? I mean, I think the consumer is definitely showing some resilience. I think consumer confidence has remained high despite all the indicators in the economy that might say otherwise. But there are beginning, I think, to be some pressures on consumers. I think the inflationary environment is taking a little toll, especially at the lower income levels. Across our customer base, I think we see some price pressure, very price-sensitive, discount-sensitive, especially in the lower-income groupings. So we are seeing a little bit of pressure on average ticket. So we're seeing healthy shopping trends. Fortunately- ... jewelry resonates even in tough times. People still get engaged and still have big milestones in their lives. So I would say it's kind of mixed. I mean, we're a little bit cautious as we look to the balance of the year with so much uncertainty in the global environment. Sure. And in the U.S., with the election year, you know, who knows what, what will happen? So we're being a little cautious as we look forward, but overall, our business is doing pretty well, and the consumer is, is kind of hanging in there. When the consumer feels some of those pricing pressures, do they trade down, and do they trade down- Mm-hmm for things like engagement rings, or do they just trade down for the other gifts that they're buying? We're seeing trading down kind of across the board. We're not seeing that so much, I would say, at our higher income customers, but at lower income, for sure. It's kind of interesting, in our business, there is some deflationary pressure right now in the engagement space because of the market dynamics with lab-grown diamonds. Oh, yeah. So that's a contributor a little bit, I think, to the downward trend. But people are definitely buying down kind of across the board. Where do things stand right now, just in terms of commodity prices, what you see? Have prices come back down? Is it a lot easier to manage through this stuff now? We've seen prices absolutely moderate, you know, since the COVID peaks. You know, we look to bring value every single day to our customers. So our products are typically a very small component in that final finished, you know, bottle that you would buy. So, you know, we just look to bring value to our customers every day. What were you guys prepared for when you showed up with us? How much did you bring? We brought 11.5 tons, and we also brought a little more merch this year. So we've got a candle, we've got T-shirts, we've got a couple of other things the people have been asking for for the last few years, and so we wanna take care of our customers, and we brought a lot more product this year. You anticipate you'll sell out? We do, yeah. 11.5 tons. We do, we do. And anything that's left over, we're actually gonna reach out to a food bank here and donate what's left instead of trucking it back to California. Wow! Yeah. Okay, that's a lot. What's the most popular thing that you sell? Well, it's always the peanut brittle. Peanut brittle and the staples, and particularly this year, because we put a sleeve on the peanut brittle with a wonderful quote from Charlie, and so yeah, that's going incredibly well. And the Berkshire box that has a picture of Warren and Mary on it as well. So those are flying like crazy. Yeah, 'cause peanut brittle, that was Charlie's favorite- Yeah he ate it through the entire meeting. Yeah. So we have an animation of Charlie on the front of it, leaning on some peanut brittle, and kinda had to give him a tip of the cap. Okay, this is your home crowd- Oh, man when you're here. Yeah, fans all over the place. Yeah. Yeah. I mean, our shops are always filled with people who love the brand, but this is different. These are, these are, these are our owners. The most important driver in our business is new home sales. And so, you know, with interest rates being high, inventory levels being low, and affordability of housing being upwardly moving, it's been a slower time over the last 12-14 months, I would say. And so it's, it's a big driver, because think about it, when somebody goes to sell their home, they usually fix it up, do a little bit of painting. They sell the home, somebody buys it, they go in, they repaint what they didn't like about the old owner's taste. So it's really two paint projects every time an existing home sale happens, and so as that slows, driven by interest rates, it definitely impacts our business. Well, the afternoon Q&A session, just moments away. Let's bring in CNBC.com Markets Reporter, Yun Li, for more on the day's events so far. Yun, great to see you. Thanks. Great to see you, too. We, we've gone through this, this continued selling down of the Apple position by Berkshire Hathaway. He gave a nod in the direction of maybe there were some tax considerations. Any clues in what you heard from Warren about whether he's looking to redeploy some of this cash? Yeah, so I think he seemed a little bit more in the mood to deploy more cash, and we heard him talking about this, the fact that he's looking at one thing in Canada, and, you know, he was very vague about it. We don't know if it's private or public, but just the fact that he's looking and overseas is very interesting. Now, he's invested in Canada before, a couple of years ago, buying a mortgage underwriter, just a few years ago. And, as things get more expensive in the U.S., he started to look more overseas, and we know he's been very successful with his Japan bets. That paid off very, very well. Of course, there's also this undisclosed position that seems to have been building. Yeah, there's a lot of speculation as to this secret holding that he's been buying, or it could be his, one of his managers. Berkshire has been buying for the past three quarters straight, and we know it's something in the bank, insurance, or finance sector, and it's, it is in the billion... It's in $2 billion, so it is very significant bet. And that we don't know that yet. I hope somebody asks that question in the afternoon. Yeah, exactly. I mean, pretty hard to think he would actually name it, but who knows? Right. You never know. What else in terms of... Obviously, a lot of attention on succession questions, both for Warren and even for Ajit Jain. It was a very specific question about, you know, what happens to leadership in the insurance division after that. Right. Yeah, and also about the equity portfolio, because I, I've been talking to shareholders here on the ground, and they asked me, "You know, what's gonna happen to Berkshire's top holdings like Coca-Cola, American Express?" And Warren said, "You know, firstly, Apple will extremely likely to be, continue to be the largest position, and when Greg takes over, they will still have, you know, Coca-Cola or the long-time holdings that Berkshire's had. Sure. I think we do have a little bit of what Warren might have said. Some of these indications that maybe things are sort of slowing down on his side. One way or another, there are more than 24 hours in his day, you know, and I just don't know how he covers the ground he does. He's willing to work. I mean, you know, I'm... You know, and I couldn't get as much done anyway. You know, what I could do in a couple of hours, you know, may take 8 hours now. I just don't read as fast and everything, so. But... ... It's working very well, and this place, if anything happened to me, it would be working extremely well the next day. I don't get any phone calls. You could - it could actually, we can ring something up, so we have some answering machine that people think I'm still around, you know, or something in terms of Yeah, and then, you know, as we were saying before, he even was saying, in reference to the idea of there being opportunities in India- Right. He sort of said, "Well, maybe some other management team might have the energy to look into that stuff. Right. Yeah, it's something that... Because he said Berkshire has built this reputation as this prominent deal maker and investor, but something in India, he might not have the energy to do anymore, different cultures and so forth. But in terms of Japan, it worked out very well. Yeah ... and he's apparently looking at Canada. Yes. In response to a question, he did point to that a couple of times. Also, really a little skeptical about potentially doing more in China at this point as well. You know, I guess just to circle back to the Apple thing quickly, he seemed to take pains both by talking about taxes and also saying it's an even better business than Coca-Cola and American Express, to suggest that he hasn't necessarily reassessed the business in terms of its long-term value. Right. He said one of the bigger motives is tax reasons. Yeah. But at the same time, when you look at Apple, the stock was getting very expensive, right? Last time I checked, it was trading 27x forward earnings, and it rallied almost 50% in 2023, and now it slowed down a little bit. There was also a lot of concerns about, China demand, also antitrust issue- Yeah ... I don't think it gets talked about enough. So a lot of issues. We didn't hear that from Warren himself, but it is interesting that he did reveal the tax reason. Yeah, well, tax-- Tim Cook was in the audience- I know ... and he didn't want to say- It's a little bit tricky. ... a whole lot, more about that. He also said he would love to buy back more Berkshire stock, but it doesn't trade enough. Right. Maybe it's also a little bit expensive. Yeah. Yeah. Yeah, they bought back about $2.6 billion in the first quarter, a little bit more than Q4- Mm-hmm ... but in line. Yeah. Yeah. All right. Yun Li, great to see you. Thanks so much. We have been talking about the first morning Q&A session of the Berkshire Hathaway annual meeting. We are now gonna start and go to the other afternoon session, Q&A. Warren Buffett is gonna be taking questions again, those that have been vetted by Becky from shareholders, as well as directly from shareholders who've come from all around the world. We heard that in the morning. We also did close the morning session with kind of a moving tribute to Ruth Gottesman, who has used $1 billion in appreciated Berkshire Hathaway stock to make a donation to Albert Einstein College of Medicine, of course, as we all know. Q&A now getting underway. More chance we'll have to talk about various questions you may have. I'd just like to follow on, however, with that film we showed just before we left for lunch because it says something about Berkshire. There are, you know, all kinds of public companies and wealthy public companies and throughout America, and there are certainly cases where in one family somebody has made a very large amount of money and is devoting it to philanthropy or much of it to philanthropy, such as the Walton family would be the number one thing in Walmart. And certainly, Bill did the same thing at... Bill Gates did the same thing at Microsoft. But what is unusual about Berkshire is that a very significant number of Berkshire shareholders located all over the United States, not just in Omaha, but the number of different Berkshire holders who have contributed $100 million or more to their local charities, usually with people not knowing about it, I think is many multiples of any other public company in the country. It's not, they're not more multiples than, you know, those putting a whole lot into philanthropy. And I don't know the details of the family, but clearly there's a huge sum of money that the Walmart family, I'm sure has done all kinds of things philanthropic and will continue to do it. But I don't think you'll find any company where a group of shareholders who aren't related to each other, so many of them have done something along the lines of what Ruth did, you know, a few weeks ago, just to exchange a little piece of paper that they've held for five decades, and they've lived well themselves. They haven't denied their family anything, but they don't feel that they have to create a dynasty or anything, and they give it back to society, and a great many do it anonymously. They do it in many states. To some extent, we see a little some concentration of it in Nebraska because they generally, when you're giving away a lot of money, they call it, in the philanthropic world, absorption capacity. The truth is, it's very, it's very hard to give away $1 billion- $10 at a time to people who are needy or something of the sort. So large institutions have this absorption capacity, which tend to be universities or colleges or that sort of thing, and some philanthropies are much more imaginative than others. But the one thing I've never... Well, most of them wanna do it anonymously, so I can't tell their specific stories, but I have to say one thing that was astounding is that the same day we bought $1 billion worth of Berkshire Class A stock from Ruth, so that... And I guess we were actually buying it from the school at that point, 'cause he's just given them the, and then, so the transaction was with them. But Mark Millard in our office bought $1 billion from them, but he also bought $500 million worth of stock from somebody else that nobody will ever have heard of, and in a different state, and I won't elaborate beyond that. But we have had a very significant number of people, and there's more to come. And obviously, they had to be people that came in early, or their parents did, or their grandparents did, but they've all lived good lives. They haven't denied themselves anything. I mean, you know, they have second homes, and they... But they generally, well, in fact, I would say almost universally, they people knew them in the community and everything, but they, they've they've used what they saved. They denied themselves consumption themselves. That's what savings are, consumption deferred. They've financed everything all over the country, and usually, they like to do it anonymously. I outed my sister when I wrote about her in the annual report. Birdie's here today, you know, I told her she should wear a T-shirt or something that said, "No solicitors allowed," or something like that. They just do it. It's really, well, Charlie and I felt it's really fun to work for a group of people like that, rather than for index funds or hedge funds or whatever it may be. I mean, you're just seeing what people actually... It sort of restores your faith in humanity, that people defer their own consumption within a family for decades and decades, and then they can do something like enable, I think it may end up being 150 people to pursue different lives and talented people and diverse people, to become a dream of being a doctor, and not have to incur incredible debts to do it or whatever may be the case. There's a million different examples, and I want you to know that you're very, you're very... Well, you're, you're a unique, actually, group of, of shareholders among public companies, as far as I know, in terms of the way you've deferred your own consumption while living fine to help other people and, and it, you know, it takes a lot of years, but it can really amount to something very substantial. And what Ruth did was, you know, at roughly my age, she looked at a little piece of paper, which actually was a claim check on the output of others in the future, and she said, instead of the output being, for her, that the output would be for a continuing stream of people for decades and decades and decades to come, that were having a different life in the pursuit of being, becoming doctors than, than they otherwise would have. Berkshire has been, of course, her husband, Sandy, contributed substantially to Berkshire's record. Sandy was a wonderful partner to have, so he, it was both input by him, and then there was deferred consumption by his family, and then there was ultimately this final gift to Albert Einstein, and like I said, the same day, there's only $500 million. It'll go to him in a different way. But it's happening all over, and I don't think any company is like that. So I just wanna tell you that it's inspiring to work for Berkshire Hathaway. And Becky, go to it. All right, the next question comes from Slaven Vukobrat. "As CEO, will Mr. Abel be in charge of the portfolio of common stocks that Mr. Buffett has been managing, or will this function be exercised by Mr. Combs and Mr. Weschler? Yeah. As investing could be defined as the discipline of relative selection, can major capital allocation decisions, such as large acquisitions, be separated from the common stock selection process? Yeah, I would say that decision actually will be made when I'm not around, and I may try and come back and haunt them if they do it differently than... But, I'm not sure the Ouija board or they will get that job done. So that job, I'll never know the answer on whether it get covered, but I feel very comfortable about the fact that it will be made by a board that they've got loads of brainpower, they've got a dedication to an unusual institution. And they will figure things out. But I would say that if I were on that board and were making the decision, I would probably, knowing Greg, I would just leave the capital allocation to Greg. And, he understands businesses extremely well, and if you understand businesses, you understand, you understand common stocks. I mean, if, if you really know how business works, you are, you are an investment manager. What, what... How much you manage? Maybe just your own funds or maybe other people. And if you really are primarily interested in, in getting assets under management, which is where the money is, you know, you don't really have to understand that sort of thing, but, but that's not the case with Ted or Todd, obviously. But I, I think the responsibility ought to be entirely, with Greg. The responsibility has been with me, and I farmed out some of it, and I used to think differently about how that would be handled. I think the responsibility should be that of the CEO, and whatever that CEO decides may be helpful in effectuating that responsibility. You know, that's up to him or her to decide at the time they're running the money. So I would say that my thinking on that has developed to some extent, as the sums have grown so large at Berkshire. And we do not want to try and have, you know, 200 people around that are managing $1 billion each. It just doesn't work. I think that when you're handling the sums that we will have, you've got to think very strategically about how to do very big things, and I think Greg is capable of doing that. I think I've missed a lot of stuff in the past, so I'm actually wiser about doing that now. But, you know, I would do it better this time around than 2008 and 2009 if something akin to that happened. But it won't be exactly like 2008 or 2009. You can be sure of that. But you also can say that there will be times when having huge sums available extremely quickly, maybe it'll be once every five years, maybe it'll probably be more like once every 10 years or something. But the way the world gets more sophisticated, complicated, and intertwined, more can go wrong. And there's no sense going through here and exploring the possibilities of the different things that could happen, but we do wanna be able to act when it happens. And I think the chief executive should be somebody that can weigh buying businesses, buying stocks, doing all kinds of things that might come up at a time when nobody else is willing to move. It wasn't that people didn't have money in 2008. It's that they were paralyzed, and we did have the advantage of having some capital and a willingness to an eagerness even to act. And the government that in effect looked at us as an asset instead of a liability. And I think that all of those qualities will be even more important as our capital pile grows. And so I think Greg may have even more fun than I had in a period when extraordinary things were happening, and we were the logical place to go. You never know whether it'll be next week, next year, next decade, but it won't be, it won't be, it won't be a century from now, that is for sure. And the more intertwined and sophisticated the world financial situation gets, the more vulnerable it gets in a certain sense. It solves a lot of small problems, but it leaves it more vulnerable to large problems. Greg, does that bother you at all or not? Without directly answering the question, I think there's one important thing is I think as we go through any transition, it's important to know that the capital allocation principles that Berkshire lives by today will continue to survive, Warren. And I think that's what the thing I'd want to communicate, that we'll we have our operating businesses, insurance, non-insurance. We're gonna, we'll provide them the capital necessary to be successful and grow if it's appropriate. Yeah. At the same time, we're expecting a return of capital from them when they have excess cash. And then, as we've discussed, or you've touched on, always looking at potentially new businesses as a whole or in a piece, and as you've always highlighted, and I fully agree, it's, we're-- we'll always look at equities as we're investing in a business, either 1% or 100%. But we're looking at the business, we're looking at the economic prospects of that business and how sustainable it is and what it will look like 10 years from now, and is our-- the capital we originally put in at exponential risk or, or where, where is that risk sit, that profile? Of course, we'll obviously continue to always put excess cash in the safest investment there is in U.S. Treasuries, knowing we want to maintain that fortress of a balance sheet for two reasons: one, to act, but also to always protect our shareholders. If we have a... We want to maintain the position Berkshire is in now, realistically, to ensure it endures. Well, when he says that, it makes me wish I'd stayed around to be number two instead of number one in this process over the years. It, it's, it's, you know, it, it doesn't get more fun than what we've-- what we're doing, and, and, and, and we're better positioned than ever before. We're not positioned, though, however, to earn extraordinary returns versus what American business generally earns. It, you know, I would, I would hope we could be slightly better, but nobody's gonna be dramatically better in some... In, you know, over the next century, it gets very hard to, it gets very hard to predict who the winner will be. If you look back, as we did a few meetings ago, as to the top 20 companies in the world at 10-year intervals, you realize the game isn't quite as easy as it looks. But getting a decent result actually is reasonably, should be reasonably easy if you just don't get talked out of doing what has worked in the past, and don't get carried away with fads, and don't listen to people who have different interests in mind than the interests of our shareholders. Okay, we'll go to station number 1. Hello, Mr. Buffett. My name is Timo Droge. I'm from Düsseldorf, Germany. This is my first time out here in Omaha, so thank you for having us here today. My question is directed to you, Mr. Buffett and Mr. Abel. In 2019, you reportedly made a bid for the IT distribution business, Tech Data, and commented that you understand its role as a middleman. I wonder if you could kindly elaborate on the criteria you look at when evaluating IT distribution businesses like Tech Data and their competitive position. Thank you. Well, we had some experience with distribution businesses, and we know their potential to a degree and their limitations. Greg, you were involved in that more than I was. Yeah. So, I mean, that was a case where there'd been a bid made, and there was a go-shop provision. Right. And, I think the management probably would have preferred that we buy it. And when we went in with a better bid, the original party raised their bid, and we never make the same offer twice. So, Greg, tell him about it. Yeah. Yeah. So, absolutely, in 2019, we saw Tech Data as a unique opportunity when we saw the other bid and the underlying value of that distribution business. Warren, Warren and I were talking, and others made the conclusion, we should talk to management. We talked to the team. They were very interested in Berkshire being their long-term owner, and we still saw a good value in the opportunity, and we had a good understanding of distribution businesses. We have TTI. It's not exactly identical to Tech Data in that they're very specific to who their customers are and who they serve and supply, and who they purchase from. Because on the distribution side, it's important to have that input coming in from folks who want their product, and you know it's needed on the other side, that there's demand for it. And they had an excellent model. If you think of TTI, for example, that Warren's talked about Paul many times and the person who founded this business. But it's a unique business in that our revenues on that business is approximately $10 billion. The average part they sell is a little over $0.09. 95 billion parts go through their warehouse every year. But it's a model that if you have the right people on both sides of the equation and you understand that well, there's a unique opportunity there. That is something we saw in Tech Data, and as Warren highlighted, we made our bid. Unfortunately, it was then topped by the original bidder, and we moved on, but we thought very highly of it. Warren? Yeah, we've probably seen at least five of them in aggregate that- Yep ... over the last three or 4- 5 years. It's not a business that you can dream about because it's a decent business, but for example, many of the items that the manufacturer just, they don't want to tie up their capital. You tie up. If you have, you know, 1 million plus SKUs, is the total of stock keeping units, it's like selling jelly beans or something like that. And you do—you're serving a purpose to a degree, but you don't, you don't really. It isn't your product in effect, I mean. Yeah. I mean, you're just a good system for the producer of the equipment to get it to the end user, without tying up a lot of capital- Right ... and being in a business they don't wanna be in. And so we understand. We... But there's no magic to it. There was, with TTI, you had a marvelous man running things, and he's, you know, and he's—and he, when you get a marvelous person running something, to some extent, that selects for better people underneath. And Greg and I went to Paul Andrews's funeral- Yep ... well, a few years ago. Yep. There were 300 people or so there, and there wasn't one person that had to say something particularly nice, but stretched a little bit about, about the deceased. I mean, everybody... Paul Andrews was the real McCoy, and he was, he was an amazing man, and he behaved wonderfully with Berkshire. I mean, he wanted to do more for Berkshire than Berkshire would do for him. I mean, it was very. You run into those people, and as I say, you run into people that bend over backwards for us, and then some bend over forwards. But that's just the way it is in this world. We've had, we've had quite a few that have bent over backwards for us. The distribution business is not a wonderful business, but it is a business, and it's a business that if it's big enough, it's one we would look at, and we would buy additional. TTI makes some smaller acquisitions- Yep ... on its own all the time. I don't even hear about them till I read the quarterly reports. And so we wanna build up, we wanna build our businesses- Mm-hmm ... in every area that we operate, and we've got unlimited capital to do it. So, we're willing to have small acquisitions take place if they fit in with something we already have. But we're not in the business of going out after small acquisitions, and if we did, we would, we just don't have the people for it, and it wouldn't move the needle anyway at Berkshire. So, we may or... We would, we would've been happy doing the deal with the questioner asked about, but if we don't do it, it, you know, it just doesn't make that much difference. We wanna do it. If we do it, we'll do it well. We'll do it right. They'll have made the right decision. If they don't, you know, we will find something else to do with the money, in the end, and we can always buy a little more of TTI for you, the shareholders, by just buying in our stock, too. Mm-hmm. Exactly. Yeah. Okay, let's see. We need Becky next, don't we? Yeah. Yeah. Becky? All right, Warren, earlier you talked about selling some of the Apple shares in order to build up your cash supply, and I think it's had a lot of people wondering where you see opportunities or what might be coming or market valuations. I'll ask this question from Foster Taylor: At the 1999 annual meeting, you mentioned that if you owned all of America's 500 businesses, you would be making $334 billion while paying $10.5 trillion. You emphasized that this was not a good return on investment. Today, by my math, the S&P 500 has a market capitalization of around $44 trillion, with profits of around $1.45 trillion. This is a very similar return on investment to the 1999 levels. Do you see similarities in the market today and the 1999 levels? Well, one thing has changed dramatically from... Well, from 1990, I misunderstood on the 1999. But, there have been times in my life that I've been awash in so many opportunities that I could have invested everything by nightfall, and then there's other times when the year goes... Well, not in the early days, but now, we just, we haven't seen anything that makes sense, that's that moves the needle. Now, we've made small acquisitions during the year. Our companies have made acquisitions, and we, you know, Greg and I may talk about something that involves a $300 million purchase or something like that, and, you know, it-- if it fits well enough, we do it. But, and if our managers see things that fit them, we wanna look at them because our managers do not have necessarily the same equations in mind that we do. But there's some managers which we would end up just say, you know, "Whatever you decide to do," and then there's other managers that wouldn't, that would not know how to allocate capital, particularly, and that they don't have to be able to be great capital allocators if they happen to be great at serving customers and understand their own industry and all of that. You know, they, they can be great managers, but many of them aren't capital allocators, and others are. But the... This is not, this is not a time when, when, the phone is gonna be ringing often, but there are times when the— and Greg will know how to handle them, and as well or better than, than, I have over time. And Charlie and I would... You know, we, we missed a lot of things, and, what we really regretted was missing something that turned out to be very big. We never, we never worried about missing something that we didn't understand. I mean, you know, why, why should we be, be able to, you know, predict the future of every business any more than we can predict, you know, what, what wheat yields are likely to be in Illinois next year? Well, not wheat in Illinois, wheat in Kansas, but corn in Illinois. I don't really think of whether it's similar to 1999 because I'm not that good on chronology anyway, unless something really dramatic happened at the time. I mean, I remember things from 2008 and 2009 better, much better than I remember whether something happened in 2015 or 1987 or... Well, 1987, I remember because of October 19. But I'm just don't think, I don't think that way. I just look at what I can do every day. Greg? I'm gonna have to use... Sorry, nothing to add. Okay, well, we'll go to station two. Yeah, that's, I mean, it's nice to know what lines you can get an applause for. Station two. Hello, my name is Stefan Erdenberger. I am a shareholder from Hamburg, Germany. I've been coming to Omaha since 2007, and I'm deeply grateful for all the things I could learn here, both about investing and about life, in particular, creating circumstances that will enable me to lead a productive life during my entire healthy lifespan. So thank you for that. My question to Warren: Your favorite holding period is forever, holding American Express or Coca-Cola for decades. Berkshire recently went in and out of Markel, and you, I believe, sold and later bought Oxy, which I think happens to everyone all the time. But can you maybe to us give examples of your thought process when you exit positions? Thank you. Well, there are various reasons for exiting positions. One is if you need the money, but that doesn't happen very often with us, but it used to happen on every decision I made when I started it, when I was 20 years old, which I consider the post-Graham period, although I actually started in 1942, if you just talk about buying stocks. But in any event, the decision process is really quite interesting in a certain way, 'cause it. We made—Charlie and I made our decisions extremely fast, but in effect, after years of thinking about the parameters that would enable us to make the quick decision when it presented itself. And people have speculated on how I've decided to really put a lot of money into Apple, and for a reason-... One thing that Charlie and I both learned a lot about was consumer behavior. That doesn't mean we thought we could run a furniture store or anything else, but we did learn a lot when we bought a furniture chain in Baltimore, and we quickly realized that it was a mistake. But having made that mistake made us smarter about actually thinking through what the capital allocation process would be and how people were likely to behave in the future with department stores and all kinds of things that we wouldn't really focused on. So we learned something about consumer behavior from that. We didn't learn how to run a department store. Now, the next one was See's Candy, and See's Candy was also a study of consumer behavior. We didn't know how to make candy. You know, we didn't. There were all kinds of things we didn't know, but we've learned more about consumer behavior as we go along, and that sort of background, in a very general way, led up to the study of consumer behavior in terms of Apple's products. And in that case, while I watched what was happening at the Furniture Mart in terms of people leaving the store, even though we were selling Apple at a price where we weren't even making any money, but it was just so popular that, if we didn't have it, people left the store and went to Best Buy or someplace. And if you know the Blumkins, they can't stand anybody leaving the store, so yeah, they behave accordingly. But then you learned that you had the interest in the brand, and then you had a million different inputs. But I think the psychologists call this apperceptive mass, but there is something that comes along that takes a whole bunch of observations that you've made and knowledge you have, and then crystallizes your thinking into action, big action in the case of Apple. And there actually is something which I don't mean to be mysterious, but I really can't talk about, but it was perfectly legal. I'm sure of that. But it just happened to be something that entered the picture that took all the other observations, and I guess my mind reached what they call apperceptive mass, which I really don't know anything about, but I've... I know the phenomenon when I experience it. And, you know, that is. We saw something that I felt was well, enormously underpriced. Maybe I've used this example before, but if you talk to most people, if they have an iPhone and they have a second car, the second car costs them $30,000 or $35,000, and they were told that they never could have the iPhone again, or they could never have the second car again, they would give up the second car, but the second car costs them 20x what the iPhone did. So, now, people don't think about their purchases that way, but I think about their behavior. And, so we just decide without knowing... I don't know, have the faintest. There may be some little guy inside the iPhone or something. I, I have no idea how it works, but I also know what it mean. I know what it means to people, and I know how they use it, and I think I know enough about consumer behavior to know that it's one of the great products, maybe the greatest product of all time, and the value it offers is incredible, and I think it has, in Tim, Tim Cook, I think it has somebody that in, in his own way, is the equivalent of a partner, partner with Steve Jobs that could do one thing extraordinarily well and, and, and, and Tim was the perfect partner to serve sequentially with him. So it's you sort of know it when you see it. I actually saw it with GEICO when I went there in 1950. I didn't know exactly what I was seeing, but Lorimer Davidson, on a Saturday in four hours, taught me enough about what... I understood what auto insurance was, and I knew what a car was, and I knew what went through people's minds, and I knew they didn't like to buy it, but I knew they couldn't drive without it. So that was pretty interesting. And you know, every now and then, it happens. You know, why do you have this, the person you met, you know, there are all these, all these different potential spouses in the, in the room, and then something happens that you decide that this is the one for you, you know? I think, was it Rodgers and Hammerstein that Some Enchanted Evening wrote about that? Well, our idea of an enchanted evening is to come up with a business, Charlie and me. And there is an aspect of knowing a whole lot and having a whole lot of experiences, and then seeing something that turns on the light bulb. And that will continue to happen, and I hope it happens a few times to you, but you can't make it happen tomorrow, but you can prepare yourself for it happening tomorrow, and it will happen sometimes. Hey, Warren? Yep. He, he mentioned Oxy, which I think is a great example. Yeah where you made the original decision basically on a weekend with some thought. But as the more you learned about Oxy and the asset position they had, their ability to operate in an exceptional manner, and then a strong CEO around capital allocation, I think your confidence in a... which was reflected in continuing to acquire more shares, is sort of that type of process where- Yeah. Yeah. It's exactly to the point. I mean, I just learned more as I went along. I learned enough... You know, I'd never... I'd heard of Occidental Petroleum. Occidental Petroleum happens to have been a descendant to some-- not a descendant, but a continuation of Cities Service, which was the first stock I bought. And of course, I knew a lot about the oil and gas business, but I didn't know anything about geology. And so I knew the economics of it. I had a lot of various things stored in my mind about the business, but I never heard of Vicki until, I guess it was a Friday or a Saturday, and we met on Sunday morning, and we made a deal. But that was one sort of deal. Then, as time passed, all the kinds of different events happened, and, you know, Oxy came in, and, I mean, there are a million things you couldn't predict at the start. I formed certain opinions as I went along, but then, I learned more as I went along. Then, at a point when I heard an investor call that Vicki was on, it put things together for me in a way. Didn't mean I knew I had a sure thing or anything like that. I don't know what the price of oil was gonna be next year, but I knew that it was something to act on, so we did. We're very happy we did, and we still don't know what the price of oil is gonna be next year. Nobody does, but I think the odds are very good that it was, but not a cinch, that it was a good decision. You know, we've got options to buy more stock. And you know, when we get through with it, yeah, it could be a worthwhile investment for Berkshire, and we're in it, and we're in it for keeps. There are other things that we own that we aren't in for keeps. But... Oh, incidentally, I should just throw this out there since there's been speculation on it. We've sold... I was 100% responsible for the Paramount decision. I read speculation that one of either Ted or Todd had some involvement in that. No, it was 100% my decision, and we sold it all, and we lost quite a bit of money, and that happens in this business, too. But actually owning Paramount made me think even further. I like to think deeper, but I certainly thought harder even about the whole question of what people do with their leisure time and you know what the governing principles are of running an entertainment business of any sort, whether it's sports or movies or whatever it might be. And I think I'm smarter now than I was a year or two, a couple years ago, but I also think I'm poorer because I acquired the knowledge in the manner I did. I just wanna be very clear that, A, we lost money on Paramount, and B, you know, I don't know whether I've anticipated one of Becky's questions now, but we'll find out. Let's see, now, you. Yeah, you're next, Becky. Yep. Yes, you did anticipate one of the questions. Let's go to another one. This, this question comes from Vincent James in Munich, Germany. "In the chairman's letter, Warren points out that the profit margins for BNSF have slipped relative to all five other railroads. However, Warren comments in the letter, BNSF carries more freight and spends more on capital expenditures than any of the other five major railroads and has a vast service territory second to none. Given the comments from Warren about the clear strengths of BNSF, what explains the decline in revenue and profit, and in particular, the profit margins relative to the other five railroads? What are the issues relative to the other railroads, and what is being done to address them? Please be specific? Okay, and I will, well, how specific we get depends on what Greg wants to say, but Greg is... It's Greg's responsibility. It was my responsibility for the purchase and for the operation up till Greg took over, but I think I'll let Greg answer that. And- Sure. Yeah, Warren touched on it, and the comments, as reflected there, are very accurate. If you look at this quarter's results or our last year's results, they're both disappointing as shareholders and disappointing relative to the other Class I railroads. And as highlighted in the question, there's five other Class I railroads, so it's pretty easy to understand how you're performing versus the others. And there's a lot of other variables, but there's some very simple things to look at. When we look at where we've been on, with associated with Burlington, I would just back up a little bit, because if you go back to 2021, the Burlington team and management team and the group, we're making excellent progress on a lot of fronts when it comes to our operating and both being efficient and effective in how we're operating the railroad. And I remember very specific comments from myself in 2022, where I commented that that was the year there was all the supply chain issues, a lot going on in the West Coast ports. Our trains were backed up in a variety of places, and we called that a reset year. And I think we did need a reset year on the operational side. But as we moved into 2023, the business cost level, cost structure, we didn't reset it to the underlying demand we were seeing. We anticipated more demand and we did not reset our cost structure. And the team's working very hard as we speak to both reset the cost structure and allocate the cost resources where they need to be. And when you go through something like that, what we've recognized as an organization, yes, the demand of the rail will drive a certain amount of the cost, but the reality is that the rail industry, if you go back many, many years, it's flat. There's not a lot of growth in the industry. There's opportunities to become more efficient and effective, and our margins can go up, but the reality is demand's gonna be flat, but it does move within different sectors of the rail. It can be in the consumer products, it can be in industrial, it can be in ag, but overall, it's generally gonna be relatively flat. So we need to get our cost structure right, and we need to get it right both for the coming year, but for the long term, and that means it's gonna be a continuous exercise. We can't stop. We can't say we've gotten far enough because our competitors and we compete with the other rails, but we also do compete with the truck industry. We have to have a cost structure that allows us to compete both within our rail industry and within the transportation sector as a whole. So the team at Burlington's working very hard to address the cost structure, just like we have in the past. I think one thing, we do recognize when the other railroads have implemented, Precision Scheduled Railroading, there's other metrics that we have to continue to pay attention to and, and challenge ourselves. If we're not at their level, what are the things that are driving it? So we're gonna... When they ask for specifics, I'll give you a few. We have to look at our rail yards and understand how we're managing that. We have to look at our locomotive fleet, both the size and how we're utilizing that, and challenge ourselves. And we have to then go back to how we're using our employee resources and allocating them across the business. So there's a lot to be done there. Our team's 100% committed to driving to the right cost structure that's consistent with the underlying demand in the business, and then we can't stop there, is the answer. So a lot to be done, but we have a team that's absolutely engaged and committed to it, and we're gonna make good progress in this current year. At Berkshire, we want everybody to have the idea that there's a lot to be done with every business, you know, and so, I mean, it is the only big key with the remarkable, remarkable company in Omaha, building company, really remarkable. And it is question after everything they did, that was something that was done particularly well, you know, digging a tunnel under the East River or something, when it said it couldn't be done. Yeah. He would say he would be, he was pleased but not satisfied. And that is exactly the way we want the attitude to be at Berkshire forever. Omaha is a railroad town. If President Lincoln in 1862, I think it was, had decided to pick Saint Joe or Plattsmouth or any place else to build the Transcontinental Railroad, Omaha would probably be a little town of 20,000 or something on the banks of the Missouri. But with Lincoln's desire to make this the eastern connection and make the Transcontinental Railroad, Omaha just took off. So it's been railroading at its base. You know, and anybody that was interested in financial matters had to think about railroads, plus they had a certain glamour to them anyway. The interesting thing is that UP, which is our main competitor, themselves fell way behind 20 or 25 years ago before Jim- Right. Before Jim Young came in. And in 2008 or so, I started buying three railroad stocks: Norfolk and Union Pacific, BNSF, and Norfolk Western, I believe. I don't know why I wasn't buying CSX, but in any event, Jim Young had done a marvelous job with BN, with Union Pacific. So we owned all three stocks. But what we did in 2009 is we were able. Well, we already owned 22% of it, but overall, it was $35 million, $1 billion, which was a significant part of our capital. We were able to put it to work in a business we liked, and there are certain tax advantages that come in terms of making money in something that's more than 80% owned, but call it 100% owned in this case, versus making it through stocks. So it has a, a net benefit to us from making the same amount of money owning one of the other railroads by owning all of the railroads, and we got $35 billion out during a recessionary period. I think that was the worst quarter, the third quarter of 2009, maybe the rails had had it for a long time. So it's, it's worked out. Actually, it's worked out very well, but it's because we were putting out capital in 2008 and 2009, and if we put money in anything, we'd have made a lot of money. But it's more satisfying, and it's actually better in certain ways, tax-wise, to make it from something that's 100% owned than a whole bunch of, you know, 5% or 10% owned businesses. You know, as I mentioned in the annual report, railroads are absolutely essential to the country. That doesn't mean they're on the cutting edge of everything. They're just essential to the country. And, you know, that's why the government, you know, I think they took them over one time, and they negotiate what our level labor settlements will be and everything. If you shut down the railroads of the country, you'd... It'd be, it would be incredible, the effects. But it would be impossible to construct now. I mean, it... Look at what's happening in California when they're trying to build a line. I mean, you know, everybody's worried about the environmental effect of every mile and, you know, and what will happen to the various species of birds. Can you imagine the rail system of the United States being built? It would take decades unless a war was on and the government took over things and just ordered them. You can't create it. So we love owning a business like that. It's gonna be around 100 years from now. Won't be the best growth business in the world at all during that period, but it will be essential, and what it earns in its relation to its replacement value is a pittance. But we'll do fine in terms of what we paid for it, and we'll distribute substantial amounts in relation to what we paid to Berkshire in a very tax-efficient way. So it's... When the question is, what are the issues relative to the other railroads? You know, it wouldn't have been the end of the world if at all if we bought the Union Pacific, and Jim Young had stayed alive to run it for us. That would have been great, too, but we had the opportunity to buy BNSF, and it's been good for them, and it's been good for us, and we think it's been... It's a very important asset to the country. You know, I just hope we can find something in other industries that where it makes as much sense as that, where we can put a whole bunch of money to work at an advantageous time. So let's go on to station three. Is that correct or not? Yeah. Yeah. Yeah. Okay. Hello, good afternoon, Mr. Buffett, Mr. Abel. My name is Siraphob Wu, a resident of New Zealand, but originally from Thailand. This is my first time in America and the first time attending the meeting. The journey was quite rough, but it was all worth it, though, because I can now personally thank you, Mr. Buffett, and the late Charlie Munger, while he is still with us, for organizing such a wonderful event, and most importantly, for being such exceptional role models and sharing your wisdom with us all these years. So thank you. Well, thank you for coming. So here's my question for you, Mr. Buffett. Toward the end of 2018, you mentioned that you guarantee you could make a 50% annual return if you had to start again with under $1 million. The question is: If tomorrow, you woke up in the body of Amer- of, of, Your body. 20-year-old American. Yeah, your body. But that's fine. ... and your name was now Warren a la carte, and you had some money to invest on a full-time basis, what method or methods would you use to achieve that return? Would it involve flipping through 20,000 pages of Moody's Manual or similar publications- Yep. or finding, you know, you know, 2-5 cigar butts? Or would it be hunting for great companies at a fair price, as Mr. Munger would? Or would it be a combination of both, with opportunity cost serving as the final arbiter of which method to use, given that your investing opportunity has now broadened significantly? Thank you. Good question. I'm glad you came. And the, the answer would be, in my particular case, it would be going through the 20,000 pages. And since we were talking about railroads, you know, I went through the Moody's Transportation Manual a couple of times. That was 1,500 or 2,000 pages or, no, probably 1,500 pages, and I found all kinds of interesting things when I was 50 or when I was 20 or 21. And I don't imagine here there's anybody here that knows about the Green Bay and Western Railroad Company, but there were hundreds and hundreds of railroad companies, and I liked to read about every one of them. The Green Bay and Western... In those days, everybody had a nickname for, for railroads. I mean, that was just what Northern Pacific was the Nipper, and, you know, Phoebe Snow was one of them in the east that used to go up to Cornell. And the Green Bay and Western was known as Grab Baggage and Walk, and GB&W. And they had a bond that was actually the common stock, and they had a common stock that was actually a bond. And, you know, that could lead to unusual things, but they wouldn't lead to unusual things that would work for you with many millions of dollars. But if you collected a whole bunch of those, which I set out to do, and actually, that's what impressed Charlie when I first met him because I knew all the details of all these little companies on the West Coast that he thought I would never have heard of. But I knew about the Los Angeles Athletic Club or whatever it might be, and he thought he was the only one that knew about that, and that became an instant point of connection. So to answer your question, I would... I don't know what the equivalent of Moody's Manuals or anything would be now, but I would try and know everything about everything small, and I would find something. With $1 million, you could earn 50% a year, but you have to be in love with the subject. You can't just be in love with the money. You really got to just find it like a trip, you know, essentially like, you know, people find other things in other fields 'cause they just love looking for it. A biologist looks for something because they may wanna find something. And that's built into the—I don't know how the human brain works that much, and I don't think anybody knows, understands too well how the human brain works. But there's different people that just find it exciting to expand their knowledge in a given area. You know, I know great bridge players. I know great chess players. Actually, Kasparov came to Omaha and met Mrs. B. I've had the luck of meeting a lot of people that are unbelievably smart in their own arena and do some unbelievably dumb things in other areas. So all I know is the human brain is complicated, but it does its best when you find out what your brain is really suited for, and then you just pound the hell out of it from that point. And that's what I would be doing if I had a small amount of money, and I wanted to make 50% a year, but I also wanted to just play the game. You can't do it if you really, if you don't find the, the game of interest, whether it's bridge or whether, you know, whatever it may be, chess or, in this case, finding securities that are undervalued. But it sounds to me like you're on the right track. I mean, anybody that'll come all the way to this annual meeting has got something in their mind other than bridge or chess. So I'm glad you came, and come again next year. And now we move to Becky. This question comes from Denny Poland, a shareholder from Pittsburgh. When describing the principal-agent problem, Mr. Munger said that capitalism often works best when the people managing the property also own the property. In recent years, agents of pension funds and asset management firms who do not have significant personal ownership stakes in Berkshire have forwarded proposals that were not in the economic interest of shareholders. What can be done to limit the negative influence of these agents in the decades after you're no longer able to cast significant votes against them? Well, that's a very perceptive question, and it's been answered in a temporary manner. But who knows what these how the situation will develop in the future? All I know is that you have a wonderful hand at Berkshire Hathaway, but you have to be able to think your way. I mean, obviously, you have to think your way through political realities, or you have to think your way for what will cause you wanna be on, you wanna be regarded as an asset to the country because you'll find more solutions if you are an asset. You owe it to the country anyway, but beyond that, you'll find more solutions than if you're regarded as evil or something, and worse yet, if you deserve it. So it's something that's constantly in our mind, and it needs to be in the mind of the directors. And they need to think for themselves on this, rather than bow to conventional wisdom, which, you know, in a sense, you don't want to become a cynic about life, but almost everybody that approaches you, if you have tons of resources, is... has got some interest in figuring out how to use your resources to their advantage. And that's true whether they're in politics or whether they're in investment banking or whether they're selling you, well, whatever it may be that they're selling. I don't wanna do any injury to anybody, but, but, you know, life insurance agents see the advantage of buying life insurance, and, and investment managers who get paid based on assets managed to get interested in selling you their services. Imagine if everybody in this room were following the investment advice of somebody that said, "You know, for 1% a year, I'll tell you how to invest your money." And in 1950, when we started in 1965, they would've, they would've said, "Well, buy Berkshire Hathaway," and, and if they were around now, and they still had their 1% deal, they'd be collecting $8 billion a year from people who aren't getting any dividends from us. So yeah, they, they would have a different interest in, in the kind of contract they worked out with you than you would have. Best thing to do is just pay them a commission one time and own the stock. But you have to be alert to how what human nature does to both other people and to you, and then you know, if you think it, if you think it through well, and you actually listen to what Charlie has told you, you'll have a big head start on most people. Charlie, there's one thing that I should mention that really is terribly interesting about Charlie. Charlie knew the importance of psychology and human behavior and incentives and all of that. He figured that out very early, and of course, he gave some talks even on, you know, 25 or so ways, whatever it happened to be. I don't remember the exact number, but the different ways that one person could take advantage of another by understanding how humans behave. And then after doing a magnificent job of explaining it, he believed in understanding what others would do, but he thought it was beneath him, and to actually use those methods to manipulate people. Now, that's a really interesting human being that thinks through the psychology of human behavior and figures out, you know, how you become a great insurance salesman or manager on Wall Street, or accumulative assets under management, or whatever it may be, and you get very rich by understanding the weaknesses of others to some extent, and then decide that it's very important for you to recognize these when they occur. It's very important for you to know them better than the person that actually is using them, but not... but you don't have to stoop to using them yourself. Charlie told me that, you know, in his lifetime, after he figured this out, there were a couple of times when he used them. He wasn't proud of it, but he also never lied to me. So, he explained to me that, you know, there were a couple times when he used some of these techniques, but he wasn't. He didn't plan on using them anymore, but he also wanted me to know that if I ever did something like that, I wasn't really behaving terribly, that he allowed for the fact that humans may misbehave. So I'm sure that I behaved somewhat better before my marriage than I did afterwards in my enthusiasm for different activities, like dancing or something, and he said, "That's... You know, we all do it, but don't do it again." And so that's part of acquiring human wisdom. And speaking of human wisdom, we've just got that one book out there by Charlie, I mean, Poor Charlie's Almanack, and that's worth reading three or four times. I think I read Ben Graham's book about five or six times, and each time I read it, I realized that I could, I just needed to think a little more deeply about certain things. They weren't complicated or anything, but, you know, it, it's better to. If, if you've got some great instruction, like you get with Charlie, it's better to read it several times than to just figure you'll just read every book once, and it's in the library. Okay, let's go to section four. Jeff Rabalais from Tulsa, Oklahoma, and I'm thinking of Dr. Graham, Mr. Munger, your father, and my question is for all of us, but it's probably especially for the younger people in the room, the importance of picking the right heroes in life, choosing friends wisely, and maybe tell us a story, if you could, about each of those folks? Thank you, sir. Well, there's no question you're 100% right in terms of having the right heroes. And you know, you're lucky if you get them. I mean, Charlie had... Charlie had them. I had them. And the interesting thing, my sister is here today, my younger sister, that we're the two survivors. And we both experienced having the same hero, even though as we grew older, we saw that we didn't agree with plenty of his ideas, but we did agree with his values and motivation. And that's a better lesson than having somebody that is reading to you from a catechism that is, has got a lot of rules in it, which are pretty good rules, but there's a special place for somebody that is going to continue loving you, even if you break some of the rules. That's what Charlie had in his life. It was what Bernie and I had in our life. So I would just repeat what you said. I don't need to give you a bunch of... Well, when I ran away from home... I'll give you a specific example with me. When I ran away from home and we hitchhiked up to Hershey, Pennsylvania, and got picked up by the state police and everything, and I talked these other two guys into it. We lied like crazy to the state police, you know, saying we had our parents' permission. Some kid at the place where we stayed had tipped them off that we'd run away from home, and we started... Like I said, when the state police picked us up, we decided that two things, you know? We decided to tell them a bunch of lies about the fact we had our parents' permission, and we decided we better get out of Hershey because these cops were gonna find out sooner or later. So anyway, we end up back in Washington after a couple of days, and when I walked in the door... Well, one of the boy's mother, and this other kid was the Congressman Bell, and his mother was in the hospital over this whole thing. He'd taken out his cash and his savings bonds, and so she was sick, and Judge Bell, her husband, was all concerned and everything. And I walked in the door, and I'm in Washington, and my mother said: "How come you came back so soon?" And my father said, he said, "I know you can do better." And I just paid more attention to my father than my mother. And, so you wanna have the right heroes, and you don't have to have them. It's not the heroes based on what they've accomplished, and it's, you know, the people that you wanna be yourself. And, if you copy the right people, you're off to a great start, and I don't mean a great start about making money. I mean, a great start about living your life. So you can check with my sister, Birdie, who's here, and see if I've told the story correctly. She ran away from home, too, incidentally, but she didn't get as far as I got. But she was running away to go over to my grandfather's house, which was about two miles away and... But I don't wanna denigrate her runaway abilities—because she was much more accomplished than I am in all kinds of other things. But when it comes to running away, I definitely outclassed her. Okay, let's go to Becky. This question comes from Vedant Sharma in India. "Warren, you and Charlie have often said that you were able to identify the people you want to go into business with and have had an exceptional record in that. However, in the case of Pilot, we noticed that the final stake purchase ended up in a dispute and had a sense of smart accounting, to put it one way, to squeeze a little more out from the deal than was deserved by the seller. Knowing well that this has been settled out of court and needs due confidentiality, I would like your views on some of the lessons learned that may be beneficial for future deals to watch for and for coming leadership to look out for as well. Well, I'll make two comments on that. That a couple of the directors had our doubts about—their doubts about going in. In any event, Pilot is working out well for us, and as my friend Sam Butler one time said to me that, and he was talking in general about certain kinds of situations, but he said, "Well, Warren," he said, "All's well that ends." And that's where we are. So we'll go to station five. Well done. Well, while we're getting to station five, I'll tell you a little bit more about the fellow that is now running Pilot, and who you may have met here, that Greg had known for a long, long time, and he grew up in Omaha and came from a poor family and was raised by his mother. Right. Went to the same high school, public high school, that my wife went to, North High. Went to University of Omaha, set an all-time record in the rushing yardage at playing there. He was a bouncer. Yes. Drafted by the New York Giants, as I remember. Exactly. Yeah, and but then injured, actually in spring training, as I remember, in some way, and so he ended up being an intern, not an intern, but a trainee, you might say- Right For MidAmerican before I was there. And now here he is, still relatively young, and he's running a huge company, and we've got incredible confidence in what he will do, and we like very, very, very much the business that was created by Big Jim Haslam. You know, it really is almost an only in America type story, but it does show you what somebody with some real stuff and with a mother that believes in them, and with bad breaks along the way. I mean, imagine how you'd feel if you were drafted by the New York Giants and then you suffered some injury in spring training- Right ... or something. I mean, and you spend your life, it just hurts. But, it's not an experience I would have ever had. I mean, I was the last guy chosen. But, you know, to see that he's running a company, well, depends on the price of the deal, but a huge company and, what does he have? 20,000-25,000 or so? Right. Yeah, of employees. 25,000. Yeah, and he's got many, many, many years to go. So I couldn't be more pleased about not only the acquisition of Pilot, but just what it tells you about America. You can... Can't you? What do you have to look up to read about him in Google or an interview with Adam? Yeah, I'm trying to think if it's a podcast. Yeah. Um- He, he, he's got a podcast- Yeah ... podcast that will just blow you away. If you don't think this is a great country and has a lot of great people in it, all you gotta do is read that podcast. But we do have a great set of assets here. Oh, yeah. You know, if you look at Pilot, we have 800, more than 800 stations, travel centers, and just so everybody knows, I mean, the beauty of that, and there's a question regarding this morning around fuel choices at Pilot. And the exciting thing is, in the end, Pilot's gonna serve whatever fuel our customers need. It can be electric, it can be renewable diesel, it can be diesel, or any of the various sustainable fuels. But the point is, it has exceptional locations that are on the interstate highways, and we- Hundreds of them. Hundreds of them. Yeah. We bought an incredible franchise, and now we have a great leadership team in both Adam and his team that's around him. So we're pleased where that opportunity will go. Yeah, we've got probably the average one might be 10 or 12 acres or something like that- Yeah ... zoned commercial on interstates throughout the whole United States. I mean, who knows? But what was created there is amazing, too. Yeah. You have a fellow that. Yeah ... that played at University of Pennsylvania, I mean, University of Tennessee, undefeated. Yeah. And came away from this football team, and you'd think, "Well, another football player, you know, maybe the..." He goes out and there may be some intermediate parts in the story about a little bit, but he buys a gas station, and he turns it into something that is huge. So it's... We're really delighted with it, and, you know, it, it's another kind of only in America story. Yeah. You know, how many of us can become an All-American, number one ranked team, let alone start a business that goes on to these sort of heights? So we feel very good about it. Becky? No, I think they're ready for five now. Oh, I see. I'm sorry. I think he's up there now. Oh, okay. He's ready to go. Okay, go to it. Yeah. Hello, Mr. Buffett. My name is Chang Yabo. I came from Haikou, Hainan, China. So I want to express my sincere gratitude for you, for the extraordinary value you generated for shareholders and the positive influences you've had on younger generation of investors like us. And my question relates to the concept of maximizing the duration of compounding. As individuals age, the quality of compounding inevitably diminishes. What are your secrets in maintaining your sharp mind, extraordinary judgment, and great physical condition? We wish you well. Thank you. Well, you don't know me well, but that's, I like... Just keep talking. I mean, the, Well, I, you know, just you have to be just plain lucky. I mean, there's no question about it that there's 100 or 1,000, you know, multiply a number of times that some drunk could have pulled out a car and broadsided me or, you know, just all the bad luck that you can have in life. And I, you know, you can say that my, my great skill has been avoiding bad luck, but that isn't a skill, that's luck, or bad, bad, bad activities. And, and, you know, and then to get to be... You know, I would not have been—If you'd taken my high school class, and you just say, "You know, a couple of you are gonna live to be 90, men are gonna live to be 93," I maybe, I've been... You know, I wouldn't, I would not have been a heavy favorite, I can tell you that. And I wouldn't have bet on myself. But you just, you, you... Now, you, you should make the most of your luck when you get it, and sometimes I've done that, and sometimes I haven't. I mean, it is absolutely true that if, if I had it to do over again, there, there'd, there'd be a lot of different choices I would make, whether they would have ended up working out as well as, as things have worked out. It's hard to imagine how they could have worked out any better. So, so, but it is interesting how many mistakes you can make, if you just keep going. And Charlie, you know, when he used to talk about that, that you just soldier through, you just keep going and... But you still need luck. You don't wanna-- Anybody that says, "I did it all myself," is just kidding. I mean, it's just, it's, they're delusional. And, you know, actually, live in a country where the life expectancy is pretty darn good, you know, so- Yeah. That alone is a huge plus. I was born. If I'd been born, my sister's here, and she was born female, and she's just as smart as I was and everything, but even my own family, who really did love us all equally, well, particularly my dad, and in a terrific manner. But he still told me that this is 10, well, I was born 10 years after the Nineteenth Amendment was passed, but he basically told my sisters, you know, "Marry young while you still have your looks." And he told me that the world, you know, that power is new in nature, and that you really could do anything. Well, I found out there were a lot of things I couldn't do, but the message given to females and males was incredibly different by the most well-meaning and loving of parents. You know, like I say, in 1930, I mean, it had been that way for millions of years. It's changed quite dramatically, but obviously not completely, but during my lifetime, but it's been during the latter half of my lifetime. If you take my sisters, if they'd been born even five or 10 years later, they would, they still would have been, you know, getting instructions when they went away to college to be sure and, be sure and get married while or, or, or get arranged so that you're going to be married, you know, while you're in school, because after you get out, all the, all the good ones are taken. That was... Birdie was telling me that was a message that, that, you know, basically was, had been imparted, to most of, a lot, lot of the women she'd met, obviously. And so it, it, it really, it's, it's extraordinary how much progress we've made, but it's, it's unbelievable how long it took to get it made. I mean, it really does make you wonder about, you know, we've got all these heroes from American history and all the wonderful things they did, but how could they say all men are created equal and then write a constitution that women, you know, allow women not to be able to own property, and then, depending on the state, I mean, just terrible conditions. But anyway, that's how you learn about what the humans can do. And I feel... And you've got to feel better about the future for your kids than you would have felt a hundred years ago, no matter, you know, what the situation is. Anyway, we'll move to Becky. This question comes from Linda Frazier in Westport, Connecticut.... Dear Mr. Buffett, in the past, you've specified that 90% of your wife's inheritance be invested in a low-cost S&P 500 index fund and 10% in short-term government bonds. But the market cap of the Magnificent Seven tech stocks now represents more than one-quarter of the market cap weighted S&P 500 index, which seems like a big bet on the tech sector. I was wondering if you would now recommend investing some portion of the funds in a low-cost, equal weight S&P 500 index fund, rather than having all of the equities exposure in a tech-heavy market cap weighted fund? Well, that's an interesting question, and I will tell you that I revise my will about every three years or so, and I get little thoughts from time to time, and then you don't change it every time you do it. You get a tiny thing, but the one section I haven't changed is that with my wife, that she got left a huge amount of money by practically anybody's measurement, except a pittance compared to what I've accumulated in total. And it doesn't—it won't make one bit of difference to her in life whether she beats the S&P or anything else. All, all I want to leave is plenty of money to take care of way beyond anything she'll ever spend, and at the same time, give her as much peace of mind as possible, and really make it so that the trustee who administers it doesn't really have to... doesn't have to worry about whether it just doesn't make any difference whether she beats the S&P or not. And the main thing is that she feels, that she feels that she's in a financial position, which, of course, she will be, that she doesn't even need to think about it, and the trustee doesn't have to worry about getting sued or anything else. So it's simply not an economic condition. Now, obviously, with 99% plus of what I have going to philanthropy and, you know, and I've got my three children. The one good thing is that they've at the age of 70, 69 and 65, they have matured remarkably, probably more than their father. And that, but at the same time, they've got less time to work with the money than they would if, you know, they were 50 or something like that. So you do, you do the best in in accomplishing your objectives in your will, and, and in the end, you know, you can't, you, you don't know what's gonna happen after you die, but you make sure that, that, to the extent that you leave, and you have a lot of money to leave, you take obviously, you, you wanna say thanks to a lot of people in, quite a few people in terms of specific requests. You wanna take care of the, your family, but, but in my case, that requires practically no money, and, and there, a fair amount for taxes, but I have, and my children are in charge of what happens to the funds that are left. But like I say, the problem is when you live as long as I have, and the kids get older, you know, then who knows what happens to the mortality tables, and they're the ones that I really wanna see handle the distributions, and they will, and they'll be very good about it. And but if we're all alive three years from now, they'll be three years older, and that... So everything—you can't solve everything in life. You do the best you can with it, and people do interesting things. And I've been around probably as many rich people as almost anybody, and a fair number of them I know what they're doing or have done with their funds. The idea that you can have a huge amount of money and leave everybody very rich and have people liking each other less when it all happens, is humans are really, they are interesting to watch. Some of them handle it beautifully, and others are terrible. The one thing lawyers will always tell you is, "Don't use codicils." In other words, you know, when you change your mind on a will, just write a new one, but tear up the old one. Don't do it by just adding codicils. But I believe I'm correct, certainly read it, that Paul Getty, who was the richest man in the world, presumably, at one point in the 1950s or 1960s, and he's a very interesting guy to read about, and he had five wives, and he's the one whose grandson was kidnapped, and they sent Paul Getty an ear of the child and everything. I mean, it's not a happy life when you get through it. But the one thing he did that was kind of interesting, he actually liked to use codicils because I think he had, like, 25 of them, and it was kind of his way of writing, "Well, I'm taking you out of the will because..." You know, and so he got – he sort of delighted in explaining through his will what, how he felt about all these people. I mean, you really get some strange things revealed in a will. I just read about a will of a fellow who made a whole lot of money and was leaving it to his... I don't know whether his children, grandchildren, whatever it may have been, but in any event, his opening line in his will is, and this was done some years ago, but I know something about the family. His opening line, in effect, said, "I'm writing this will while I'm riding in the economy section of Eastern Airlines number such and such." I mean, he believed in getting right to the point of what the people who were recipients, how they should live, and he was gonna be judging them. And it's just so damned interesting to watch people's wills. But you know, one guy left a lot of money to his wife on the condition that she remarry so that at least one man would mourn his passing, you know? Well, I'm not giving legal advice here, as they always say, but I feel, I feel very, very, very good about how things have turned out, and I wish I could figure out ways better to use, you know, the really vast resources I've got in some of the really important questions of the world. But I haven't been able to do that. I mean, I had a few goals when I was 30 or 40 and may have written them in the wills then in terms of what the world needed done and how the money could be used, and unfortunately, I decided that it just they weren't feasible to accomplish. And, of course, I'll be setting out to accomplish things that are, that were important, but nobody had solved yet, so you gotta expect that. Why, why should I be able to solve them? But nevertheless, it's an interesting... But, and the one thing about it is everybody here, I don't know about the ones who've come from other countries, but they should, you should have a will, 'cause if you don't have a will, you still have a will, and it'll be whatever the state says. And it's amazing, four American presidents died intestate, without wills. four. You know, we've only had 45, and imagine becoming President of the United States and not having a will. But you can look up a somebody recent, I think Lincoln. I'm certain Lincoln was one of the four, and here's a man... I mean, I don't know whether you can always say, "Well, he didn't get around to it," but that's hard to imagine why Abraham Lincoln would've died intestate, and I'm sure we've got some Lincoln scholars out there that will write me after this and explain why, but I—and I'll be interested to receive their letters. But human beings are human beings, and we all have weaknesses and peculiarities and everything else, and don't be too hard on yourself, because you have some of those, but don't be totally forgiving either. You can change the future. You can't change the past, but you can change the future. Okay, station six. Good afternoon. My name is Caroline, and I'm a lawyer in San Diego. A lawyer, you're in trouble! But please don't hold that against me. Remember, Mr. Munger was once an attorney, too. Right. First, I'd like to sincerely thank you, Mr. Buffett, for your business integrity, tireless leadership, and generous contribution to philanthropy. My question for the distinguished panel of two is, now that the AI genie is out of the bottle, as someone astutely put it earlier today, what business in Berkshire Hathaway may be most at risk with AI? Well, that's a wonderful question. The problem is, I really don't know anything about AI, but obviously, you know, anything that's labor intensive and that it can create an enormous amount of leisure time. Now, what the world does with leisure time is another question. Whether more leisure time, I know an awful lot of people think when they go to work at first, that what they want is leisure time, and what I like is actually having more problems to solve than... But AI is profound, and I mean, that's what makes it a genie, you know, is what can happen. I could tell a few genie jokes, but I better not. I guess Warren, we probably- I don't know, you know, in terms of our businesses, they'll figure things out. I mean, we've got smart people, and it's obviously if it's used in a pro-social way, it's got terrific benefits to society. But I don't know how you make sure that that's what happens any more than I know how to be sure that when you use two atomic bombs in World War II, that you know that you hadn't created something that could destroy the world later on. Yeah. Yeah, I think when we think of AI at a lot of the business units, I mean, we're truly, Warren, trying to think how does it make us more efficient, more effective? I mean, it results in more idle time, and we're probably not thinking of the iterative AI, where we're looking at very specific processes where our people can implement it, and either at times it displaces the labor, but then hopefully there's other opportunities for them within the business. But I think, you know, when you think of all our businesses, I mean, we do have a heavy labor workforce in a lot of them, but I think at the stage we're at as a company and maybe where it's at right now, it's really around how do we do things more effective, more efficiently, more safely if it's involves dangerous processes. So it's... We're early innings. Yeah. John Maynard Keynes was just wonderful to read and incredible mind, but in around the time I was born, he wrote a book about what could happen. I don't know whether it was in the next 100 years or whatever, and he predicted correctly that output per capita would grow at this incredible rate that it has. But in terms of speculating as what people would do with that, I mean, this guy was unbelievably smart. But it hasn't developed exactly the way he predicted. He was right about what was gonna go into the equation, but he didn't have it figured out exactly what at all what would be the result. So it is really... Well, we didn't know when we were developing the bomb that there would probably be, as very soon, nine countries, three of whom we should worry about plenty, that will have what they have, but we didn't really have any choice. And you could have had all kinds of papers written on it and everything else, but we were gonna do it anyway. We needed to do it. And if you haven't read it, it's fascinating to go to Google and read the letter by Leo Szilard and Albert Einstein to President Roosevelt, written about a month before, well, almost exactly a month before the, Germany had moved into Poland, and it laid out... Well, Leo Szilard knew what was going to happen or had a good hunch of what was gonna happen in terms of nuclear bomb development, and he couldn't get through to Roosevelt, but Roosevelt, but he knew that a letter signed by Albert Einstein would. So it's probably the most important letter ever written, and you can read it, which is just fascinating to me. But that started the Manhattan Project. That started, you know... It just, everything flowed out of it, and, like, I'll bet anything that Roosevelt didn't understand it, but he understood that Albert Einstein just sent a letter, and he probably knew what he was talking about, and he better get, he better start the Manhattan Project. It is just unbelievable what happens in this world. Anyway, let's move on to Becky, I guess, is next, right? Yep. Randy Jeffs from Irvine, California: "The March 25, 2024 Wall Street Journal reported that the Treasury market is about sixfold larger than before the 2008, 2009 crisis. Do you think that at some point in time, the world market will no longer be able to absorb all of the U.S. debt being offered? Well, I would say the answer, of course, I don't know, but my best speculation is that US debt will be acceptable, but for a very long time, because there's not much alternative, but it won't be the quantity. You know, the national debt was nothing to speak of, like, you know, for a long, long time, and then it won't be the quantity. It'll be whether in any way inflation would get let loose in a way that really threatened the whole world economic situation, and there really isn't any alternative to the dollar as a reserve currency. And you get a lot of people who will give you a lot of speeches on that, but that really is the answer. That, and Paul Volcker worried about that back in 19... You know, well, before 1980, but he had threats on his life, and I happened to have a little contact with him at that time, and he was an amazing fellow that in effect decided that he had to act or go. Really, the financial system would fall apart in some way that he couldn't predict, and he did it, and he had people threatening his life and do all kinds of things, and but he was the man for that crisis. But it wasn't the quantity of US debt that was being offered that threatened the system then. It was, it was the fact that, that inflation and the future value of the US dollar, you know, the cash is trash type thinking, the term, you know, that, that was setting up something that could really affect, the future of the world in terms of its economic system, and Paul Volcker took it on, and, and, he was gutsy as could be. And if you haven't read a book or two about him, or the one he last wrote, you really ought to take a look at it. But, it is... I, I don't worry about the quantity. I worry about the fiscal deficit, you know, if it, it... But I'm not a worrier, just generally. I mean, I think about it, and but I don't sit and get upset, work myself into a stew about it in the least. But I can't help thinking about it, and that's... We've got a greater tension. It's interesting, and I think the media enters into this, and the focusing, it focuses on the Fed, and they, you know, they just love it because things are always happening, and economists are always saying what's going to happen with the Fed and everything else. But the fiscal deficit is what should be focused on, and Jay Powell is not only a great human being, but he's a very, very wise man, but he doesn't control fiscal policy, and every now and then, he sends out a kind of a disguised plea for "Please, please pay attention to this because that's where the trouble will be if we have it." Yeah. As one of the comics used to say, there was a stand-up comic, he used to say, "Who have I forgotten to offend?" After this talk, and I always feel like that after these meetings, but we've got time for at least one question and maybe two, but let's go to station seven. Hello, my name is Dennis from Gifu in Germany. This is my first time here. I'm here with my friend, who would, by the way, love to invite you to dinner. You talked about the importance of heroes, and we are very happy to... and thankful that we have you as our hero with great values, and thank you for that, first of all. My question is: It is clear that you achieved great success in life. Earlier, you talked about every investment having opportunity cost. From what I've learned in life, that does not only apply to investing your money, but also to investing your time. Right. Every hour you spend in your office is an hour you cannot spend with your spouse or children. With the life experience you have now, if you had the possibility to start all over again, would you set your priorities any different? If yes, how and why, and what's the best way to invite you to dinner? Well, well, that definitely won't be one of my priorities if I figure out how to... But that doesn't... Don't take it personally because that, when, when, you know, you can figure out the, at the maximum, how, how long a period I've got, and, you know, I don't think... I mean, I can figure out all kinds of things that should have been done differently, but so what? You know, I mean, the, I'm not perfect. I, I, I don't believe in lots of self-criticism or being unrealistic about either what you are or what you've accomplished or what you'd like to do. You do the, you know, you do a lot of things, and, and, who knows whether somewhat different trade-offs... You know, you just can't, you, you can't—you don't know what the past would have been. I don't think there's any room in beating up yourself over what's happened in the past. You know, it's happened, and you get to live the rest of the life, and you don't know how long it's going to be, and you keep trying to do the things that are important to you. And if I was a doctor or if I was, you know, all kinds of different professions, I might do different things, but I really enjoy managing money for people who trust me. I don't have any reason to do it for financial reasons. You know, I'm not running a hedge fund or getting an override on or anything, but I just like the feeling of being trusted. Charlie felt the same way. You know, that's, that's a good way to feel in life, and, and it continues to be a good, good feeling. So, I'm not really looking to change much. And, you know, if I'm very lucky, I get to play it out for six or seven years, and it could end tomorrow. But that's, that's true of everybody, well, although the equation isn't exactly the same. But I don't believe in beating yourself up over anything you've done in the past, and I don't believe in—well, I believe in trying to find, you know, what you're good at, what you enjoy. And then, I think the one thing that you can aspire to be, and 'cause this can be done by anybody, and it's amazing, doesn't have anything to do with money, but you can be kind. You know, that's... You can be kind if you're... And then, the world's better off. You know? Yeah. I'm not, I'm not sure that the world will be better off if I'm richer, but there's no question that... I mean, and you know kind people, and in the end, aspire to be more, or you're... I'm sure many of you are yourself, but just aspire to be more so. And I guess we can take one more question from Becky, and then we'd wind up. This question comes from Devon Spurgeon. On March fourth, Charlie's will was filed with the County of Los Angeles. The first codicil contained an unusual provision. It reads, "Averaged out, my long life has been a favored one, made better by duty imposed by family tradition, requiring righteousness and service. Therefore, I follow an old practice that I wish was more common now, inserting an ethical bequest that gives priority not to property but to transmission of duty." If you were to make an ethical bequest to Berkshire shareholders, what duties would you impose, and why? Hmm. I'd probably say read Charlie. You know, I mean, he's expressed it well. And, I would... Well, I would say that, that if they're not financially well off, if you're being kind, you're doing something that most of the rich people don't, don't do when they-- even when they give away money. But, that- that's not a question of when you're-- whether you're rich or poor. And, and I would, I would say if you're lucky in life, make sure a bunch of other people are lucky, too. Yeah. Okay. Just in case you know what my advice to myself would be, has been during this period. So we only got 30, what, three questions or whatever it is. But thank you very, very much for coming. I not only hope that you come next year, but I hope I come next year. Thank you. Thank you. Thank you.