In the eagerly anticipated Q&A session at the shareholder meeting, Warren Buffett, the CEO of Berkshire Hathaway, spared no effort in answering the questions of the attendees. These questions covered a number of hot topics, including the reduction of Apple Inc.’s shares, the company’s cash reserves, succession planning, and artificial intelligence and autonomous driving.
On Saturday morning, local time, under the leadership of the legendary investor Warren Buffett, Berkshire Hathaway welcomed its 59th annual shareholder meeting. The 93-year-old Buffett provided a fascinating Q&A session for shareholders. This was the first time Buffett faced the shareholders alone after the passing of his longtime partner, Charlie Munger. Alongside Buffett answering questions were Berkshire’s non-insurance business manager Greg Abel and insurance business manager Ajit Jain. Notable figures, including Apple CEO Tim Cook, were also present at the event.
After the death of his longtime partner Munger, Buffett specifically requested that the lights be turned on at the venue to pay tribute to Munger, who had fought alongside him for more than sixty years.
Buffett looked back on his investment journey, mentioning that Munger had firmly insisted on certain decisions, which led him to make crucial investments, such as those in BYD and Costco. He praised Munger’s judgement in these moments as being accurate and stated that there was no better discussion partner in financial affairs than Munger.
When faced with questions about the potential threats of artificial intelligence, Buffett cautiously stated that his understanding of artificial intelligence was limited, but noted that any industry centered on labor might be affected by AI technologies. He also pointed out that artificial intelligence is a “genie that has been released from the bottle,” meriting deep discussion.
In discussing the potential impact of autonomous driving on the insurance industry, Buffett believed that autonomous driving technology might reduce traffic accidents and related costs. He added that many people are skeptical about innovative technologies, just as they were initially with Uber, but in the end, Uber proved its success. He emphasized that as technology continues to advance, the future trend of autonomous driving would be revealed by actual data.
Buffett’s deputy and Berkshire vice-chairman, Ajit Jain, added that the current technology sounds sufficient to change the probability of car accidents occurring. However, this does not mean that the overall average number of accidents would decrease.
Tesla is making inroads into the insurance industry, but whether it can become a new darling of the market remains uncertain. Due to the high costs associated with the transformation of the automotive insurance industry, the success of this innovative initiative will require time to be validated.
Investment guru Warren Buffett is known for his keen investment vision, and he emphasizes the huge role of luck, pointing out that avoiding risks and averting disasters are his real tricks, which is key to his achievements today.
Buffett displays generosity in taxation, noting that if Berkshire Hathaway paid over five billion dollars in taxes like last year, and if the other eight hundred companies did the same, the United States wouldn’t need other taxpayers.
Buffett also points out that excessive attention to the stock market often hinders capital appreciation and that there should be a concept of long-term ownership; hence, Berkshire investors are unlikely to trade stocks frequently.
Regarding the investment in Apple, Buffett made a comparison: Consumers might find it easier to afford a second iPhone rather than a second car. Even though he doesn’t fully understand how iPhones work, his understanding of consumer behavior leads him to believe that the iPhone is an undervalued, innovative product. He commends Cook’s work, calling him an outstanding business partner.
Discussing hedge funds and index funds, Buffett reveals their greed and emphasizes that both he and Charlie Munger find it gratifying to work with a dedicated shareholder base of Berkshire Hathaway.
When asked who will manage the investment decisions after Abel takes over Berkshire, Buffett replies that the decision will be made by the board of directors. He further explains that the board may consider different management strategies without him, but if he were on the board, he would prefer to entrust the capital allocation powers to Abel based on his deep understanding of the business.
Buffett emphasizes that if one understands the operations of a business, then he is an outstanding investment manager, hence the current responsibility will ultimately be entirely assumed by Abel as the next CEO.
Regarding opportunities in India, Buffett recognizes the potential and is observing and considering local investment opportunities. He suggests that it’s important to assess whether Berkshire has an edge in the Indian market and if their investments align with India’s vision. He also mentioned Berkshire is contemplating expanding its investment footprint in Canada.
Investing in Canada, a reassuring choice
Investing funds in Canada is a choice that brings peace of mind. However, details of the investment, including whether it’s public or private, have not been disclosed yet.
Past societal pressures
In the past, families often expected women to marry young and beautiful, even before completing their education, because suitable partners might be scarce at graduation. Today, we have witnessed tremendous social progress, a transformation that is truly amazing.
Berkshire liquidates its Paramount shares
Berkshire Hathaway has exited all of its equity in Paramount Global, resulting in some financial loss. This decision has deepened the contemplation of people’s priorities during leisure time.
Future Leadership Succession
Regarding the vision of Berkshire Hathaway without me at the helm, I am confident that the new management team will perform their duties well. You will not have to wait long to see the new leadership in action, as I also believe that promising the job to someone of advanced age for the next four years is not wise.
Expectations for the Next Shareholders Meeting
The shareholders meeting concluded successfully, and I thank all who traveled from afar. I look forward to meeting again next year, of course, that depends on whether I will be able to attend.
The “Master Strokes” of 2023
Since 1965, our cumulative gains have exceeded 40,000 times, with an annualized return rate of 19.8%, which greatly outpaces the performance of the S&P 100 index over the same period. In 2023, we continued to increase our investment in Japanese stocks, raising our stake in the top five Japanese trading companies. We also increased our investments in energy stocks, including Occidental Petroleum and Chevron, and reduced our holdings in Apple. These decisions, over time, have shown their profound foresight and deep understanding of the market.
Berkshire Hathaway announced in its latest earnings report that it achieved remarkable financial results in 2023. The company recorded a net profit of $96.223 billion for the year, which not only greatly exceeded the market’s expectation of $40.8 billion, but also contrasted sharply with the net loss of $22.759 billion the previous year.
The company’s revenue also showed a strong growth momentum, reaching $364.482 billion, an increase of 20.65% compared to last year. Especially in the fourth quarter, Berkshire Hathaway’s net profit was $37.574 billion, which is an astonishing 107.8% increase year-over-year.
