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<\/p>\nBerkshire\u2019s authority will no longer hinge on individual charisma but will instead be built upon a more diversified operational system.<\/p>\n
On Saturday, May 2, 2026, Central Time in the U.S., the annual gathering of the investment world\u2014the Berkshire Hathaway 2026 Annual Shareholders Meeting\u2014took place in Omaha.<\/p>\n
The meeting lasted approximately four and a half hours. New CEO Greg Abel addressed multiple hot topics, while 95-year-old Warren Buffett sat front-and-center to speak. CNBC also conducted an exclusive interview with Buffett.<\/p>\n
This is the first shareholders meeting held since Buffett stepped \u201cbehind the scenes\u201d after six decades at the helm of Berkshire\u2014and marks the inaugural public \u201cstress test\u201d for Buffett\u2019s successor, Greg Abel.<\/p>\n
A highly symbolic adjustment this year was seating the heads of Berkshire\u2019s subsidiaries on the main stage alongside Abel to answer questions. This move sends a clear signal:Berkshire\u2019s authority will no longer hinge on individual charisma but will instead be anchored in a more diversified operational system.<\/p>\n
WallStreetCN\u2019s summary of key takeaways from the meeting follows:<\/p>\n
1) Buffett on markets:<\/p>\n
\u201cThis is not our ideal environment,\u201d Buffett said, adding that people\u2019s gambling enthusiasm has never been higher.<\/p>\n
The most likely buying opportunity arises when nobody else is picking up the phone.<\/p>\n
Things people discuss and worry about rarely happen; instead, unexpected black swans are what truly shake markets.<\/p>\n
2) Buffett on succession:<\/p>\n
\u201cAbel has done everything I used to do\u2014and even more\u2014and he\u2019s done it better in every respect. So we give this decision a perfect score of 100.\u201d<\/p>\n
3) Buffett on Apple:<\/p>\n
Ten years ago, Berkshire spent $35 billion acquiring Apple shares. Including dividends, that stake is now worth $185 billion\u2014and Buffett did nothing.<\/p>\n
\u201cTim Cook stepping into Steve Jobs\u2019 shoes created one of the miracles of American business management.\u201d<\/p>\n
4) Abel on AI:<\/p>\n
\u201cAI must deliver tangible benefits to our businesses. We won\u2019t adopt AI for AI\u2019s sake. We\u2019ll deploy AI incrementally, focusing strictly on value creation.\u201d<\/p>\n
A deepfake video of Buffett shown during the meeting highlightedthe cybersecurity risks posed by AI.<\/p>\n
Data center construction\u2014and its surging demand on power grids\u2014presents massive growth opportunities for utility companies.<\/p>\n
Energy costs for data centers must be isolated from those of general grid users.<\/p>\n
5) Abel on investing:<\/p>\n
He reaffirmed Apple, American Express, Moody\u2019s, and Coca-Cola as the \u201cCore Four\u201d pillars of Berkshire\u2019s equity portfolio.<\/p>\n
He emphasized \u201cabsolute collaboration\u201d with Buffett on investments.<\/p>\n
Berkshire\u2019s investments in Japan\u2019s five major trading houses are long-term and strategic; partnerships with firms like Mitsui O.S.K. Lines (MOL) are deepening.<\/p>\n
Berkshire\u2019s internal structure is lean and efficient, with cross-group capital allocation capabilities\u2014no spin-offs or divestitures are planned.<\/p>\n
6) Abel on his own \u201cCharlie Munger\u201d: <\/p>\n
The Buffett-Munger partnership is \u201cunreplicable.\u201d<\/p>\n
\u201cI\u2019m surrounded by outstanding people and have an excellent team of CEOs\u2014I reach out to them and seek their counsel.\u201d<\/p>\n
7) Ajit Jain, Berkshire\u2019s Vice Chairman of Insurance:<\/p>\n
\u201cHormuz Strait coverage depends on price,\u201d Jain stated, noting U.S. Navy escort is among the prerequisites for underwriting such risk.<\/p>\n
AI is unlikely to soon achieve the sophistication needed to weigh trade-offs in pricing or claims adjudication\u2014that remains many years away.<\/p>\n
\u201cIf you expect AI to tell you which stocks to buy or sell, I don\u2019t think that will happen.\u201d<\/p>\n
Earlier, Berkshire Hathaway released its Q1 earnings report, with highlights below:<\/p>\n
<\/p>\n
Berkshire Hathaway reported $11.346 billion in operating profit for Q1 2026, up 18% year-on-year. Insurance underwriting profit rose 28%, BNSF Railway\u2019s profit grew 13%, and foreign exchange gains turned sharply positive.<\/p>\n
Net investment losses narrowed from $5.038 billion a year earlier to $1.24 billion, driving GAAP net income up ~120% year-on-year.<\/p>\n
Cash reserves stood at $397 billion in Q1\u2014the highest in company history.<\/p>\n
As of March 31, 61% of Berkshire Hathaway\u2019s total equity portfolio fair value was concentrated in American Express, Apple, Bank of America, Chevron, and Coca-Cola.<\/p>\n
Below is a chronological transcript of key moments from the 2026 Berkshire Hathaway Annual Meeting:<\/p>\n
In the morning session,Abel co-moderated with Ajit Jain, Vice Chairman of Insurance. In the afternoon session,Abel co-moderated with Katie Farmer, CEO of Burlington Northern Santa Fe (BNSF), and Adam Johnson, CEO of NetJets.<\/p>\n
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<\/p>\n
At the opening of the annual meeting, Abel formally retired a jersey bearing the number \u201c60\u201d in honor of Warren Buffett\u2014permanently commemorating the \u201cOracle of Omaha\u2019s\u201d six-decade tenure at the conglomerate. Jersey retirement is a tradition in sports, regarded as the highest honor bestowed upon an athlete.<\/p>\n
The jersey now hangs prominently from the rafters\u2014alongside the retired jersey of the late investment legend Charlie Munger, who wore number \u201c45\u201d to mark his 45 years at the company.<\/p>\n
\u201cI\u2019m pleased to announce these two jerseys will hang there forever,\u201d Abel said.<\/p>\n
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<\/p>\n
21:20 Opening Remarks \u2013 2025 Annual Meeting<\/p>\n
Ninety-five-year-old Warren Buffett entered the front row of the boardroom, guided by staff, drawing enthusiastic applause from shareholders. For the first time in sixty years, Buffett was no longer the undisputed centerpiece of Berkshire\u2019s annual meeting.<\/p>\n
The meeting opened with a tribute video montage to Buffett, featuring archival photos and footage set to Huey Lewis and the News\u2019 classic \u201cBack in Time,\u201d interspersed with highlights from past meetings.<\/p>\n
Abel introduced key personnel alphabetically\u2014when he reached Buffett, the crowd erupted in applause.<\/p>\n
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<\/p>\n
21:45 Buffett Praises Abel: \u201c100% Successful\u201d CEO Choice<\/p>\n
Buffett took the microphone from his seat and again lavished praise on Abel. He noted today marked the anniversary of his original announcement naming Abel as his successor.<\/p>\n
\u201cThis is the best decision we\u2019ve ever made\u2014100% successful. He\u2019s done everything I did\u2014and more. He is the right person.\u201d<\/p>\n
21:50 Buffett Praises Apple CEO Tim Cook<\/p>\n
During his opening remarks, Buffett invited outgoing Apple CEO Tim Cook to stand\u2014a gesture echoing Berkshire\u2019s own leadership transition from Buffett to new CEO Greg Abel.<\/p>\n
Buffett reflected on the immense pressure Cook faced succeeding Apple founder Steve Jobs\u2014and how he exceeded expectations with outstanding results.<\/p>\n
Buffett said:<\/p>\n
Think about it: stepping into Steve\u2019s shoes\u2014and surpassing his achievements\u2014requires extraordinary courage. It\u2019s one of the miracles of American business history. Thank you, Tim. After Steve passed, we made an investment decision to commit nearly 10% of Berkshire\u2019s resources to Apple\u2014effectively placing that bet in Tim\u2019s hands. And he turned it into a pre-tax return of roughly $185 billion.<\/p>\n
Cook announced earlier this month he would step down as CEO, succeeded by Apple hardware chief John Ternus.<\/p>\n
22:00 Abel Presents Earnings Report<\/p>\n
Abel said the insurance market is \u201csoftening\u201d amid intensifying competition. Auto insurance customers are engaging in unprecedented price comparisons.<\/p>\n
22:20 CEO Rejects AI Hype, Upholds Buffett\u2019s Investment Philosophy<\/p>\n
On AI, Berkshire CEO Abel stated: \u201cWe won\u2019t adopt AI for AI\u2019s sake. We\u2019ll only invest where we see real value. AI must deliver tangible, substantive benefits to our businesses. AI applications present opportunities across all our operations.\u201d<\/p>\n
Abel said Berkshire takes a cautious stance on AI deployment and governance\u2014sharply contrasting with other CEOs rushing to rebrand or restructure around the technology.<\/p>\n
\u201cWe\u2019ll deploy AI in focused, value-driven ways. At the same time, we\u2019re acutely aware of AI\u2019s potential risks to humanity and remain highly vigilant.\u201d<\/p>\n
22:40 Abel: Data Center Build-Out to Drive Utility Growth<\/p>\n
Abel said the large-scale construction of data centers\u2014and the resulting strain on power grids\u2014is creating substantial growth opportunities for utilities.<\/p>\n
Citing Iowa\u2019s expansion of hyperscale data centers, Abel noted current energy demand remains well below peak capacity:<\/p>\n
Peak load from data centers\u2014their actual electricity consumption\u2014currently accounts for about 8% of total capacity. Industry players generally target 5%\u201310%, and we\u2019ve already hit 8%. So we expect this ratio to grow another 50%\u2014or more\u2014over the next five years.<\/p>\n
Abel stressed isolating data center energy costs from general grid users\u2014and ensuring end-users bear full cost responsibility\u2014was critical. \u201cHyperscale data center operators, data centers, and all electricity consumers must shoulder the full cost themselves.\u201d<\/p>\n
Amid the AI boom, data centers\u2019 strain on regional power grids has drawn scrutiny from environmental and consumer advocacy groups.<\/p>\n
22:50 Clayton Homes Hit by High Interest Rates<\/p>\n
Abel said prefab homebuilder Clayton Homes faces headwinds as prospective buyers grapple with high mortgage rates and other pressures\u2014clearly driven by current interest rate levels. Consumers face additional challenges.<\/p>\n
Abel said the company\u2019s goal is to provide \u201caffordable housing\u201d for U.S. consumers\u2014a comment met with enthusiastic applause.<\/p>\n
23:05 First Q&A Question Asked by Buffett: Why Hold Berkshire Long-Term?<\/p>\n
Shareholders received an unexpectedly vivid lesson on AI risks during the Q&A. As it began, Abel played a video showing a familiar face.<\/p>\n
On the big screen, a man in a suit resembling Buffett introduced himself and asked Abel: \u201cWhy should investors hold Berkshire stock long-term?\u201d<\/p>\n
Hello, I\u2019m Warren from Omaha. Abel, I\u2019ve followed this company for some time\u2014quite a long time. My question is simple. I\u2019m 95, and aside from time and Cherry Coke, I lack for nothing. I\u2019d like to know\u2014so I can tell my fellow shareholders\u2014why they should hold Berkshire stock long-term.<\/p>\n
Abel then revealed the truth: the video was not real\u2014it was an AI-generated \u201cdeepfake.\u201d He seized the moment to underscore cybersecurity risks to shareholders.<\/p>\n
In answering the AI-Buffett\u2019s question\u2014\u201cWhy hold Berkshire long-term?\u201d\u2014Abel highlighted the company\u2019s $397 billion cash hoard as a powerful asset granting Berkshire exceptional flexibility. \u201cWe hold cash and U.S. Treasuries for several purposes\u2014we won\u2019t let anyone dictate our actions.\u201d<\/p>\n
Abel reiterated Buffett\u2019s enduring core investment and operating principles.<\/p>\n
He told investors that holding cash in U.S. Treasuries, maintaining financial independence, flexibly allocating capital, prioritizing tax efficiency, and remaining vigilant against \u201cABC\u201d\u2014Arrogance, Bureaucracy, and Complacency\u2014remain top priorities:<\/p>\n
We\u2019ve heard it countless times: Arrogance, Bureaucracy, and Complacency can quietly erode a company until it collapses. We will never allow that to happen at Berkshire.<\/p>\n
He described Berkshire as a unique enterprise\u2014capable of integrating vastly different businesses while deploying capital swiftly and flexibly:<\/p>\n
Berkshire is a conglomerate\u2014we recognize that. But we\u2019re a different kind of conglomerate because we allocate capital extremely efficiently. We can shift funds from insurance to non-insurance businesses, invest in equities, or hold cash when appropriate.<\/p>\n
Abel said the deepfake video starkly illustrated the AI-driven cybersecurity risks confronting Berkshire:<\/p>\n
It\u2019s a timely wake-up call for our team. This is a major, pervasive risk across Berkshire\u2014one we confront daily. Berkshire will actively use technology to detect cyber threats, especially within insurance operations. Abel also clarified that this deepfake video was produced without any involvement or authorization from the \u201cOracle of Omaha\u201d himself.23:15 Real Q&A #1: Where Does Human Judgment Remain Berkshire\u2019s Edge Amid AI Tools?<\/p>\n
Ajit Jain, Vice Chairman of Insurance: AI is very much in vogue right now. People are rushing into it across both insurance and non-insurance domains. Clearly, if AI lives up to its hype, it will unquestionably be a game-changer.<\/p>\n
Currently, we see AI used primarily as a productivity tool\u2014to reduce labor costs and automate routine, repetitive tasks. I don\u2019t believe AI can yet make decisions requiring trade-offs in pricing, claims, or similar areas. That will take many more years.<\/p>\n
And I\u2019m inclined to be skeptical. If someone tells me they\u2019ve solved that problem, I\u2019d be surprised. So if you\u2019re counting on AI to tell you which stocks to buy or sell, I don\u2019t think that will happen.<\/p>\n
Jain said he\u2019d recently discussed this with Abel, who immediately brought his team onto a call to highlight network risk\u2014a topic they\u2019d already covered.<\/p>\n
They quickly moved on to how to improve coding efficiency and code management across insurance operations\u2014a priority they\u2019d flagged. Then, as you mentioned, how to become more efficient. They cited an excellent example:<\/p>\n
For instance, if a traditional underwriter assesses risk, they might focus only on the top five largest exposures\u2014your team pointed this out.<\/p>\n
Now, we can rapidly identify those top exposures\u2014but technology also lets us quickly spot other risks. We may now examine 15 additional exposures with strong judgment.<\/p>\n
23:20 Q2: Balancing Patience and Action<\/p>\n
Question: As a young investor navigating uncertainty and rapid technological change, I often struggle to balance patience and action. How do you personally distinguish between the two?<\/p>\n
Answer: One of Berkshire\u2019s greatest advantages is patience\u2014and discipline in capital allocation. Over time, opportunities will arise. That doesn\u2019t mean no opportunities exist today, nor does it mean you must deploy all your capital or spend all your money now.<\/p>\n
This truly is our daily approach. We recognize the importance of our large cash and U.S. Treasury holdings\u2014as exemplified by our own position. I view this cash as an asset\u2014an enormous opportunity. You\u2019ll feel the moment when an opportunity presents a compelling value proposition. When will we see these?<\/p>\n
We\u2019ve articulated our investment philosophy, and a crucial element is deep familiarity with what we invest in. We seek profound understanding\u2014you mentioned technology and its rapid evolution. I always start there, and I know Berkshire has always done so: Do we understand this business? Do we understand this opportunity? More importantly, do we understand the risks?<\/p>\n
Then, we aim for a crystal-clear view of its economic prospects over the next 5\u201310 years. Yes, next year matters\u2014but we don\u2019t invest for one year. A long-term perspective on opportunity is essential. We go further\u2014we intend to hold these investments indefinitely.<\/p>\n
So we think: We want a strong conviction about the management team\u2014their capability and integrity. But above all, value must first justify deploying our capital. We won\u2019t rush capital into suboptimal opportunities.<\/p>\n
We ensure alignment with our principles\u2014and then, as I said earlier, we act decisively and commit significant capital.<\/p>\n
23:25 Q3: Balancing Oversight of Wholly Owned Subsidiaries vs. $288B Equity Portfolio<\/p>\n
Question: Abel, your background as an operator differs from Warren\u2019s as a public-market investor. Can you share how you balance your time overseeing wholly owned subsidiaries versus Berkshire\u2019s $288 billion equity portfolio? And relative to Warren\u2019s historical approach, will your operator\u2019s lens alter how you evaluate new investment opportunities?<\/p>\n
Abel shared fresh insights on how he views Berkshire\u2019s massive equity portfolio, emphasizing a concentrated strategy anchored in a few core holdings.<\/p>\n
He named Apple, American Express, Moody\u2019s, and Coca-Cola the \u201cCore Four,\u201d viewing them as the bedrock of Berkshire\u2019s equity investments. He also highlighted Berkshire\u2019s large stakes in Japan\u2019s five major trading houses as another pillar of the portfolio, underscoring Berkshire\u2019s long-term holding commitment. Beyond these core positions,Abel specifically cited other key holdings including Bank of America, Chevron, and Alphabet. Berkshire purchased approximately $4 billion of Alphabet stock in Q3 2025.<\/p>\n
Abel said he will play a more active role in portfolio management\u2014timely adding to or adjusting positions.<\/p>\n
He added that he is \u201cfully collaborating\u201d with Buffett on investment decisions.<\/p>\n
Abel: I ran various businesses at Berkshire Energy for many years, then served as Vice Chairman of Non-Insurance Operations. Fortunately, Jain and I have held these excellent roles for the past eight\u2014and now nine\u2014years. This gave me a vital opportunity to deeply understand these businesses.<\/p>\n
As I\u2019ve noted, we have outstanding businesses and outstanding leadership\u2014but opportunities remain. Still, it reminds me I\u2019ll spend dedicated time on these businesses to ensure sound capital allocation, ongoing risk assessment, and encouragement of excellence in operations. Because, look: as an insider, it\u2019s easy to rely on internal metrics to convince yourself you\u2019re doing fine\u2014you must look outward and ask: What do customers see and feel? What are competitors doing? I believe this is precisely the value we bring through operations.<\/p>\n
I mentioned giving Adam Wright broader responsibilities\u2014or having him take on more duties across 32 businesses. He brings exceptional operational knowledge, and we have the insurance team too.<\/p>\n
Now, regarding the equity portfolio and time allocation: There remain huge opportunities in deploying capital on our balance sheet. I\u2019ve shared the scale of our cash and U.S. Treasuries. Let me emphasize: If you examine our current equity portfolio\u2014as outlined in my letter\u2014we run a concentrated portfolio. We emphasize this by calling it \u201ccore,\u201d but the clearest description is that it truly is a concentrated portfolio. We have what we call \u201ccore and concentrated\u201d investments.<\/p>\n
In my letter, I highlighted our Japanese investments. Interestingly, if you look at the next tier of companies where we hold significant stakes, I\u2019d add that for these companies, we may still be buying shares or rationalizing positions appropriately. So the first group I emphasized stands just under $200 billion\u2014and remains at that level. We now hold close to $100 billion\u2014or $85 billion. Then adding other Berkshire investments like Bank of America, Chevron, Google, etc., plus another $7 billion, underscores how heavily concentrated our overall portfolio is in a limited set of holdings. Active management of these is actually quite limited\u2014which is precisely what I want to stress.<\/p>\n
We understand those businesses. We understand their management teams. These are things Warren and I still absolutely collaborate on and discuss. You don\u2019t need to discuss them daily\u2014but if something arises in these businesses, we\u2019ll discuss it that week or month\u2014perhaps about their direction or lessons learned. Japanese companies just reported earnings within the past 48 hours, making this an active discussion topic. Yesterday morning, Warren and I discussed their results and what we\u2019re seeing there. So these are core\u2014but that doesn\u2019t mean we set them aside or treat them as static holdings we merely monitor.<\/p>\n
Ted manages another $20 billion\u2014or slightly less\u2014but his responsibilities extend far beyond that. He clearly helps us across other opportunities\u2014or assists in evaluating risks or capital allocation within our businesses. So we\u2019re fortunate to have these resources\u2014but considering the management required, this is a highly manageable portfolio.<\/p>\n
As we\u2019ve noted, deploying this cash and U.S. Treasuries at the right time is a massive opportunity\u2014including equities, operational businesses, and insurance.<\/p>\n
Regarding time allocation: Yes, we\u2019ll spend time on operations\u2014and prioritize this, given the significant room for continued improvement and narrowing gaps in operational excellence. We see opportunities in our existing portfolio\u2014either increasing stakes or adjusting sizes. Then we continuously assess other market opportunities\u2014whether acquiring private or public companies outright. Similarly, we consider incremental opportunities where we could acquire partial stakes in companies. These are evaluated identically\u2014as I said, assessing economic prospects\u2014and closely tied to the prior answer.<\/p>\n
Jain: I truly believe capital allocation and operations are two sides of the same coin. Warren said something years ago that I find deeply insightful: \u201cA good capital allocator makes a good operating manager\u2014and vice versa.\u201d<\/p>\n
Abel: When considering our operating companies, as I mentioned earlier, we have exceptionally deep talent. We have outstanding operators who understand their businesses, industries, and customers. Yes, do we still have room for improvement? Yes\u2014it\u2019s an ongoing process, and we\u2019ll narrow those gaps. But we have outstanding teams here. Whether it\u2019s Jain, myself, or Adam Wright, we spend time ensuring we\u2019re satisfied with our capital allocation approach, understand the risks, and recognize those gaps.<\/p>\n
23:35 Q4: Patience Has Opportunity Cost\u2014How Should Long-Term Investors Think About Capital Allocation?<\/p>\n
Question: When patience carries real opportunity cost, how should long-term investors think about capital allocation today? How can individuals balance patience and action\u2014especially given Mr. Buffett\u2019s decades-long track record setting the standard?<\/p>\n
Abel: Again, our capital allocation approach and long-term orientation align closely with our owners and shareholders present here. They take a very long-term view on investing. We\u2019re fortunate to have this unique owner base in our shareholder roster. And long-term, Berkshire will have major opportunities. This circles back to the patience and discipline in capital allocation. Do we know what will happen tomorrow\u2014or in two or three years? But market dislocations will recur, enabling us to act. This is where our disciplined approach shines\u2014knowing our investment philosophy around these activities.<\/p>\n
It\u2019s not that we don\u2019t see outstanding companies today. We\u2019d love to own many. I\u2019ll be cautious. Long-term, we\u2019d gladly hold those companies\u2014excellent businesses with outstanding management teams, which we rigorously assess. I\u2019d say, thinking globally, there aren\u2019t dozens of such companies\u2014but they exist. Yet relative to opportunity, economic prospects, and associated risk, we\u2019re uninterested in acquiring them\u2014even partially or fully\u2014at those prices. That doesn\u2019t mean such opportunities won\u2019t arise in the future.<\/p>\n
This is what we prepare for: First, maintaining discipline; second, recognizing core opportunities we value\u2014or value at the right price. This truly circles back to discipline.<\/p>\n
You asked how I personally balance patience and action. Again, this aligns with my role\u2014and I\u2019m fortunate to work with Warren, Jain, and others. We do this because we love and believe in Berkshire. Warren brings immense commitment to Berkshire, profound understanding, and passion. Based on this, he aimed to build something truly long-term\u2014including the opportunities it might create. Personally\u2014and I know we all share this\u2014I bring the same passion and fully intend to continue exactly as before.<\/p>\n
Jain: You know, insurance\u2014like investing\u2014is a patient game. It\u2019s incredibly difficult to sit idle. When hiring, my go-to line is: \u201cYour job is to say \u2018no.\u2019\u201d You\u2019ll be bombarded daily with deals\u2014but your fundamental duty is to say \u201cno.\u201d I say, occasionally you\u2019ll encounter a deal that hits you like a plank\u2014it screams \u201cmoney!\u201d\u2014then come find me, and we\u2019ll decide together.<\/p>\n
You know, jokingly, when everyone else is being hustled by brokers and flown to London, you sit there doing nothing\u2014it\u2019s genuinely hard. I believe the true test of success\u2014in insurance, and certainly in investing\u2014is the ability to say \u201cno.\u201d<\/p>\n
23:40 Q5: Insuring Ships Through the Strait of Hormuz<\/p>\n
When asked when and how Berkshire would insure ships transiting the war-torn Strait of Hormuz, Ajit Jain, Berkshire\u2019s Vice Chairman of Insurance, delivered a crisp reply: \u201cSimply put, it depends on price.\u201d Laughter and applause erupted instantly.<\/p>\n
Jain said Berkshire is participating in a program to insure vessels transiting the Strait of Hormuz\u2014but no policies have been issued yet. The strait has been repeatedly closed or tightly controlled during the U.S.-Israel\u2013Iran war. \u201cWe\u2019ve participated on a small scale in a program to underwrite Hormuz Strait voyages\u2014but no policies have been issued yet.\u201d<\/p>\n
Jain said U.S. Navy escort for transit vessels would be one condition for underwriting. \u201cThe plan is still being refined. But if we secure satisfactory terms\u2014including conditions at the underwriting decision level and U.S. Navy escort guarantees\u2014we\u2019ve provided a price we deem acceptable. However, there\u2019s been no substantive progress yet.\u201d<\/p>\n
23:45 Q6: Managing Warren Buffett\u2019s Legacy Equity Portfolio<\/p>\n
Question: How do you manage Warren Buffett\u2019s legacy equity portfolio?<\/p>\n
Abel: Regarding managing the existing portfolio\u2014and its composition, as you noted, built by Warren\u2014this is a group of companies Warren knows intimately. And I\u2019m highly confident I understand these businesses and their economic prospects. So, when I articulated this in my letter, I truly wanted to convey: Yes, we\u2019re highly satisfied with these companies, we understand them, yes, it\u2019s a concentrated portfolio\u2014but their businesses evolve, and risks may emerge. So we\u2019ll continually assess it\u2014but it\u2019s a portfolio we\u2019re deeply comfortable with.<\/p>\n
Warren highlighted Tim Cook\u2019s remarkable success at Apple. Warren and Tim recently discussed this, noting Warren invested in Apple not as a tech stock\u2014but based on its products and how deeply consumers value them. It\u2019s an extraordinary perspective\u2014but one I believe many of us apply similarly.<\/p>\n
Take power generation\u2014I know a great deal: how to ensure generation, transmission, etc. But am I deeply curious about how iPhones are manufactured? I\u2019m intrigued by where they\u2019re made and the related risks and challenges. But I fully trust our team when discussing this broadly. We\u2019ll scrutinize and ask: Do we understand its value\u2014and why consumers value that product? That\u2019s ultimately its consumer value.<\/p>\n
I believe our unique opportunity\u2014and our great fortune\u2014is that Warren comes to the office daily. It\u2019s fortunate we can discuss potential opportunities and bring diverse skill sets. But ultimately, we\u2019ll quickly narrow the scope: What is this opportunity? Why is it valuable? Why will that company and product endure\u2014for consumers, or users in any sector? Relatedly: Where are the risks? This is essentially Warren\u2019s method\u2014and mine.<\/p>\n
Regarding our existing portfolio, we\u2019ll always be clear on what we own. But in understanding opportunities and risks, we\u2019re highly confident in our clarity\u2014and satisfied with our position.<\/p>\n
23:50 Q7: Succession Planning for Jain and Abel<\/p>\n
When asked about succession plans for Jain and himself, Abel said the board treats such matters seriously: \u201cThey\u2019ve developed plans and continue discussing them. So if Jain can\u2019t perform his duties today\u2014or I can\u2019t\u2014the board knows exactly what action to take.\u201d<\/p>\n
These succession plans are clearly critical topics. Jain joined Berkshire in 1986 and designed our insurance business, building an unparalleled franchise with exceptional culture and discipline.<\/p>\n
When Warren announced the transition plan last year, the first step was convening our top five insurance managers to discuss business and culture. It was an extraordinary opportunity for me to deepen my insurance knowledge base. What I saw in that team was deep managerial and insurance expertise\u2014and the same values and culture Jain emphasizes.<\/p>\n
Maintaining a disciplined culture is challenging. In insurance, telling underwriters accustomed to active deal flow to \u201ctake a few months off\u201d isn\u2019t easy. But Jain has an outstanding team\u2014and our board treats succession with great seriousness. We have a plan in place: if Jain or I cannot perform, the board knows exactly what to do.<\/p>\n
Regarding culture and underwriting discipline, I follow simple rules. Very few people are involved in actual decisions\u2014my top three have worked together for over 35 years. Compensation is fixed salary\u2014not complex formulas that let individuals capture upside while Berkshire bears downside risk. We insulate them from market volatility so they can confidently do the right thing.<\/p>\n
Over the years, I\u2019ve seen all these compensation plans. I once told Warren: \u201cGive me a compensation plan, and I\u2019ll game it\u2014and you won\u2019t discover it for years.\u201d Plus, employees lose and want to renegotiate; win and walk away with everything. It\u2019s a massive challenge.<\/p>\n
23:55 Q8: When Will Berkshire\u2019s Utilities Phase Out Fossil Fuels?<\/p>\n
Question: When will Berkshire\u2019s utilities phase out fossil fuels, shift to renewable alternatives, and stop inflicting irreversible harm on the environment\u2014and my generation\u2019s future?<\/p>\n
Abel: We operate these assets as stewards\u2014serving our states and customers. First and foremost, we must absolutely comply with current laws\u2014including federal law. Our team is committed to both compliance and doing things right. We have resource plans\u2014and timelines for phasing out coal and gas units\u2014largely driven by state policy. States determine how we operate and how long these assets run, because customers ultimately bear the costs and risks.<\/p>\n
Look at our Iowa utility: ~93% of its energy comes from renewables\u2014leading the nation\u2014and at affordable costs. Yet we still operate coal plants, using them only to stabilize the system during peaks unless absolutely necessary.<\/p>\n
The challenge is that hyperscale data centers place heavy strain on the system. If AI continues growing, carbon-based unit usage will increase\u2014putting pressure on the system and entire industry.<\/p>\n
01:20 Abel Returns to Stage for Afternoon Session<\/p>\n
Greg Abel returned to the CHI Health Center stage in Omaha, Nebraska, to host the afternoon session of Berkshire Hathaway\u2019s Annual Shareholders Meeting.<\/p>\n
Joining Abel were BNSF Railway CEO Katie Farmer and NetJets CEO and Consumer Services & Retail President Adam Johnson.<\/p>\n
01:25 Q9: How Geopolitics Affects Berkshire Subsidiaries<\/p>\n
Question: How is the current Middle East geopolitical situation affecting Berkshire\u2019s subsidiaries?<\/p>\n
Abel: It impacts all our businesses in multiple ways. But what I\u2019m most proud of is that we run these businesses with a long-term lens. When the phone rings, you know challenges arise\u2014but that\u2019s okay. We\u2019ll explore, strive, and always find a way forward. Regarding the Iran war and Middle East conflict, I see our teams adopting this attitude again: \u201cThis is the reality we face. What\u2019s the best solution for customers? How can we continue serving them as we always have?\u201d<\/p>\n
I mentioned LSBI Pipeline\u2019s drag-reducing agents\u2014they typically don\u2019t sell much to the Middle East, but when they tackle this challenge, many things happen. This doesn\u2019t mean our businesses haven\u2019t been directly affected. Our chemical group\u2019s input costs doubled in a short time. Over time, prices rise per our contracts, rebalancing the situation. In running our businesses, we simply roll up our sleeves and operate steadily over the long term.<\/p>\n
BNSF CEO: Railroads are excellent barometers of industrial and consumer economic health, given our broad commodity exposure. We see several distinct impacts from the Middle East conflict. Supply chain disruptions created opportunities for some commodities\u2014like aggregates and steel\u2014whose demand is rising. Our largest business segment is intermodal\u2014rising fuel prices make our intermodal service more competitive. But overall, if fuel prices stay high long-term, consumer demand suffers\u2014and ripples across all our businesses.<\/p>\n
Yes, we see some impact. Some major retailers say consumers now must choose what to buy. If high fuel prices persist, I truly believe this customer impact will ripple across our businesses.<\/p>\n
NetJets CEO and Consumer Services & Retail President Adam Johnson said cost increases\u2014including oil briefly hitting $100\/barrel\u2014have begun suppressing demand in certain areas:<\/p>\n
On the consumer goods side and physical retail, this is indeed affecting some demand. Acknowledging these pressures, Johnson said his businesses are accustomed to navigating volatility and adapting when necessary. \u201cWe\u2019re prepared for these situations and ready to adjust. But this is indeed impacting some retail and consumer goods businesses.\u201d01:35 Q10: Managing Berkshire\u2019s Decentralized Model\u2014How Does BNSF Stay Competitive?<\/p>\n
Question: Berkshire\u2019s model relies on decentralization\u2014each manager operates their subsidiary as a CEO. Which operating units require more oversight? How are underperforming managers handled? BNSF\u2019s profitability lags competitors\u2014how will it maintain competitiveness against rivals and new technologies?<\/p>\n
Abel: I emphasized decentralized operations, risk discipline, and capital allocation. We have outstanding leaders and enterprises\u2014closest to their customers\u2014who deliver excellent group-wide results when they think like owners.<\/p>\n
But decentralization doesn\u2019t mean abdicating accountability. Autonomy means embracing immense responsibility\u2014and pride in doing things right. We hold high expectations\u2014do they manage risk? Do they act as Chief Risk Officers? Are they skilled at allocating capital on hand? If we see underperformance or poor decisions, that\u2019s when we intervene and discuss.<\/p>\n
BNSF CEO: We fully recognize that driving efficient operations, maintaining a competitive cost structure, and narrowing the profitability gap with competitors remain critical.<\/p>\n
Our top priority in 2025 is improving carload efficiency. Enhancing the carload network releases resources, creates capacity, and allows handling equal\u2014or greater\u2014freight volumes with fewer assets. In Q1, we handled more freight than Q1 last year\u2014but used 260 fewer locomotives.<\/p>\n
Second is our technology transformation. We\u2019re attracting data scientists and operations research specialists\u2014placing them alongside our operations staff in the Network Operations Center to develop digital twins and predictive ETAs for customers. Our Q1 fuel efficiency set a record.<\/p>\n
Regarding truck competition: Among all railroads, we have the largest intermodal network. We used to run trains with five people; now most trains run with just two. But we also need permission to innovate\u2014and regulatory support enabling railroads to compete with trucks.<\/p>\n
NetJets CEO: I returned on June 1, 2015. I asked: \u201cHow many people truly understand both ends of our business?\u201d NetJets is complex\u2014we fly to thousands of airports across 150 countries. I didn\u2019t like the answer\u2014it was far too few.<\/p>\n
We rebuilt culture from there. I recall preparing my first board meeting, talking about growth. Abel kindly pulled me aside: \u201cWhy don\u2019t you ease Warren\u2019s mind a bit and focus first on reducing debt?\u201d That was a lesson I\u2019ve kept close.<\/p>\n
We spoke about safety and service. Warren acquired NetJets in 1998 after becoming a customer, saying: \u201cI want safety. I want service.\u201d We\u2019ve stayed intensely focused on keeping everyone on that path. This is largely why we repaid debt, returned cash to Berkshire Hathaway, and became leaders in service.<\/p>\n
01:50 Q11: Tariff Impact on Portfolio?<\/p>\n
Question: Is Berkshire Hathaway seeking tariff relief or compensation programs for wholly owned operating businesses facing import-cost pressures? How significant is this impact across the portfolio?<\/p>\n
Abel: Tariff impact across our portfolio mirrors the Middle East discussion. We experienced this in the government\u2019s first term and learned lessons\u2014so we\u2019re better prepared. We\u2019ll simply roll up our sleeves and manage it ourselves. We\u2019ll find ways to keep serving customers\u2014recovering tariffs via direct customer contracts or products we manufacture. Our team has handled this superbly. Many details remain unclear\u2014we\u2019re not actively pursuing these measures.<\/p>\n
BNSF CEO: No compensation, but let me address tariff impact. Early in 2025, we saw some customers ship ahead of tariff implementation\u2014boosting freight volume. Then volumes stabilized in H2 2025, and into 2026, our customers adapted and adjusted to tariffs. That said, this creates uncertainty. From a planning perspective, it\u2019s extremely difficult for our customers\u2014leaving some capital in manufacturing facilities on hold. It\u2019s the uncertainty of tariffs\u2014not the tariffs themselves\u2014that\u2019s the real impact we see with customers.<\/p>\n
NetJets CEO: I\u2019ll cite Berkshire Hathaway Automotive Company\u2014its new-car sales this year are slightly down year-on-year, partly due to tariffs. The issue is tariffs change daily\u2014just understanding this \u201cbouncing ball\u201d is itself a full-time job.<\/p>\n
Across our 32 consumer, service, and retail companies, average founding age is 88 years. When I call those CEOs, they say: \u201cWe\u2019ve dealt with tariffs for 100 years.\u201d Think of the past 7\u20138 years\u2019 CEOs\u2014we\u2019ve navigated global pandemic, 40-year-high inflation, and now this \u201cbouncing ball\u201d of tariffs. Businesses have handled these issues superbly\u2014and I believe our future position is quite strong.<\/p>\n
01:55 Q12: Japanese Investment Portfolio<\/p>\n
Question: Berkshire\u2019s investments in five Japanese trading houses are passive\u2014good businesses bought at good prices, financed in yen. Your deal with Mitsui O.S.K. Lines (MOL) is fundamentally different: a ten-year joint M&A and reinsurance partnership. This is an operational integration depth Berkshire has never attempted internationally. What does this look like in practice? Does it signal a shift toward more active international partnerships under your leadership?<\/p>\n
Abel: MOL has performed exceptionally well. I previously framed this as a strategic relationship\u2014not a financial transaction. We like our 2.5% investment in MOL\u2014it\u2019s a long-term commitment. This mirrors our other five Japanese investments\u2014we truly view them as permanent, as they transcend mere investment to reflect relationships we aim to build there. You\u2019ll continue seeing this\u2014detailed underwriting opportunities where we jointly participate in MOL\u2019s risks and returns, effectively representing 2.5% of their books today. This remains part of the financial transaction\u2014but also embodies tremendous trust.<\/p>\n
The third point discussed is the partnership\u2019s emphasis on various elements\u2014and how this relationship evolves remains undefined. So we\u2019ll let it develop organically. This partner shares our culture and values. Undoubtedly, it will be outstanding for many years to come. As for absolute acquisitions in insurance or other fields\u2014that will evolve over time, clearly a topic for Jain and MOL\u2019s executive team. If such opportunities arise, we\u2019ll be delighted.<\/p>\n
02:00 Q13: Will Berkshire Spin Off Businesses or Be Split Up?<\/p>\n
Question: Are there any foreseeable future scenarios where Berkshire would spin off businesses or be split up? If so, what would trigger them?<\/p>\n
In responding to this shareholder question, Abel stated he expects Berkshire Hathaway will neither split up nor spin off subsidiaries. He emphasized the absence of bureaucratic layers in Berkshire\u2019s structure\u2014and the conglomerate\u2019s unique ability to flexibly allocate capital across business units. \u201cWe\u2019re a conglomerate\u2014but an efficient one. We have no layered management hierarchy.\u201d<\/p>\n
Abel said Berkshire is committed to long-term ownership of acquired companies\u2014but may consider selling in certain circumstances. \u201cWe buy something to hold forever. When we acquire a utility, we tell regulators it\u2019s a permanent holding. But it must be a viable relationship. If it breaks down, we\u2019ll seek a better path.\u201d<\/p>\n
Abel said unresolved labor disputes or reputational risks could prompt Berkshire to divest a business.<\/p>\n
Nonetheless, Abel concluded: \u201cWe do not contemplate spinning off subsidiaries or splitting the group.\u201d<\/p>\n
When considering this, in some cases we may not be the optimal owner of a business. If we can\u2019t resolve labor issues\u2014or face reputational risks we\u2019re unwilling to expose Berkshire to\u2014that business doesn\u2019t belong in the Berkshire family. If a business is unsustainable\u2014and no longer generating operating cash for shareholders\u2014if others can run it more successfully, we must consider it.<\/p>\n
We take our obligation to ensure proper capital allocation extremely seriously. We\u2019ve already announced the sale of PacificCorp\u2019s utility in Washington State. In Washington, the policies PacificCorp was expected to implement significantly impacted costs in our other states. Our other states bore costs imposed by another state\u2014so we exited, finding an excellent buyer. When we buy something, we always approach it with \u201cforever\u201d in mind\u2014but it must be a viable relationship. If it breaks down, we\u2019ll find a better path.<\/p>\n
Regarding the second part of the question: Absolutely no splitting. We\u2019re a conglomerate\u2014but an efficient one, with no layered management and no committees dictating how our businesses operate. Many conglomerates end up with layer upon layer of costs that add no value to the whole\u2014but we won\u2019t do that.<\/p>\n
Our conglomerate structure operates without bureaucracy or bloated costs\u2014allowing highly tax-efficient capital transfers across groups. We won\u2019t spin off subsidiaries or split any group.<\/p>\n
02:10 Q14: Safety First or Seizing More Investment Opportunities? Tech Stocks or Cash-Flow Companies?<\/p>\n
Question: Compared to Warren, what\u2019s the most important evolution in your personal framework for evaluating cash-flow certainty and margin of safety? Specifically, are you more inclined toward tech companies exhibiting similarly strong cash flows?<\/p>\n
Abel: On how Warren views investment methodology\u2014our margin-of-safety approach and how we handle it\u2014we are absolutely aligned. This starts with our culture and values\u2014and how we\u2019ve approached everything over the years.<\/p>\n
If I revisit energy opportunities, it quickly shifts to: Do we truly understand the associated risks? When we acquired NV Energy, three major risks immediately came to mind\u2014prompting urgent discussion with Warren. Our immediate dialogue was: Economic merits fully understood\u2014then straight to the biggest risks. One risk was rooftop solar disrupting the business. That risk surfaced 12\u201318 months later\u2014and we managed it successfully. Our risk-thinking differs\u2014we view them through Berkshire\u2019s lens, looking ten years ahead: What will this business look like in ten years? If we can\u2019t envision that, we won\u2019t proceed. We must have a vision for the future\u2014that\u2019s central to our approach.<\/p>\n
Now on tech companies: We\u2019ll never say a specific industry is mandatory for us. If a tech company presents an opportunity we understand\u2014with clear risks and reasonable valuation\u2014its sector alone won\u2019t disqualify it.<\/p>\n
02:15 Q15: Who Is Abel\u2019s \u201cCharlie Munger\u201d?<\/p>\n
Question: Warren had Charlie\u2019s partnership for most of his CEO tenure\u2014naturally reducing investment decision error risk. Who will serve as Abel\u2019s Charlie?<\/p>\n
When asked who would be his \u201cCharlie Munger,\u201d new CEO Greg Abel declined to name any single individual\u2014instead highlighting his entire surrounding team. \u201cYou surround yourself with outstanding people\u2014and they\u2019re already here.\u201d<\/p>\n
Abel named Adam Johnson\u2014Berkshire\u2019s Consumer Services & Retail President and NetJets CEO\u2014as well as Ajit Jain, Vice Chairman of Insurance, and Katie Farmer, BNSF Railway CEO. All three executives appeared onstage with Abel on Saturday.<\/p>\n
He said, \u201cWithin our CEO group, we\u2019re extraordinarily fortunate to have outstanding people\u2014and for any specific situation, I proactively reach out to any of them for counsel.\u201d<\/p>\n
Abel: We\u2019re extraordinarily fortunate to still have Warren as our Chairman\u2014enabling an outstanding transition. We have an exceptional board\u2014and I can easily contact any member based on the situation. When answering Warren\u2019s question in Omaha, I said we want Berkshire to endure. I want to lead Berkshire\u2014and I\u2019ll be a strong leader. But you surround yourself with outstanding people\u2014and they\u2019re already here.<\/p>\n
In non-insurance operations, I\u2019ve been fortunate to work with Adam\u2019s 32 companies\u2014and another 18. Clearly, I have an excellent working relationship with Jain\u2014and am fortunate to regularly seek his advice. Then there are our CEOs\u2014we\u2019re fortunate to have such an outstanding group\u2014and I\u2019ll contact any of them for situation-specific counsel.<\/p>\n
Fortunately, thanks to Berkshire\u2014and how it was built\u2014we have extraordinary resources at our disposal. Berkshire will endure\u2014and endure as a team.<\/p>\n","protected":false},"excerpt":{"rendered":"Berkshire\u2019s authority will no longer hinge on individual charisma but will instead be built upon a more diversified…\n","protected":false},"author":2,"featured_media":54709,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[162],"tags":[892,33389,33387,33385,33386,15592,33390,33384,669,33388],"class_list":{"0":"post-54708","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-warren-buffett","8":"tag-blockchain","9":"tag-blockchain-applications","10":"tag-blockchain-in-depth-analysis","11":"tag-blockchain-media","12":"tag-blockchain-news","13":"tag-blockchain-technology","14":"tag-blockchain-trends","15":"tag-techflow","16":"tag-warren-buffett","17":"tag-what-is-blockchain"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@people\/116508654723322924","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/posts\/54708","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/comments?post=54708"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/posts\/54708\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/media\/54709"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/media?parent=54708"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/categories?post=54708"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/tags?post=54708"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}