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Berkshire Hathaway shareholders flocked to Omaha, Nebraska on Saturday to hear from CEO Warren Buffett and other Berkshire executives. For about 5 hours, Buffett took questions on Berkshire’s many businesses, investing and life in general.
The meeting included a video tribute to Buffett’s longtime partner and Berkshire vice-chairman Charlie Munger, who died in November at age 99. Shareholders kicked off the gathering with a standing ovation for Munger, who Buffett calls the “architect of Berkshire.”
Here are some key takeaways for investors from the meeting.
Berkshire Hathaway annual meeting: Key takeaways for investors
1. Portfolio update
Berkshire’s first quarter results revealed that it trimmed its stake in Apple by about 13 percent. The iPhone maker is still the largest position in Berkshire’s portfolio and stood at $135.4 billion at the end of March, down from $174.3 billion at the end of 2023.
Buffett praised Apple’s business and said it was very likely it would remain Berkshire’s largest stock position at the end of the year and that Berkshire would likely hold it after he’s gone.
Buffett also said he sold Berkshire’s entire stake in Paramount Global and that he was “100 percent responsible,” adding that they had lost “quite a bit of money.” Some Berkshire watchers had speculated that the position was held by Todd Combs or Ted Weschler, two investment managers who work for Berkshire.
2. Cash pile grows in absence of attractive investment opportunities
Berkshire’s massive cash pile grew to more than $182 billion at the end of the first quarter and Buffett said it was fair to assume it would reach $200 billion at the end of the second quarter.
“I don’t mind at all, under current conditions, building the cash position,” Buffett said. “When I look at the alternatives 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.”
Berkshire has often held large amounts of cash and been willing to wait until it finds investment opportunities that meet its requirements. Buffett has historically put cash to work during market downturns such as during the 2008 financial crisis.
“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,” Buffett said.
3. Don’t make investment decisions based on taxes
Berkshire has many long-term investments that have seen enormous gains over time such as Coca-Cola, American Express and Apple. Berkshire pays taxes on any dividends it receives from these holdings, but capital gains aren’t taxed until shares are sold.
But Buffett told shareholders that holding an investment just to avoid paying taxes doesn’t make a lot of sense.
“Almost everybody I know pays a lot more attention to not paying taxes than I think they should,” Buffett said. “We don’t mind paying taxes at Berkshire.”
4. AI could be harmful
Buffett was asked a few times during the meeting about the potential impact of artificial intelligence on the economy and Berkshire. He compared AI to the development of nuclear weapons, saying you can’t put the genie back in the bottle.
“As someone who doesn’t understand a damn thing about it, it has enormous potential for good and enormous potential for harm,” Buffett said. “I just don’t know how that plays out.”
Buffett also warned about the potential for investment scams that use AI to trick people into handing over their money. Scamming is “going to be the growth industry of all time,” Buffett warned.
Berkshire’s businesses will be able to adapt to the new technology and will use AI to become more efficient, Berkshire vice-chairman Greg Abel told shareholders.
5. Climate change poses risks for investors
The Berkshire meeting also highlighted the risks that investors face in certain industries from climate change. Berkshire utilities in western states face risks as wildfires become more frequent and regulators and investors grapple with who should bear the costs.
Berkshire’s PacifiCorp unit faces billions of dollars in liabilities for its role in Oregon’s 2020 wildfires, but Buffett reiterated at the annual meeting that Berkshire would not knowingly “throw good money after bad.”
Berkshire’s vast insurance operations also face risks from climate change as hurricanes potentially become more frequent, more powerful and take different paths.
“The amount of activity in terms of storms, both the frequency and the severity, is also so severe that the losses in Florida make it very difficult for the risk bearer to make money,” Berkshire’s vice-chairman for insurance Ajit Jain said, but added Berkshire had increased its exposure to Florida in the past year and “nothing bad happened.”
Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.
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