Berkshire Hathaway Annual Meeting 2024 transcript morning session

Berkshire Hathaway Chairman and CEO Warren Buffett presides over the company’s annual meeting. Watch the full coverage of Berkshire Hathaway annual shareholders meeting on https://www.cnbc.com/.

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Easily discover all the topics of this interview transcript by clicking on the table of contents:

Introduction

[00:00:00] WARREN BUFFETT: Yeah. Don’t wear out all your clapping on Charlie. I mean, we’ve got, in addition, well, we have, first of all, Greg Abel, a director, and Ajit Jain. Then, in the back of this first section…

(Introduces the directors: Howard Buffet, Susan Buffett, Steve Burke, Ken Chenault, Chris Davis, Sue Decker, Charlotte Guyman, Tom Murphy Jr., Ron Olson, Wally Weitz, and Merrill Whitmer.)

[00:01:25] WARREN BUFFETT: Okay, there are two people I would like to thank, and then we’ll get on to a brief description of the results 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.

She just reported to me that we set a new record for See’s Candy. I think they brought along six tons, and they will sell out. One thing I do want to mention, we have only one book at the bookstore of 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. And 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 involve 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 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 Brad Underwood for just a minute.

(Spotlight on Brad Underwood.)

First Quarter Result Discussion

[00:04:21] WARREN BUFFETT: Okay. We put out some results for the first quarter this morning at 7:00 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 one, which should be showing now, you’ll see that in the first quarter…

(Continues to discuss the first quarter results.)

(Becky Quick takes over for Q&A.)

Q&A: Buffett on Apple, Taxes, and Berkshire’s Holdings

[00:18:09] BECKY QUICK: 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 Lamb. 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.

And your recent shareholder letter, I noticed that you have excluded Apple from this group of businesses. Have you or your investment managers’ views of the economics of Apple’s business or its attractiveness as an investment changed since Berkshire first invested in 2016?

[00:19:02] WARREN BUFFETT: No, I would… 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 look at common stocks or marketable equities as businesses.

And so 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, 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 their 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 are differences in taxes, factors, there’s a difference in managerial 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 is 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.

I wasn’t wasting my time, because I was reading every book possible and everything else. But finally, I picked up a copy of The Intelligent Investor in Lincoln, and there were a few sentences in there that said, much more eloquently than I can say it, 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 pronouncements and all of that sort of thing. And so that made a lot of sense to me then, the way I’ve been allowed to deploy it. Charlie and I talked about this, of course, constantly.

It’s changed over the years, the amount of capital we have has changed and all 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.

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. And it’s such a simple approach that it’s almost deceptive. Most things, if you keep working harder and harder at it, 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 mindset properly. So, we will end up, if something dramatically happens that really changes our capital allocation strategy, 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, the equity markets, and I look at the composition of what’s going on in the world, we find it quite attractive.

And one thing that may surprise you, but we… Almost everybody I know pays a lot more attention to not paying taxes, and 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%. And I would say, with the present fiscal policies, I think that something has to give, and I think that higher taxes are quite likely, and if the government wants to take a greater share of your income, or mine or Berkshire’s, they can do it. And 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, was here. And if we… 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, whether income taxes, no Social Security taxes, no estate taxes. It’s open down the line now. That’s…

I would like to… I hope things develop well enough with Berkshire that we say we’re in the 800 club and maybe even move up a few notches. It doesn’t bother me in the least to write that check. I would really hope, with all 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.

[00:24:47] WARREN BUFFETT: Okay, let’s go to section one.

Q&A: Buffett on BYD and the Future of Berkshire’s International Investments

[00:27:54] MATTHEW LAI: Hi, Mr. Buffett, this is Matthew Lai from China, Hong Kong. I’m running my listed company called FW, and we are so grateful to have learned from you, and you really inspire us. My question is, besides the electric car company, BYD, under what circumstances would you reinvest or reconsider investing in a Hong Kong or China company? Thank you.

[00:28:21] WARREN BUFFETT: Well, our primary investments will always be in the United States. We do think it… The companies we invest 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 are the preferred soft drink. You know, something like maybe 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, 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. And part of the reason for that is one of the directors we introduced a few minutes ago, Ken Chenault. But it has strengthened dramatically over the last 20 years for a lot of reasons. So we will…

The BYD investment was a… Well, we made the commitment in Japan, which I did five years ago, and that was just overwhelmingly, it was compelling. It was extraordinarily compelling. And we bought it as fast as we could, and we spent a year, and we got a few percent of our assets in five very big companies. But that’s the problem of 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 around the world. I don’t pick up on other cultures extremely well. And the lucky thing is, I don’t have to, because I don’t live in some tiny little country that just doesn’t have a big economy. I’m in an economy already that is, after starting out with half a percent 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 are only two times he’s told me that this one is really… He would always go along with me and 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 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 aggressive. But I should have been more aggressive in Costco. It wasn’t fatal that we weren’t. But he was right big time on both companies.

I’m aware of what goes on in most markets, but I think it’s unlikely that we’ll make any large commitments in almost any country you can name, although 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’re far less likely to make any truly major mistakes in the United States than in many other countries. Okay, Becky,

Q&A: Buffett & Abel on Energy, Utilities, and Wildfire Risk

[00:34:10] BECKY QUICK: 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, citing state sovereignty, may already be poised to move in that direction.

The Utah legislature recently mandated the state’s right to serve as the 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 specific 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 Energy working with officials in Utah to minimize potential corporate losses if and when state control is asserted over its electrical utility sector?

[00:35:35] WARREN BUFFETT: I will let Greg join me in answering 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 expect, 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 are going to be enormous amounts of money, enormous amounts of money spent on power. And if you’re going to do it with private owners, there’s nobody better situated than Berkshire to satisfy 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 going to get any return. It would be kind of crazy. And we’ve seen actions in a few states where some of the costs associated with climate change, they’re not being regarded as costs the utility shouldn’t incur. Well, believe me, if it was publicly owned, they would have incurred it too.

But we’ll do what society tells us, and we have the money and the knowledge to participate in something that is enormously important for the country. But we’re not going to throw good money after bad in the field. 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.

[00:38:58] WARREN BUFFETT: Charlie? Charlie, I’m so used to that. I had actually checked myself a couple of times already, but I’ll slip again.

[00:39:19] GREG ABEL: That’s a great honor. Yeah. When we 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 industry, the utility sector, for many years to come. And I think if we start there if I think of our different utilities, it will definitely come to Utah and PacificCorp.

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. 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 legislators 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 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, and it took 100 years plus to get where we are today, and now it’s going to double. And that will require substantial amounts of capital from MidAmerican and its shareholders. And 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 timeframe and you look at the underlying demand in that utility and say, go into the later 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 six to 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 work? When I think of the wildfires, there have been many claims, and a recent additional claim last week for $30 billion. We don’t take that lightly, but it is an incremental claim to an already existing lawsuit that’s in place.

And 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, is in places unfounded, and we will continue to challenge it. And 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 has to change. Change because 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 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. It’s not in their mind, 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 are now going to be situations where we prioritize de-energizing the assets, and that’s completely different than we’ve operated those assets, as I’ve highlighted, for 100-plus 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 increasing, approaching, we will turn off our systems now, and 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 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 be 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 are 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 is a much broader one that we will 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.

[00:48:51] WARREN BUFFETT: The return on equity investment that’s been promulgated and been 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 plus a half a percent or x minus a half a percent, 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 they might like it if it’s better when it’s plus a half a percent than minus a half a percent. 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 Coca-Cola or American Express or, to really top it off, Apple. It’s just, it’s, you know, it’s just a whole different game.

But in utilities, the trade has been, 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 do, somebody’s going to put up many, many hundreds of billions, maybe in the trillions, and climate change enters into that, and it can be done through public power or it can be done through private enterprise to quite a degree. And we would be certainly good for 100 billion or more, but we’re not going to throw good money after bad.

WARREN BUFFETT: Okay, let’s do station four.

Q&A: Buffett on AI: “Genie Out of the Bottle”

[00:51:35] AUDIENCE MEMBER: Hi, Joe, visiting from San Francisco. How do you think about the role of technological advances, especially generative AI, on more traditional industries? Thank you.

[00:51:46] WARREN BUFFETT: 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 I do have… that doesn’t mean I deny its existence or importance or anything of the sort. And last year I said that we let a genie out of the bottle when we, when we developed nuclear weapons, and that genie has been doing some terrible things lately. And the power of that genie is what, you know, scares the hell out of me. And then I don’t know any way to get the genie back in the bottle.

And AI is somewhat similar. It’s partway out of the bottle, and it’s enormously important, and it’s going to be done by somebody. 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 [should have] tested a 20,000-ton bomb that we felt was absolutely necessary for the United States, and would actually save lives in the long run. But where we also had [J. Robert] Oppenheimer, I think it was, who 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 saw an image in front of my eyes on the screen, and it was me, and it was my voice. And [I was] 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 [aren’t me and say], “I need money, 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, [think] it’s going to be the growth industry of all time, and it’s enabled in a way… 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 [have] send money to myself over some crazy [scheme].

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 has enormous potential for good, [and] enormous potential for harm. And I just don’t know how that plays out.

WARREN BUFFETT: 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?

Q&A: Buffett & Jain on GEICO’s Data Challenge

[00:56:08] BECKY QUICK: Yeah. This next question is for both Warren and Ajit. It’s from Ben Noll, 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 [his] first meeting [with] you in 2010, he told you GEICO is better at marketing and branding, 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.

[00:57:09] AJIT JAIN: As Warren has pointed out in the past, 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 product based on the risk characteristics. 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 are still behind. We’re taking steps to bridge the gap, and hopefully by the, certainly by the end of ’25, 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.

[00:58:16] WARREN BUFFETT: I would add, equating rate with risk obviously is important in every line of insurance business. I mean, that’s what you’re involved with, is deciding whether a given rate offers us the chance or the probability that we will make a little [bit] of 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 [at] 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 just very, very, very few companies that can compete with us.

So 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 x percent of the market than a half of x percent. But we roughly, I think in the month of March, we, 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 operations. 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.

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 twelve, and I would like everybody to really make an attempt to be in their seat and quiet at 01:00 and if you can’t do that, if you’ll wait a few minutes and watch in the halls and all that.

You know, now we have. We’re getting over $2,000. Well, all the advances in technology and everything like that, if we had been wedded this 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 it 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 towards station three. I believe.

Q&A: Canadian Economy and Investment Opportunities

[01:12:28] LIAM: Hello. Hey, everyone. Hi, Warren. I’m Liam. I’m 27, from Newmark, 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 had idols who are rappers, but instead, my idols are Warren, Charlie, who will 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 are on these. And I also wonder at, in their 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.

[01:13:28] WARREN BUFFETT: 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. Go to it, Greg.

[01:13:41] GREG ABEL: 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 where we’re always looking at making incremental investments there, because it’s an environment we’re very comfortable with. Warren touched on understanding the US 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 US.

So the results we’re seeing out of our various businesses that report both the US 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…?

[01:14:54] WARREN BUFFET: Yeah, no, obviously there aren’t as many big companies up there as there are in the United States. But when we get. I got one from Canada just the other day that I sent over to Greg, too. 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.

And there are things we actually can do fairly well that where Canada could benefit from Berkshire’s participation. We did it some years ago, not that many years ago, but there was a financial institution up there. They had a problem and they did, as I remember, 30 plus 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. Ted Wesler 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, they don’t have a mental, 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 give them, you feel confident about operating there. Okay, Becky.

“Nobody is Irreplaceable”: Buffett and Jain Discuss the Future of Berkshire’s Insurance Empire

[01:17:16] BECKY QUICK: 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 Blackley in Tulsa, Oklahoma. He said, Warren, for years you have spoken about the incredible impact Ajit has had on Berkshire. Often joked, if you and Ajit are in a sinking boat and we can only save one of you, 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.

[01:18:01] WARREN BUFFETT: 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 I start working by Ajit.

We won’t find another Ajit, but we have an operation that he has created and that is at least part of it. There are certain parts of it that are almost impossible for competitors to imitate, and if I were in their shoes, I wouldn’t try and imitate them. And so we’ve institutionalized some of our advantages, but Ajit is, 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. I’d been in the business when he came in 1986.

I 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 an Ajit, unfortunately, he came into the office on a Saturday and he was tired of working at something where he really didn’t.

It just challenges his intellect. And I said, well, we got a lot of challenges. Nobody’s perfect. 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.

[01:21:00] Ajit Jain: Thank you very much, Warren. 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 has set an example for a lot of people who follow.

[01:21:23] WARREN BUFFETT: That’s a great observation.

[01:21:26] Ajit Jain: 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 would be 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 will be the biggest non issue of the day. The earth will still keep revolving around the axis.

[01:22:25] WARREN BUFFETT: Okay, we know what we will do. We know it’s a good answer, but we know it isn’t. It isn’t. We won’t have another Ajit. Station five.

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“We Had a Lot of Fun”: Buffett Reminisces About Charlie Munger and Their Life Together

[01:22:46] Andrew Nickes: Hi, my name is Andrew Nickes and I’m wondering, if you had one more day with Charlie, what would you do with him?

[01:23:03] WARREN BUFFETT: 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 he.

We always lived, in a way where we were happy with what we were doing every day. I mean, Charlie. 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. And 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. And 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 ten years ago just continually produce more and more profits. So it wasn’t, you know, he really fooled me, though. He went to 99.9 years. I mean, if you pick two guys, you know, he never publicly said he never did a day of exercise except where it was required when he was in the army.

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 have done the same thing we were doing the earlier days and we wouldn’t have wanted another.

We only had one day. There’s a great advantage in not knowing where you’re going, what day you’re going to die. And Charlie always said that, just tell me where I going to die, so I’ll never go there. Well, the truth is 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, they, he.

I would, I told him toward that. In the last few years, I’d never seen anybody that was peaking, you know, in 99 and where the world wanted to come and see him. I mean, they actually wanted to go out to 351 North Yune street. And whether it was, well, I could name a whole bunch of names, but just. I’ll start with Elon Musker, but go down the list.

And they all wanted to meet Charlie, and Charlie was happy to talk with them. And 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 again. I can’t remember any time that he was mad at me or I was mad at him.

It just didn’t happen.

And calling him was fun back when long-distance rates were high and we didn’t talk as often as the years in recent years, as we used to be on daily for long periods. And we did keep learning and we liked learning together, but, you know, we tended to be a little smarter because as the years went by, because we had mistakes and we had other things where we learned something. And the fact that he and I were on the same wavelength in that respect meant 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 had only have lunch with one person that lived over the last 2000 or so years, you know, who would you want to have it with?

Charlie says, I’ve already met all of them. You know, because he read all the books. I mean, he, and he eliminated all the trouble of going to restaurants to meet him or anything like that. He just went through a book and he met Ben Franklin. And he really, he 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 want to 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, because why wait a little last day and don’t bother with the others?

Okay, Becky.

Q&A: The Aggregation Risk: Why Berkshire is Hesitant About the Cyber Insurance Market

[01:30:20] BECKY QUICK: This question comes from Carol de Gend in Switzerland, in Europe, and this is for both Mister Buffett and Mister Jain. As political instability in the world is growing with a 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, etcetera, do you see a potential for profit making in cybersecurity insurances, and what are the key challenges?

[01:31:03] AJIT JAIN: Okay, let me start. Cyber secure. 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 for the part of. 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. That aggregation potential can be huge, and not being able to have a worst case gap on it is what scares us. Secondly, it’s also very difficult to have some sense of 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 or five years, I think, have not been beyond forty cents of 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 is 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 good. It’s projected to be a huge business. My guess is at some point it might, 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.

[01:33:33] WARREN BUFFETT: Well, you’ve just made, you’ve just heard why Ajit is invaluable because 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 has happened, I think in the 1968 when there were the riots in various cities because I think it was the Bobby Kennedy death that set it off for 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, you have one event, nor do you have a thousand events. And there’s no place where that kind of a dilemma enters into more than cyber. Because if you think about it, if, you know, let’s say you’re writing $10 million of limit per risk, and that’s fine, if you lose 10 million for some event, you can take it.

But the problem is if that one event turns out to affect 1000 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. You can write a lot of it. The agents like it.

You know, they’re getting the 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 risks that you never dreamt of and maybe worse as, and some earthquake happening someplace just because you have a whole bunch of policies with a million-dollar 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 cheerful view. We’ll go to station six.

Q&A: NV Energy, Solar Power, and the Transition to Renewables

[01:36:37] MARIA PREENAS: Good morning. This question is for Warren Buffet and Greg Abel. My name is Maria Preenas. I am a retiree from Las Vegas, Nevada. I am here today as a member of ChiC Spike Nevada, a group of developed Latin leaders for the environment of justices.

I am almost here representing Maryland families in Nevada who are struggling to pay their utility bills and want access to affordable, clean electricity. I want to add today, why is NV Energy, which is owned by the Berkshire Hathaway, building new gas plants instead of investing in solar energy? With Nevada one and the sunniest state in the country, can I expect to see future leadership take dangerous investments in the fossils levels more seriously?

[01:37:59] WARREN BUFFETT: Thank you. And thank you, Maria.

Greg, you want them?

[01:38:02] GREG ABEL: Sure. Thank you. So, as we touched on with NV Energy even earlier, there’s a lot going on there. When I think of.

There’s no question solar is a great opportunity for NV Energy, and we’ll continue to utilize that as a resource and continue to invest in it in that utility and the other utility we have in Nevada. We’re also in 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 at this point in time, time, we cannot transition completely away from the carbon resources.

So if I think of Nevada in the, in the next two years, our last two coal units are. Well, 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, 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 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 and 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. So thank you for your comments.

[01:40:43] WARREN BUFFETT: Yeah, we’ve got the capital to do whatever makes the most sense in a place like Nevada and the 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 having the lights go off. And they, I think they would probably agree with you very much, Maria, that they what they where they want to get, but they can’t do it tomorrow because of 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, well, Greg may know more about this, but I’m barring some real breakthroughs in storage and that sort of thing. Right? Yeah. Yeah.

[01:41:18] GREG ABEL: 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, a lot of things, you can accomplish things, but the reality is that there’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 delicate balance of both delivering reliability but doing it in an affordable way.

[01:42:58] WARREN BUFFETT: My friend Bill Gates, he’s working on shortening up that, lengthening the time the battery works on.

And so you got some very smart people working on it, but it isn’t something that you actually do overnight. And I can understand why people want it done overnight, but it is going to take a lot of money. It’s going to take a lot of good ideas and smart people like Bill and Greg, not me. I don’t understand why the damn lights go on when I even turn the switch, but those, those fellas really do know. And there’s plenty of them working on it and we got plenty of money to implement it.

But there are certain things 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 may want a baby, so there are certain laws of nature that you have to work with. Okay, Becky.

Q&A: Buffett and Jain on the Florida Insurance Market

[01:44:10] BECKY QUICK: 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?

[01:44:31] AJIT JAIN: 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 keeps skyrocketing, making it difficult for us to 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 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 flew straight to the bottom line. Florida is a large market. Florida is the market that’s subsidized by the rest of the country. I don’t think those that’s going to 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 an 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.

[01:45:20] WARREN BUFFET: Okay. Station seven, please.

Q&A: Buffett’s Life Advice

[01:46:28] CHRISTINE GARCIA: Hi, Warren. My name is Christine Hone Garcia and I’m from Agora 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?

[01:46:52] WARREN BUFFETT: Well, too bad you didn’t add that what the rest of us would like to hear.

I would say that if I had one piece of advice, I would try to. Well, and you’re lucky to live in this country just to start with, because you’ve got opportunities here that wouldn’t exist in much of the world.

But I would like. I would. I would like to really sort of use Charlie’s advice of the thinking how you like your obituary to read, and then start selecting the educational past, the social pass, whatever. Maybe that 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 were offering some similar benefit to the partner and.

But the opportunity in this country is basically limitless. When you think of going back not that many centuries, if you were going to be a shepherd or something like that, 100 years from now, your grandson was a granddaughter, was going to be a shepherd, nothing really happened. And what has happened in the last 200 years with the combination of the industrial revolution, whether it’s science or education or health, you name it. We are so lucky to be born when we were the people in this room, and many of us were lucky enough to be born in the United States as well, that you.

You’re entering the best world that’s ever existed, and you want to 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 students to take the job. I mean, find the job that you would like to have if you didn’t need a job.

And sometimes you can find that very early, and sometimes you go through various experiences, but don’t forget what you actually are trying to do, and there’s no place to do it like this country. Find the person that you like to share your life with in many cases. And, you know, sometimes you get lucky into that early, and sometimes you make mistakes.

But I would try to, in a very, very general way, I would try to figure out how you’d want to look back on your life and think about yourself and start today to go on the path that leads to that goal and expect some difficulties along the way. But if you’re thinking that way, you’re more likely to get there.

Becky?

Q&A: The Role of Greg Abel and Ajit Jain: Changes at Berkshire Hathaway

[01:50:59] BECKY QUICK: This question comes from Axel Mayerseek in Hamburg, Germany. What has changed for Berkshire’s operating CEO’s since Greg Abel and Ajit Jain became vice chairman? For example, can and do the operating CEO’s still reach out to Warren Buffet directly?

[01:51:22] WARREN BUFFETT: Well, the answer might surprise you, but they overwhelmingly, the operating executives, well, they prefer to talk to Gregor, to Ajit. And that didn’t. And that’s understandable because I don’t really do much and I don’t operate at the same level of efficiency than 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.

And you’ve got. When you’ve got somebody like Greg in Ajit, why settle for me, 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 and insurance to him now. They had it before we stuck some of those titles on 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, 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. And they still like it when he does it. He can deliver news very well to people who.

There will be some people. If you have. 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. And we are a very, very rich company and we don’t.

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 wouldn’t make the effort. We didn’t want to change our lives that way. Plus, we slowed down in various ways, ways physically and everything. So I would say that the number of calls I get from managers is essentially awfully close to zero.

And Greg is handling those. 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, 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.

[01:55:59] AJIT JAIN: Yeah. 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.

After the transition, when they would continue to do so, Warren would very skilfully, 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. I would probably add.

[01:56:57] GREG ABEL: Yeah, 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 was a very easy transition because they cared deeply about Berkshire, they cared deeply about the culture, and they very much wanted it to be a success it. And we’re fortunate to have those managers in insurance and non insurance. So thank you.

[01:57:30] WARREN BUFFETT: Yeah. What Greg is talking about is they really wanted more direction in some cases than I gave them. You know, I mean, 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, and 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. He’s willing to work. I mean, I, you know, I, 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 said, 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 can 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.

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.

Buffett on Berkshire’s Potential in the Indian Equity Market

[01:59:12] RAJIV AGARWAL: 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 Do Darshi India Fund.

My question is related to India. Indian economy and Indian equities have done quite well in the last 5, 10, 20 years. It is the fifth-largest economy and will be the third-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.

[02:00:02] WARREN BUFFETT: 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 contexts, it will make possible some transaction that might what 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 asset met, on assets managed or something of this 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 going to 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.

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. I shouldn’t be taking on any four-year employment contracts like several people doing in this world in an age where you can’t be quite that sure where you’re going to be in four years. Okay.

But you’re absolutely right about, if you were energetic, had some way to be become a buyer or a party that people particularly wanted to do business with.

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 act two of Berkshire Hathaway. Becky?

Q&A: The Future of Berkshire: Succession and Maintaining the Culture

[02:04:20] BECKY QUICK: This is a question from Rafael DePino from Spain. Maine.

Berkshire has grown tremendously. Thanks to, and among other things, its architect, Mister Munger, and you, its general contractor, were 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. Mister Abel, Mister Jain, Mister Combs, and Mister 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? And what are potential renovation works in this great building that may necessitate a new architect?

[02:05:15] WARREN BUFFETT: Yeah, well, that’s a great question, which Charlie and I obviously talked a lot about over time. And of course, we will not be sure 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 when you learn what they’re really like managing something, or it may turn that you want to 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, and 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. And 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 or directors at all. And it’s. It doesn’t operate at all.

Well, I shouldn’t say at all, but it doesn’t. It doesn’t operate as people may think. It generally operates. So we will.

We’ve really got the problem solved for the next 20 years unless something untoward happens. And if something untoward happens, then. 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-year period. There’s 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 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 kind of 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 director’s really to decide whether he’s made the right one, but 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 the century, and you might need six or seven, but the answer is you need a little luck, and you need some break in 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.

It’s sort of like Charlie said about marrying the best person that will have you. Well, we’ve got something that the right person would want to marry, 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, 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.

[02:10:52] GREG ABEL: 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 going to 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 going to change.

[02:11:29] WARREN BUFFETT: Okay, station nine. I’m never sure where nine is.

Q&A: Buffett on Berkshire’s Strategy: Lessons from COVID and Future Leadership

[02:11:41] SHERMAN LAM: Hi, I’m Sherman Lam, a Berkshire shareholder, and I work for family office in Kuala Lumpur, Malaysia. Just really happy to see you, Warren and the team. And 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.

[02:12:10] WARREN BUFFETT: Thank you. Thank you. That makes us feel good.

[02:12:18] SHERMAN LAM: 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, appreciate it if you can get your views, as well as your representations on Ted and Todd, as well as directly from Greg and Ajit, too, on their respective businesses. Thank you.

[02:12:48] WARREN BUFFETT: 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 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, you know, I just don’t agree with our mission.

I would say that, for example, anybody who wants to retire at 65 would be disqualified from being CEO of Berkshire. They might get retired the next day if they were the wrong person. But there are just certain things we don’t want, and were well fixed now, and the odds are very good, but far from certainty that that will take care of the next 20 years. Now, 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.

There are a few people who know my thoughts on that, but the job of the director 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, Charlie said, what was this?

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, and we’d have been better off.

So the answer was for him to get in the tv business, like Murph had done and ad-supported. You know, 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 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 have Tom Murphy and then hand them 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. It got to 2000, he says. Now my goal is 3000. He kept doing that, surpassed all these people, like CB’s and ABC, that only 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 somebody like him operate. I mean, it’s like watching a great golfer, a great tennis player, then you ought to learn something about the kind of swing you’re trying to develop or something of sort. So that’s not a great answer for you. But 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’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 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, and so therefore, they don’t.

They don’t want to. They don’t necessarily want to 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 with Greg’s mortality, they can do just what Revan would 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, 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 ones willing to act. And at those times, we want to be sure that the US government thinks we’re an asset to the situation and not a liability or a supplicant, as the banks were.

We’ll say in 2008 and nine, they were all tarred with the same brush. But we want to be sure that the brush that determines our future 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?

Q&A: Buffett on Berkshire’s $182 Billion Cash Pile: Why He’s Waiting

[02:21:36] BECKY QUICK: This question’s from Johan Halen, who writes, you’re sitting on $168 billion of cash, which he 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?

[02:21:55] WARREN BUFFETT: Well, I think that’s pretty easy to answer. 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. If it was at 1%.

Don’t tell the Federal Reserve that, but prefer it. We don’t. 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. It’s just.

There are times, and obviously. But I would say this, I would not like to be running 10 billion now. 10 million. 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, I wouldn’t basically see many more opportunities than we found now. It’s true that something like Japan, we could have done, if the company had had a 30 or 40 billion, and we’d make. We’d have had great returns on equity. But if I saw one of those now, I’d do it for Berkshire. It isn’t like I’ve got a hunger strike or something like that going on.

It’s just that things aren’t attractive, and there’s certain ways that can change, and we’ll see whether they do.

Okay. Station 10.

Berkshire Hathaway HomeServices and the Real Estate Commission Settlement

[02:24:14] SEAN CAWLEY: Mister 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 Home Services in Arizona and California. My mother, Cindy, my brother, and my two sisters all sell real estate with Berkshire Hathaway Home Services for many years. We love being a part of the Berkshire family, and along with the 70,000 other agents that sell real estate for the company, Mister Buffett Home Services of America recently settled our class action lawsuit.

Regarding commissions for $250 million last week. This dollar amounts about 100 million more than Keller Williams. 166.5 million more than anywhere real estate, which is better homes and gardens in Coldwell. Banker as a realtor with Berkshire Hathaway home services 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 maybe ask the note to Greg and Ajit, too. Would you consider a Berkshire agent when buying your next home?

[02:25:21] WARREN BUFFETT: I don’t buy them that often, as some people have noted.

I certainly would consider him but I say the probability of that happening is low. And I really appreciate the fact you’ve joined up with us, but I’m going to. In terms of the settlement, I mean, Greg kept me informed, but I turned it over 100% to him. So, Greg, you want to talk about it?

[02:25:50] GREG ABEL: Sure.

So, thank you for you and your family for being an agent and working for our company, Berkshire Hathaway Home Services. 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, association of Realtors settled for more than 400 million. So effectively everybody was swept up in that settlement, and it did set the grounds for both home services and for the industry to move forward. There’s a lot of changes that happen in, or are being proposed associated with that settlement. The one thing that I think you hopefully would absolutely agree with, the real estate agent, is still an important part of these transactions. It’s the one time in our lives where we make these massive investments, and having that counseling 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 negatively 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 home services 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 home services and can be met by home services. And that was an important condition because they were also pursuing Berkshire and Berkshire Hathaway Energy. And we said, you could pursue us separately, but that settlement will reside with home services and be an obligation of that. And they decided the ultimate settlement.

And we’ll go forward from there. So, Warren, any other comments?

[02:28:09] WARREN BUFFETT: Well, yeah, I’ve sold two houses in the last. Well, the last 93 refraction years, and I’ve bought one that I still have, but I obviously bought the other two, and I have not negotiated down the commission, even though 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. When I got out of school, they had what they called Fizzbowl for sale by the owner and so I’ve been involved to some degree in watching the whole system operate, and I know what our average agent makes. I know how long they work on things sometimes that don’t materialize.

I don’t think we’ll end up with a better system, but it’s up to Greg and the people at home services we work 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 brokerage business. It was just one or two operations when we bought Berkshire Hathaway Energy, and we really built up quite a company.

And I think it’s a very fundamental business. You need help. 90% of the people need help in buying a home or selling one. And I’ve watched it operate all my life and been involved with lots of people who have been in the business. But there was a decision in court, and I told Greg to handle it, whatever seemed best to him. And I’m quite. I’m perfectly happy with the way we’ve handled.

I think I’m surprised at the decision, but we get surprised indecisions in the insurance business lots of times. I mean, just think of the various things we faced, and when 9/11 came along, we never thought something like that could happen, but it happened, and then we didn’t know what was one event or more events. If they closed down the New York Stock Exchange, a bunch of brokers. Well, all kinds of people lose their jobs or lose their income for a while. Is that one event or multiple events?

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?

[02:31:37] GREG ABEL: Missouri, yes.

[02:31:38] WARREN BUFFETT: Yeah. But we’ve gotten surprised by some other decisions, and we’ll keep doing sensible things as we move forward. Greg, do you want to.

[02:31:48] GREG ABEL: Yeah, 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. 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 US. Our agents take great responsibility for the whole transaction.

In the US, they put, as Warren said, time and capital at risk to ensure the transaction closes. And when you do close, 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.

[02:32:59] WARREN BUFFETT: Yeah, we still will want to buy real estate brokerages at the right price, and I hope we’re bigger in the industry ten 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.

Tesla’s Autonomous Driving and Geico’s Future: Buffett and Jain’s Perspective

.[02:33:29] BECKY QUICK: This question’s 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 ignore. Assuming Elon succeeds in reducing accidents by 50% versus human drivers, wouldn’t auto insurance rates fall to reflect the reduced underwriting risks, thereby adversely impacting Geico’s revenues and float and perhaps margins, too?

[02:34:17] WARREN BUFFETT: Well, yeah.

Well, let’s just take the extreme example. Let’s say there are only going to be three accidents in the United States next year for some crazy reason that anything that reduces accidents is going to reduce costs. But that’s been harder to do than people have done before. But obviously. But if it really happens, the figures will show it, and our data will show it, and the prices will come down.

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 confirmed they’re close to bankruptcy now, aren’t they? Because of taking things on at the wrong prices. Is that true?

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 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 going to be good for society and it’s going to be bad for insurance companies volume. But, you know, but for society is what we’re looking for so far you might find kind of interesting. I mean, the number of people killed per 100 million passenger miles driven. I think it actually, when I was young, it was like 15, but even post-World War Two, it only fell 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, they didn’t drive immediately, they didn’t drive as many miles, but they drove more dangerously, didn’t they? Is that right, Ajit?

[02:36:59] AJIT JAIN: Yeah. 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

[02:37:57] WARREN BUFFETT: Okay, we’re going close to noon. When we’re going to break for lunch, I just want to tell everybody that we appreciate very much if they get on their seats and be ready at 1:00 when we reconvene, because we will have another very [important presentation]. But we do not want to be seating people and have people milling [around] here at 1:00, just like a play in New York or something. It’ll take a few minutes, and only a few minutes, to cover what we’re going to [do] at 1:00, but we don’t want to be seating people during that period.

But now let’s… We’ll go on till 12:00, and then we’ll have a break until 1:00, and we will go to station 11.

Q&A: Buffett on Zero-Emission Vehicles and Berkshire Hathaway’s Strategy

[02:39:31] HUMPHREY LIU: My name is Humphrey Liu, and I am from Charlottesville, Virginia. I asked the 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. Thank you.

[02:40:23] WARREN BUFFETT: Yeah, well, we will. I hope you’re right [about massive adoption]. And massive adoption 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.

All of climate change… it’s got a terrible problem just 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.” But that really hasn’t been settled yet.

It’s a fascinating problem to me, but I don’t have anything to add to how you really slice through the world [population]. When I was born in 1930, there were just essentially 2 billion people in the world. Now there are 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 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 we lived.

So we will see what happens with it. But that’s a problem that is very, very, very hard to solve, [to be] solved among a couple of hundred countries. And I really don’t have anything to contribute on it.

And now I’ve got instructions from the monitor in front of me. I would like to introduce one person here that [you all know] because she’s been here so many times, but my friend Carol Loomis, who is now… well, she’s going to be 95 on June 25. You can send [cards] to her care of our office. And Carol has edited the [Berkshire] annual report since 1977.

[02:44:38] WARREN BUFFETT: 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? I think she’s put ten on each one. But I’ve always wondered if she 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 want to reveal one other… Well, I want to ask one more question while Carol was here, because I’m sure most 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 is immortal. But Carol has a distinction that probably most of you don’t know, but she dated Ty Cobb.

And Carol was officed at 6th Avenue and 50th Street in the Time Life building. And NBC was right across the street in, in Rockefeller Center. And the quiz shows became the head of TV. And Carol, being the kind of person she is, walked across the street at lunchtime and went on the quiz show [in] the late 1950s. And they gave her the… they gave her the questions regarding baseball. And Carol answered them all correctly, of course. She was encyclopaedic on all kinds of things. So she knew all the answers. And 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… [It] 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 I think he subsequently had one more lunch [with her]. 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 bad at-bats they didn’t count. So the real question I want to know from Carol, and I think she should maybe tell us, is that would she have dated Ty Cobb if she [had known]? 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?

And if Carol would… 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 Loomis. And Barbara’s… 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’m sort of a non-anxious guy… older, in front of a lot of people. Carol. Carol. Or are we going to have Barbara as [our] guest? Either one will… She would have been happy to go either way, right?

Carol is the best business writer. She comes from a town of [Kahoka], Missouri. I don’t know, around a thousand [people], probably. She never took an accounting course and ended up becoming the best business writer in the United States.

And we… You know, she didn’t want to 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 of] 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 anybody enjoys reading them, let’s give a hand to Carol.

[02:51:27] WARREN BUFFETT: 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 more about it when we come [back]. So if we’ll dim the lights, we will have [a video] showing what a Berkshire shareholder did when she sold us a billion dollars 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 zeroes, but she’s the prototype of a good many Berkshire Hathaway shareholders. It’ll be the first thing we talk about when we come back. But some of you may have noticed, whenever it was a few weeks back, when Ruth Gottesman gave $1 billion to Albert Einstein [College of Medicine] to take care of all of us, 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 Gottesman had just made a decision to take care of all of the costs of education at Albert Einstein, and it’s going to be in perpetuity. So let’s just show the film.

[02:52:56] RUTH GOTTESMAN: I’m happy to share with you that starting in August of this year, the Albert Einstein College of Medicine will be tuition-free.

[02:53:41] WARREN BUFFETT: And that’s why Charlie and I have had such fun running Berkshire. She transferred a billion dollars to other people. She happened to do it with Berkshire stock, and, you know, they offered [to] rename the school after [her] and everything like that. But she said, “Albert Einstein. That’s a pretty good name to start with.” So there’s no ego involved in it, no nothing. She just decided that she’d rather have 100 plus, closer to 150 eventually, of students be able to start out debt-free and proceed in life. And she did it happily, and she did it without somebody asking, you know, [to] name it, you know, put my name on [it] for all four sides of neon lights, and I salute her.

So let’s all have lunch, and we’ll come back and talk a little bit more about that. Thanks.

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