I just got around to watching the Berkshire meeting (you can see it here) As always, a lot has been written about it so I just wanted to bullet a few of the key points.
This was Buffett's 60th Annual meeting for Berkshire and at 94 he's still as sharp as a tack.
Obviously, the big news was his retirement. He'll step down this year and Greg Abel will take control of the non-insurance business. Buffett will still be in the back ground, just less hands on.
Big shoes to fill, obviously, but Greg has been a long time understudy and clearly has Buffett's full faith. I cant imagine the ship changes direction under his leadership.
The cash balance of berkshire is truly mind boggling -- around 1/3 of a trillion USD. That's 5x the RBA's holdings of USD! and more than the combined cash reserves of tech giants like Apple, Microsoft, Alphabet, Amazon, and NVIDIA. It's about 27% of Berkshire's total assets -- about double the long-run average. Buffett said this was NOT due to any near term market forecasts, but just a lack of compelling opportunities, and that it was generating 5% anyway and providing a huge amount of optionality. They wont hesitate to deploy it when the right opportunity presents itself.
Another super interesting thing was his comment on the US dollar and the fiscal irresponsibility of Washington. In his words:
You can’t keep writing checks without worrying about the balance… Eventually, the world starts asking questions—and you may not like the answers.
He said that persistent deficits and unchecked spending are a dangerous game and that although the U.S. dollar remains the world’s reserve currency for now, he also cautioned that this privilege could erode if trust in America’s financial stewardship continues to decline. Buffett made it clear that printing money and piling on debt without restraint is unsustainable, and that both political parties have failed to tackle the issue seriously. Anyway, i thought his tone was notably more critical than in past years.
His comments on Apple where also interesting. Buffett was quick to reaffirm his admiration for Apple, calling it “a better business than any we own” and highlighting its brand power, ecosystem lock-in, and customer loyalty. He explained that Berkshire had trimmed its Apple stake slightly, but purely for tax-related reasons as opposed to a shift in conviction. I like how he described Apple as a “consumer product company with a tech wrapper,”
AI came up (of course), but Buffett basically said it was outside his circle of competence. But he very much seemed to grasp the potential magnitude of the tech:
"When you think about the potential for good versus potential for harm, it’s similar to when we developed nuclear weapons. There’s no putting the genie back in the bottle.”
And:
“I think it’s something we should be cautious and humble about.”
Lastly, he emphasized the importance of free trade, calling it "enormously important for the world." He acknowledged that while trade can hurt certain industries or workers in the short term, it ultimately creates wealth by allowing countries to specialize and benefit from comparative advantage. Buffett argued that the benefits of trade far outweigh the downsides and said the U.S. should not turn inward, even amid political pressure to do so. He also warned against protectionism and trade wars, noting that they often backfire and hurt consumers. Buffett also brought up the Smoot-Hawley act, saying "...we started thinking we could control trade and we ended up with something approaching a worldwide depression. It doesn't work to make everybody else your enemy in terms of trade"
He's not wrong.
Anyway, all told, there wasn't much new (there rarely is) but it's always a worthwhile watch.
Anyone who takes investing or storing value seriously, should take the time to hear this history of money
https://open.spotify.com/episode/3v2qGJZ7XT63PQNwxk6Kc7?si=539ws24lSOORme0r1OX5Rw
