Berkshire's 2025 annual shareholder meeting: Watch the full morning session

If everyone will please take their seats. This is my 60th annual meeting, and it's the biggest, and I think it'll be the best yet. And I would, before I start, I'd like to give you a A few figures from yesterday, because we set all kinds of records. Yesterday, we had 19,700 people that joined us in the afternoon between noon and 5 o'clock, and that was up from 16,200, which was a previous record the year before. And in every aspect, we set records. Seas Candy did $317,000 against $283,000 the year before. Most of these were limited by capacity.

I mean, there were lines there throughout the total day. Brooks did 310,000. It was all-time record sales day for them. And I think they have close to 3,000 runners lined up for Sunday, which is a lot of people to get up. I think we've had 2,200 or 2,400 before, but 3,000. That doesn't count me, and it won't count me. And I could go up and down the line. Jazzware's around 250,000, double the previous years. They just sell as fast as they can sell. Most of the most—every place had people lined up at the at the cash register sometimes for a lot longer away than we wish we had, but we'll learn the game eventually.

And it goes on and on. Every company sends records. There's no way of knowing how many people we have here today. We have people listening in around the world. But I think we're setting—we'll probably set records in a great variety of ways. And I would—we're going to have—in a minute, we'll get to the question and answer, but I'd like to first introduce our directors. And I'm Warren Buffett, and I was born and bred right here in Omaha. We have Greg Abel. He was born and bred in Canada. And we have Ajit Jain, who was born and bred in India.

We have a very diverse group in the audience, and I will introduce them. alphabetically and if they'll stand as I introduce them. And I know it'll be an effort, but withhold your applause till the end so that we can get through the list. But we'll start alphabetically with Howard Buffett, how I would just stand and withhold the applause. It'll go to his head. Susan Buffett. Steve Burke, Ken Chenal, Chris Davis, Sue Decker—Sue's our lead director—Charlotte Diamond, Tom Murphy Jr., Ron Olson, and I'll have a few—when we finish, I'll have a few more things to add about him—Wally White's Merrill Whitmer.

And with that, you've got our all-star cast. And Ron, if you don't mind standing, I would like to point out that Ron—they finally got through an age-director thing at Berkshire. I think we had five that were over 90 here not so long ago, but we put in the highest—Sue tells me anyway that it's the highest age limit that any Many of the companies she checked out came up with, but Ron has been on the board for 28 years, and been associated with Charlie Munger at Munger Tolls for many years beyond that, and has been around it.

a variety of times of crisis and joy and disappointments and surprises and everything else at Berkshire, and has been of invaluable help to us. So, I think—I think I'd like to give a special hand to Ron Olson. I think I'll do something else that isn't done usually at annual meetings, but I haven't had a chance. I listened to him on Thursday afternoon. It's the only investment quarterly call that I listened to, but I listened to Tim Cook, and I understand. It will be tough for me to see him from up here, but Tim Cook—there he is.

I'm somewhat embarrassed to say that Tim Cook has made Berkshire a lot more money than I've ever made Berkshire at. I—credit should be given to him for—I knew Steve Jobs briefly, and Steve, of course, did things that nobody else could have done in developing Apple. But Steve picked out Tim to succeed him, and he really made the right decision. Steve died young, as you know. Nobody but Steve could have created Apple, but Tim could have developed it like it has. So, on behalf of all of Berkshire, thank you. There's a couple other people I'd like to thank.

I don't do any work in terms of the show or anything else around Berkshire, but what you see today is the product of a lot of people at Berkshire. They forget—you know, they don't think of themselves as the one who's supposed to screw a light in and leave for— somebody else, a specialist to come along and do other things. The people of Berkshire put on this show every year. our chief financial officer, and just everybody pitches in. It's a remarkable organization that way. But it's led this year, in the last few years, by Melissa Shapiro, and she's made this whole thing work.

And then we got an idea a while back—well, many years ago. Well, I'll take it all the way back. Maybe 65 years ago, I met Kerry Solva's grandfather and his wife. Well, they had nine children, and Susie and I joined a—a playhouse group, and I don't look like the kind of guy that would join a playhouse group, but it turned out to be a great move in many ways. First of all, I enjoyed the plays, but beyond that, I met not only Kerry's grandfather, who ran an insurance company in Omaha, Bill Kaiser, but I also met the Pumpkin Boys.

So, in one sort of accident, when I was in my 20s, came up with all kinds of good things, and in connection with Carrie, her father ran a company called Central States, and later on we bought that company, and then her father, ran the company. Her sister wanted to work for Berkshire some years ago, and then she decided to have a family and subsequently had four kids, so she left. But Kerry moved right in, and Kerry had amazing talent behind—just like A good many people do. They have a challenge you don't realize until you give them some responsibility.

And so, 10 or 11 years ago, I asked Carrie to do a 50th anniversary book. about Berkshire, and just use her imagination. And she never—she didn't need to check with me or do anything. She just—she never edited a book. She never published a book. She never dealt with the printers before. But she just went out and promptly put together this 50th anniversary book, and then, this Well, then, Carrie, of course, got married and had three kids, so she had to leave us. But we go to a baseball game once a year, and we invite some of our distinguished alumni like Carrie to join us.

Even though she was raising three children, and you may have met one or two of them in the last day or so. She volunteered to bring together a 60th anniversary book, which I asked for. And again, she took the whole thing. She just did it. She kept doing the things with her kids, and every now and then she'd—I'd ask her how it was going, and she'd tell me how it was going. And so, she put together this 60th anniversary book. Got it done by, you know, maybe a week before the meeting because I gave her the assignment very late.

And yesterday we sold. I think it was 4,000 plus, 4 to 4,500 maybe, 4,400. We printed 8,000. We intended to print 5,000. So we sold 4,400 books yesterday. And we'll have 30, I guess roughly 3,600 left out there today. It's kind of a whimsical, but accurate. And she came out with just a book I hoped she would come out with. And then, as we went through this publishing experience, Carrie wouldn't take a dime, but I did get her to name her. favorite charity, and the Statement Center, which takes care of homeless people and does a great many other things.

It's located about five or six miles from where we are here south has been doing a wonderful job. Her grandfather helped form it. Her husband has now joined the board, and we're selling 20 copies of This is a commercial place, isn't it? We are selling 20 copies that we sold 10 prior to the meeting. That's all we let them sell. And we raised a few hundred thousand dollars doing that. I think we sold one for a hundred thousand dollars. But we limited that to 10. And the only difference in these in the $25 version is that Carrie and I signed them.

But we saved six for yesterday. And the six brought $148,000, which is a pretty good average per book of about $20,000. And then I had them say four more. So this afternoon, when we disband at 1 o'clock, the area right behind us that has all the goods in the bookstore, they will sell the final four. And when we get all through, I'll match whatever we've raised for the 20. And we'll give the Stevens Center a boost both in financially, but also in awareness. So, anyway, that—and when you look at that book, Carrie really did the whole thing.

I mean, there's a lot of information in there, and she dug through it. And she came through a couple times, maybe to check a fact or two. But she got material from the Munger family. She just did a wonderful job. And I couldn't get her to take a penny for it. So I'm going to ask her to do a lot of other things in the future. OK. With that, I think we've covered all the business, so we will move to… Becky has questions that she's received from—I don't know how many she's received, but from all over the country and perhaps outside the country.

And she's picked out a group of them, which she has not shared with me. And we will alternate questions between Becky and the audience, which we have by zones. And with that, I will turn things over to Becky for the first question.

Thanks, Warren. This first question comes from Bill Mitchell. I received more questions about this than any other question. He writes, Warren, in a 2003 Fortune article, you argued for imports of certificates to limit trade deficits and said these import certificates basically amounted to a tariff. But recently, you called tariffs an act of economic war. Has your view on trade barriers changed, or do you see import certificates as somehow distinct from tariffs?

Yeah, the import certificates were distinct, but their goal was to balance imports against exports, and so that the trade deficit would not grow in an enormous way. In fact, it would have—and it had various other provisions in it to help Third World countries at that time, as they were called, perhaps catch up a little bit. And they had a variety of aspects to them, but basically they were designed to balance trade, and I think it makes them very good. arguments for the fact that balanced trade is good for the world, and the more balanced trade there is, the better.

It will continue to be better for cocoa to be raised in Ghana and coffee and coffee and a few things. And over time, the American industry has gone from being an agricultural country—this was nothing but an ag country. I mean, virtually—and that was only 250 years ago. And we have become a very industrial country, and we did not want to make that a situation, in my view, where we ran. greater and greater deficits building up greater and greater debts against the country. So, I designed this import certificate thing, which Charlie called it a little Rube—too much like Rube Goldberg.

I don't know whether that name is—but it's gimmicky. It's certainly a lot better than anything I think, than we're talking about now. And there's no question that trade—trade can be an act of war. And I think it's led to bad things, just the attitudes it's brought out. In the United States, I mean, we should be looking to trade with the rest of the world, and we should do what we do best, and they should do what they do best. And I don't think it—that's what we did originally. I mean, we were good at producing tobacco and cotton 250 years ago, and we traded it.

We want a prosperous world with eight countries with nuclear weapons, including a few that are what I would call quite unstable. I do not think it's a great idea to try and design a world where a few countries say, ha ha ha, we've won, and other countries are envious. So, my import certificate idea, which went no place—I think we've got extra copies to run with. Not a great demand for the copies. If anybody could—and if you'd like, and write the office, I think we could probably send you a copy of it. But the main thing to do is not use—trade should not be a weapon.

And the United States—the United States—we've won. I mean, we have become an incredibly important country, starting from nothing. 250 years ago, there's nothing been anything like it. And it's a big mistake, in my view, when you have 7.5 billion people that don't like you very well, and you've got 300 million that are crowing in some way about how well they've done. And I don't think it's right, and I don't think it's wise. I do think that the more— The more prosperous the rest of the world becomes—it won't be at our expense—the more prosperous we'll become, and then the safer we'll feel, and your children will feel someday.

So that's—but don't expect my import certificate idea to go down there with Adam Smith's Wealth of Nations or anything. Okay, let's go to area one.

Mr. Buffett, Mr. Abel, and Mr. Jane. Good morning. I'm S.T. Cheung. I'm from Hong Kong. Mr. Buffett and Mr. Munger did a very good and successful investment in Japan in the past five or six years. The recent CPI in Japan is currently above 3%, not far away from its 2% target. Band of Japan seems very determined in raising rates, while FAT, ECB and other central bands are considering to cut them. Do you think BOJ makes sense to proceed the rate hike? Will its planned rate hike deter you from further investing Japanese stock market or even considering to realize your current profits?

Thank you very much for arranging this greatest event every year. Finally, I wish you healthy always and keep holding this shareholder meeting. Thank you.

Well, I'm going to extend the same goodwill to Japan that you've just extended to me. All of the people of Japan determine their best course of action in terms of economics. It's incredible. It's been about six years now, as you pointed out. I was just going through a little handbook. It probably had two or three thousand Japanese companies in it. One problem I have is that—I can't read that handbook anymore. The print's too small. And there were these five trading companies, they have a special name for them in Japan, but they were selling at ridiculously low prices.

And so I spent about a year acquiring them, and then we got to know the people better, and everything that Greg and I saw we liked better as we went along. So we got fairly close to the 10% limit that we told the company we would never exceed without their permission. And so we did ask them, reasonably, whether that limit could be relaxed, and it's in the process of being relaxed somewhat. I would say that I'll speak for Greg beyond me, that in the next 50 years—and I hope he's running things then—we won't give a thought to selling those.

I mean, Japan's record. has been extraordinary, actually, in terms of—my guess is that Tim would tell you—Tim Cook would tell you that iPhone sales there are about as great as any country outside the United States. American Express would tell you that they sell their product very, very well in Japan. Coca-Cola, that we do business with. investment of ours. They do extraordinarily well in Japan. They have a number of habits in a civilization that operates differently than ours. Japan is by far the biggest This is the container they've always preferred. They're soft drinks, and they have a whole different sort of distribution system there.

But we have been treated extremely well by the five companies. They talk with Greg primarily. I went over there a year or two ago. Greg's more cosmopolitan than I am, which isn't saying much, actually. How many times do you think you've met with representatives of one company or the other?

Yeah, when you think of the five, there's definitely a couple meetings a year, Warren, and I think the thing we're building with the five companies is, one, it's been a very good investment, but we are really, as Warren touched on, we envision holding the investment for 50 years or forever. But I think we also are building relationships to do incremental things with each of those companies. And we really do hope to do big things with them globally. They bring different perspectives and different opportunities than we see. And that's why we're building that long-term relationship with them.

It's super long-term.

And they have a different customs. They have different approaches to business. That's true around the world. And we don't have any intention in any way of trying to change what they've done because they do, because they do it very successfully. And our main activity is just to cheer and clap. I can still do it, 94. So, we will own those. You know, we will not be selling any stock. I mean, that will not happen in decades if then. My guess is that they will find things—because they cover the world pretty much, the five trading companies—we will find things occasionally that may be very large for any individual company there.

They may, in some way, be assisted by some help we bring to the situation. That will be an expanding relationship. It's too bad that Berkshire has gotten as big as it is, because we love that position, and I'd like it to be a lot larger than it is. But even with the five companies being—they're very large companies, and they're large companies in Japan. And we've got, at market, in the range of $20 billion invested, but I'd rather I don't have $100 billion and $20 billion, and that's the way I feel about it. Several other investments we have, but size is an enemy of performance at Berkshire, and I don't know any good way to solve that problem.

Charlie always told me that having a few problems was good for me. I never quite understood that, but if you listen to him moralize, you would understand. And it's not an impossible problem at all. And the Japan investment has just been right up our alley. Do you want to add anything on that?

No, I think you've touched it. As you said, it's right up our alley, and I absolutely agree, Warren. I do believe we'll see some very large opportunities long-term, and that's just been a great plus of that relationship.

Yeah, I would say they would like to present us with opportunities. We would like to receive them. We've got the money. We both get along very well with each other. And they have some different customs than we have. They drink the number one Coca-Cola product. They drink over there something called Georgia coffee. I haven't converted them to Cherry Coke, and they're not going to convert me to Washington and Georgia coffee. But it's a perfect relationship. I just wish we could get more like it. And I never dreamt of that when I picked up that little — it wasn't so little, it was about that thick.

Sometimes two companies to a page, and a couple thousand pages, I believe. But it's amazing what you can find when you just turn the page. We showed a movie last year about turn every page. And I would say that turning every page is one important ingredient to bring to the investment field. And very few people do turn every page, and the ones who turn every page aren't going to tell you what they're finding. So you got to do a little bit yourself. OK.

Becky? This next question comes from Advait Prasad in New York. He writes, today Berkshire holds over $300 billion in cash and short-term investments, representing about 27% of total assets, a historically high figure compared to the 13% average over the last 25 years. This has also led Berkshire to effectively own nearly 5% of the entire U.S. Treasury market. Beyond the need for liquidity to meet insurance obligations, is the decision to raise cash primarily a de-risking strategy in response to high market valuations? Or is it also a deliberate effort to position Berkshire's balance sheet for a smoother leadership transition, providing Greg Abel with maximum flexibility and a clean slate for future capital allocation decisions?

And I will add one line from another shareholder, Mike Conway, who asks, Are you encouraged you may see some fat pitches coming your way?

Well, I wouldn't do anything nearly so noble as to withhold investing myself just so that Greg could look good later on. Now, if he gets any edge when I leave, I'll resent it. So, the amount of cash we have is—we would spend—well, we came pretty close to spending $10 billion not that long ago, for example. But we'd spend $100 billion, I mean, and those decisions are not tough to make. when something is offered that makes sense to us and that we understand and offers good value and where we don't worry about losing. And the one problem with the investment business is that Things don't come along in an orderly fashion, and they never will.

I mean, it isn't like every day. You know, the long-term record is sensational, but that is not a product. And I've been in—see, I've had 200 trading days times 80 years. 16 million trading days. It would be nice if every day you got four opportunities or something like that, and they were expected to be equally attractive. If I was running a numbers racket, every day would have the same expectancy that I would 40% of whatever the handle was, and so the only question would be is how much we transacted. But we're not running that kind of a business.

And so we're running a business which is very, very, very opportunistic. Charlie always thought I did too many things. He thought if we did about five things in our lifetime, we'd end up doing better than if we did 50 and that we never concentrated enough. So that we would rather have, if we've got $335 billion now in charges, We would rather have conditions that have developed where we would have like $50 billion or something like that. But that just isn't the way the business works. And we have made a lot of money by not wanting to be fully invested at all times.

And we don't think it's improper, actually. for people who are passive investors, just to make a few simple investments and sit for their life in them. But we've made the decision to be in the business, so we think we can do a little better than that by behaving in a very irregular manner. But if you told me that I had to invest—well, let's say that we have roughly $40 billion a year coming in, and we start with $3.35 billion. If you told me I had to invest $50 billion every year until we got down to $50 billion, that would be the dumbest thing in the world, to invest in that manner.

Things get extraordinarily attractive. very occasionally. The long-term trend is up. Nobody knows. I certainly don't know. Greg doesn't know. Ajit doesn't know. Nobody knows what the market is going to do tomorrow, next week, next month. And nobody knows what business is going to do tomorrow, next week, or next month. But they spend all their time talking about it because it's easy to talk about. But it has no value. I've never found anybody I wanted to listen to on the subject. On the other hand, I've found the leafing through things like that big Japanese book that I can't read anymore.

That's a treasure hunt. And every now and then you find something. And occasionally, very occasionally, but it'll happen again. I don't know when. It won't—it could be next week, it could be five years off, but it won't be 50 years off. You will have—we will be bombarded with offerings that we'll be glad we have the cash for. And it'd be a lot more fun if it would happen tomorrow, but it's very unlikely to happen tomorrow. Very, very unlikely to happen tomorrow. But it's not unlikely to happen in five years, and then it gets—probabilities get higher as you go along.

It's kind of like death. I mean, if you're 10 years old, the chances that you're going to die the next day are low. If you get to be 115 or something like that, it's almost a cinch. Particularly if you're a male. I mean, all the records are held by females in terms of age. I tried to get Charlie to have a sex change so he could test out whether... He did pretty well for being a male, I'll put it that way.

Good morning, Warren, Greg and Ajit. My name is Jackie Han. I'm from China and now work in Toronto, Canada. This is my eighth Berkshire Hustling meetings at this point. I've probably spent more time with you than most people spend on Netflix. As you might guess, coming from a Chinese family, we've always had a soft spot for real estate. So your question isn't why don't you own a house. It's why are you still buying stocks instead of more property. So here is my question. With today's high interest rates and global uncertainty, do you still believe in being greedy when others are fearful or the value investing facing new challenges in today's environment?

Thank you.

Well, in respect to real estate, it's so much harder than stocks in terms of negotiation of deals, time spent, the involvement of multiple parties and the ownership usually. When real estate gets in trouble, you find out you're dealing with more than the equity holder. But there have been times when large amounts of real estate have changed hands at bargain prices, but usually stocks were cheaper, but they were a lot easier to do. So, Charlie did more real estate, because Charlie enjoyed real estate transactions, and he actually did a fair number of them in the last five years of his life.

He was playing a game that was an interesting game to him. But I think if he'd asked him to make a choice when he was 21, and he had to either be in stocks exclusively the rest of his life or, let's say, the rest of his life, he would have chose the stocks of the second. There's just so much more opportunity. At least in the United States, there's so much more opportunity that presents itself in the security market than it does in real estate and in real estate. You're usually dealing with a single owner or a family that owns maybe a large property they've had a long time.

Maybe they've borrowed too much money against them. Maybe the population trends are against them. But to them, it's an enormous decision. When you walk down to the New York Stock Exchange, you can do billions of dollars worth of business totally anonymous, and you can do it in five minutes. And the trades are complete when they're complete. In real estate, when you make a deal, a big deal with a distressed lender, you know, when you sign the deal, then you go into another phase. I mean, then people start negotiating more things and more things, and it's a whole different game.

And a different type of person, to some extent, enjoys the game. We did a few real estate deals that came our way in 2008 and 2009, but the amount of time that they would take us, compared to doing something intelligent and probably better, and securities, there was just no comparison. In a real estate deal, every sentence is as important as a person and in stocks. If somebody needs to sell 20,000 shares of Berkshire or something and they call us and the price is right, it's done in five seconds. And it closes all the time. People who you certainly wouldn't want to have marry your daughter or They behave well, actually, in stocks.

Partly that's because they're probably having their wires or phones or whatever it is recorded as to what they've said and everything. But the completion rate for working on anything in stocks is, assuming you've got a meeting of the minds on prices, essentially 100% in real estate. It just begins when you agree on deals, and then they take forever. For a guy 94, it's not the most interesting thing to get involved in something where the negotiations could take years. We have the capability. There have been some huge failures. If you go all the way back to Zeckendorf in the 1960s, he was going to change the world and Century City out in California is a product of his.

And if you go to Eurus, he was sitting on top of the world with the Eurus buildings. So people tend to get in trouble in that business. The banks usually don't want to recognize it, but that takes a long time to go through the bank processes. They just got through redoing. the musk alone that he made dead when he was buying it three years ago, the company that's now X. And, you know, three years to work out a transaction that—or you've got parties on both sides that aren't ready to act. We find it much better when people are just ready to pick up the phone and you can do hundreds of millions of dollars worth of business in a day.

I've been spoiled, but I like being spoiled, so we'll keep it that way. OK, Becky.

This question comes from Sam England in San Francisco. And it's for Warren and Ajit. As AI systems become more capable and harder to interpret, how do you see that affecting the insurance industry's ability to assess price and transfer risk? Are there parallels to past disruptions Berkshire has navigated in underwriting or capital allocation?

OK, Becky, and he's got about 100 points of IQ on me, and he's just going to be here this morning, so I'm going to let him answer the question first.

Well, there is no question in my mind that AI is going to be a real game changer, and it's going to change the way we assess risk, we price risk, we sell the risk, and then the way we end up paying claims. Having said that, I certainly also feel that people end up spending enormous amount of money trying to chase the next new fashionable thing. We are not very good in terms of being the fastest or the first mover. Our approach is more to wait and see until the opportunity crystallizes and we have a better point of view in terms of risk of failure, upside, downside.

So right now, the individual insurance operations do dabble in AI and try and figure out what is the best way to exploit it. But we have not yet made a conscious, big-time effort in terms of pouring a lot of money into this opportunity. And my guess is we will be in a state of readiness. And should that opportunity pop up, we'll be in a state where we'll jump in promptly.

Yeah, and I would just add I wouldn't trade—wouldn't trade everything that's developed in AI in the next 10 years for a G. So if you gave me a choice, that—gave me a choice. having $100 billion available to participate in the property casualty insurance business for the next 10 years, and a choice of getting the top AI product out of whoever's developing it or having Ajit making the decision. I would take Ajit any time. And I'm not kidding about that. Okay, station free.

Hello, I'm Sean Siegel from Chicago, Illinois. Thank you for investing your time to you and the executive committee for putting on this meeting and for bringing together a diverse group of people in attendance under one roof. Out of all the companies that Berkshire Hathaway owns, there was one that you acquired, the Chicago-based company Portillo's Hot Dogs. How did you know that this would be a good fit for the overall company's portfolio?

Well, I'll have to ask Greg about that because I don't know anything about it, so maybe he bought it when I was looking the other way.

I think I got to call a friend on this one.

Yeah, I—we own a lot of companies, but I do like to think I know most of them, but the—it may be a subsidiary of a subsidiary in some way, but I really don't know a thing about it. I'm sorry to—that may be a good thing. I do know something about hot dogs, though, sorry.

And we do have a lot of companies in Chicago, Warren, through Marmon, and that's been a great opportunity where we've accumulated a variety of excellent companies under that portfolio, but, as you noted, I don't believe Portillo's fault under that.

No, I look at the financial statements of about And perhaps 50 or 60 of our companies every month. But in the case of Marmon, for example, Marmon itself owns over 100 companies. And it was the creature of—it was created by Jay Pritzker and his brother Bob. It was a remarkable company when we bought it, but it was highly diversified already, and then we diversified it further. So it is something of a Berkshire within Berkshire. And we found that that's working very good as an arrangement. It was interesting. remarkable manager, and there's various branches of the Pritzker family, so you'll—it really goes back to A.N.

Pritzker before J. and so on. But in 1954, they changed the federal tax code very dramatically in the United States. It was quite a blow to me, because I'd been at Columbia, and I'd been reading a J.K. Lassert book about the tax code, and then they went and changed the whole damn thing. But 54 was a big year, a big change. Those years come every now and then, like, 1986. And you may see a big one one of these days. There was a company called Rockwood Chocolates in Brooklyn, and they made Rockwood chocolate bits, which we used to sell at the Buffett grocery store, and people made chocolate chip cookies out of them and everything.

Then it turned out that Cocoa, which lately has had a big run too—Cocoa was five cents a pound in 1941, when LIFO was first allowed for insurance for tax purposes, and the Rockwich Offer Company went into on the LIFO message, so they owned like 30 million pounds or thereabouts of cocoa. And then cocoa took a run in 1955, and I had just moved to New York. There was a provision in the new tax code that if you were in two or more companies and you did certain things and you've been in them for five years and you got out of one of them, that there would be no capital gains tax, unlike all inventory gains.

And the tax rates were around 48%, maybe 52%. And so there was this huge profit because Cocoa had gone up in price, but that made it terrible for them in selling rock with chocolate bits because the price of retail of the chocolate bits did not match what was going on at wholesale. Something almost identical has been happening in the chocolate business. Recently Hershey Chocolate just came out and said they're going to have a bad quarter and we're paying $4. 50 cents a pound for chocolate because things are going on in West Africa that make cocoa prices go up dramatically in any event.

Jay Pritzker bought control of Rockwood, the chocolate company. And like I say, I was 24 or 5 years old, and they called the meeting to split off the two one of the chocolate businesses in a way that would enable them to recognize the gain on these cocoa beans without paying roughly 50% federal taxes on the gain. So I went to the meeting, which was in Brooklyn. And nobody was there. This is in the turn-every-page category, except one guy. And I was 24, and he was 29. And it was Jay Pritzker. And nobody had showed up at the meeting, and it was kind of a crummy building they had.

But they had a lot of cocoa there. And Jay just gave me a lecture—or a lesson, really, I should say. I'm on the tax code. And I mean, with that, I could have gone to graduate school for years and never learned as much as he did. And then later, we actually bought the company—that Rockwood Company, but after he did some other things, became the basis for Marmon. And Marmon, among other things, developed the car that won the first Indianapolis Speedway race. And it invented the rear view mirror, which I'm not sure is great. great advantage in economics or anything, but the guy that used to help on the Indianapolis 500, they had two people in the car.

One guy was to look back and see what the other people were doing, and the other guy was to drive the car. And our guy got sick, and so they invented a rear-view mirror. If you want to look at the kind of, you know, what's going on in the laboratories of Berkshire Hathaway. We've got people working on things like the rear view mirror.

So that still works. Peter Eastwood, who runs one of our Berkshire subsidiaries and does a great job of running it, tracked down that Portello's is owned by a private equity firm called Berkshire Partners. So that was the basis of the question, but it's not associated with Berkshire. So we got to the bottom of that one. Thank you, Peter.

That's just a sample of the way we operate around it.

OK. Becky.

All right, this question comes from Jessica Poon, who says, you've long been a strong believer in the American tailwind and the resilience of the United States, and history has proven you correct. Today, the U.S. appears to be undergoing significant and potentially revolutionary changes. Some investors are now questioning the concept of American exceptionalism. In your view, are investors being overly pessimistic about the U.S. economy, or is the country indeed entering a period of fundamental change that requires a reassessment from a new perspective?

Well, I would say that Jessica, who I believe is in substance—she is the step-granddaughter of one of our managers that I mentioned in the annual report—may not be the same—but in any event, America's been—America's been insignificant in revolutionary change, really, ever since it was developed. I mentioned that, you know, we started out as an agricultural society. We started out as a society with high promises, and we didn't deliver on it very well. We said all men were created equal, and then we wrote a constitution that said blacks get counted as three-fifths. In Article 2, you'll find male pronouns used 20 times and no female pronouns used.

So, you know, it took until 2000—I mean, yeah, 2000 and—or 1920, I should say, until the 19th. The 19th Amendment was passed saying, oh yeah, we promised the women this back in 1776, and now we'll do something about it. And then we didn't do something about it for a long time. So we're always in the process of change. We'll always find all kinds of things to criticize in the country. The luckiest day in my life is the day I was born. I was born in the United States, and at the time about 3% of all the births in the world were taking place in the United States.

And I'd like to say that I had something to do, you know, listen, sent messages out to my parents, for God's sakes, moved to the United States before I was born or anything, but I was just lucky. And I was lucky to be born male, I was lucky to be born white, and I was lucky—all kinds of things. But it's been—if you don't think the United States has changed since I was born in 1930, it's been—we've gone through all kinds of things. And we've gone through great recessions, we've gone through world wars, we've gone through the development of the atomic bomb that we never dreamt of, you know, at the time I was born.

So, I would not get discouraged about the fact that it doesn't look like it. We've solved every problem that's come along, and if I were being born today, I would just keep negotiating in the womb until they said, you can be in the United States. So, we're all pretty lucky. We've got two non-United States guys here just to get the other side.

Who now live in the U.S.?

Okay, station four.

Hi, Mr. Buffett. My name is Daniel, and I'm from Tenafly, New Jersey. First of all, I just want to say how grateful I am for getting the opportunity to ask you a question. When it comes to your principles of investing, you often talk about how important it is to be patient. Has there ever been a situation in your investing career where breaking that principle and acting fast has benefited you? Thank you.

That's a good question, and there are times when you have to act fast. In fact, we made a great deal of money because we're willing to act faster than anybody around. Jessica Toombs is, I think she's the step-daughter of, or step-granddaughter of Ben Rosner, a manager of ours. And in 1966, I got a call from a fellow named Bell Steiner in New York, and he said, I represent Mrs. Annenberg. And there were actually nine Annenberg sisters, I believe, before Walter Annenberg came along as the son. But he said, we have a business we'd like to sell you.

So I called Charlie up. And I got a few details. And it sounded very interesting. And Charlie and I went back to the office. of Will Feldsteiner in New York, who was a marvelous guy. Never met him since, but he was handling things for Mrs. — well, A. Simon, but she — her name was Annenberg, and her husband had been the partner of Ben Robson, but he had died. Ben got kind of tense about working with her, and so he offered his business at a bargain price. He offered his business for $6 million. It had $2 million of cash.

It had a $2 million piece of property and a 900 block of property. What's the key street in Philadelphia? Down there, Market Street. And it was making $2 million a year pre-tax, and the price was $6 million. And Charlie and I went back to this place, and Ben Rosner was there. And he really—he just was upset about doing business with us. his partner's widow. She was extremely wealthy. And he just didn't—he wasn't enjoying it. He was very nervous about selling it. And he said to me and Charlie, he said, he said, I'll run this business for you until December 31st, and then I'm out of here.

And I got Charlie, we went out in the hallway, and I said, if this guy quits, at the end of the year, he can throw away every book on psychology I ever read. And so, that began a wonderful—we bought the company and had a great relationship. And did I know that morning, when I got a phone call from Will Falsteiner that did this background about I've had a couple of times—and that was one of them—where people in the East felt that they had a stereotype in their mind of what people from the Midwest were like, and Ben had been married—his first marriage was to a woman from Iowa, and he just figured that anybody from the Midwest was OK.

And the trick, when you get in the business with somebody—get in the room with somebody like that and they want to sell you something for $6 million that's got 2 million in cash and a couple million in real estate and is making 2 million a year. You don't want to be patient then. You want to be patient and waiting to get the occasional call. My phone will ring sometime, you know, with something that, you know, wakes me up. I may be sleeping in there or something, but you just never know when it'll happen, and that's what makes it fun.

I mean, it—so, patience. It's a combination of patience and a willingness to do something that afternoon if it comes to you. You don't want to be patient about acting on deals that make sense. And you don't want to be very patient with people who are talking to you about things that will never happen. So it's not a constant asset. It's not a constant liability to be patient.

Well, Warren, I was going to add, as you're being patient, I happen to know, and I think that goes for Ajit also and all our managers, very patient when we're looking at opportunities. And as you touched on, we want to act quickly. But while we're being patient, never underestimate the amount of reading and work that's being done to be prepared to act quickly. Because we do know, be it equities, but I would include a variety of private companies, that when the opportunity presents itself, we're ready to act. And that's a large part of being patient, is using it to be prepared.

Yeah. And of course, it doesn't come in anything. Mine can even flow. I mean, it's the almost uneven sort of activity you could get into. And the main thing you have to do is you have to be willing to hang up after five seconds, and you have to be willing to say yes after five seconds. You can't be filled with self-doubt in the business. You just forget it isn't going to work. Go into some other activity, but you also—I mean, one of the great pleasures—it is the great pleasure, actually, in this business is having people trust you.

That's really—why work at 90 when you've got more money than anybody could count? You know, if they started today and had machines that are helping them and everything else. It means nothing in terms of how you're going to live or how your children are going to live or anything else. But both Charlie and I, we just enjoyed the fact that people trusted us, and they trusted us 60 years ago or 70 years ago in partnerships we had. And we never sought out professional investors to join our partnerships. Among all my partners, I never had a single institution.

I never wanted an institution. I wanted people, and I didn't want people that were sitting around having people present to them every three months and tell them what they wanted to hear and all that sort of thing. And that's what we got, and that's why we've got this group here today. It's all worked out. It's—you don't want to be patient when things are going your way, when the time comes to act. You want to get it done that day. OK. Becky?

This question is from Flavio Montenegro, a shareholder from Guatemala. A couple of years ago in this meeting, Mr. Jain outlined the significant challenges Geico faced in modernizing and integrating its IT systems. It was also mentioned that competitors were ahead in their pricing strategies because of the use of telematics. Today, Geico's turnaround is evident through strong pricing and operational improvements Could you provide more details on the specific actions taken under Todd's leadership and how those changes will help sustain a long-term competitive advantage in the coming years?

Yeah. Todd has done a great job for us in terms of turning around the operations. When he took over, there were two major issues that GEICO was behind its competitors on. Firstly, the term Warren used and we all have been using is matching rate to risk. And secondly, telematics. We were at the bottom of the list in so far as telematics are concerned about five, six years ago. Since then, we have made rapid strides. And telematics, which used to be a source of competitive disadvantage to us, is no longer so. And I would argue that our telematics at GEICO is about as good as anyone else's today.

So that's been one huge catch-up. Secondly, in terms of matching rate to risk, there again, I think we have caught up with our competitors. And we are as good as anyone else in the field. All this together with the cost reduction effort that Geico and Todd gets a lot of credit for. He has basically reduced the workforce by 20,000, starting with something close to 50 or 1,000. He's brought it down to 20,000. And that translates to, I guess, at least $2 billion per year. So all this has allowed Geico to become a much focused competitor, so much so in the last seven quarters, Geico has shown a combined ratio that has an eight in front of it.

And I never thought I'd live to see the day when anyone could have a combined ratio as solo as it is right now. So I think Geico has done a great job. Its 80 combined translates to the largest profit anyone is making on the underwriting side in the personal automobile business. So we've achieved a lot. Todd has achieved a lot. But I do not want to be so arrogant as to say that mission accomplished. We've achieved a lot. But I still think we need to do a lot more in technology. AI, as we talked about, is going to be a big force.

And we need to play catch up there. Not catch up, but we ought to be in a state of readiness. So I think Geico is in a great shape right now.

It's a fascinating case study, but that's what's so interesting about the whole game of business, but particularly about our businesses, is that each one is a little different, but they all have challenges of certain sorts, but they also, many certain numbers have opportunities. $50 million for half of GEICO in 1976. What turned out to be half of GEICO? $50 million. We now own 100%, but 50% of $2 billion that we earned in the first quarter is a billion dollars, which on a $50 million investment is 20 for one and a quarter. Now, that takes years to develop.

But the interesting thing is the auto insurance policy, which didn't even exist 100 years ago. I mean, it didn't. It just, well, I should say 120 years ago. It's by far the largest item in the property casualty insurance business. It's huge.

The only thing I'd like to add is, in addition to the underwriting profit, Geico provides $29 billion of flow. Oh, yeah, in addition, yeah.

And that's not unimportant. When you paid $50 million to get the business, it's given you $29 billion to work with for nothing. And on top of that, it gives you a billion dollars of profit in the quarter. The interesting thing about auto insurance is that... We're—the company was started in 1936. We're selling the same product as 1936. We're being more sophisticated about pricing it than we were then. Somebody just made the judgment—a fellow that came from the USAA made the judgment that government employees—the name GEICO stands for Government Employees Insurance Company—that government employees were better drivers than average.

I don't think he was an actuary or anything else, but he just made an observation. And so he left USAA, which is still a very successful company, and he started Geico for a few hundred thousand dollars. And he made money the first year for my underwriting. He made money the second year. This is not a public offering type thing. He was phony accounting for 10 years and all that sort of thing. Just prices to make money. That's exactly what's been done since 1936. The policy really—you know, your insurance—your auto insurance policy looks a lot like the one that you had then.

And this huge field has sprung up around us, and it's still growing. And, of course, nobody likes that. to buy insurance, but they sure like to drive. And Geico is a fascinating story. And about three times over the years, the company has gotten sidetracked one way or another. And then it gets back to its basics, and it's a wonderful, wonderful business. And we showed at this annual meeting one time a message from Lorimer Davidson. And Lorimer Davidson, in January of 1950, was the only person in the building that had gone down on a Saturday to visit, but turned out they didn't work on Saturdays in Washington.

And I pounded on the door until finally a janitor brought me in. And I said to the janitor, is there anybody I can talk to here except you? And he didn't take it personally, and he said, oh, there's one guy on the sixth floor. And a fellow named Leroy Ormer-Davidson did wonderful things for me. You get a few breaks in life in terms of people you will meet who could just change your life dramatically. You need a handful of those. And when you get them, you treasure them. And we've had them on this board at Berkshire.

If you take Tom Murphy and Sandy Gottesman and Walter Scott and Bill Scott, one thing we've done is we've held on to human assets. We've made lifelong assets out of people that that are the right sort and with incredible talent but also just lots of fun to work with and always doing more than their share. You know, to get a chance to talk to it over at Orem or Davidson on a Saturday afternoon, you just listen carefully. And that comes in the category of turn every page. Some of them you want to turn pretty fast, but you just get lucky in life.

And you want to take advantage of your luck. Okay, station five.

My name is Benjamin Graham Sanderson from Pasadena, California. Warren, thank you for all you've taught us over the years. Earlier you said nobody but Steve Jobs could have created Apple, but nobody but Tim Cook could have developed it like he has. Warren, nobody but you could have created Berkshire. And I presume you view Greg as an outlier among outliers. but he seems so normal. Sorry, Greg.

That's a nice way of saying it's not normal, actually, but I appreciate it.

So I was hoping you could share what specifically about Greg makes him your preferred successor. And Greg, we're excited to get to know you more over the next few decades. Thank you. Thank you.

Thank you.

Well, you've hit on the most important question, you know, in terms of the business. We've got a wonderful group of businesses. We've got an ability to do things that nobody else can do, which is hard to get into the capitalistic system that's been developed as fully as the United States has been. I mean, imagine being able to create something that—and then a very, very, very, very big playing field, I don't think it would be very, very hard to develop anything like it. I don't think you could develop the people around it, let alone the capital position and the history and everything else.

And the answer, of course, is that it does take a long, long time. And it takes getting around you a small cadre of people, which then spreads out somewhat. You've got mutual trust, where people do more than their share. And I've been around a lot of businesses over the years, and by nature, I'm somewhat critical of everything. I mean, I'm looking for what's wrong in things, because that's—part of investing is looking, you know, what aren't you—what are you missing? But we've got people that, if they're asked to put on a show like this instead of doing whatever their regular job is, they've participated.

I went around the groups of people who were exhibiting yesterday for an hour and a half, and these are people who are thanking me. totally enthused about coming and doing a lot of work for which they don't get paid anything extra. I don't know anything about the arrangements the individual companies make, but they work hard and they enjoy their work. And, you know, you really want to work with something you enjoy. I've always had—I've had five bosses in life, and I liked every one of them, and they were all interesting. I still decided that I'd rather work for myself than anybody else.

But if you find people that are wonderful to work with, you know, that's the place to go. And I've told my kids that, basically, that you don't get lucky like I did. when I found at seven or eight years of age what really interested me. It could have taken a lot longer, but you want to find the song, find the sound. There's a movie called The Glenn Miller Story, and Glenn Miller went on from having a broken down band for 15 years to turning out the first. He found the sound. gold record, I don't know whether any of you know what it was, but it was the Chattanooga Choo Choo in 1941, I think it was.

And he turned around from being a nothing with the band that he had until he found the sound. And I always have told my kids ever since that. Their sound isn't my sound. And you don't find it necessarily on the first job you take, because you've got to eat. But if you get lucky like I did, you find it when you're very young. And then just keep doing it. And don't worry. Don't worry too much about starting salaries, and don't worry about—be very careful who you work for, because you will take on the habits of the people around you, so there are certain jobs you shouldn't take.

But you've got the greatest country in the world, and you've got the greatest time in the world. I would say that, while I'm handing this over to Greg, that you can't even dream all the dreams that you could have about a place like Berkshire, but the big thing you have to do, though, is always be sure you can play the next day. I mean, in terms of In terms of financial activities on a meaningful scale, you don't want to go—there was a book about—what was the name of that book? You only have to get rich once.

I mean, you don't want to do anything that risks. what's been created. So you know, if very stupid things are happening around you, you do know and not want to participate. If people are making more money because they're borrowing money, or they're participating in securities that are really pieces of junk, but they hope to find a bigger sucker later on, You just have to forget that. That'll bite you at some point. And the basic game is so good, and you've been so lucky to be born now. I mean, if I've been born in… 1700, I'd say, I want to go back in the womb.

What the hell with this? It's too hard. But now I've come along to do something where I can just play around all day with things I enjoy doing. And it's a pretty wonderful life. Anything, Greg, you want to add or subtract from that?

Nothing to subtract, but I would always just say it couldn't be more, as I've said in the past, more humble than honored, obviously, to be in this role. But to have actually been part of Berkshire for, Warren, it's now 25-plus years, had the opportunity to be part of Berkshire and to work with you and Ajit and our board, but many other people in our company. And as you touched on, when you find something like that and you find something like Berkshire that's so special, You fall in love with it, and it becomes just what you want to do every day, and it's just an incredible opportunity, so thank you.

And to the gentleman who asked the question, if you don't find it immediately, you know, don't starve to death or anything in the meantime. You will find it, and you'll find it in the right individual. In a sense, it's somewhat like finding the right person in marriage. I mean, probably the first—some of you married—may have married the person you met on your first date, although I guess they don't even have dates anymore. But, you know, sometimes it pays to wait, too. Okay, Becky.

This is a question from Mark Bonke and Helen Friedrickson in Rapid City, South Dakota. As the US dollar quickly loses value in relation to other foreign currencies in 2025, is Berkshire Hathaway taking steps to minimize this currency risk and its impact on quarterly and annual earnings? If so, please explain. And I'll just add from Mary Chang, another shareholder, Berkshire currently borrows in Japanese yen to offset its currency risk and its Japanese stock investments. In the future, will you invest in foreign currency denominated assets unhedged?

Yeah, well, we always have, pretty much. The Japanese situation is different because we do intend to stay so long with that position, and the funding situation is so cheap that we essentially have attempted to some degree to match purchases against yen-denominated of funding, but that's not a policy of ours. In fact, that's the first time we've done that. And we've owned lots of securities in foreign currency, so we do nothing in In terms of the question about its impact on quarterly and annual earnings, we don't do anything based on its impact on quarterly and annual earnings.

I mean, there's never been a board meeting I can remember where I… or the conversation I had with Charlie when I said, where I say, if we do this, our annual earnings will be this, you know, and therefore we ought to, whether it's accounting or anything, we just, you know, the number will turn out to be what it will be. What counts is where we are five or 10 or 20 years from now, and if you start focusing on what number you're going to produce. You will quickly get tempted, at least based on the experience I've seen from viewing 20 companies.

You will get so you'll, one way or another, play around with the numbers, and sometimes seriously play around with the numbers. And I've seen people that You know, I trust them in all kinds of other ways, but they regard playing around with numbers as perfectly OK. And that's just not something, you know, we just don't think about that. So actually, the relationship of the end, behavior of the end in the last quarter, resulted in certain gap charges. But it doesn't make any difference. It'll change next month or next year. And obviously, we wouldn't want to be owning anything that we thought was in a currency that was really going to hell.

And that's the big thing we worry about with the United States currency. I mean, the tendency of a government to want to debase its currency over time. There's no system that beats that. You can pick dictators. You can pick representatives. You can do anything. But the people, there will be a push toward weaker currencies. And of course, I mentioned very briefly in the annual report Fiscal policy is what scares me in the United States, because... It's made the way it is, and all the motivations are doing a lot of things that can cause trouble with money.

But that's not limited to the United States. It's all over the world, and some places it gets out of control regularly. You know, they devalue at rates that are breathtaking, and that's continued. I mean, people can study economics and you can have all kinds of arrangements, but in the end, if you've got people that control the currency, you can issue You can pay for money, and you will, or you can engage in clipping currencies like they used to do centuries ago. There will always be people—it's the nature of their job. I'm not saying William out is particularly evil or anything like that.

The natural course of government is to make the currency worthless over time, and that's got important consequences. And it's very hard to build shucks and balances into the system to keep that from happening. And we've had a lot of fun here in the last Either in the first hundred days or the last hundred days, whatever you want to call it, watching what happens when people try to make sure that they aren't running fiscal risks and that game isn't over and never will be over, you know, in finality. If you look up and search the great inflations of post-World War II, it's just the list that goes on forever, and the same names keep popping up and everything.

So currency is—the value of currency is a scary thing. And we don't have any great system. For beating that, we do in this particular Japanese position, because we expect to hold it for 50 or 100 years or more, and we will be owning something that's denominated in yen and easily predictable, and we'll just—as long as the carry on it is right and everything, we'll attempt the issue. Japanese denominated liabilities, but that's not because of anything we care about in terms of quarterly or annual earnings. Greg, do you have anything to say on that?

I was just going to say that, relative to the question, that there's no question we were fundamentally very comfortable with investing in the five Japanese companies and recognizing we're investing in yen. The fact we could then borrow in yen was almost just like a nice incremental opportunity. But we were very comfortable both with the Japanese companies and with the currency we would ultimately realize, i.e. in the yen.

Yeah, we only made, as I referred to earlier, one big currency play, which was connected a little bit with when I wrote that article for Fortune, and we got long. 12 other currencies, as I remember, only four or five of them are really big currencies. But when I say we got long, that means we're short the dollar. And so we held that position for a couple years, and we made several billion dollars on it, which was significant to us then. Still is. Charlie always felt that if he had to pick an area, outside of stocks in which to invest—and he knew a lot about bonds, he knew a lot about real estate, he knew a lot about a lot of things, but he said he thought he could make a lot of money out of being in foreign currency.

We've done it once. It's not inconceivable we would do it again, but it's unlikely. But there could be. Things happen. in the United States that would make us want to own a lot of other currencies. And I suppose if we made some very large investment—European country or some—there might be a situation where we would do a lot of financing in their currency, but it's not a—it was something that just was sort of obvious to do in the Japanese situation, where we had the ability to borrow yen, a very, very low carrying cost. And we felt very good about the income we'd be receiving from these securities.

And if the present condition, which it won't, I mean, it never does, but prevail for Decades and decades we would probably keep doing the same sort of thing but Things change in the world too, so don't take that as a prediction Okay Section six

Good morning Warren and Greg. Thank you so much for hosting this event. Good to be here. My name is Dashboi Uindegir and I'm from a great country of Mongolia. A little bit background about my country. Mongolia is an emerging market and landlocked country sandwiched between Russia and China. But we are rich in history and minerals and have full democracy and growing economy. Last week we hosted our second annual Mongolia investor conference in New York to attract investors like yourself. I know you needn't give advice informally to government leaders such as South Korea, China and India.

What advice would you give to government business leaders of emerging markets like Mongolia to attract institutional investors like yourself? It'd be great if you have long-term plans for exposure to emerging markets as a hedge or an opportunistic investment. Lastly, I welcome all of you to Mongolia, and my country folks would be very happy if you can make it to our economic forum this July.

Yeah, I have trouble planning a trip that Council Bluffs, which is just a few miles from here, but takes an optimist. Actually, I met a fellow here at the annual meeting, probably 20 years ago or more, who did a lot in Mongolia. And he did very well in Mongolia and actually moved there for a while. I would say that if you're looking for advice to give the government over there, it's to develop a reputation for having a solid currency over time. I mean, we don't really want to go into any country where we think that there's chance—I mean, a significant probability of runaway inflation.

It just—it's too hard to figure. Other people have figured out ways to make money in hyperinflationary situations, but that's not our game, and I don't think I'd play it well. That would be a factor with us. The chances are we won't find anything in Mongolia that fits our size requirements aside from that. But, like I say, I think my friend that I met here 20 years ago has done very well in Mongolia. And if the country develops a reputation for being business-friendly and currency-conscious. I think that bodes very well for the residents of that country, particularly if it has some other natural assets that it can build around.

I don't know that much about the minerals there or anything of the sort. I mean, who would have bet on the United States in 1790? But we didn't have to have perfection. We just had to be better than the other guy for quite a while. And we started out with nothing, and we ended up with close to 25% of the world's GDP and faster growth rates. Generally, sounder currencies and all kinds of things. So, I wish you well.

Okay, Becky?

This question is from Peter Shen in New Jersey. It's for Mr. Buffett and Mr. Jane. In recent years, large private equity firms like Blackstone, Apollo, and KKR have aggressively expanded into insurance, raising permanent capital, managing float, and aiming to replicate the model that Berkshire pioneered decades ago. Given that these firms are now directly competing for insurance assets, often using higher leverage and more aggressive investment strategies, how do you view their impact on Berkshire's insurance operations and underwriting discipline? Do you believe that the private equity model poses risks to policyholders in the broader financial system? And has this competition made it more challenging for Berkshire to find and price insurance opportunities safely and profitably today?

Part of the question is very easy. There's no question the private equity firms have come into this space, and we are no longer competitive in this space. We used to do a fair amount in this space, but in the last three, four years, I don't think we've done a single deal. Now, you ought to separate this whole segment in two separate segments. One is the property casualty end of the business and the life end of the business. The private equity firms that you mentioned are all very active in the life end of the business, not the property casualty end of the business.

You are right in identifying the risks in these private equity firms are taking on both in terms of leverage and in terms of credit risk. And while the economy is doing great and credit spreads are low, The private equity firms who have taken the assets from very conservative investments and I won't say high octane but they've certainly invested these assets in situations where they get a lot more return on the investment. And as I said, as long as the economy is good and credit spreads are low, they will make money. They'll make a lot of money because of leverage.

However, there is always the danger that at some point the regulators might get cranky and say, you're taking too much risk on behalf of your policyholders. And that could end in tears. We do not like the risk-reward that these situations offer, and therefore we put up the white flag and said, you know, we can't compete in this segment right now.

Yeah, and I think—there are people who want to copy Berkshire's model, but usually they don't want to copy it by also copying the model of the CEO having all of his money in the company forever. And, I mean, they've got a different equation. They're interested in—you know, and that's capitalism, but they have a whole different situation, and they probably have a somewhat different fiduciary feeling about what they're doing. And sometimes it works and sometimes it doesn't work. And if it doesn't work, they go on to other things. And if what we do here at Berkshire doesn't work, I spend the end of my life regretting what I've created.

So it's just a whole different personal equation. There is no property casualty company that can basically replicate Berkshire. That wasn't the case at the start. I mean, at the start, we just had national indemnity a few miles from here, and anybody could have duplicated what we had. But that was before a G. And the G came with us in 1986. And at that point, the other fellows should have given up. Station seven, please.

Hi. My name is Marie. I'm from Melrose, Massachusetts. Thank you for the time today. As a young person interested in investing like myself, I would love to hear your insights, Mr. Buffett. What were some pivotal lessons you learned early in your career, and what advice do you have for young investors who are looking to develop their investment philosophy? Thank you.

Well, those are good questions. I thought of them myself earlier in my life. Who you associate with is just enormously important, and don't expect You'll make every decision right on that. I mean, but you are going to go into—you're going to have your life progress in the general direction of the people that you work with, that you admire, that become your friends. I mentioned a few fellows that have died in the last couple years. Well, all of those people were people that— that, you know, if we were working together on something one 10,000th the size of Berkshire, I mean, they'd be the kind of people you'd choose.

You just—there are people that make you want to be better than you are. And you want to hang out with people that are better than you are and that you feel are better than you are, because you're going to go in the direction of the people that you associate with. That's something you learn, and, of course, you learn it late in life, that you—it's hard to really appreciate how important some of those factors are until you get much older. But when you've got people around you, like Tom Murphy, and like—well, like, just name him, Sandy Gottesman, and Walter Scott.

You're just going to live a better life than you do if you just go out and look at somebody just making a lot of money and decide you're going to try and copy them or something of the sort. I've tried to be associated with smart people, too, where I could learn a lot from them. And I would try to look for something that I would do if I didn't need the money. I mean, what you're really looking for in life is something where you've got a job that you'd hold if you didn't need the money.

And I've had that—I've surely had it for a very, very long time, back when all the fellows I named had it. Every one of those ones I named, they always did more than their share. And they never sought more than their share of the credit. They just behaved just the way you'd like anybody you work with. And when you find them, you treasure them. And when you don't find them, you still keep doing whatever causes you to eat or enables you to eat. But you don't give up on looking around, and you will find You'll find people do wonderful things for you.

I mentioned earlier, you know, going down to Geico. knocking on the door when the door was locked. I mean, who knows what was behind that doorway went in. But in 10 minutes, I found that I had a man that was going to be just wonderfully helpful to me. And of course, if somebody's going to be helpful to you, you want to try to figure out ways to be helpful to them. So you get a compounding of good intentions and good behavior. And unfortunately, you can get the reverse of that in life, too. And, you know, with a lot of—I was lucky in having a good environment for— living that kind of a life, and other people, you know, have a whole different environmental situation, they have to overcome it.

But don't be—don't feel guilty about your good luck. If you've got, you know, if you've got—well, if you live in the United States, you know, you've If there are 8 billion people in the world and there's 330 million in the United States, you've already won the game, to a great degree, and then just keep making the most of it. But you don't want to—you don't want to associate with people or enterprises that ask you to do something that or tell you to do something that you shouldn't be doing. And that's one of the problems. Different professions select for different types of people.

It's interesting to me that in the investment business, So many people get out of it after they've made a pile of money that—you really want something that you'll stick around for, you know, whether you need the money—Greg doesn't need the money, and she doesn't need the money remotely. But they enjoy what they do, and they're so damn good at it. It's, you know, it's just, well, I've had the advantage of seeing how that works over time. They're the best manager I ever knew, and there's a lot of contention for who that would be. But actually, it was Tom Murphy, senior, who lived almost 98.

And I've never seen anybody that could get the potential out of other people more than Murph could. I mean, if you wanted to become a better person, you went to work for Tom Murphy. And there are all kinds of successful people that that really don't have that sort of, don't bring that to the party. And I'm not saying that's the only way to succeed, but I think it's the most pleasant way to succeed for sure. And I think that the Berkshire experience is pretty dramatic. I mean, to operate with Sandy got us one from 1963 until he died a couple years ago.

And Walter Scott, 30 years, operated with him for 25 years or so, whatever it was. Right, yeah, 30. Yeah, and you really can't miss. You'll learn all the time, but you'll not only learn how to be successful at business, you'll learn how to be successful at life. That's my recommendation. And for some reason, apparently a little longer, too, because it's pretty amazing. I mean, these people I'm talking about, including myself, I mean, I like to attribute it to this and a few other things, but. I think a happy person lives longer than somebody that's doing some things that they don't really admire that much in life.

Okay. Let's move on to, I guess it's Becky next.

The first quarter ended March 31st, and it did show that Berkshire's cash pile expanded from the end of the last year. But the greatest market turmoil came in April. Martin Devine, a shareholder from Scotland who is attending the meeting today, wants to know, has the recent market volatility presented Berkshire with opportunities? And Martin just wrote in an addendum in the last 40 minutes or so. pointing out that you mentioned Berkshire almost invested $10 billion recently, wanting to know if you could talk more about that.

Well, I can give you a good answer to the second part, which is no. But $10 billion wouldn't have done that much. That's another side of it. What has happened in the last 30, 45 days, 100 days, whatever you want to pick up, whatever this period has been, it's really nothing. There's been three times since we acquired Berkshire that Berkshire has gone down 50 percent. in a fairly short period of time, three different times. Nothing was fundamentally wrong with the company at any time, but this is not a huge move. The Dow Jones Average hit 381 in September of 1929.

It got down to 42. So that's by going from 100 to 11. This has not been a dramatic bear market or anything of the sort. As I pointed out, I've had 250 trading days a day. However many years I've been old enough to trade stocks, I've got 17 or 18,000 days. There's been plenty of periods that just are dramatically different than this. I mean, when the day I was born, the Dow Jones was a 240. And my first—that was August 30th, 1930, and between that and the law, it went from 240 to 41. I mean, that's—so, if people think that it made a really major change, it didn't—if it had gone up 15 percent instead of down 15 percent, people think—they take that with remarkable grace.

If it makes a difference to you, whether your stocks are down 15% or not, you need to get a somewhat different investment philosophy, because the world is not going to adapt to you. You're going to have to adapt to the world. And you will see a period in the next—certainly in the next 20 years, you'll see a period Somebody in the market described one time as a hair curler compared to anything you've seen before. I mean, it just happens periodically. The world makes big, big, big mistakes and surprises happen in dramatic ways. And the more sophisticated the system gets, the more the surprises can be out of right field.

That's just part of the stock market. And that's what makes it a good place to to focus your efforts if you've got the proper temperament for it and a terrible place to get involved if you get frightened by markets that decline and get excited when stock markets go up. I don't mean to sound particularly critical. I know people have emotions, but you've got to check them at the door when you invest.

Station 8, please. Good morning, Mr. Murphy, Mr. Gregg and Mr. Aziz. My name is Peter Chen. I'm from Shanghai, China. This is my first time attending this shareholders' meeting. I would like to ask a question about the wisdom of life. Have you ever encountered any major setbacks or lower points in your life? And how did you get through and overcome them? Thank you very much.

Well, everybody gets setbacks. And some people have particularly bad luck in that respect, and others get through with barely minors. But Charlie, you know, He had setbacks, I had setbacks. It's part of life, and they're not any fun. I don't have any great advice for you about having the time of your life while you're having some major setback. But it comes with lifetime. You certainly have a setback when you die. So everybody's got that setback guaranteed to them. But some people get—and, I mean, it isn't a laughing matter in a sense, because, I mean, people get extraordinary bad luck, and other people get extraordinary good luck.

Usually the people who get good luck don't really think it was so much luck as themselves. You're just going to have it. I think you're going to—I think that you're less likely to have it in terms of medical problems, in terms of various things in life. I mean, you were born at a good time. I mean, if you look all the way through the history of China, when would you rather have been born? you know, 100 years ago, 500 years ago, 1,000 years ago, or now. You know, it's just hands down, you'd be lucky. I mean, you know, if I came from 20 generations of shepherds, I think I'd get kind of tired of, you know, my life just looking at these sheep every day.

But, you know, we can sit here and I can watch Nebraska not quite played the same game of football that we played 20 years ago. But I mean, everything in life has been made so much better that you've got to figure that you do a lucky straw by staying in the womb for a couple hundred thousand years and then just emerging at the right time. So I would focus on the things that have been good in your life rather than than the bad things that happen, because bad things do happen. But it can often be a wonderful life.

You could get terrible breaks in it. So far, that really hasn't happened with me, but it's happened with some of my friends. But you get some bad breaks from time to time. For 94 years, I've been able to drink whatever I want to drink. They predict all kinds of terrible things for me, but it hasn't happened yet. And it's true. I mean, if you look at what pro football players are making now and everything compared to what that were making 30 or 40 years ago, you can say, well, isn't that wonderful? But if you look at the lifespan of professional athletes, after a while, you get used to—you really decide that you're better off if you really weren't the first one chosen to be on the baseball team or the basketball team or anything else.

Charlie and I, and I think I speak for the others to some extent, and we never really exercised that much or did anything. We were carefully preserving ourselves. So, look at the bright side of things to the extent that you can. You know, you're lucky enough to—you're here today, you're healthy, you've come from a long distance, and you're getting a chance to learn more about something that interests you and compare that with the situation a couple hundred years ago that you would have been offered. So, anyway, that's enough moralizing.

OK, Becky.

This question comes from Himanshu Bindal for Ajit and Warren. Autonomous vehicles are already driving across roads in American cities with no driver involvement. How do Warren and Ajit think about any disruption risk from these autonomous vehicles to GEICO's auto insurance business, which is built around understanding and underwriting human drivers? Wouldn't what we call auto insurance today just become product liability for autonomous vehicles and autonomous software companies?

Well, Ajit? Yeah, there's no question that insurance for automobiles is going to change dramatically once self-driving cars become a reality. The big change that we will see is what you identified. Most of the insurance that is sold and bought revolves around operator errors and how often they happen, how severe they are, and therefore what premium we ought to charge. To the extent these new self-driving cars are most safe and are involved in fewer accidents, that insurance will be less required. Instead, it will be substituted by, as you mentioned, product liability. So we at GEICO and elsewhere are certainly trying to get ready for that switch where we move from providing insurance for operator errors and be more ready to provide protection for product errors and errors in emissions in the construction of these automobiles.

Yeah, we expect We expect change in all our businesses, and it's a good thing we didn't. Charlie pushed me into it, but if I'd settled for being in New England textiles, you know, even though it worked well for 70 years or so prior there, too, you know, the world changes. If the game didn't change at all, it really wouldn't be very interesting. If every time you swung at a baseball, you hit a hole in the game, it wouldn't be interesting. If every time you hit a golf ball, you had a hole in one, it wouldn't be interesting.

So the fact that there will be things you have to think about all the time as you go along and you'll make mistakes and all that. And that's really part of the fun. I mean, your brain would turn to mush if you didn't have a few problems now and then. So, you know, auto insurance will change, although it's remarkable how little it has changed. But it's only been around since, you know, for a relatively small time. Who knows what we're doing to move in transportation 100 years from now? If you go back a couple hundred years ago, who could have predicted the United States would look like what it does, and people would move like they do, and people would enjoy themselves like they do?

I mean, it's just—it's a dynamic world, and the biggest thing we have to worry about, unfortunately, is that we've learned how to destroy the world, too. recent years and so we've got this wonderful world which now we know that there are eight countries and probably a ninth coming on that can destroy and we don't have what I would consider necessarily the perfect people leading each of one of the nine or some of the nine countries. When Einstein came up with the equals MC squared back in 1905, he didn't dream of the fact, I mean, that energy could really be converted, or mass could be converted into energy in a way that would change the world.

When I was born in 1930, they had no one about the law of physics. that Einstein had come up with 25 years earlier. Nobody, to my knowledge, had thought, what can this do to change warfare in the future? And literally, it just wasn't thought. Einstein didn't think about it at that point. 1939, Roosevelt got a letter around a month before Germany moved into Poland. It got around August 1st. It's the most famous letter in history from Leo Szilard. Leo Szilard couldn't get his letter in front of Roosevelt because whoever heard of Leo Szilard, but he got Einstein to sign it.

Roosevelt probably understood about as much about physics as I do, so he didn't understand it, but he understood that I cited. So he calls in General Roe, who may not have been general then, and said, we should do something about this. And all we did was learn how to destroy the world, and we needed to do it. And Germany had Heisenberg. He looked like he was—he was out of his—and we can't put that genie back in the wattle. And it's—the world does change. And we've got all these wonderful things, but we also have, you know, we have a guy in North Korea.

If we criticize his haircut, even, you know, who knows what he might decide to do with it. What does North Korea need nuclear weapons for? I mean, can that be a good thing in the world? But they're not going to go away. It's a world of change, and we are enjoying incredible change that's contributed to everybody in this room living so much better than people were living a couple hundred years ago. But we haven't been able to avoid—we haven't changed human beings very much so far. We've certainly changed weapons of mass destruction, but we haven't made much progress with the human race.

And we'll see what happens with that. But in the meantime, we'll see changes in auto insurance, too, and cars. be easier for us to deal with it than it was when we had to deal with the problems of turning out textiles in New England. And you deal with the world as it develops. And like I say, everybody here is living in the luckiest period. But enjoy your luck. And you still try to figure out the answers to what's going to happen. In all insurances, we go along, and we've done pretty well actually adapting to the answers.

There's a few big problems in insurance, and I don't know how the insurance industry adapts to them particularly, but that makes the game interesting. You wouldn't want to go out and play golf if you know you're going to hit the ball in the hole, on every hole.

I'd just like to add, we talked about the shift to product liability and to protection for accidents that take place because of an error in terms of how the product was designed or supplied. The only thing I want to add is, in addition to that shift, I think what we'll see is a major shift where the number of accidents that take place and need to be provided for will drop dramatically because of automatic driving. But on the other hand, the cost per repair, every time there's an accident, the cost of repairing and bringing everything back to where it used to be would go up very significantly because of the amount of technology that's going into the car.

How those two variables interact with each other in terms of the total cost of providing the insurance, I think is still an open issue.

I'll give you two interesting figures to ponder. When I walked into the Geico's office in 1950, the average price of a policy was around 40 bucks a year. It varies all over the lot, depending on location and everything, but, you know, it's pretty easy to get up to $2,000, depending on how urban your areas are, and everything can get considerably higher. During that same time, the number of people killed in auto accidents have fallen from roughly six per hundred million miles rather than just a little over one. So the cars become incredibly safer, and it costs 50 times as much now, or they're about to buy insurance policies.

So when people talk about the developments in car driving and all that sort of thing, It's a lot easier sometimes—I mean, the Buck Rogers aspect of it, people look at it, but they don't actually think of what really happens to the math of the business. The auto insurance industry has been a huge growth industry, and for that matter, Homeowner's insurance prices in Nebraska have doubled in the last 10 years, adjusted for general inflation, and convective storms, you know, have just gone on a terror, and it's still unprofitable to write a homeowner's insurance in Nebraska after doubling the price in the last 10 years.

So it's very hard to predict what these big changes mean and you just got to keep thinking all the time but you don't want to read some research report that says the world's coming to an end or the world's going to be wonderful because of this or that because there's about 50 other developments going on at the same time that you You need to keep observing as you go along. You never reach an answer in this business. You reach a point of action that you take, but we try to get into as high probability things as we think we can do and play the game in the same way.

But it will be different than you think. And you should wake up every morning and think about that, too, if you're in the business of managing businesses.

Hey, Warren, as we approach the break, would you like to address the operating earnings?

Oh, yeah. Yeah, let's put up the—we released our 10Q this morning. We always try to do it on a Saturday, so nobody gets a jump on other people. And we just have three simple charts. You'll see that our insurance underwriting income was down dramatically for the first quarter, and last year was as good a year as you'll see in insurance. And it's always unpredictable, insurance, but everything broke our way. or the insurance industry's way last year. Prices are down this year. Risks are up this year, so you don't have to be a genius to figure out what the answer is on that.

But we do have unusual advantages in the insurance business. It can't really be replicated by our competition. That doesn't mean they aren't trying to get advantages we don't have. But we'll try to replicate anything that seems better. In fact, we'll try and top it. But we—I wouldn't talk about our insurance business as much as I do, unless I really thought we had some. really permanent advantages in a very, very large industry. We just announced within the last 24 hours that we in Zurich and Chubbup have arranged a joint operation to be the writer of really large sums.

that very few people can do. And of course, we've got to write about the right price in terms of liability. But we can do that sort of thing without blinking. And anybody that wants to do it wants to get us in it. So anyway, our investment income did not change that much because we have a float that grows a little bit, which gives us more money for investment. And then we have retained earnings. which grows. So we would expect in a year to have like 40 billion or more that will build up investments unless we find things to do with it.

So the investment income rates on treasuries are less than they were—or short-term bills, I should say—are less than they were before, so you had that negative effect pulling it down, but not that much, and we had more money, so we came up with a little more in the way of earnings. The railroad is earning a little more than last year, but it's not earning what it should be earning at the present time. But that's solvable and is getting solved. And it's still an incredible asset for Berkshire. The energy company last year was having particular problems, and those are absent this year, so those earnings are up.

And then, among our range of general businesses, they were pretty much a push. And I think—I think you did a little calculation the other day on how many were up and how many were down, didn't you, Greg?

21 were up and 28 were down. So you can tell it was really a mixed quarter when you go across the non-insurance operating businesses.

Yeah. The next slide. I'm getting a five-minute warning here. Before the long ball now. Uh, shows our financial condition, which continues to hold a lot more in cash and treasury bills than I would like. But I—but that's simply a question of what opportunities occur. And if you get real opportunities every five or six years, you're— You know, you have to be patient. Charlie always pointed out that we made most of our money on about eight or nine ideas over 50 years. And we talked about it every day, and we read every report, and we did everything else.

But if you think you can get an idea a day from listening to your friend's book or doing a lot of reading of it, of the financial information published or—forget it, because every now and then you get extraordinary opportunities, and most of the time you don't have much of an edge. So, we also have on that the hard float, which continues to build, I don't think any kind—there's no company that has. Poverty Casualty Company has our folders, they're cheap.

Clearly, we are heads and shoulders above anyone else.

Yeah. So, that is money that, as long as we're writing it at an underwriting profit, is absolutely free money. And we would expect that over a 50-year, 100-year period, that we would be able to say the same thing. But there will be—there will be years when you have a very bad underwriting record, and it will lead into the full earnings. But so far, in the last 20 years, I think we've only had one underwriting loss of any.

Yeah. I think if you look at the entire range, including life insurance. Our cost of float is 2.2 negative. That means we've got the float plus somebody's given us 2.2% of that cash to...

Yeah, it's like running a bank where people leave their money with you, and you pay a minus 2.2 percent, and you don't have any check clearing or anything else to do, and it's included in that. But we run our business, actually, with a different mindset than any other PC company, I think, probably in the world. And I wouldn't be talking about it if I thought they'd duplicate it. The final page is on share repurchases, and clearly we haven't made any—we have not made share repurchases so far this year. share repurchases—if Berkshire buys Berkshire shares and repurchases, we now pay more than you will pay if you buy Berkshire shares.

I don't think people generally know that, but there is a tax that was introduced years ago where we pay 1 percent, and that not only hurts us, Because we pay more for it than you do, it's a better deal for you than for us. But it actually hurts some of our investing companies quite substantially. Tim Cook has done a wonderful job, I mean really wonderful job running Apple, but He spent $100 billion, roughly, in a year repurchasing shares, and there's a 1 percent charge attached to that now, so that's a billion dollars a year that he pays when he buys Apple stock in which we like, compared to what you pay.

It doesn't sound like much, but—well, a billion dollars sounds like a lot still, in order. But there are people that want to increase that particular rate dramatically. And you won't read about it or anything like that, but it does make—it's slightly less attractive. than it was before, and we will only buy in our shares if we think that they are almost certainly underpriced, as valued very conservatively. And we get that opportunity occasionally, but the higher that charge goes, that the federal government charges us for doing it, unless we will be able to do all repurchases.

So, on that happy note, we will rejoin at 1 o'clock, and we will—I'm sorry. Correct that—correct that to 11 o'clock, and then we will— —Yeah, 11 o'clock. —And then we'll continue until 1 o'clock. And then, in the meantime, enjoy yourself. And I think all our stores are still open, so bring the cash register.