Warren Buffett & Berkshire Hathaway’s 2026 Annual Meeting: Part 2 5/3/26

26:19So consistent growth over that time based in product. So an arms race for the foot race. That's right. That's right. Dan, good to talk to you. Thank you very much. Thanks for having me. Dan Sheridan, CEO of Brooks Running. Let's get down to the floor here in Omaha. CBC producer Katie Kramer is at the Oriental Trading Company's booth. So Katie, what are this year's highlighters? I get the best assignment every year, Mike. I get to check out what shareholders are shopping for on the exhibit hall floor. And this year, Greg Abel is a new character in so many different branded items. We've got Squishmallows.

26:52We have got candy. We've got spatulas from Pampered Chef and Collectible Ducks from Oriental Trading. This year, Warren Buffett, Charlie Munger, and Greg Abel, available as Rubber Ducks, and Oriental Trading CEO Steve Mendelik is here. How fast do these sell it? Yeah, they're selling like hotcakes. Warren obviously is still a feature for us, but Greg has reached icon status this year. He's on the Mount Rushmore with Charlie and Warren here, and we're selling a lot of them. They're hot. How many? Like 1 ,000, I heard. Yeah, we're over 1 ,000 ducks sold so far. Our top seller. This is the liveliest that the floor has been.

27:36I think through the shareholders meeting, we've got crowds of people here around. We've got Flo, the Oriental Trading Flamingo. We've got tons of materials that people are taking home to share, to enjoy their experience here in Omaha. Are you going to sell out of the ducks, do you think? You better hurry. If you're in the building, you better hurry. Supplies are limited, very much. You've also got Squishmallows that have got Greg Abel's face on them this year. You've got some collaborative items with BNSF, with NetJets, with Seize Candies. is these candies has got 11 tons of chocolate over there.

28:12So this is the moment when shareholders really empty their wallets and fill their luggage for all the great stuff they're taking home with them. Excellent. Katie, thank you very much. Looks like there's a lot of activity back there, too. Right now, we're joined by a longtime shareholder of Berkshire, former Activision Blizzard CEO Bobby Kotick, who has been coming to this meeting for how many years? I ask you this every year. It's more than 30, right? More than 30 years. More than 30 years you've been here. Bobby, I just want to ask you, as a long-term shareholder, as a long-term Berkshire follower, what did you think of the meeting so far?

28:48What was it like sitting out there? It was fantastic. I have to say, Greg handled himself fantastically well. I think Ajit adds a great dimension to the stage. Warren's presence, especially his AI presence, I think added special value. And I think the business is in terrific shape. If you were to think about this company, its current market values, if you were to revalue the equity portfolio to, let's say, the historic mean of the S &Ps, let's say 17 times. Yeah. That's maybe about 70 or 80 billion dollars of risk. The operating businesses trade way below 17 times, probably closer to 10 times.

29:39So there's a lot of upside in Berkshire. Well, you know, that's been a question that has come up. We haven't gotten a chance to ask a little bit of them on stage yet. But Berkshire has underperformed the S &P 500 pretty significantly over the last year. S &P has been up by about 29 percent. I think Berkshire's down maybe 12 percent over that same period. Maybe a little less. Maybe it's 9 percent. Yeah, over that period of time. But when you look at that, what does that tell you as a shareholder yourself? What do you want to see? What do you think of it all? Well, I think it was one of the first slides.

30:09They're buying stock. Maybe not as much as people anticipated. But I think we saw it today. There was a substantial amount of stock purchased. And we're sitting on$400 billion of cash. So I see nothing but opportunity. I like to buy when they like to buy. Are you buying back shares? Are you buying more shares of Berkshire? Rather not say, but I think, you know, I like to buy when they're buying. And I think that was a vote of confidence. I did find it interesting. First of all, Greg was at pains to say that it wasn't quite as much cash as is portrayed in the tank you file. The$17 billion they still have of a T-bill purchase that hadn't settled yet.

30:55So there's some double counting. So fine. $380 billion. But it seems as if some of the things that Craig said were meant to kind of put the investment portfolio a bit off to the side. He emphasizes the four very large core holdings, which are kind of there forever, as well as the Japanese businesses. And the rest of it, he sort of says, well, it's not really that big and it's not all that actively managed. Does that say to you that he's mostly focusing his energies and attention on just the operating businesses and what else in terms of bolt-on acquisitions he can do as opposed to the portfolio?

31:30No, I don't think so. I think he's very engaged with Warren on those discussions. I think he's thinking a lot about the investment portfolio. I think if you look at Apple and Coke in particular, they're both going through CEO transitions and they are being managed with excellence. And I think inspired a lot by the Berkshire transition. In fact, I talked to Tim Cook last night and that was the first thing he said is he wants to be recognized as the person who's managed succession better than anyone. And I said, well, you've got a tough, tough comparison. on both ends, right? When he took over for jobs and now he's handing it off again.

32:10I was joking that, you know, Warren was polite enough not to say why you retiring at 65. Right. You get 30 more years left, you know. Bobby, I want to talk to you that about that as a former CEO yourself and somebody who knows the stresses that come with that and the huge responsibilities with that. We've seen a lot of executive turnover of some very long-term, well-known names, big companies. You mentioned Coca-Cola, where you were a board member before, too. Tim Cook with Apple. You've also got Bob Iger turning you over. Vicki Holub was just sitting here. Doug McMillan, he stepped down. There's just this long, this big number of relatively young people in a lot of cases.

32:53Doug McMillan was, what, 60? James Quincy's 60 years old, too. So you're talking about people who are young, and some of them, when they've sat down with me, have said, look, it's really tough to think of what AI is going to do, and that's going to be a five-year transition. How do you think that through? Is that what's happening here? Is there something else? Is it just a good time to step down? What's your take on all of this as somebody who's been in that role? You know, I think in every one of these cases, it's something different. I think in Apple's case, Tim's done this for a long time. I think he has realized that there's an opportunity for product innovation.

33:28And somebody like John, you know, is head of hardware engineering. You probably couldn't pick a better person for the next decade of Apple and the need for innovation. I think at Coke, Enrique is a fabulous successor. I would have loved to have seen James stay longer. But I think that, you know, the demands of these jobs are great, especially a company like Coca-Cola, where you're operating 204 countries around the world and you're traveling to those countries. But I think Enrique will be an excellent successor. I think in Doug's case, he acknowledged that the AI transition is going to be one that probably needs different leadership.

34:06And I think in a lot of these cases that you're citing, you have CEOs who realize their limitations and the opportunities for somebody new that's going to continue to create shareholder value for the businesses that they run. And they're so convicted to the future success of the company, like you see at Berkshire, that they're making the right choices. As you look at Berkshire, I mean, and it's understandable that would be portrayed AI could be much more of an enhancement to a lot of what's done there, as opposed to them being disrupted by it in various businesses. But I was fascinated by what Ajit said about cyber risk related to AI and how he just has a hard time figuring out how to model it?

34:47Like, is one incursion going to proliferate? How are you going to aggregate that risk? Well, the beauty of the AI is it will model the risks for you. Or show them to you. It will give you an opportunity to then assess, you know, how right or wrong has the AI actually given you the ability to assess it. But those AI tools are going to be incredibly useful. Then you look at like these operating businesses, they're run incredibly efficiently from an SG &A perspective. But there's no question that there's optimization opportunities. Just think about risk calculation in the insurance business. AI will be an enormous contributor to reassessment of risk, reassessment of pricing.

35:30I just think all these operating businesses over time are going to have a great benefit in efficiencies and opportunities from AI. What do you want to hear more? What have you not heard so far that maybe you'd like to hear in the second Q &A session? Asking for a friend.

35:48Well, you know, I think they're not going to talk a lot about the macro environment, but I would like to hear their perspectives about the macro environment. I just don't think that that's something that historically they've spent a lot of time talking. I think when you look at where the S &P is trading and you think about 26 times multiple and 100 year mean at 17 times, we will regress to the mean. And so but I almost think it's implicit in the cash balances, what they think about the opportunities going forward. You would think, I mean, because Berkshire was so somewhat early in identifying Japan as an opportunity for kind of rejuvenization, whether he might have a view on that, if he gets a question on that.

36:39Because I know that Fred was kind of close to that transaction. I think they answered that with Tokyo Marie. True enough. Yeah. Through your actions. Yeah. I keep going back to just the structure and how it's changed. And I will tell you, I've been hearing from a lot of people who have been kind of texting me and telling me what they're thinking from the arena while they're sitting in there. The general impression is people were pleasantly surprised by how much they learned in this meeting. Structures change, but I think they're looking at it as an evolution that, hey, may not be what they wanted, but they're enjoying it to this point.

37:18I have to say, I love the fact that they're actually doing more of a deep dive into the businesses. And I think that that's a great pivot. You know, you're never going to replace the Warren-Charlie dynamic. That can never be replaced. But for a company that's so big and so complex, has so many operating subsidiaries, going and actually doing a deep dive and showing the depth of the management teams across all of these businesses, I think that's a great pivot and not what I expected, but something that I'm actually really enjoying. That's great. Bobby, I want to thank you very much for sitting here with us and talking this thrill.

37:59It's been a pleasure. Thank you for having me. And by the way, I'm going to head out at the same time. We've got Warren Buffett coming up in just a little bit. We might get the chance to ask him about some of those macro issues that you were just referencing about what he sees happening with the economy and stocks right now, too. That'd be great. Thank you. Thank you. All right. Well, get on back in there. I'll see you in a little bit. One other newsy nugget from this morning was a question about insurance and the current risk around shipping in the straight of four moves. Here's what Vice Chairman of Insurance Operations, Arjeet Jain, had to say about that.

38:29The question is, how and when can you offer insurance to ships crossing the Strait of Hormuz? I mean, the short answer is depends on the price.

38:53Ajit, I like your Charlie answer.

39:00Obviously, some thought has gone into that because there's a lot of dynamics there. Yeah, there is a lot of chatter. There's a lot of need. Fortunately, there's enough capacity in the world today that would like to right that risk. For no other reason, but people are sitting on excess capital, and they'd like to find a way to deploy that excess capital. we ourselves have taken small participation in a program that's been put in place so as to write insurance for the ships in the Strait of Hormuz we haven't written any deals as yet, it's still being fine tuned but if we can get our terms in terms of the underwriting decisions and the fact that the US Navy will escort these ships, we have put a price on which we will be comfortable underwriting that risk.

39:58But nothing has happened as yet. Greg Abel also highlighted what makes Berkshire's business special and spelled out his ethos for running the company going forward. How are we unique as a conglomerate? We live by the fact that we hate bureaucracy. We do not embrace in our... Thank you. Yes.

40:25Ajit's the biggest fan. He reminds me, I love it. I treasure it. But no, we've heard many times, the ABCs, the arrogance, bureaucracy, complacency that can creep into a company will kill a company. And we intend to never allow that to happen. So we have this unique opportunity to both take the businesses we have today, take that foundation and build upon it. Let's get a deeper dive into this morning's Q &A session with our Yoon Lee. So, Yoon, you looked at the numbers this morning. Of course, you were in on the session from Greg Abel this morning. So what are your headline thoughts? Yeah, he really spent a good chunk of time talking about the equity portfolio, which I think a lot of shareholders really appreciated because there were some doubts about how he's able to be this hands-on operator at the same time running this massive portfolio, right?

41:19So he talked about how he's thinking about it, the core four, that's Apple, American Express, Coca-Cola and Booty's and then the Japanese holdings and then some other significant stake like Bank of America and Google. Yeah. So I think it's really interesting. And I think a lot of people appreciate it. And also, like you said, last quarter, Berkshire Hathaway was actually a net seller of stocks once again, selling about, you know, a net$8 billion of stocks. And that's just not slight tweaking, right? That's there's a lot of repositioning going on. Right. Because it was$24 billion in growth sales and then$16 billion in purchases netting out to minus$8 billion.

42:05So, yeah, that's that's not trivial. It's interesting. He definitely spent a lot of time on the portfolio characterizing how he views, I guess, different pieces of it. But those things that were not mentioned, like all the rest, I think it still leaves open the question of whether he considers them either too small to matter or maybe not worth spending a lot of time on. That's a good question. What happens to the rest of the stock he didn't mention? And also the selling we talked about, a part of it, I think, is likely tied to the departure of Todd Combs. the unwinding of the positions he used to run, right?

42:40And because he left for JP Morgan at the end of last year. And we don't know exactly which stocks they were, but I know he said in the past that Lisa and MasterCard were the two first stocks he bought for Berkshire 15, 16 years ago. So we'll see if those ones are still there. If they survive. Yeah, exactly. I think there was a lot, a little purchase activity there was in the quarter. Obviously, Greg Abel had said they had restarted the buyback program over$200 million. And then it turns out it was$235 million total in the quarter. Obviously, a pretty small amount relative to a trillion dollar market cap.

43:17Right. That's very small. And he still sounded very conservative. And he signaled this disciplined approach to buyback. They're evaluating the intrinsic value with Warren Buffett. And And yeah, I think people want to hear more, more aggressive buyback approach. Yeah, especially when you consider, you know, all the cash that they have. And now, you know, that's obviously a cushion and it's obviously ammunition to go and do something down the road if they want to do it. But a lot of folks feel as if, well, if you feel as if there's a positive expected return to buying your shares at these levels, maybe do more of that.

43:53Or they want to just wait for a bigger discount to their estimate of intrinsic value. Right, totally. But he did sound like he's ready to buy new either companies or stocks when the price is right. Yeah. And just judging by how comfortable he was talking about AI and tech and, you know, LLNs and the deep fake video we saw. I wonder if there's a sign that maybe Berkshire will be more open to technology investments going forward, because as we know, Buffett was a little bit hesitant because it was outside of his circle of competence before. It's true. Yeah, it is interesting, especially when you consider, you know, some of these big formerly blue chip software companies that have actually come down so much in valuation because of AI disruption fear.

44:35If Berkshire would see that as a dislocated deal, they could they could get in there. Yeah, totally. And to that point, they added that alphabet stake. It was pretty significant, more than four billion dollars last year. And then he did mention it in this session. So I think there are signs that they're getting more into technology. You know, I think we with tech being a big topic of discussion this morning, Abel did take a moment to speak about the role data centers will play in Berkshire's energy investments. Listen up. If I look at our peak load, i.e. the amount of energy being used from those data centers, it's at 8 percent of their peak load.

45:15And the only reason I highlight that 8 % is when I hear people in the industry and all the utilities around us, a lot of states, they're talking about this great opportunity. And geez, hopefully in the next five years, they'll be from a relatively starting point. They want to get to the 5 % to 10%. And we're already at 8%. And we see opportunities to grow that by 50 % over the next five years or potentially more. But we'll do it in a way, and you're starting to hear more and more of this across the U.S., we'll do it in a way where we're not going to impact the costs of our other customers. These users, i.e.

45:58the hyperscalers, the data centers, and the users of the energy, they have to bear their full cost. Interesting. He's able to portray the utility business as essentially, you know, kind of newly a growth business, pretty ahead of the industry in terms of data center exposure, but able to do it in a way that's not going to harm local customers. Right. Totally. And I think it's definitely welcome news that, you know, he's trying to expand into data center infrastructure build out. It's such a growth area. Yeah. Yeah, for sure. I mean, I guess the other pieces of it at this point, they highlighted some of the connections among some of the industrial businesses.

46:37They talk about the building products area, even though they don't want to say that this is all meant to, you know, fit together like some kind of a top down machine. Right. There are linkages between these companies. Yeah. And he's talking about he also talked about AI in a broader sense, and he's evaluating ways that can be additive to Berkshire's array of different businesses. Right. And how they can be more productive and efficient. Yeah, for sure. You know, that's a big part of the the priorities here as well as in the insurance business with with G. June Lee. Thank you so much. Enjoy the second part of the session.

47:10Now, we're now awaiting what was just announced a little while ago as an interview between our Becky Quick and Warren Buffett, who, of course, remains chairman.

47:22We are sitting down right now with Warren Buffett, the chairman of Berkshire Hathaway, who for the first time in 60 years has been watching all of this from the audience instead of being on stage. And, you know, last year at this time, Warren, you surprised everyone with the announcement that you were stepping down as CEO. Fast forward a year and here we are. What do you think? Well, I think it's all working. It's all working. It isn't our ideal surrounding area or environment, I should say, in terms of deploying cash for Berkshire. But in terms of how we've got the right management, we've got the right arrangement, and, you know, we can pick our spots and nobody can tell us what to do exactly.

48:19And so sometimes we're doing nothing. But other times we get quite active. I mean, you know, Ajit spent some time on the stage today talking about how one of his keys is to do nothing when it comes to insurance, when it comes to writing insurance, which is the same thing that you have always talked about with whether to invest or not. Yeah. The world is full of people that are offering you things to do. And then the question is to find one that, you know, makes sense. And there may be 20 out there that make sense that you don't understand and you just leave them alone. You said that the world or the surrounding environment is not ideal.

48:57And I guess that points to the idea that there's almost 400 billion dollars in cash on hand. Although Greg took some pains to show it's really more like$380 billion in cash on hand. But there's a lot of cash on hand. And you're still active in managing the portfolio, too, and looking at stocks. You're looking around and you don't see a lot that you want to invest in. Well, then we don't do anything. I mean, of the 60 years I've been in the business, you know, probably five of them are really juicy. And I think it was Tom Watson Sr. of IBM that said, they asked him the reason why IBM had been so successful or something like that.

49:45And he said, I'm smart at spots and I stay around those spots. And that's the whole thing. And IBM was in three different businesses, including time clocks. and two of the three turned out to be no good. So they just focused on the one. What is it when you look around that it's just prices are too high at this point? I would imagine there are, Greg said this from the stage too, there are businesses that you like just about these prices. I would say I understand fewer of the businesses as a percentage of the whole than I did 10 years ago. I have not learned new industries for some years, you know, and so I don't kid myself on that.

50:36I'm not going to learn. I'm not going to have an edge on, you know, a whole bunch of younger people that have actually grown up with them, used the product, seen things.

50:51But, well, as I mentioned, you know, you don't have to understand too many if they're like Apple. But looking around, let's just get some macro thoughts on this, because I don't know that this is something that Greg is going to comment on, per se. Just looking at the macro stock market environment, what does this feel like to you? Does it feel expensive? Does it feel like there are opportunities in some places? It feels like, you know, I've compared the markets to a church with a casino attached. And people can move between the church and casino. And I would say there are more people in the church and more people in the casino.

51:33But the casino has gotten very attractive to people. If you're buying one-day options or selling them, I mean, that's not investing. It's not speculating. It's gambling, just totally. There's nobody that can explain why they're buying an option for one day unless maybe the fellow that made the$400 and some thousand dollars from knowing when we were going into Venezuela. the way I could definitely do it. But I mean, that's pretty good. And the quantity of those things is just incredible. So we've never had people in a more gambling mood than now. But that doesn't mean that investing is terrible.

52:21It does mean that prices for an awful lot of things will look very silly. I mean, they had a squeeze. And then Avis of all things. Well, Avis has been around for 50 years. But just this past week, and we have lots more regulation and everything now, but people spend their time figuring out how to get around the rules rather than follow the rules. That's just a challenge. The type of investor you are, though, is you lay it out yourself. In the 60 years you've been doing this in the business, you've had maybe five juicy years. I guess that means you're always looking for the next juicy year. What do you think it would take to make a juicy year or a juicy opportunity for you?

53:11It's a phone call in some cases. We bought a business last year that wasn't big enough to be meaningful, but we got a letter. Bell Labs? Yeah, Bell Labs.

53:28And sometimes there's more zeros attached to them than others. And we're big enough to handle anything. We can make decisions faster than anybody, and our word is good.

53:41There's an awful lot of people that, when they, they're in the business of reselling something.

53:52And it's a lot better. If you're a good salesperson, there's no reason to be selling vacuum cleaners. or, you know, as we'll sell stock, you'll make way more money. It's where the money is. And there's more money around than ever. But the best opportunities have probably come when the macro environment leads to panic. Most likely. Well, the most likely time to buy things is when nobody else will answer their phones. You know, everybody else talks about their wonderful trading departments and everything. Just try them out sometime. When markets are collapsing, they don't answer the phones. And if they do, the bids are subject and the offers are subject and the spread is wide.

54:41And they'll use the information they get from you about what you want to do to go out and kill you some other way. I mean, it's really like going to a slaughterhouse. I mean, you don't feel like eating hot dogs for a while. I guess what I'm trying to get at is, do you see the circumstances building up anywhere that could lead to a time like that again? Any sort of panic in the market? Where do you see them? Well, if you saw them, they wouldn't happen. Okay. I mean, you've got all kinds. You don't worry about what people are talking about can happen. It's something that comes out of the blue. But something will come out of the blue.

55:22I mean, a nuclear bomb can come out of the blue. Well, let's knock on wood on that. Well, it doesn't do any good to knock on wood. That's the point. It was the Archduke getting shot in 1914 or something like that for World War I. one. It just takes everything in life. And if it's something people are talking about and thinking about, it's not going to happen. But there are things that can happen out of the blue. And actually, that's particularly true to use that phraseology now, because the things that can come out of the sky, you know, we don't know what can happen tomorrow. I don't like to talk that way to people, whether it's you or anybody else.

56:25I mean, because whether it does you a lot of good to worry about that, I don't think it does do any good to worry about it. I think it's good to be cognizant of it, but worrying about it is terrible. And I don't like to even cause that belief with people. I don't like to go around telling them the end is coming, the end is coming, or something like that. A friend told me yesterday, he's recently started using the phrase, I don't fret, I don't worry. And that's probably a good way to go about life. But let's talk about some of the issues that are out there right now. Inflation is up. That's an issue.

57:05So how does Berkshire handle that with its businesses? Well, we can't handle runaway inflation except not to be there in the way of it. And if you look at the number of countries that have had runaway inflation since World War II, you know, in my lifetime, it's very large. You know, and once you create that, it becomes a different world. You know, Germany, obviously, is very soon after World War I. But there are dozens and dozens of countries that have experienced it. And, of course, you have countries that have gone bankrupt like six or seven times. I mean, it's just amazing what people do in financial markets.

57:59What about the inflation that we're dealing with right now, which is not excessive? It's north of 3 % at this point, but we're not even back at the levels we were during COVID, 8 to 9%. So what about just higher energy prices, how that works through the line, and how you handle it? Well, it came close before Volcker. I mean, it was cash is trash. And people were losing faith in the currency. And they felt they could borrow 12 % to earn 6 % on farming or something like that. And they had huge farmers in this state, Nebraska. collapse because they bought beyond the earning power, their paid interest rates beyond the earning power just because they felt that the dollar was going to disappear and the land wouldn't disappear.

58:55It's tragic for many people. and if you're the best doctor in town or the best lawyer in town, you'll always make money under any choice. The best TB personality. I mean, it's... But what not having faith in the money does to a country, it turns it into something else. And I always hope that the U.S. never does it, but we are not immune from it happening. We have a lot of control over whether rates may go up a half a point or down a half a point, but we may have less control over whether they go up 50 points. You've long been a supporter of Jay Powell's. Exactly. He had his last FOMC meeting as chairman just this last week.

59:58He did say that he's going to be sticking around, staying on the Fed, staying in that position for the foreseeable future, in part because of the threats that he's faced. I'll feel better when he's there. When he's not. I mean, it.

1:00:18No, I just felt better when Volcker was there. But you, economists aren't the best at this sort of thing either. If you read any old economics book from 1950 or 1970, it was that Paul Samuelson was a terrific guy and smart as hell. He had the standard textbook for 25 years. And if you looked up, you know, zero interest rates and year after year after year, it was a 900 page book. And there wasn't an entry for it. You know, I mean, it was the most important economic development. I mean, in terms of the impact it would have and everything during the lifetime of the students reading it. But it's what you don't think of that does all the damage.

1:01:17Yeah. Let's talk a little bit about CEOs in some of the Berkshire holdings. You mentioned Apple's Tim Cook and just the phenomenal job you think he's done. Incredible. He's not the only one of your major holding CEOs who stepped down. James Quincy recently stepped down from Coca-Cola, too. And we just spoke with Vicki Holub, who announced that she is retiring and stepping down from that position at Occidental. Part of what Greg's talked about is how stable that portfolio is. And these holdings are companies that he knows and managers that he knows. There's going to be some new managers in some of those major holdings coming in.

1:01:54Is that a problem? Well, it was certainly a problem with Coca-Cola there for a good many years around the company. I mean, sure, it's... And you have the most problems with a really good company because it'll continue. I mean if you're selling some product that people are buying every day, you can make the wrong decision for a long time.

1:02:23But that's one of the problems with investing.

1:02:30Tim Cook, I felt, was very, very good from the start. And most of our managers are very good at the smaller problems. They can't anticipate the overwhelming problems. That's my job or now Greg's job. Do you feel good about those holdings still? Have you met any of the new managers of those businesses? I haven't met the old managers. Of the new businesses, of the new CEOs that are coming in. Tip Ice Replacement, Enrique at Coca-Cola. I certainly met the people at Bell Labs that we did. And obviously I met Vicki. We made the deal. So I enjoy meeting the people. But you can make mistakes with people.

1:03:26I mean, look at the divorce rate. You know, that's more important than whether you got the right CEO or anything else. And now you've got years of trial. I mean, back when I was young, you had to make the decision. You know, you didn't have to make it. A good many people made the decision when they were 20 or 21. To get married. Yeah, they got married. Now they spend five years, they still make the same mistakes.

1:03:56So you think we're getting worse at our judgment? Well, I don't know. And maybe the people behave differently before the marriage and after. Who knows? Exactly. I would say that almost everybody feels either their marriage is better or worse than they anticipated a month after they were married. But I don't know which. Sure. Warren, let's talk a little bit about deep fakes, because the deep fake Warren that popped up early in this session was pretty good. They had somebody standing up. You know, Greg was joking about it. But, you know, the first the first question went to a guy from Warren up in the rafters who lives in Omaha.

1:04:37You've been concerned about some of these A.I. deep fakes and what that means for the world. Yeah, I would be concerned if everybody was, well, actually the worst thing would be to have a really good imitator of any president that came along. I mean, just imagine, well, we had that famous thing before, way back in New Jersey where the Martians coming and everything like that. Oh, War of the Worlds, Thorsten Wells. What you can do, well, if you're convinced what people lend you money for, you shouldn't be borrowing it. I mean, it's scary. And it's particularly scary when you have nine countries or so with nuclear weapons and people working on it, something even more lit.

1:05:33We haven't dealt with this. but don't know what's going to happen. Let's circle back to Berkshire and the Berkshire of today. I think I was speaking with you yesterday or the day before, and we were talking a little bit about Greg Abel and what a nice guy he is. He's a terrific guy. You said something interesting to me, though, about how you picked him and it wasn't because he was a nice guy. Why did you pick him? Well, he's very, very, very smart about businesses. Incidentally, he's getting his American citizenship here very soon, and he was going over with me all the things he had to learn about.

1:06:14I've actually spent a little time in the past with groups of individuals. Of course, my wife still became an American citizen. and the things they have to learn about the Constitution and all these, and they're usually so proud when they become American citizens. And I think I detected in Greg even, I mean, you know, as successful he's been and everything else, I mean, he is, it means something to him to become an American citizen. and he sits there with his young son and the son knows more about some of the answers to the questions that he may get asked or something about becoming a citizen. It's really interesting.

1:07:04Where else does that happen in the world? I mean, what people... America's special

1:07:14and it's a miracle what America's accomplished. I mean, it's just an absolute miracle. And yet the miracle, the division of the output and everything is about as inequitable as it you can come up with, while at the same time it's got these great attractions. There is some secret sauce. I've never been able to define it precisely, but when you run a country for 200 and some years and people want to come here every year I mean there's there's something about it and what Greg Abel was very you know is looking forward to becoming an American citizen that means something to him and you can't buy that any place they were packaging or you know It won't work for a Madison Avenue approach, you know, being American or something like that.

1:08:17But that feeling just goes. In my 95 years, I've seen it. It's time after time. So I felt good when I just volunteered that in the last day or two to me that he was up there for his final exams here for becoming a citizen. I didn't realize he wasn't a dual citizen already. I knew he was Canadian, but I thought he had dual citizenship. He doesn't have a full, whatever the complete citizenship requirement is. And you can say, why does he care? I mean, he's gotten along fine without it here and everything. He still wants to be a citizen. Yeah. 250 years, we're celebrating our 250th anniversary. You pointed out that you've been around for 95 of them.

1:09:01You think we have the special sauce that that will continue in this country? Or what do we need to do to preserve that and make sure that it does continue? We've got a special sauce, a secret sauce. It's such a good secret that I don't know what exactly it is, but I do know this, that anybody that has a choice would choose to be born in America. I mean, you can pick some very small little country, they're very happy. that there, but is there any other country that everybody's for a couple hundred years wanted to emigrate to? I mean it, and it attracted some terrible people, you know, too, but it worked.

1:09:51And they had the mafias from the different groups, not just the Italian mafia, but I mean it wasn't that We had some system for picking out the wonderful people from some other countries. But it has worked. But it's worked. The extremes to which it works don't seem to belong to that kind of a society. I mean, if you were drawing up dreams for the ideal society, and you would have this kind of GDP cap and everything, It wouldn't design the inheritance of laws. I mean, you'd just do all kinds of things differently, but somehow it's worked. But that doesn't mean that we can't do better at all. You know, Warren, there are thousands of people, shareholders and partners of yours for decades in some cases who are sitting out in this arena right now.

1:11:00And I just wonder if there's a message you'd like to give to them. Those have been following you for years and have been partners of yours for years. The number one rule I give them is just that give them the golden rule. I'm not a religious guy, but I mean, nobody's done it any better in a couple thousand years than that, which may be why it's lasted to a certain degree, too. I mean, more people are reading a 2 ,000-year-old book about how to behave than anything that anybody's coming up with lately. But now it's got a lot of, particularly the Old Testament's got different kinds of stories to some extent.

1:11:48But if the whole world lived by the golden rule, it would be such a more wonderful society. Do unto others as you'd have them do unto you. Yeah, and that's true for everything from parenthood to being a boss to being all, I mean, just everything in life. And it doesn't cost you anything. In fact, it's reflected in better behavior toward you. So, I mean, it's a very selfish sort of thing in one sense. But I've never seen anybody that's unhappy that behaved that way. I don't see a lot of people in a lot of different kinds of situations. Warren, I want to thank you for taking this time to sit down with us today.

1:12:41Warren Buffett, the chairman of Berkshire Hathaway. Greg Abel is going to be taking the stage in just a moment, and you will see more from him in just a moment.

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1:14:11Thanks for listening to our coverage of the Berkshire Hathaway Annual Shareholder Meeting. There is more to come in a third podcast. If you already follow Squawk Pod, that should be coming up right in your feed. You can check out our show notes as well for links to more resources and a listening guide to this podcast. I'm Becky Quick. Stay tuned.

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