Warren Buffett & the Berkshire Hathaway 2025 Meeting Part 2: The Exit 5/3/25

33:15You earn a very set return for taking on a very set defined risk associated with that asset. And this has gone well beyond that. We don't earn the type of returns, nor can you earn a large enough return to take on these risks. So it's not just about solving the return side. We really have to solve the risk side, which means we work with our regulators. We're working with our state legislators to get to the right answer. And that's really just, that'll be an ongoing process. There are not silver bullets out there, but every day our teams across utilities are working hard to reduce that risk, recognizing the fundamental risk of the wildfires is not going away.

34:00But there's some problems that can't be solved. And we shouldn't be in the business of taking your money. investors money and tackling things that we don't know the solution for and

34:18you can present the arguments but it's a political decision when you are dealing with states or the federal government and if you're in something where you're going to lose the big thing to do is quit and you present your case as well as you can and everything else But if you don't hold the pen in the end, you know, we don't have any business taking your money and doing dumb things with us. And we can do our best to explain what the intelligent things are. But it's your money. And so it's very hard to tell how to handle the questions of politically determined decisions that are going to go to court in many cases.

35:18But you know that it just doesn't make sense. we know what we think a sensible system would be, and we ought to explain what we think it is,

35:36and do the best to get our position, because it's pro-social to have the right solution to have it. But the right solution, for example, in the interstate, wasn't to let 48 states each decide on their own. way of doing it and award contractors the jobs based you know there's just there's some problems that can't that can't be solved and we are not in the business of trying to solve insolvable problems yeah i didn't go for example but then the problem you have of course is that the people that work for you that's it's their job so they they they they they want to have reasons to keep going. And those are tough choices if you're managing, but that's why they have managers.

36:31And Warren, I was just going to add, because you touched on something really important there, that effectively, for example, with the utilities and the wildfires, we can't just become the insurer of last resort and that we're going to cover any costs and all costs, irrespective of what occurred. And that's a little bit of the situation we're in right now with our largest challenge of 2020 wildfire, where there were four fires occurring at a challenging time. One, we've always asserted, was a lightning strike that was not inside our service territory. The fire burnt into our service territory, and we became responsible for that fire.

37:17effectively through the courts. And we've continued to hold firm that we're not responsible for that. Rightfully, I mean, we didn't contribute to it. And we didn't initiate it, nor did we feel we ever contributed to it. But it's getting, again, if you look at the risks, it's there. We have to manage through things like that. We'll get through that litigation. We're happy to report, for example, on that one, after five years, the Oregon Forestry Department has come out and said the other fires we did have that we were able to manage and extinguish did not contribute to that fire. And that fourth fire is the largest fire of the four.

38:01It's 60 percent of the claims. We're five years into effectively getting that information into the courts. Now, that will align our legal strategy, obviously, going forward, but it's things we're dealing with. But we continue to learn from this as a utility industry. So we're in very much each of the legislatures, as I said, making sure we get clear definition where liability falls, what can the economic damages be, but most importantly, what can the non-economic damages is be. And again, with the thought, we can't be the insurer of last resort. We just can't be responsible for everything that happens in a state.

38:44Yeah. If we want to do it with our own money, we can do it, but we're not going to do things with your money that we think are stupid. I mean, you ought to get rid of us if we do it. And it's easier to do stupid things with other people's money than it is with your own money. That's one of the problems government has. Just generally, we don't want to bring it to private enterprise.

39:17But it is important that the United States have an intelligent energy policy, just as it was important during World War II that we learned how to make ships instead of cars extremely fast. And we figured out the answer. We combined private enterprise with the power of government and how feasible that is in a democracy. It was clearly obvious during World War what needed to be done, and we did it. But it's not so clear when you get 330 million people all arguing their own self-interest and, of course, deciding what will happen and having the people often who are making the decisions reacting as they did 20 years earlier, when they don't really bear the responsibility for the decision.

40:27Anyway, that's management, and we'll do our best.

40:34Station 11.

40:39Hello. My name is Alicja Burek, and I'm from Poland, but I currently live in Chicago. This question is on behalf of an inspiring man that I know, Walid Ahmed, who's here with us today. Mr. Buffett, nearly 74 years ago, on a cold Saturday in January 1951, you traveled eight hours by train from New York to Washington. You went all the way on nothing but hope that someone might teach you more about the insurance industry. Arriving at GEICO's office to find the doors locked, you persisted until a janitor let you inside. You credit that meeting with Lorimer Davidson for the insurance float that was the rocket fuel behind Berkshire's success.

41:21In 2011, when I was 15, I wrote to you with similar determination, asking to meet. You kindly wrote back, saying you had only 3 ,000 days left and more pressing priorities. Well, Mr. Buffett, it's now been 5 ,000 days since you replied. And so inspired by your persistence in 1951 and the tenacity of Mrs. B, I humbly renew her my request for just a quarter of the time Davy gave you, a single hour in your office. You may wonder why must it be you? You have often shared an anecdote about a Polish Jew who survived Auschwitz, who said to you once, Warren, I'm very slow to make friends because when I look at someone, I I ask myself, would they hide me?

42:09You said that the number of people would hide you was the best test of life well lived. Well, I believe that at this meeting, you don't have 40 ,000 shareholders, but you have 40 ,000 people who would hide you. You are a testament to a life extraordinarily well lived. Yet even you have not fully witnessed this transformative power of a client. I'll let you write my biography, but I think I've got the point of your question. So respectfully, I ask again, Mr. Buffett, before Father Time wins, will you please grant Walid Ahmed an hour of your time or any time you can dedicate? Thank you so much for your time.

42:51Thank you. And I will say this, I grant an hour to everybody of the 40 ,000 here. Well, I have an interesting time the rest of my life. But I will give you one tip. I found that when I was very young, and I would drive around to various companies all over the country. And because I was very young, and these were companies that were offbeat, and they didn't have investor relations departments then, And almost every CEO would see me because they figured they'd never see me again. And they weren't getting calls like that. And I would ask them two questions. I would explain to them, it's not a bad idea, incidentally.

43:51If you're going to walk into somebody's office and you say you want 10 minutes of their time, take a hourglass and stick it on the desk of the person you're talking to and turn it up so that it's going to go for 10 minutes and you say you're going to leave in 10 minutes unless they ask you to stay and that sets the terms but then once you have that if they're in the coal business we'll say which happened to be one that I was interested in 70 years ago or so So, let me just ask them one question, that if they were to be stuck on a desert island and they had to own only one of their competitors' stock during the 10 years they were going to be on that island, which one would it be and why?

44:45And then, after they give you that answer, you said the same thing. If you were going to short your net worth while you were on that island, which would it be and why? because every manager likes to talk about their competitors. They're like a bunch of school kids, you know, when they get into talking about their competitors. I probably learned more about various industries by just making sure that they didn't think I'd stay too long, and in the meantime, they would have the floor and talk about their competitors. I kept my own mouth shut in those days. That's a lesson I've lost somewhere along the line.

45:29But essentially, they've outsourced, or I shouldn't say outsourced, but they've departmentalized investor relations of all companies of size practically now. So you've got 3 ,000 companies or whatever they have, and they all have departments. And each one of them has an investor relations department practically. and their job is to say this is the best thing you can do today is buy our stock. Well, the whole concept is totally idiocy. But it's a big business and it gets bigger and the investor relations department gets bigger and, you know, it's what we have now. But do a little of your own work your own way.

46:18But Berkshire Hathaway has got plenty of material out there for you to read. and when you get through reading it all, you'll know way more than most of the people that work at Berkshire. So you don't need a personal interview. If we take an hour at times, even the 40 ,000 people we may have here, plus Becky's many listeners and viewers, it just doesn't work. So I admire your effort, but you'll just have to settle for that is the admiration that you get in this. Okay.

47:04Becky? This is a question that you touched on in a lot of ways in the last answer from before, but I did get this question from a few different people, so I'd like to ask it. Ricardo Briz, a longtime shareholder based in Panama, says that he was very happy to see Berkshire acquire 100 percent of BHE. It was done in two steps. One, in late 2022, 1 percent was purchased from Greg Abel for$870 million, implying a valuation of BHE of$87 billion. And then two, in 2024, the remaining 8 percent was purchased from the family of Walter Scott Jr. for$3.9 billion. dollars, implying a valuation of$48.8 billion for the enterprise.

47:52That second larger transaction represented a 44 percent reduction in valuation in just two years. Ricardo writes that Pacific Corp liabilities seem too small to explain this. Therefore, what factors contributed to the difference in value for BHE between those two moments in time? Well, we don't know how much we'll lose out of Pacific Corp and decisions that are made, but we also know that certain of the attitudes demonstrated by that particular example have got analogs throughout the utility system, and we—there's a lot of states that so far have been very good, decent to operate in. And there are some now that are rat poison, as Charlie would say, to operate in.

48:48And that knowledge was accentuated when we saw what happened in the Pacific Northwest. And it's accentuated by what we've seen as to how utilities have been treated in certain other situations. And then on top of that, so that it wasn't just a direct question of what was involved at Pacific Corp. It was an extrapolation of a societal trend. And secondly, we also had a decision we didn't expect out at all, the real estate business. And those kind of things can change values, and courts can change values. And it's a lot easier to make those decisions when you just own marketable securities than when you own businesses.

49:44And I've made plenty of those decisions as I've watched what have happened in various industries and companies in over 70 years. But Greg made the decision, which was fine with us, to get out. And he had no knowledge of what was going to be happening in either the real estate field or the utility field.

50:13And we're not in the mood to sell any business, but Berkshire Hathaway Energy is worth considerably less money than it was two years ago based on societal factors. And that happens in some of our businesses. It certainly happened in our textile business, and it's happened in the public utility businesses and not as good a business as it was a couple of years ago. And if anybody doesn't believe that, they can look at Hawaii and Electric, and they can look at Edison in the current wildfires situation in California, and there's societal trends that are— Oh, I just got a note here on my monitor that says the books are now sold out, so you'll have to spend your money on other things.

51:07Here's fudge. This is what I'm eating, so—

51:13But that's the explanation. The values change, and they don't always change upward. and when we made the deal with Greg we would have happy to buy out Scott family at that price and when we made the deal with the Scott company we wouldn't have been happy to pay Greg the price that he received but that it's like Berkshire shares we bought in stock at X and we buy in stock at less than X if conditions change poor and we pay and over the years we pay more and more because it builds in value, but it doesn't do it in a straight line. And I would say that our enthusiasm for buying public utility companies is different now than it would have been a couple years ago.

52:08That happens in other industries too, but it's pretty dramatic in public utilities, and it's particularly dramatic in public utilities because they are going to need lots of money. So if you're going to need lots of money, you probably ought to behave in a way that encourages people to give you lots of money, and we will see where we go.

52:34We'd like to see public utilities do well, but our responsibility is to the shareholders of Berkshire Hathaway. Okay, station.

52:45station one again

52:52dear Warren, dear Greg dear fellow owners it's such a pleasure to be here my name is Brevi Panida I was born in communist Albania but I'm now teaching economics in London, England the wonderful writing of Warren and Charlie has significantly shaped my thinking and teaching I thank you both very much for the many insights over the years. Warren has often written about the importance of Berkshire's earning power to owners. My question is, what was, in your estimate, Berkshire's earning power in the latest fiscal year? It would be great if you can comment on any significant items that either increased or decreased the earning power as compared to reported net income measures for Berkshire.

53:35Thank you. Well, I think our underlying earning power was affected negatively here a while back by what happened in the utility field. I think that our earning power was not enlarged by any large acquisitions that come along, but they come along periodically. So, we will see something at some point that, well, could be, you know, on the one that was 10 billion, we would have added to earning power. I mean, why else would we do it?

54:15So, that's very situational. And, of course, it depends so much on what the general market is doing and what interest are doing and what psychology is doing. We will make our best deals when people are the most pessimistic. You know, that's been true ever since I was 1930, born in 1930. When I was born, things got much more attractive over the next two years, and apparently I didn't do anything about But, you know, that was the opportunity of a lifetime, and I blew it by, you know, worrying about the kid in the next crib or something. But over my lifetime, you know, I've had fabulous opportunities sometimes, and they happen because humans are human.

55:18And I don't—you know, I'm fearful of all kinds of things. I don't want to try and, you know, be one of the Walunders and walk on a tiny strip between a couple of Twin Towers or something or whatever it may be. but I don't get I just I don't get fearful by things that other people get are afraid of in the financial way you know the idea that if Berkshire went let's say Berkshire went down 50 % next week I would regard that as a fantastic opportunity and it wouldn't bother me in the least and And most people aren't—they just react differently. And so, it's not that I don't have emotions, but I don't have emotions about the prices of stocks.

56:14I mean, I actually—those decisions get all the way to my brain, whereas emotions can get bogged down some other place. So, Berkshire will increase its earning power over time as we retain money. I mean, we are doing things, making decisions every day. People are working. We're retaining earnings. We will build the earning power, but it won't be coming in any even stream, and it certainly won't be matched dollar for dollar on either the upside or the downside in market prices. But that's what makes it a good business, the investment business, is that everything isn't properly appraised. And the sellier other people get, the better your opportunities get.

57:12Okay. Becky? This question comes from Achit Patel, and it's about the big cap technology stocks. In the 2017 annual meeting, you said, Warren, you really don't need any money to run these companies and referred to them as ideal businesses, referring to the big tech companies, Apple, Alphabet, Microsoft, and Amazon. With all of those companies now announcing massive capital investment endeavors around AI ambitions, Have you rethought the above comment, just in terms of them being asset light and what you think of them as a result? Well, it's always better to make a lot of money without putting up anything than it is to make a lot of money by putting up a lot of money.

57:59And so a business that takes no capital to speak of, Coca-Cola, the finished product, which has gone through bottling companies and everything, that takes a lot of capital. But in terms of the selling the syrup or the concentrate that goes to it, it doesn't take a lot of capital. So one is a fabulous business, and one is a—you know, it depends where it is and everything like that. Coca-Cola's popular every place, but some places that—I mean, if you're in the bottling business, it costs real money. You have real trucks out there, and you have all kinds of machinery, and you have capital expenditures coming up.

58:45And, you know, we've got businesses that take very little capital, that make really high returns on capital. And the ones the politicians talk about as making high returns actually aren't making high returns usually in terms of capital.

59:08Insurance, property casualty insurance is kind of a rare business because you need capital as a guarantee fund that you will keep your promises. but you can use it to buy other low intensive capital businesses I mean you can buy a whole you can buy Apple and that would support that business so that can be a pretty good business and it's one of the reasons we've done well over time but

59:42the well it'll be interesting to see how much capital intensity Certainly, there's more capital intensity going on with the Magnificent Seven than there was a few years ago. I mean, basically, Apple has not really needed any capital over the years, and its repurchase shares. A dramatic amount of reduction, whether that world is the same in the future or not, is something. Hollywood's answer was always to get their money from other people to put up the capital. A lot of people have gotten very rich in the country by essentially figuring out how to get others to put up the capital. And that's what people do in the money management business, and they get very, very rich because they get an override on other people's capital.

1:00:49And incidentally, if all of you were paying 1 % for investment management fees, at Berkshire last year you would have paid$8 billion for managing, and you really wouldn't have had to do it. But, you know, investment management is a very good game because other people put up the capital and you charge them for the capital, whether they do well or not. And then you charge them a lot more if they do well. I mean, it's a well-designed business for the people who practice it and who can blame them. I mean, that is capitalism, but—and I saw that in operation when I was working at Solomon, but I didn't need to see it, and I knew what existed anyway.

1:01:49The trick in life is to get somebody else's capital and get an override on it.

1:01:57Charlie and I decided it wasn't too elegant a business after a while, but we weren't, we were not criticizing the efficacy of it. We were just, it just appealed to us after a while. I did it for 12 years, though, or something. Not really. The one difference that Charlie and I did from other people is we put all our own money in and do it. So we really, we did share the losses with our own capital, but we got an override on other people's capital. and that's been people have made advances where they get the override on other people's capital without putting up any of their own capital to speak of and that's a very good business but

1:02:44it it leads it can lead to a lot of abuse

1:02:53Greg, you've watched capital management in the United States, and would you say that Canada's behind or ahead in this respect? Well, I think when it comes to their capital system, Warren, it is very comparable. There's no question. Other than as we know, I mean, I think the U.S., as far as having a capitalist system, it would be tough to be touched by any country. And I think when I think of Canada, there's just certain responsibilities or obligations that the government wants to take on and aren't going to leave with the public sector. And that's just a decision that's made by society or by the Canadian people, or if you look at another country, Australia, or wherever it may be.

1:03:43But so there's, it's different. But when you think, when I think of capitalism, that drive is there and the desire to allocate capital properly, it's very similar. it's produced wonders in the United States if you think about it but originally with the Rockefellers and Carnegie they actually put up money to build steel mill whatever it may have been with with Rockefeller refineries and pipelines and all that sort of thing they put up money to do it now Well, the trick is to use other people's money, basically, and, you know, you can't blame human beings for behaving like humans, but you should be aware of what their motivations are.

1:04:45It's a—capitalism in the United States has succeeded like nothing you've ever seen, but What it is is a combination of this magnificent cathedral, which has produced an economy like nothing the world's ever seen. And then it's got this massive casino attached. So you've got the cathedral and the casino. And in the casino, everybody's having a good time, and there's lots of money changing hands and everything. But the cathedral is what—you've got to make sure the cathedral gets fed, too, because the temptation, and the temptation is very high now, is to go over to the casino where people say, you know, we've got magic boxes and all kinds of things that will do wonderful things for you, and that's where people are happiest, that's where you get the most promise to you, that's where the most money is for the people that are pushing things.

1:05:37And, you know, the balance between the casino and the cathedral, it's very important that that the United States in the next 100 years make sure that the cathedral is not overtaken by the casino. Because people really like to go to casinos. And it's just so much more fun. And they ring bells when you win. And they bring you drinks and everything else.

1:06:10And it's designed to move money from one pocket to another. And in the cathedrals, they basically are designing things that will be producing goods and services for 300 and some million people like it's never been done before in history. It's an interesting system we've developed. But it's worked. it dispenses rewards in what seems like a terribly capricious manner I mean the idea that people get what they deserve in life and it's hard to make that argument but if you argue with it any other system where it seems to work better the answer is we haven't found one so I'll leave it to the next generation to send me the answer and then my Ouija board or whatever.

1:07:15Okay, station two.

1:07:20Hi, my name is Patrick Nestor. I am 13 years old and from Tampa, Florida. I'm here with my brother, John, who's 15, and my dad. Thank you for hosting this meeting. This is my first ever shareholder meeting. My question is, what high school class or activity helped influence you to who you are today as the greatest investor of all time? Well, that's a good question.

1:07:53The teachers you get in your life have this incredible impression on you. And a lot of it are the formal teachers you have, but some are informal teachers, too. I mean, I learned from certain employers, you know, so much. You really hope you're learning from everybody you find who's well-intentioned and has had a lot of experience. And I had a lot of good luck in that, but I would say that where I was really lucky was my dad was in the investment business. So I would go down on Saturday, and I'd wait for him to go to lunch with, and I'd read the books that were around there that nobody else ever read.

1:08:44And they just—they talked to me. Numbers talked to me.

1:08:53And I could never get my fill of them, and then I discovered the public library, and I read every book there was on investments, literally, in the Omaha Public Library at 19th and Arnie.

1:09:07And, you know, I enjoyed learning about that. unlike Charlie, if Charlie was reading about electricity, he would want to know everything that Thomas Edison knew and more, and go through the same thought processes and understand how everything worked. I didn't care whether how it worked. I just cared whether it worked. And that's a limitation. I'm confessing here. I'm not bragging. but you know the as Charlie would say I mean people would always say if you don't only have lunch with one person living or dead who would it be and Charlie said I've already had lunch with all of them because I've read all their books you know basically and so and he really did I think having curiosity and actually finding sympathetic teachers is very useful.

1:10:04I ran into a couple of teachers that, both in high school and college. In fact, I would say that I went to three different universities, and I went to high school in Washington. And at each place, I found about two or three really outstanding people, and I just spent my time with them and didn't pay much attention to the other classes. And I was lucky to find something that really fit me very early on. If my ambition had been to become a ventriloquist or, you know, whatever the hell it might have been, it wouldn't have worked. You know, I'd have spent hours and hours and hours, and I wouldn't have been any good when I got through.

1:10:58So I don't believe that. I think there was that book that talked about spending 10 ,000 hours at something. I could spend 10 ,000 hours at tap dancing, and you'd throw up if you watched me. But if I spent 10 hours reading Ben Graham, I would be damn smart when I got through. So minds are really, really different. I watch great bridge players, and I watch great physicians. I mean, people really, really, really have different talents, and, you know, I don't know. I think you're supposed to have 88 billion cells in your brain. I'm not sure that all of mine are flashing bright lights, but you are different than anybody else.

1:11:53that's what my dad always used to tell me that essentially that, you know, you're something different. It may not be good at the moment, but you find your own path, and you will find the people in schooling that want to talk to you, people that teach in general. They love having a young student who's actually really interested in the subject, and they'll spend extra time with you. They'll do all kinds of things. And I ran into that. I had Graham and Don at Columbia, where Dave Don treated me like a son, basically. And, uh, uh, but I was interested in, excuse me, I was interested in what they were saying.

1:12:50And, and they found it kind of entertaining that I was so interested. And, uh, so I would just, I would, I would look around at who you, you know, what really fascinates you. I wouldn't try and be somebody else. and then I would you'll find the teachers at a school and you'll find some outstanding people that are teachers I've had at least 10 people that have had huge impacts on my life and every one of them was positive because I got to select in a sense and And a number of people really like helping younger people. You know, I found that in school. And it probably helps to look a little bit lost and all that.

1:13:48You need help. But I would say my school experiences were good, but were really very good. but I attribute it much more to the individual than to the institutions. Okay. I've already told you more than I know, so we'll go on to— Becky, you're next. This question comes from Scott Williams in Portland, Oregon. He said, do you think the net benefit of Doge will be positive or negative for the long-term health of the United States? Well, why don't you give me a hard one? I think that bureaucracy is something that is amazingly prevalent and contagious, even in our capitalist system. And the big corporations, you know, overwhelmingly, most of them look like they could be run better.

1:15:04I'm sure Berkshire does in many respects.

1:15:10And it, you know, and government is the ultimate. So it really doesn't have any checks on it. and that's why it scares you to some extent about what the future of the currency will be because they can print currency and if you have people that get elected by promising people things and that doesn't mean that they aren't sincere about all kinds of items but there's no politician that says to anybody that at least if they have money that you know, I really think you have bad breath and if you don't mind would you step over and away from me? It just doesn't happen. And so I I think the problem of how you control revenue and expenses in government is the one that is never fully solved.

1:16:17and has really hurt dramatically many civilizations, and I don't think we're immune from it, and we've come close to it. But if you tell me how in a democracy you go in and really change things, you know, we're operating at a fiscal deficit now that is unsustainable over a very long period of time. We don't know whether that means two years or 20 years because there's never been a country like the United States. But you know that if something can't go on forever, it will end, to quote Herbert Stein, a famous economist. And we are doing something that is unsustainable. and it has the aspect to it that it gets uncontrollable to a certain point.

1:17:20I mean, essentially you just give up on it. And Paul Volcker, you know, kept that from happening in the United States. But we came close. We've come close multiple times. And, you know, we've still had very substantial inflation in the United States, but it's never been run away yet. And that's not something you want to try and experiment with because it feeds on itself. So, I wouldn't want the job of trying to correct what's going on in revenue and expenditures in the United States with roughly a 7 % gap, when probably a 3 % gap is sustainable. And then the further away you get from that, the more you get to where the uncontrollable begins.

1:18:25And I think that it's a job I don't want, but it's a job I think should be done, and Congress does not seem good at doing it.

1:18:49Well, it sounds like you should quit while I'm ahead.

1:19:00It's—well, we've got a lot of problems always as a country, but this is one we bring on ourselves. I mean, we have a revenue stream, a capital producing stream, a brains producing machine like the world has never seen. And if you picked a way to screw it up, it would involve the currency. And that's happened a lot of places. And the incentives plus the checks. Well, there aren't any real checks. In theory, you would make it so there was substantial downside for anybody that screwed things up. But there isn't downside. There's upside.

1:19:55So it's the problem of the most successful company in the history of the country and the history of the world. And at this point, we've got a little room to go in solving. With that, I'll shut up and go on to Station 3.

1:20:21Hello, Mr. Buffett. My name is Saskia from Giffen, Germany. And first of all, I want to thank you because you made such a great impact in my life and the life, the people I love, and that's priceless. Well, thank you. Mr. Buffett, imagine it's 1776 and you're sitting alongside Benjamin Franklin helping to shape the foundation of a new nation. What core economic principles would you advocate for building a fair, resilient, and opportunity-driven capitalism society, one that supports long-time prosperity for future generations? Well, I probably—that's a good question, but I would probably say to Ben Franklin, you just keep thinking and don't talk to me, because you'll come up with some better ideas than I will.

1:21:25He was an incredibly remarkable person. I mean, you would say he's almost probably the last person to almost have a grasp of every aspect of activity in the country. He invented all kinds of things, and he incidentally—we were talking about power of compound interest and that sort of thing. He left a will that left a sum of money to Philadelphia and another sum to Boston that would serve as an example for a couple hundred years, you know, of the power of compounding and all kinds of things. He was so far ahead of his time that the best thing I could do if I was under that tree with him was to get out of his way and let him just keep thinking.

1:22:29But he saw the problems that success could bring to a society as well as other problems, I mean, more immediate problems in all kinds of fields. but the problems of how how to cause how to take 8 billion people because there's no way we can separate ourselves from the rest of the world we can be example to the rest of the world and I think it behooves us since we have had all this good fortune in this country and we do have a pretty good system. I don't think you get very far by lecturing the world on how you're the one that should tell them what they should do with their lives. I think you get a certain amount of resentment when just a few hundred years ago, a whole different group of countries were running the world, and now you start giving them advice.

1:23:46I think it's a real mistake in communication and persuasion to lecture a bunch of people where you've just won the game. I mean, that's—but anyway, I would say that I would advise Ben to figure out how to win the game and keep a certain amount of humility at the same time. And I would tell him to try and design a system that doesn't invent too many things that can destroy the planet, But, you know, that become uncontrollable once you get them out there. There was no alternative to us developing the atom bomb, but the expansion of the number of people that have the ability from one to eight, and nine probably pretty soon with Iran.

1:24:49I mean, that's a mistake that society just could not afford to make. I mean, solving the problem with nine variables instead of simply one. Now, it's totally understandable. My dad was in Congress when the atom bomb was first used. It was amazing how Sam Rayburn kept the House of Representatives uninformed. because they were supposed to appropriate all the money. And he had 435 congressmen there, and they had no idea they were appropriating money for Los Alamos or what was going on in Chicago or what was going on in Tennessee. But anyway, we do have a society that is far beyond anything that Ben Franklin dreamt of.

1:25:55It's achieved some of the—or is achieved—it's moving toward, in the right direction, toward solving some problems where we made kind of broad declarations about all men being created equal and et cetera. And then we did some of the things we did. But generally speaking, we moved in the right direction. But we face problems that I don't know how Ben Franklin would attack the problem of what you do once you get weapons of mass destruction in many hands. and when you essentially look at the world as something where there are winners and losers and that the winners are you know humiliate the losers and do all kinds of things but I'll let the people that are a lot younger figure out the answers on that but it's still the most wonderful there's never been anything you could dream like before this happened in the United States so we still it's the best place the best time to be alive by miles in history just think of a couple hundred years ago somebody you know yanking out a few of your teeth and pouring whiskey down I mean subsistence and particularly in this Midwest just imagine waiting until the Missouri froze over every year just to see whether you can get your wagon across and maybe have a pregnant woman in the back.

1:27:46You know, it's just amazing what has happened of a positive nature during my lifetime. And then the question is, how do you keep it and how do you improve it? And I do think that fundamental to all of it, though, is having a currency that does not get debased. What that does to the stability of a society where all the people that trust their government get screwed and all the people that figure out ways to profit off of it become rich or richer. I don't think you want a society that operates in that manner. So anyway.

1:28:45Let's see, that was section three. So we're going to Becky, is that right? That's right. Greg, this question's for you. It comes from a shareholder named Jay Milroy, who writes, Mr. Buffett has a hands-off approach to managing the operating subsidiaries. How would you describe your approach? Better.

1:29:14Well, we've got our managers over there. And I would say going back to 2018, it's been very fortunate to be in this role because one, I had to learn a lot of the businesses and there's no question as Warren bought the businesses had that general knowledge, I absolutely had to engage with each of them and they've been great in sharing their business models, their approach, their thoughts around where the risks and opportunities are. And I think as we went through that, there's no question. I had questions and wanted to engage with them. And Warren talks about the curiosity being important as you go through things.

1:29:58That would be my style to have questions and comments around their business, their frameworks. At the same time, they have great businesses and they run them very autonomously. And that remains in place. But if there's opportunities to see where maybe you've seen something in another business or an opportunity I may see in their industry, we're going to discuss it and see if that's something we should pursue or are we properly addressing the risk. And I found all our managers to be absolutely engaging on that and want to have those dialogues. And I'd say that's a reflection of my approach. I'd also say that when you think of our managers, again, very autonomous.

1:30:46They run their businesses. They know it better than I ever will. But if I see an opportunity that it's well worth their time to talk to another one of our managers, if it's Geico and they've gone through a technology transformation, they're not by themselves that need to be thinking that way. we want to make sure the right folks are talking and figuring out how we can benefit from the prior experiences. So it's, I would say, more active, but hopefully in a very positive way. And we've got an exceptional group, so it's worked out exceptionally well as I've gone through that period of time. It's working way better with Greg than with me because, you know, I just didn't want to work as hard as he worked.

1:31:41And I could get away with it because we've got a basically good business, very good business. And I wasn't in danger of you firing me by virtue of both ownership and the fact that we would do pretty well. But the fact that you can do pretty well doesn't mean you couldn't do better, and Greg can do better at many things. Many people want to be managed, need help in being managed. Some don't. Some you just leave alone. You know, we've had managers that would have been crazy to start giving instructions to because they just quit. and I wouldn't blame them because I'd be the same type myself. But a lot of people, I mean, people really do welcome direction and help, and particularly when they're getting it from somebody like Greg that really lives the life himself and doesn't just come down from a high and say, you know, here's what you do while I do something else.

1:32:53You know, a manager that behaves differently than what he's asking the people beneath them to behave, it just doesn't work over time. And people want a manager that they admire, and they're not going to admire him if those people profess to behave in one manner and behave in another manner. It's easier—this is a sad thing, but it's easier for an organization to see its quality move downward than it is upward. I mean, if the boss behaves badly, it causes everybody to behave. I mean, that is really catching. It's not as catching on the way an upper management, but if the manager is doing a lot of little things to grease his own situation, pretty soon—let's say you're running a retail establishment—pretty soon all the employees, or a lot of the employees, are telling their friends that they get a discount with the retail operation, and if their friend wants something, they'll put it on their account and then get the discount.

1:34:31Once you start deviating downward, it is really contagious, and it is hard to rebuild. So you really need someone that behaves well on top and is not playing games for their own benefit. And we get a lot of managers that bend over backwards not to do that sort of thing. And then we get a few that bend over forwards. And if you get enough companies, you're going to get a lot of different forms of behavior. And Greg does something about it. And I've generally been lax in doing something about it, but he's done a way better job at that than I have. Okay.

1:35:24Station four.

1:35:29Hello, Mr. Buffett and Mr. Abel. My name is Kansas Lohmeyer. I am a junior at Elkron South High School and was born and raised in Omaha. My question is directed to Greg Abel. Berkshire Hathaway is the second largest utility provider in the United States. And in 2025, Reuters investigation found that coal fleet is the dirtiest in the nation. There is currently no concrete plans to retire coal and fully transition to renewable energy. I'm 17 years old. considering that, what do you have to say to young people like me who will live with the consequences of climate change caused by companies like Berkshire?

1:36:25Thank you for both your question and your comments, because it is important to understand and say Berkshire Hathaway Energy, but also how they operate and maybe using Iowa at least as a starting example, because I think that was one of the states cited in the report. One of the important things that I'd say early in us acquiring our energy companies, and I go back to when we acquired MidAmerican. We acquired it in 1999, Berkshire purchased MidAmerican in 2000. But one thing that became very clear to myself and our teams was that what we do within our utilities is really driven in two fronts. One, we absolutely have to meet the requirements and the law that's laid out federally.

1:37:24But most importantly, we had to recognize we implement public policy across these states. And that was an interesting conversation when I go back to Iowa. And again, the report cited that as a significant problem. It was early in the 2000s when, for the first time in Iowa, we were going to, as a utility, be short of power. so we didn't have the energy and we entered into a significant discussion with our governor at the time and really sat down and said, where do you want us to go as Mid-American and what resources do you want as a state? And at that time, we were predominantly a coal-based state And we recognize that, obviously, and fundamentally, personally viewed it as a risk, but we needed to have that conversation with our state and as to how we would manage that going forward.

1:38:33The interesting thing was that as we had that conversation in the early 2000s, again, with the leadership of our state, it was clearly decided we wanted to continue to be long power, so i.e. not be short for our customers. We discussed the type of resource, and I remember a very clear conversation around we wanted to stay balanced across a variety of energy sources. And at that time, it was really coal and natural gas. And at that time, we made the decision to build the largest wind project in the U.S., in Iowa. So we undertook an effort to build three resources, a coal plant, a gas plant, and what was the first wind project we owned in Mid-American.

1:39:31And again, it was very consistent with what the state wanted. But we also laid some important groundwork there because we started to define the importance of renewable energy, non-carbon resources. But it has to be consistent with what the state wanted. And we've gone on over the since that period of time to deploy 16 billion dollars into Iowa associated with renewable energy. Again, very consistent with what our state wanted us to do, i.e. the underlying policy. We don't get to make that decision and just spend$16 billion. It's done in conjunction with our governors, our legislatures, our regulators.

1:40:18And at the same time, we've had the opportunity to retire five of the ten coal units. Now, as the report highlighted, I understand people would like those other five coal units retired at this time. But to think we deployed$16 billion to retire five, and it's a very good outcome for our customers. We've been able to maintain our rates. They're some of the lowest in the country. So it's been done very efficiently. But the reality is we still need those five coal units to keep the system stable. We cannot have a Spain-Portugal situation.

1:41:12So we absolutely respect the input. We absolutely respect the process and will continue to work with each of our states to identify the path they would like to chart. And we work hard to ensure there's good, balanced outcomes because we recognize the challenges they're associated with other folks' desires. So I think you'll continue to see our utilities implement policy consistent with the needs of their stakeholders or customers. And at the same time, always respecting what's required by any of the federal standards. So thank you for your comments.

1:42:07Okay, 31. Let's see. Becky. This question comes from Billy DeRoss. He writes, Mr. Buffett, as a nurse from New York State, I've spent years struggling to secure good health insurance for myself, even while working on the front lines to save lives. In New York, accessing insurance means navigating a confusing state-run system that feels like it's designed to overwhelm. I'm curious, what ultimately led to the end of your healthcare venture with J.P. Morgan and Amazon? And given your commitment to value and long-term thinking, would you ever consider taking another look at health insurance reform in the U.S.?

1:42:46Yeah, we're spending close. it's hard to get the precise figure but close to 20 % of GDP on health and if you go back to 1960 there were a number of countries that were each spending around 5 % and then the lines began to diverge dramatically but the mathematical fact that there are only 100 percentage points in the equation didn't change. So we tried that experiment with J.P. Morgan and Amazon and we had three people that didn't think they knew the answer but thought that in my case I used the term that it was a tapeworm. in the economy. And we also found out that the tapeworm was alive in every part of the country.

1:44:02I mean, the hospitals liked it. The hospitals had prominent people working with people. People generally liked their doctor, but didn't like the system. I mean, all kinds of things, but in the end, J.P. Morgan and Amazon and Berkshire were not going to have any effect on changing that 20%. Now that 20%, there are only 100 percentage points available, and one of the countries spend 6 % or 7 % and perhaps use our system to their advantage, which is also very true. you know, that is an enormous percentage of an economy. And we simply, it was too entrenched to really do much in the way of change. And we spent some money on it, and we did some work, and we learned a good bit about our own systems.

1:45:13and we saw the degree to which the present system was ingrained in so many peoples, you know, whether the health care providers or everybody. And these aren't evil people. I mean, they're just going about something and trying to save lives. But we found that whether it was in Canada or France or Britain or wherever it might be, if you looked at our costs, they were just far higher. And to some extent, we were subsidizing the rest of the world. that people would come to the United States to do the really unusual or challenging aspects of health in terms of operations and that sort of thing. But we made no progress.

1:46:15And there comes a point where the government's, you know, I mean, it's so involved in the situation, and health is so important to everybody.

1:46:33And we couldn't—we—well, as I said to Jamie and Jeff, I said, well, the tapeworm won. And there are problems in society. When you get 20 % of your GDP going into a given industry, the degree of enthusiasm for changing that industry, the political power that the industry will have, and that doesn't mean they're evil. And, you know, everybody, they just end up there. And so I don't know the—we came to the conclusion we didn't know the answer, three of us. And we had the money to do it. And we didn't know how to change how 330 million people felt about their doctor, felt about their healthcare, what they felt entitled to.

1:47:48It won't change by itself. And government is the only one that can change it. And the only people in government that can change it are getting a majority of 435 people and 100 people. And my dad lost one election in his life in 1948, and he was a very strong Republican. And in 1950, he went back and beat the guy that beat him in 1948, and he got the doctors behind him.

1:48:25and he did very, you know, they're very well and they believe 100 % in what they're doing. They're helping people every day and during the pandemic, the sacrifices made by people save other people, just incredible. Can you imagine working in something where they're bringing in people that are, you know, going to die by the dozens and dozens and dozens and you try to somehow keep your own morale up and keep working with them. So you can't argue about the importance of it, but our costs are so different than any country in the world that it's a huge element. And we're a very rich country, so we can do things other countries can't do.

1:49:14And through our elected representatives and a whole variety of things over time, We've developed a system that is enormously resistant to any kind of major change, and it's important in every community that it's in. So, I wish we had an answer for you, but I was somewhat pessimistic going in, and I was a little more pessimistic when we came out, but I'm glad we did what we did, and we learned something about our own failings in the process. So Berkshire, in effect, got its money's worth, but we didn't kill the tapeworm. Okay. Trying to change things in government is an interesting proposition in the country, because you get self-selection in terms of the people that go into government and continue in it.

1:50:19And to some extent, they have to make decisions that they don't like as they go along, and they learn to accept them or to rationalize them or whatever it may be. But it's still the best—you know, this country's worked out better than any country in the world, so it—you can't argue it was a failure, but you can argue that there are certain problems that are terribly tough to figure out ways to solve. And of course, one of them gets back to the fiscal problem I mentioned before, because it's easy to spend money and it's hard to cut people's receipts. And if you get elected, you're going to say to yourself, Well, I can do more good if I stay in than if I really vote my conscience on this sort of thing.

1:51:18So, you give away a little bit here and a little bit there and a little bit there, and finally you don't recognize yourself in the mirror anymore.

1:51:29And that's—I grew up in a political family, but—and I watched—I watched how people behaved, and they behaved like human beings, which is what you have to expect. and I behave like human beings.

1:51:46We still manage to keep moving forward in a dramatic way. It's so much better to live here than it was 100 years ago or 200 years ago. It's dramatic. So you can't say the system's a failure, but you can say that it is very difficult to make major changes in it. Okay. Station five.

1:52:16Hi, Warren Gregg. My name is Ping Huang Chen. I'm from Taiwan. This is my seventh time here. First of all, I want to thank you, Warren, for your generosity of sharing your wisdom and lesson. You changed my life, and you're my role model and my hero. And my question is, Warren, you mentioned that Mr. Apple would be in charge of capital allocation in the future. And I'd like to know your perspective on, is it easier for a business operator to be an investor or for an investor to be a business operator? Thank you. That's a good question. I see we call him Mr. Apple even. Yeah. Thank you. Yeah, you'll take it.

1:53:06It's a lot tougher to be an operator. I mean, it is—it's easier to sit in a room like I do and play around with money. It's just an easier life. That doesn't mean it's a more admirable life. It doesn't—but it's actually been a pleasant life for me, so I don't complain at least. And I've been able to choose my friends, which has made an enormous difference in my life. I've never had to work for anybody that I really didn't admire. I mean, that's a luxury in life. I had five different people I worked for, and you know I just they were fantastic whether it was the manager of the local pennies which is located well it used to be located a couple miles from here and newspaper managers everything I've never been really disappointed by any teacher I've had so but I would have to admit that that I've been able to choose what I do with my day to an extraordinary degree compared to be a business operator.

1:54:38And in many cases, I wouldn't like to compete to be a top-notch business operator in terms of some of the behavior that might be forced upon me. I am the master. I mean, I found myself in this position where I can run the kind of company I want to run, and that's an extraordinary luxury. And with that, I should say that I'm getting a section that says, five-minute warning, exclamation point, five-minute warning, exclamation point. So I would now like to turn to a subject that I want to discuss with you a few minutes, and then when I'm through discussing this, I'll let Becky ask me a question or two, which you may want some elaborate questions that come to you as I make these comments.

1:55:43tomorrow we're having a board meeting of Berkshire and we have 11 directors two of the directors who are my children Howie and Susie know what I'm going to talk about there the rest of them this will come as news to but I think it's the time has arrived where Greg should become the chief executive officer of the company at year end, and I want to spring that on the directors effectively and give that as my recommendation. Let them have the time to think about what questions or what structures or anything they want, and then the meeting following that, which will come in a few months, will take action on whatever the view is of the 11 directors.

1:56:55I think they'll be unanimously in favor of it. And that would mean that at year end, Greg would be the chief executive or officer of Berkshire. And I would still hang around and conceivably be useful in a few cases. But the final word would be what Greg said, in operations, in capital deployment, whatever it might be. I could be helpful, I believe, in that in certain respects, if we ran into periods of great opportunity or anything. I think that Berkshire has a special reputation that when there's times of trouble for the government, that we are an asset and not a liability, which is a position that's very hard to have because usually the public and government and get very negative on business if there's a time like that.

1:58:15So I think I could—there might be a time when I'd be helpful, but Greg would have the tickets, and he would make, like I said, whether it's acquisitions, I think the board would be more welcome to giving him more authority on large acquisitions, probably if they knew I was around. but he would be the chief executive period and like I say the plan is to and we're not knowing about this until what he's hearing right now but that yeah the

1:59:05the board will

1:59:10be able to ask me questions tomorrow as to a little more of the specifics of what they should be thinking and all that but they they'll digest it and then at the next board meeting after that if we, as I would guess we would if they act then obviously we have something to announce to the world. It's a material change in procure, and we'll go forward with that operation, and I will play with a Ouija board or whatever that comes out in terms of doing things, but I will not. I have no intention, zero, of selling one share of Berkshire Hathaway. It'll get given away gradually. I can't believe that.

2:00:17Now,

2:00:23it just won't.

2:00:55Thank you.

2:01:17Thank you.

2:01:57Okay, drink a Coke and calm down.

2:02:08I would say that I would add this. The decision to keep every share is an economic decision because I think the prospects of Berkshire will be better under Greg's management than mine. And, but, you know, I will come in and there may come a time when we get a chance to invest a lot of money and and uh and at that time comes i think it may be helpful with the board the fact that they know i've got all my money in the in the company and that i think it's smart and i've seen what greg has done so uh that's the news hook for the day follow up and thanks for coming

2:03:10Thank you.

2:03:24There you have it, another Berkshire Hathaway annual meeting in the books, an extraordinary This meeting just ended with a bang, with Warren Buffett suggesting to the Berkshire board that Greg Abel become the CEO at year's end. This was Warren Buffett's 60th annual meeting as CEO. There was some anticipation at some point a transition would happen. Greg Abel was always the heir apparent and the designated successor, but it is formalized here. And Warren Buffett also saying that he would be around to help, especially if there were any big consequential deals that might come around. Well, of course, the entire hall, including Greg Abel, was surprised by this.

2:04:06Let's listen to how he delivered that news. Greg should become the chief executive officer of the company at your end. And I want to spring that on the directors effectively and give that my recommendation. Let them have the time to think about what questions or what structures or anything they want. And then the meeting following that, which will come in a few months, will take action on whatever the view is of the 11 directors. I think they'll be unanimously in favor of it. And that would mean that at year end, Craig would be the chief executive or officer of Berkshire. And this is what it looked and sounded like in the hall as the shareholders absorbed that blockbuster news.

2:05:13It just wasn't.

2:05:20Thank you.

2:05:44Thank you. That was the response. Of course, Mr. Buffett always being self-deprecating, was quick with a quip, and he said, of course, that long ovation, once he said he would be leaving as CEO, could be interpreted in two different ways, but he decided to take the more positive implications there. Again, Warren Buffett saying he proposes he will step aside as CEO. Greg Abel will take over that role. Able already has been handling a little more of the day to day of the capital allocation responsibilities, which, of course, Buffett there had. And he said, you know, as as as the continuing major owner of Berkshire Hathaway, perhaps the board would like him in there if there was some large transaction that came around.

2:06:29Buffett also saying he had no plans to sell a single share of Berkshire Hathaway. Of course, there's a longstanding plan for him to over time give away his holdings in the company. But he said he will not sell it. He also said that that was an economic decision to hold on to the stock because he says that the company he expects will perform even better under Mr. Abel. So that has been essentially a theme for multiple meetings, but especially this one where Warren Buffett in in many ways looking to turn the spotlight aside and have Abel take over there. So, again, after his 60th annual meeting.

2:07:07And look, a lot of shareholders have been, in some respects, gearing up for the possibility that this might come, that, in fact, Warren Buffett might decide exactly how this transition would be handled. And maybe it would come sooner than later. Of course, the company stockpiling all this cash and many other ways to get around this huge story. Becky Quick is back with me. I just caught up with both Warren Buffett and Greg Abel behind the stage. Just ask a couple of questions about this. Greg looked pretty shocked. This is the first he's heard about it. They have not had conversations with us about this.

2:07:45And so I asked them very quickly, you know, Warren said in the meeting that he'd be hanging around. I asked, in what capacity? What does that mean? Would he be chairman? The two of them talked for a minute standing there and said that they're going to discuss that with the board tomorrow. The eventual plan upon Mr. Buffett's death, this is what the two of them just said, is that Howard Buffett will become the non-executive chairman of the company. As of January 1st, I don't know if that means that Greg will be chairman and CEO or if Greg will be CEO. And I think those are details the two of them have to discuss.

2:08:24I guess ultimately the board and the board has to discuss this tomorrow. Again, I think they would give Warren Buffett a lot of leeway. They would defer to whatever he prefers probably. I think Greg would defer to whatever he said. I asked Warren if he's still going to be going into the office every day and he said, yeah, probably. That's his plan. I asked Greg if the office would be moving because Greg's based in Iowa, not here. And Greg said, no, the office will always be in Omaha. So the office will be here no matter what. Warren's still planning on coming to work every day. And as you heard him tell the crowd, he hopes that he can be useful and help out in times of need.

2:09:00I think this has been a transition that's been such a long time in the making. I don't know that anybody was expecting this now, including Greg, including the board. Yeah, I mean, Buffett himself said that only his children among the board members were aware that this was coming. Look, this does create some questions about what happens with capital allocation in particular, because last year at the meeting, Warren was asked what the role of Ted and Todd would be, how those things would come. And his announcement was that it would be Greg's decision. Ted and Todd who run part of the investment portfolio.

2:09:34Right, who run a big part of the investment portfolio right now. I mean, if you think about it, there are some complicating factors. Berkshire's a huge company. Being an involved operator is no small task. And as Warren said, Greg is a much more involved operator. He does - 60 operating companies or so. Walks the walk with these companies, checks in with all of them, knows what's coming along the way. You also have the capital allocation plans. Now, I'd always thought of capital allocation as being, for the most part, either acquisitions or going into stocks. Today, they talked about a different plan with capital allocation too.

2:10:09That would be to lay out massive amounts of money for big infrastructure builds too. So, you can kind of mix all of those in if there's a need for more electrical systems and grids as you see the country's needs changing, if there's big ways to do some of those things, too. But you have that, and then you have the insurance companies. And, you know, Ajit Jain is here running the insurance companies. Yeah. A lot of big jobs that take a lot of people to fill. For sure. And you wonder how or if any of those things will change, or if all of those people will continue to kind of do the jobs they're doing at this point, too.

2:10:41Look, I mean, the theme for so long, I would argue that Buffett tried to underscore, is that the principles that he's run this company with and the culture and just the general approach to taking care of capital is built to persist. It's not something that will come and go with him. That remains to be seen. It remains to be seen how investors will think about that. There was an answer before this news that Greg Abel gave about his thoughts on capital application. Yeah, that was the first question when we came back. It's a decent question. It's one that several shareholders wrote in with questions about it.

2:11:13Now, look, with the analyst that we were here, with the investor we were with - David Samra. David, who just pointed out, look, Greg does have some chops with capital allocation, too. He was so closely involved with the investment in the five Japanese trading companies. And he's been involved in a lot of different things along the way. But this is a big shift. We've been gradually led down this path. And Mr. Buffett doesn't sound like he's going anywhere in terms of still going to the office every day and still holding a huge portion of the voting shares and the equity and saying, look, he thinks the company is going to be worth more and he'll be there to back them up, not just with shareholders and outsiders, with the board too.

2:11:56For sure. No, it all pretty fascinating. I mean, he didn't pose it as a question like, Greg, do you want the job? I mean, it was just a foregone conclusion that we're just going to flip the switch as we've planned all along. Yeah, quite remarkable. I mean, that idea, too, though, he twice came back to the idea, like, look, if there were some kind of big, complicated transaction, if we're going to make a big investment, maybe the board would want me there. Since I've been there and I own a big chunk of the company, obviously flagging that, that that will be a measure of continuity. Look, a lot of times over the years, Warren Buffett has gotten calls that come from the government, that come from investors, that come from CEOs who are saying, here's an opportunity.

2:12:39Are you game? Now, I guess my question would be if I had the chance to ask, how many of those calls are already going to Greg? How many of those queries already go to Greg? And this seems like that's part of the baton handing too. I'm here if somebody knows me better and maybe wants to start here and maybe we go through. And many times it was, you know, we have a problem, we have a crisis, can you help? Not just do you want the opportunity? And that is a real issue in terms of whether, look, part of the story with Berkshire has been being the preferred buyer of high quality companies and assets when a family is ready to sell, when some other investors were ready to sell.

2:13:18Does that transfer to a new CEO or is it just the prestige of selling to Warren Buffett who decided he wanted to buy your business? It was the good housekeeping seal of approval to have that going into a particular And would shore up other markets, players, who might have been trying to take advantage of rumors or weakness in a stock at any point in time, too. Berkshire board member Ron Olson is here with us right now, joins us on set to talk about this. Ron, you were, I'm guessing, one of the many board members who didn't know about this. What do you think of this announcement? It surprised me, but it impresses me.

2:13:57Warren has lived a life full of surprises. Very few of his decisions have been anything other than sensational. I am very anxious to see Warren become the Charlie Munger for Greg Abel. He's had a lot of practice watching Charlie. I don't know if he can get nothing to add, but Greg is ready. I have no doubt about that. We've known it for a long time. People don't recognize that since 2018, he has been learning the businesses that we have outside of the insurance business, but he's also had plenty of time talking to Ajit. talking to the various heads of our insurance businesses. So he is, the businesses he will manage, and Warren will say it, better than him.

2:15:10And with regard to acquisitions, people worry about that. No worry. I mean, if you looked at Berkshire Hathaway Energy 10 years ago and looked at it today or take it back to its beginning, Greg has been instrumental in making acquisitions for a long time. He can do it all. His humility comes through. His honesty comes through. No one has to question what he said is very important for the young people to learn. Hard work. I could go on, but you've heard me before. Let me ask a question. Warren said that he's not selling a single share of Berkshire. And in large part, that's because he thinks it's going to be more valuable under Greg's leadership.

2:16:03Are you selling any of your shares? Not a way. Berkshire will be the last thing I sell to put bread on the table. And as I'm sure you appreciate the Olson family wealth to the extent it exists, It's nothing like the Buffett family, but it's Berkshire Hathaway. It's not just out of good feelings for the company or Warren. It's a sensible investment. Greg knows how to allocate capital. He knows how to run businesses. He's got unbelievable strategic ability. I've been around him now enough in situations where I'm deeply into it to watch him make decisive calls in tough situations and do it in a strategic, thoughtful way.

2:17:02Warren said that, you know, at the meeting, the board will have a chance to ask him questions and get the details straight. What questions would you first have for him? What questions would I have? The first question I have when I usually see him, how's that kid of yours doing on the ice? Greg was not kidding when he said he wanted to be known as a great hockey coach for the kids in the Des Moines neighborhood. He's been that. But to be serious about it, I want him to feel like there are others there that want him to succeed even more than he wants to succeed. And I would ask him about who else besides Warren do you think you need for a consigliere?

2:18:00who's going to be your the person who can tell you no which is not you know telling Warren no I've had to do it a few times Charlie did it many times and at the same time be able to lead with a positive creative spirit. And I think he can do that. But I want him to be supportive. And I think he will want to be supportive. And every great CEO that I know has had his or her consigliere. I mean, I would imagine that that person is Warren Buffett for the foreseeable future. That's it. I mean, as I said, I think the first thing I said was, you know, he's going to be the Charlie Munger for Greg. And that's great.

2:19:00Who else is Greg close to? Are there people that you know within the business that he relies on? Yes. I mean, he relies on a number of people. Certainly, Scott Thome that heads the day-to-day, running the business of Berkshire Hathaway Energy. But I think he will, and you've got to talk to Greg, I guess I would ask him another question. Who do you want to bring in to your inner circle? Should we be adding an attorney general, I mean a general counsel? Should we be adding any people to the corporate staff that Warren has, as you know, limited to a great extent? Warren relied on Charlie, a little bit on others like myself.

2:19:58But I got a feeling Gray's going to want to have his own general counsel who could become his consigliere. Or, you know, he's certainly going to need, at some point in time, the great Mark Hamburg is going to step aside. Mark Hamburg, I mean, people do not understand how vital he has been to the success of Richard Hathaway. He has been not only the CFO, he's operated as a general counsel. I've talked to him as if he was a general counsel. So he knows every business probably even better than Greg. I mean, it's unbelievable. So there are going to be people that I know Greg will need to have him, to have help from them.

2:20:52And he's going to have to add some people. Yeah, I mean, they've got seven months to think about this, to get through to the end of the year and go through it. How do you think the board will feel, felt about hearing, other board members felt about hearing this news? I mean, you were sitting with everyone there. What was kind of the general read? Well, I wasn't actually sitting there when that announcement was made. I had started my way across the business. To come talk to us. Right here. And I'm glad I did, or I might have gotten here about 3.30. But, you know, I don't have a feel for that. But I think people were surprised but were ready for the decision to be made.

2:21:43Yeah, the assumption on the board would have been, if Warren so chooses, then that's it. You're not going to say, hey, we consider... We, the board, had made the decision about Greg being his successor years ago. And you all will remember the one and only annual meeting held outside Omaha in our law office in L.A. And Charlie let it slip. It wasn't a decision made the day before Charlie let it slip. It had been made before that. And we've become increasingly comfortable with that judgment call. I think that was 2021. And you guys had made that decision years before? Yeah. So it and whatever causes to make that judgment then is even more so today.

2:22:34So we feel good. And I think that would be the general feeling of everybody on the board without question. Ron, the age limit on the board, which we would have started with had it not been for this news. You're ending your time on the board as well and going around. How did you all get to that decision? What did you think about it? Well, it was a decision that Warren hinted at it. I think there was a time when there were five members of the board that were 90 and over. They were iconic leaders of industry. Incredible people, every one of them. You didn't want to let go of a person like that. There are very few people like that in life.

2:23:19And I don't put myself in that category. I think that getting new blood periodically in any institution is useful, even in Berkshire. So to me, it is a sensible thing to have some kind of turnover at some point. And that doesn't mean everybody gets to stay until they're 80. There may be reasons to make changes before that. But having an endgame that you don't have to explain, I think, is useful. And frankly, I've been in a situation on another board that I was on where, well, you need an exception here, we'll change the bylaw and make a new exception. So let's try this for a while and see how it goes.

2:24:13I think it's a positive thing. yes, I'm the only one affected, but that actually made it a good time. Warren kind of put himself in the same camp. Well, the first one affected. In terms of how we should start to think about, we were talking a little bit about capital allocation under Greg. Of course, he got responsibility for that last year. Does it imply a further de-emphasis of the investing in public equities, the stock picking part of what Berkshire Hathaway has become? I don't think so. As both he and Warren have said, Warren in his letter, and I think Greg today, we'd prefer to buy 100 % of a great company at a fair price, as Charlie used to say.

2:25:01And that will be the objective when and if the opportunity presents itself. But in the meantime, an alternative will be to buy a portion of a company, and Greg has thoughts about that just as Warren does. And as you all have said, Warren's going to be available to talk about it. Warren reads, I mean, he's not going to change what he reads. He just reads all the time, and he's going to have ideas about companies, and he'll share them with Greg for sure. One of the things that Warren talked about in the afternoon, or I can't even remember which part of the session it was, but one of the things he talked about was this idea that it's okay to not swing very often, not to take many swings on this.

2:25:53There's been pressure that has built up pretty significantly to what is Berkshire doing with all this cash? It's now north of$340 billion, based on the numbers we got this morning. And that pressure has been something that Warren Buffett probably uniquely has been able to put off. And he explained it very well today, just this idea that we don't want to be doing stupid things. Greg added this is a financial asset to us to have this flexibility and the ability to jump in in times of need. will Greg be able to have the same patients not not internally externally there will be more calls probably than there would have been for Warren Buffett never a lot coming for Warren Buffett at this point that I think your interpretation is correct and it could be seen in the questions that you had gotten for this session yeah I mean people ask the same question about what in the hell are you going to do with that$300-plus billion?

2:26:58That is a pressure, but Warren has withstood it. I think Greg will withstand it to the extent that it's necessary. There are opportunities, and Warren pointed out, we've done pretty well with the Treasury bills during a good part of this period of time. Maybe not quite as well now as at other times, But I mean, it has been a great play. And at the same time, we're looking at various things all the time. They pointed out the Japanese investments. There are other opportunities related to those that we already have invested in, in portions of the business. So, I don't doubt that there will be some diminishing of it, of the$340 billion.

2:28:01But there's going to be a lot held waiting for those special opportunities that Warren has uniquely waited for in the past. And Greg's got that message. I think he's got the confidence to do it. Let's wait and see. What do Warren say in there that we've made our best deals when people are most pessimistic? So I guess people, you know, things are okay right now. Most fearful. Yeah. And that's when he gets most excited. I see it in his face when it happens. And he loved those moments, But he didn't let those motions and that emotion overtake his judgment. And that's the rationality that characterized him and Charlie.

2:28:57I know of no two people more rational than Charlie and Warren Buffett. And so I think Greg's right up there. How many years have you served on the board run? Well, I've been on 28 years. On the board. And it's been a great run. I'm leaving the board, but I'm not leaving Berkshire. I'm not leaving Warren. I'm not leaving Greg, whatever. I'm available. I'm still working every day. That's what I love to do. I'm not much of a golfer.

2:29:36People ask me, why are you still at it? I've got too many interesting people and interesting problems in my life. And I enjoy that. So, you know, my life will go on. Don't worry about me. I want to see you two once in a while. But it's been a great run. I look back, saying to myself, I've had the two greatest teachers I could possibly have. Charlie since 1967 when I first met him. and Warren 1969. And that's a pretty good run with two special people. And Warren was very grateful today and expressed it in front of the crowds to thank you for everything you've done for Berkshire. Nothing compared to what others have done, but I've had my little roles, and it's been, you know, sometimes just as a backboard, people talking to me and bouncing ideas but other times I kicked in a little more my legal background so it's been great.

2:30:52It's been phenomenal and it has been a pleasure and a joy to get to talk with you all these years and like you said you're still gonna be around and we can still do this. I wouldn't have known you but for the luck of being on the board and getting to know Warren and I can say that about so many people that are in my life and I hope will stay in my life. And anyway, it's been great. And it's been wonderful having you explain so many things to us about the inner workings of all of this. So we really, truly appreciate it, Ron, and we'll continue these conversations. I appreciate the opportunities that you've given me, and I enjoy it.

2:31:30I mean, I love talking with you all. Thanks. We'll find other ways to do that. We will. Even if it's off the camera. Off and on. For sure. Ron Olson. Ron, thank you very much. Bye-bye. We appreciate it. Thank you. All right. For those of you who are just joining us, Warren Buffett threw us all a huge curveball ending this year's annual meeting saying that the vice chairman, Greg Abel, should become the CEO at year end. That's his opinion of what he wants to happen. He's going to be presenting it to the board, the board of directors, which is meeting tomorrow. But this came as a big surprise both to Abel and almost everyone on Berkshire's board.

2:32:13Warren Buffett said that he had told both his daughter Susie and his son Howie about these plans before. Here's what he said. Greg should become the chief executive officer of the company at year end. And I want to spring that on the directors effectively and give that as my recommendation. Let them have the time to think about what questions or what structures or anything they want. And then the meeting following that, which will come in a few months, will take action on whatever the view is of the 11 directors. I think they'll be unanimously in favor of it. And that would mean that at year end, Craig would be the chief executive or officer of Berkshire.

2:33:20Well, that got quite the reaction from the crowd in the center. I've been here for a lot of standing ovations over the years. I've never seen one quite like this. Listen in and take a look at what was happening here.

2:33:43Thank you.

2:34:06as they were walking off. They were talking about this for the first time because he had never discussed it with Greg Abel before. And Warren said, again, as he did on stage, well, you can take that two ways from the crowd clapping this decision to hand things over like this. Again, Warren Buffett said that he'd be hanging around in the auditorium when I pressed him on that as I was walking out. What's going to happen? Hanging around in what capacity? He said, well, he'd still be coming into the office probably every day. Will you be chairman? I don't know. They're going to have that conversation with the board tomorrow.

2:34:37It's probably a conversation that Greg and Warren have been having since we walked off that stage. They both reiterated that the ultimate plan is for Howie Buffett, his son, to become the non-executive chairman. Warren said that will happen upon his death. He reiterated that again. But Buffett's plan is to continue to come into the office. He loves what he's doing, wants to be useful, wants to be helpful, wants to be a sounding board for Greg. and I think probably also give him cover, not only from the outside and from the board, but just give him the ability to do things the way that he wants them done.

2:35:12But he said it again, Greg will be the CEO. He will be making these decisions at this point. Right now, I want to bring in Congressman French Hill. He's a Republican from Arkansas who is also the chair of the House Financial Services Committee. His son, Payne Hill, is also with us today. And let's set this up a little bit. French, I didn't realize until you were on set with us maybe a month or two ago that you've been coming to the Berkshire meetings for how many years? Since the early 90s. Warren Buffett's been a hero of mine since I was in college. And the super investor article he wrote back in 1984 was what got me so interested in value investing and also following his work.

2:35:54And then when I was at the Treasury Department, I was there for the Salomon Brothers escapade And when I got out of government in 1993 and went back to the private sector and investment management, it was Warren Buffett who was, you know, my role model, a man I've never personally met, but I've admired all these years. And he always loved tap dancing to work. Well, now he's tap dancing out of work. What a day. What a happy day. And the board and Greg and Warren have done a magnificent job over the last decade preparing shareholders for today. And it's great to have this young investor. Thanks for having us.

2:36:31And Payne, you've come to this meeting before with your father. I don't think you come every year. When was the last time you were here? So last time we were here was 11 years ago. And it's safe to say that's kind of where I caught the investing bug, watching the markets. I've been chatting about Apple stock with my dad since I was 10 years old. So I think that's kind of where I started thinking about it, reading about Charlie Munger, Warren Buffett, that kind of thing. and I even did a sixth grade Powerpoint project on Warren Buffett. I need to dig it up. I think it's in some old hard drive, but yeah, so huge fan.

2:37:05And it's influenced your life, too. You work at a consulting firm in Washington at this point? Yes, I work at a company called FTI Consulting. It's been a great experience living in D.C. I'm really humbled and privileged to be able to watch him do what he does. So it's great. Let's talk a little bit about what Warren said that was kind of directed at Washington. There were a lot of kind of discussions around the edges on this. One would be his thoughts on the trade deficit and tariffs. Another would be his thoughts on doge and bloat and the government bureaucracy. He came back at us a lot of ways, even with the idea of the U.S.

2:37:42health care system, not being able to fix that same government would have to be the one who did that. What did you, as a sitting congressman, kind of take away from all of those thoughts? Well, I took away his thoughts. He introduced the topic by talking about his 2003 balanced trade piece he did on import certificates and how Charlie thought it was a Rube Goldberg scheme of an idea. But his idea was that balanced trade over the years is a good thing. But as the reserve currency and the biggest economy in the world, you know, we're not going to have balanced trade with every country. It's not possible.

2:38:14We're importing so much. But I thought his idea that balanced trade was a theme was important. But he argued that putting punitive tariffs on people probably is not the way to do it. That using the carrot rather than a full stick. And in my two years of doing it during the Bush 41 administration, it was the threat of the stick. 301 sanctions on semiconductors in the 1980s, on Japanese auto imports in the 1980s, that led us to open up the market and create what I think is a pretty substantial trade partnership between Japan and the United States here 30 years later. And if you talk to the Treasury Secretary, the Commerce Secretary, that is the ultimate goal.

2:38:56More fair trade, balance where it can be balanced, and then, in their view, try to bring some strategic national security manufacturing back to the U.S.? Not a bad goal, but not something that's going to happen overnight. And the pandemic taught us that we need to have more resilient supply chains. And people are working on it. You see reductions in dependence on one country or one source, there's no doubt. But it's going to take time. Is that what we're getting right now, though, the threat of the stick, or is it the actual stick? I know we're in this weird 90-day period where tariffs are on hold for the most part.

2:39:35I think it's created a lot of market uncertainty. And my hope is that the applying of the stick will lead to negotiations that will ultimately be more of a carrot and recognize that we have to have some distinctions here between a big complex situation like China versus a country that we have excellent allied terms with, Korea or Japan or the European Union, and have a little bit more discretion there. But I'm hopeful that we can do it and do it soon because I think the market and the uncertainty has not been good for the economy. It's also, of course, interesting the way Warren frames things.

2:40:10And he likes to do this, right, by just sort of panning out and saying, you know, let's appreciate what the U.S. has built. Right. And the fact that, as he said, we've won. In other words, we're kind of claiming to be taken advantage of by countries whose economies we wouldn't trade for ours. Right. Exactly. And he talked about the lottery, the global lottery, where Payne Hill's the luckiest kid in America because he got born here. I would always say to him. I want to win the lottery one day, Dad. He's like, you already have born in the United States. I know Mr. Buffett covered on that a lot. 100%.

2:40:40We were looking at each other. But it is still something where you want to have it as balanced as you can make it. And if you do have dumping, my argument's always been, if you believe that people are dumping product into the North American trade arena, Mexico, Canada, the U.S., Mexico and Canada as our partners can stop that. We can say we don't want dumped steel entering the Mexican borders that goes into a U.S. product. Right. So my advice is we should have Trade Promotion Authority. Joe Biden left a mess on trade. He allowed Trade Promotion Authority to expire in the Congress in 2021. And we didn't initiate any new trade agreements under Joe Biden.

2:41:22And we didn't enforce the ones that even President Trump. I mean, that's a lot of Chinese goods that are coming through Mexico and getting dumped on. So I get the point. But I would use the USMCA's five year review as a chance to strengthen that. And I think that's the way to have Canada and Mexico on our side to curtail dump products. But you think go after that first, use some of our allies, and then everybody gang up to go after China? Well, I do believe that you don't, money is fungible, trade is fungible, partners are fungible, and that you win by building allies to curtail bad behavior, whether it's in military or economic diplomacy, either one.

2:42:02French, as a Republican in Congress, obviously somebody who's hoping that a year from now we're not looking at these same tariff situations, that we have better trade agreements as a result. What has been your message back to Congress at this point, or your message back to the administration through the Commerce Secretary, through the Treasury Secretary, or any other conversations you've had? Well, prioritize. And it's a different strategy. Using trade to open up markets that we've had a 30-year effort to try to open up, like India takes a different set of skills, steps, and abilities than just trying to bring down trade barriers with a longstanding ally with whom we have under trade arrangement.

2:42:40So I think prioritize and get some early wins and then focus on explaining to our constituents that it's going to be a long transition to get supply chains and critical minerals and critical technologies in the U.S. It's just not an overnight strategy, but it's one I think that we can do, but we should do it with our partners. And he didn't speak really as much as we might have thought about the broader fiscal situation, but he sometimes does as a, you know, biggest owner of Treasury bills and one of the biggest corporate taxpayers. He kind of has a proprietary spot to say what he thinks the structural direction of the federal budget should be.

2:43:17He made two good points today beyond trade, I thought, was our 7 % of GDP deficits are unsustainable. Congress has to do something about that. It's a hard fought battle in Congress to try to reduce the growth rate that exceeds the GDP growth rate on spending. We can't do that. This has happened since the pandemic and we need to shrink that. That's the goal. I think that Doge plays a role. Doge has gotten off to a start where if you're looking for IT productivity solutions, This will be the most informed FY26 appropriation process ever because of some of the Doge work in these departments. So I thought he spoke favorably for Doge as a concept because he says bureaucracy can choke a private company and it can choke a federal bureaucracy.

2:44:09And a great example was Geico today. Shrinking employment at GEICO from$50 ,000 to$30 ,000 and putting more money in technology and producing the results that Ajit talked about. Fred Schell is the chairman of the House Financial Services Committee. His son, Payne Hill, with him here too. And both of them, long-time Berkshire shareholders and long-time visitors to this annual meeting. It's really great to see both of you today. Great to be with you. Thanks for having us. And what a great lesson Warren's done for 60 years on financial literacy for young investors. Like, Warren, we heard from him today, and that did my heart good.

2:44:47You saw a lot of young people that are following in your footsteps. Yeah, I know. It really is great. We'll see what happens. And looking to hold on to our shares. Your old presentation didn't say what happens after Buffett retires? Oh, yeah. I can't remember past the first slide. It was so long ago. But I remember it well. Thanks for having us. Thank you, gentlemen. We appreciate it. Once again, a wild ending to Warren Buffett's 60th annual meeting announcing that Greg Abel, he thinks, should be Berkshire's CEO at the end of this year. It's something he's going to be recommending to the board of directors tomorrow when they meet.

2:45:25Obviously, this is certainly something that will reverberate through the markets this week. With that, we want to thank you for joining us today, Mike Santoli and I, And we'd like to leave you with some of what Warren told shareholders here in Omaha. Thanks again for joining us. The luckiest day in my life is the day I was born. I was born in the United States. I was just lucky. And I was lucky to be born bail. I was lucky to be Warren White. I was lucky to be all kinds of things. But 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.

2:46:05We've gone through world wars. We've gone through the development of an 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 if we've solved every problem that's come along. And if I were being born today, you know, I would just keep negotiating in the womb until they said, you can be in the United States. 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. Well that's just, that's part of the stock market.

2:46:53And that's what makes it a good place 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 mean, I know people have emotions. I don't get, I just, I don't get fearful by things that other people get, are afraid of in the financial, in a financial way. It's not that I don't have emotions, but I don't have emotions about the prices of stocks. I mean, I actually, those decisions get all the way to my brain, whereas emotions can get bogged down in some other place.

2:47:40I went around the groups of people who were exhibiting yesterday for an hour and a half. And these are people who are thanking me, you know, and totally enthused about coming and doing a lot of work for which they don't get paid or 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 really want to work as something you enjoy. It's interesting to me that in the investment business,

2:48:17so many people get out of it after they've made a pile of money.

2:48:24You really want something that you'll stick around for. While I'm handing this over to Greg, you know, 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 to be sure you can play the next day. Greg should become the chief executive officer of the company at your end. And I want to spring that on the directors effectively and give that as my recommendation. Let them have the time to think about what questions or what structures or anything they want. And then there's a meeting following that, which will come in a few months, will take action on whatever the view is of the 11 directors.

2:49:22I think they'll be unanimously in favor of it. And that would mean that at year end, Craig would be the chief executive officer of Berkshire.

2:49:48Thanks for listening to our coverage of the Berkshire Hathaway annual shareholder meeting. If you want more information about Warren Buffett, you can sign up for CNBC's Buffett Watch newsletter to get the latest headlines and video clips. Just go to BuffettNewsletter.com. Check out our show notes for links to more resources and a listening guide to this podcast. If you liked what you heard today, let us know. I'm on X at Becky Quick, or you can write a brief review on Apple Podcasts. Just follow SquawkPod to get the best of our morning show, Squawk Box, every day. We're available wherever you listen to podcasts.

2:50:21I'm Becky Quick. Thanks so much for being with us.