#309: 2 Legacy Stocks for Long-term Investing

0:00So the stock that we mentioned a fair few times last year, first one was in July, I believe. We did an interview with Clem Chambers and then myself and yourself did a deeper dive in October. So since the first episode, the stock is up about 270 % of the time of recording. And then since October 1, it's up about 130%.

0:26welcome to stock club the podcast where we find and discuss stocks that anyone can buy many of which we believe will go on to grow your wealth how are you mike i'm all right now yeah coming off a hectic weekend i spent it with seven french lads and my brain is melted from trying to translate all weekend so yeah a bit of recovery needed after that it's amazing when you're learning and speaking a different language how exhausting it is it's like feels like you've spent a day working out on a field 100 yeah and then once it's in a group i you have no chance i'm just completely like when there's more than one person talking at once it's like a tennis match my head is flying around the place i can't i can't keep up at all but are you finding your french game is on the up though oh it has to be yeah for sure i mean it's definitely getting better but it's so long to go well i actually coincidentally so in ireland it's what we call a bank holiday weekend this coming uh first weekend of may and uh in other words the national holiday on monday historically known as a bank holiday and i have to go to paris for a meeting and you're going to be in paris as well mike but we've both resigned to the fact that the city is so vast we're going to leave each other to it i think so yeah maybe now if you want to join um but we'll see we'll see you sound there for business i'm there for pleasure so we mightn't make the two mix so um this week we decided we had we'd have a chat about two companies one each both of which are as old as the stock market itself or at least they're 30 years old and mine is certainly older than that and yours is probably 40 years old i'll let you talk about it your your company might actually own stocks that are older than the stock market itself for sure oh yeah yeah well certainly has a outgoing well a former uh ceo and chair uh who's 93 i'm talking about warren buffett and obviously i'm going to be talking about berkshire whereas you're going a little more high tech and you're going to talk about intel which in my mind when i hear the word intel i think the inventor of the mass market processing chip i think of when in the 90s computers and laptops were taking off there was a badge a tiny little hologram sticker in the bottom right hand corner of the computer or laptop which had the words intel inside and even though 99.9 % of people hadn't a clue what a processor was or what it did.

3:04It was a badge of reassurance and it was the highest quality thing inside this high-tech machine that was now part of our lives. And lo and behold, a lot of time has passed between then and now and the story has gone through a lot of iterations. So you said you'd have a little chat about it because there's another interesting chapter chapter so what's going on over at intel mike well yeah it stemmed from just unbelievable results from q1 there posted last week and it kind of inspired a bit of a victory lap for the part a bit of a victory lap for the podcast um so the stock that we mentioned a fair few times last year first one was in july i believe we did an interview with clem chambers and then myself and yourself did a deeper dive in October.

3:53So since the first episode, the stock is up about 270 % of the time of recording. And then since October 1, it's up about 130%. And look, you set it up there. There is a lot of interesting things going on in Intel and it's been a stock that has been through 10 different iterations throughout the last 10, 20, 30 years. I mean, it's the largest chip fab in the US. And when you consider that Taiwan Semiconductor is essentially, do you know the last teetering Jenga piece you see at the bottom of the global economy in terms of its importance to the global supply chain and semiconductors in general?

4:30It's clear why Intel is so important and the future of Intel is so important. Just geopolitically, who knows what could happen in Taiwan over the next decade? There really is question marks there. But that has been the case for a long time. And yet the stock has struggled, really struggled since pre-COVID times over the last five years. And so basically what happened with Intel was Taiwan Semiconductor came and ate its lunch. You know, the stock is tanking. And then last year, everything really seemed to change. So in August, the big story around Intel is the government, the U.S. government taking a stake in the company.

5:13So this actually just happened a month after we talked about it on the podcast. We talked about it in July, and then the government came in in August. And it was quite a messy situation. So the Chips Act was brought in by the Biden administration, and it was essentially building a huge package for Intel because it is the largest U.S. chip manufacturer. Realize how important semiconductor manufacturing is and how important it will be to at least domesticate some of that supply chain. So it's still bigger than NVIDIA is what you're saying. It's definitely not bigger than NVIDIA. But NVIDIA isn't a chip manufacturer.

5:52It's a chip designer. Oh, yeah. Oh, that. I knew that. So Intel is the kind of building blocks and then NVIDIA will go, well, NVIDIA buys it from Tyrone Semiconductor and it'll go and do its thing on those building blocks. so intel is was due from the chips act about eight billion dollars in grants about 11 billion in low interest loans and then there's tax credits attached to its expansion across a number of states as well trump came in he said wait a minute i want a little bit quid pro quo here if we're going to hand over nine billion quid and so essentially demanded intel issue the u.s government shares it ended up issuing them 433 million shares at roughly 20 bucks a pop um and this is where it gets interesting because you know i think at the time recording now they're trading at 85 dollars which is amazing like well wall street bets would be jealous of that kind of turnaround um so you're looking at i think it was 8.9 billion stake in intel the u.s government took up which is about roughly 10 % of the business.

6:56That's sitting at about 36, 37 billion quid as we talk right now. So who knows? Maybe they listened to the podcast in July. That's what inspired everything. I'd put it down to that. Yeah, I think so too. And I mean, like, retrospectively, this was kind of staring us in the face of it. You know, you got a government-backed chipmaker in the middle of the biggest CapEx spending streak, maybe ever. Maybe back, you have to go back to the gold mining times or the railroad building to look at how much money is being pumped into AI infrastructure right now. You take into account all the geopolitical implications, the importance of being able to domesticate at least some of that global supply chain, the AI race, the resources at the hands of the companies competing in the AI race.

7:43So you look at the Magnificent Seven and just how much money they have to spend there. It really all fell into place for Intel and its investors very quickly. and it also like this is a side note but it employs about 5 000 people across ireland so i hope there are some listeners in leaf slick or leap slick or wherever you are right now sitting on plenty of shares of the big grin on their face listening to this podcast because this qr q1 earnings report it really was a great example of a turnaround coming to fruition like a validation of that turnaround so i want to get into it because it really just the results established Intel as not established because it was already there as a major AI player, but kind of reinforced its position as a major AI player going forward.

8:29Because maybe investors were looking for some proof of like, okay, you've talked enough about your importance in the AI race. Now let's see it. And this quarter, we've really been seeing it. So revenue for the quarter was 13.6 billion. analysts were expecting 12.4 so a huge jump there gross margins expanded by six and a half percent and then for q2 it's it's forecasting between 13.8 and 14.8 billion dollars in revenue which is miles ahead of what wall street had predicted for it so the money is coming from where you'd expect the usual suspects it signed major deals with google and tesla it's going to be heavily involved in tesla's tariff ad project which is a big deal because tesla is you know actively choosing to manufacturer in the US rather than abroad with that.

9:14And that's the real trademark for Intel right now is, yes, it is US production. You are taking out your political risks with Taiwan. You are playing friendly, I suppose, with the US government. And what stems down from that is going to be positive for you. It's going to be positive for, say, tax implications for whatever else, grants. That's all going to come into effect with Intel on your side because they are the US manufacturer. But out of all of it, I really wanted to highlight the server CPU side of the business because that's really firing right now. So data center and AI revenue jumped 22 % year over year to 5.1 billion.

9:56But apparently demand was so high that they left about a billion quid on the table in potential sales just because they couldn't make them fast enough. And a lot of this is coming from its new Xeon 6 line of CPUs, which are proven to be very critical in the agentic AI build-out. So agentic AI needs more complex processing units than the standard GPUs, which are used in, say, your standard generative AI. And by that, I mean, CPUs are designed for fast sequential logics compared to, say, a GPU, which could do 10 ,000 math problems at once. a CPU is better at deciding which math problem to do and when, if that makes sense.

10:39So the example used was an agent deciding to check your calendar, then search a database, then send an email. So it's not about power so much as that sequential logic, which is really important. And the thing with these Xeon 6 chips are really shining in terms of comparison to competitors. So it's reported that they're two times faster reasoning in agentic workflows compared to the next best chip. So yeah, I'm really interested in Intel right now as that major US player. There is no huge US fab that can compete with this. And it's just, it's a really interesting point because there's so much money being thrown at this problem.

11:32And it's so important for national security. It's so important for US businesses as a whole, for the US government to wrest away control from China, to domesticate the supply chains. And Intel is just a core aspect of that. So I really do think it's an important business right now. and the Q1 results validated that turnaround that's been talking about for years and years because it really needed it too. I think the stock was down from February 2020 to February 2025. It was down about 65, 70%. And since then, it's up about fourfold. It's up near its dot-com bubble levels, I believe. So yeah, it's a very interesting business right now.

12:11A very interesting stock. And I hope people have been following the podcast. They jumped on when they did. I hope there's a lot of happy Irish listeners right now. And so, yeah, that's my little piece on Intel for the day. It was Goliath and NVIDIA was David. And there was a time when they were so dominant, they were the only chipset manufacturer at the table, really. AMD were there. And as you said, Taiwan Semiconductor were also in the background, but they were the giant. and then the giant and they did they did both this was the thing and this almost tripped them up as well so they did they did manufacturing and design yes and what taiwan semiconductor really did well was that they focused only on design only on manufacturing and then designers like nvidia like amd would come in they would buy them after and there and then instead of being able to buy chips off in buy chips off intel you'd have to go and buy their own design chips as well and it kind of made it messy for them so tyrant semiconductor really have taken a complete lead in that fab project per se and this is intel clawing background i was offered a job in intel when i graduated mike because i used to in college make etch as it's known as preamps preamplifiers tiny little matchbox size pot knots that you could plug your electric guitar into before it went into the signal as soon as the signal came out of the innards of your electric guitar and basically cranked up the sound and that was enough to get a job in intel i mean this thing was by circuit standards pretty low tech and i I didn't sell too many of them, but it was enough to get a job offer.

14:09And I went out to Leak Slip. And in my interview, I think I was asked to draw a zine or diode or something like that. It was dead easy. And the guy who interviewed me, I don't know if I can say, oh, what the heck? I can't say it. It's 30 years later. He had had a big night out the night before. I mean, honestly, it was a miracle he was there at all. And anyway, I got the job offer, but I also got a tour of the place. and I wasn't overly keen. It just didn't kind of, this has nothing to do with share price or the investability folks, which we're talking about 1996 here. So like that's, we're talking about three decades ago.

14:47So all these stories are forgotten and as boring as you can imagine. The story just gets better folks. But anyway, yeah, it's great to see they survived without me. Hats off to you Intel, total respect. So are you a buyer, seller or holder at today's price knowing what you know mike i think i'm a regretter yeah yeah regretter of talking and not acting that's the worst it's the worst this has been on the table for a while and i was looking at us in the face and you kind of just oh yeah that sounds like a good idea and i won't uh i won't do anything about it until i look back on it a year later yeah but that's a hazard of our job you and i look i mean we look discuss write think about stocks all week and then a few months will pass and inevitably you will have looked at something when it was absolutely in the gutter like all birds i spoke about it i tweeted about it going i just can't believe that this business with a fairly good retail uh footprint around europe is trading at like 40 million market cap now i never thought it i never envisaged their ai pivot but i can still look back and go ah it was i was interested in that of 40 bucks and that's like it's and you're looking back at the five-year chart and you pinpoint the exact low point to be like oh yeah i was looking at that stock right then imagine now and and you were but you were also looking at it at its high exactly oh well you know that's the way the cookie crumbles we're not going to cut ourselves up that's the that's the nature of the pursuit so thank you for that mike that's interesting you are a regretter of intel i still am not a buyer because you know one of the things that people have rightfully criticized me of over the years as well why didn't you buy nvidia and you know i would have had i known but what i did know is that it is such a complex industry so beyond my my ability to analyze to a competent level i was always a little bit kind of scared to invest and even now you're telling about the xeon chip is an indispensable part of the overall tech infrastructure for a gentic ai if i heard you correctly you kind of like i'm like okay that word jumble doesn't really mean a whole lot to me do you know no um i had the same i was talking about um i was talking about i had half a page written up for micron this time last year for stock of the month and i was just getting further and further into it And do you know, the more you read, the more you realize you don't know.

17:24Oh yeah. CRISPR technology. I sat about this year to read everything I could on CRISPR. I had to stop. I was worrying myself. Yeah. So that was it. Left micro on the table. Just five, 600 % later. So yeah. Yeah. You always remember the ones you didn't take. For sure. For sure. And you also remember the ones you sold. And that's a nice segue for me because I sold shares in Berkshire Hathaway. I must say probably, probably 24 years ago, because I was worried that Warren was nearing the end. He was too old. And he was pretty old. You know, he was pretty old. He was about 70. And I thought, nah, people are retired, 60 of this guys.

18:07So here we are, 2026, and this Saturday, May 2nd, around 40 ,000 Berkshire shareholders are going to crush into the CHI Health Centre in Omaha, Nebraska, for what is commonly known as the Woodstock for capitalists. And I know loads and loads of people who've gone over for that AGM. And as a non-shareholder, alas, I have not. And I should have back in the day. There's lots of should have. And as I told in the podcast before my wife went, as a guest of Brian Chesky, the founder of Airbnb, who at the time was her boss or her boss's boss. and that story, for those who didn't hear it, I'll give you the 60-second version.

18:56She flew from Ireland to go to the Berkshire AGM, which I thought was totally unfair. I'm like, you? She's like, yeah. I'm like, you? She's like, yeah, that's not fair. But she went and she arrived at the Woodstock for capitalists and got a front row seat where she promptly fell asleep because it was a pretty grueling journey and you have to kind of join a line at 4 a.m outside to get the good seats even when your good seats are assured you kind of have to be there at a stupid early time so she there's a picture floating around on the family whatsapp group of her fast asleep in the front row of the AGM and what woke her was Charlie Munger crunching down on the peanut brittle because it's a loud thing to eat especially in front of a microphone so that's my only personal uh berkshire story anyway this weekend's agm is going to look the same as it always has done uh ostensibly like you're going to see see's candy booths and the geico geico stand and then brooks running shoes and dairy queen which is owned by berkshire but it will feel different uh in a way that no berkshire meeting has felt in living memory because for the first time since warren buffett bought a struggling new england textile mill way back in 1965 the man taking questions on stage will not be warren buffett he'll be in the building he'll be probably sitting in the audience and maybe in the wings but the ceo answering the shareholders is a guy the new ceo whose name is greg abel a 63 year old canadian accountant who most of the world has never heard of or at least hadn't heard of five years ago and that transition that buffett himself called the most telegraphed succession in corporate history finally arrived on january 1st of this year and this is his kind of unveiling like you can just hop on youtube and see lots of interviews with him on cnbc which i did before this podcast um so the announcement of the new ceo greg came and it was vintage Warren Buffett at the close of 2025's annual meeting after roughly five hours of questions and his customary sermons on America and on integrity and on the dangers of too much debt the 94 year old legend that is Warren casually told the room he intended to recommend to the board that greg abel succeeded him as ceo at the year end and he hadn't told most of the directors in advance uh he hadn't even told greg abel beforehand this is when he found out yes can you imagine that for a bit of an update when you get home from work yeah i i agree but also as buffett said himself we kind of all knew it was coming and we all knew it was him so it was only a matter of when yeah that's right so but he it was typical of warren he kept the cards close to his chest he hadn't told abel beforehand who by the way was sitting next to him on stage i you're right can't be that shocking and i'm sure well at least that's how the story goes he wasn't told it'd be a little bit surprising if a word wasn't whispered in his ear so the room first murmured and then stood and applauded for several minutes i mean it's total stock market geekery but and buffett let it happen he allowed the applause to to do their thing and move on and uh and i read at the time that it was the most consequential five seconds of capital market news in a generation uh and he delivered it like a man announcing the cafeteria switching dessert vendors so like it was complete total warren oh by the way this guy is the new ceo i'm going to recommend this guy evan stands in applause and then he just kind of keeps going on um so the board confirmed able unanimously on december 8th and buffett officially stepped down as the ceo on the last day of last year and he of course remains a director and the largest shareholder and holds a non-executive role around the company but his son whose name is harvard buffett um he's a kind of farmer he's a philanthropist he he doesn't look metaphorically like his dad but he is taking the role of non-exec chairman a position that exists primarily protect berkshire's culture from future activists or successor who might be tempted to dismantle it Now, usually that non-exec chairman role would be to protect the financial interest.

23:51But this is quite interesting that it's more about cultural protection. And in November, then, Buffett published his last full annual letter calling himself lucky to be alive, as you do when you're that vintage. I think anyone who gets that. Not only that vintage, but that diet as well. That's right. 94, 95 years of age and eating McDonald's every day. it totally reminds me of my late dad who turned to me about two years ago and said hey how old am i i said dad you're 86 and he went oh no and it was that realization that you're at an age where every moment is a bonus so like bringing it to warren buffett it was no surprise that he said i'm lucky to be alive because he is um and he thanked shareholders in his letter and it was a nice read they're always a lovely read his letters they're an outpouring of intelligence insight balance maturity like you could do well to buy and read nothing other than the collected letters of the of warren buffett from over the years if the only thing you ever read about stock market it's like 10 mbas crushed into just a small volume actually not small it's a reasonable volume there's a good bit of there's a good bit of reading in that there's a good bit of reading No, you're right.

25:10Sorry, it's reductive to call it a small volume, but it's a small volume if you stacked up all the MBA books that you'd have to read to get an MBA. So yeah, it's smaller volume. Yeah, and you'd cut out an awful lot of faff too. Yeah, for sure. And he wrote a line that I figure might be engraved and Oma has some time when eventually he goes to the great trading floor in the sky. And the line was, I will no longer be writing Berkshire's annual report talking endlessly at the annual meeting. And he promised to keep his writing, to keep writing his Thanksgiving notes, which are nice. They're more quaint and folksy and shorter.

25:49And otherwise, to use his own turn of phrase, he's going quiet. So I thought it might be interesting to talk a little bit about Greg Abel. Because you and I, before this podcast spoke, when we talk about the new Berkshire boss who has been known about since the turn of the year and indeed since last year or we talk about the new apple boss because they're both equally weighty interesting and influential characters and we settled on the berkshire the new boss greg because of the agm this weekend and i'm sure in another podcast we'll we'll need to come back and see what's this new ceo of apple all about but it felt right to talk about this guy so i'm going to give it a few minutes if if you think it's of interest mike very much so and i think it's a good comparison too because it's it's tough to put buffett and tim cook in the same bracket just because buffett's been doing it for six times as long as tim cook but in terms of value creation and their their totemic um positioning in you know what we know as modern wall street they're two absolute giants um they've created trillions in market cap and they've they've really transformed you know the u.s stock market to what it is today in terms of just pure value creation for the shareholders of sitem so definitely big shoes to fill i think culturally the impact warren buffett has left behind through his letters through these uh annual meetings through his kind of almost like you know he's a bit like a modern day finance version of aesop's fables like he'll always try to tell a story and he's become this amazing storyteller which is almost harder to fill than just say tim cook who in his own right had even bigger shoes to fill in steve jobs but he did it in a different way he did it from a kind of positioning and financial prowess in transforming apple to what it is today you know true true but able able is more like the tim cook because steve jobs founded apple very much yeah and they're both building on the foundation set before yes entirely and i think the beat of abel's drum is going to be very different to warren's and i'll explain why but let me rewind a bit he was born in on the first of june 1962 in edmonton alberta up in canada his dad worked for firefighting equipment manufacturer and his mom was a part-time legal secretary so he he grew up in a working class neighborhood he played hockey uh as i'm sure a lot of kids do up there on backyard rinks and his uncle sid abel was in the hall of fame uh for nhl uh for the detroit red wings famous production line which i can safely say 99.99 of our audience that absolutely none of our audience knows actually what that means but he was obviously a very good uh hockey player and You know, good luck to you if you know that Hall of Fame.

28:52But nonetheless, he came from a degree of sporting pedigree. And there's almost something suspiciously autobiographical movie-like about all of this. He grew up in a small town in Alberta, son of a fireman's equipment salesman, hockey-playing nephew of a hockey legend. So it kind of looks like the start and the opener of a movie. He went to the University of Alberta. he graduated in accounting in 84 he qualified as a chartered accountant and started his career in price waterhouse coopers now known as pwc in sam fram and in 1992 he joined cal energy which was a small geothermal company and in 1999 the future giant i guess was brought into the house because Cal Energy merged with the Iowa-based Mid-American Energy and Berkshire Hathaway acquired a controlling interest in the combined business.

29:54And that's when Abel entered Warren Buffett's orbit. So we're talking about 1999. So they're known to each other for quite a while, 26 years. He became the CEO of what is now Berkshire Hathaway Energy in 2008. and he ran it through 15 years of acquisitions and renewables built out and in 2018 was promoted to vice chairman of all non-insurance operations which like most people know that Berkshire is in large part a house of insurance brands Geico being the cornerstone but there's a giant portfolio of non-insurance stuff that includes uh bnsf railroad sees candy as discussed uh dairy queen brooks pilot travel centers uh the marmon industrial group and loads and loads dozens and dozens more of brands but by 2021 charlie munger supposedly let it slip that uh greg will keep the culture but i don't really buy that because charlie munger rarely let anything slip the guy was a human computer and he was he measured his words he didn't speak all that often yeah there's a bit of there's a bit of carry man in him oh so the succession uh was a wall street open secret so you're dead right when eventually warren said oh and he's the new guy and everyone pretended to be surprised probably including greg abel but privately um he is very different to his predecessor's caricature he still lives in fairness in des moines we would call it des moines but in america i believe it's called des moines which is in iowa iowa thank you not home i don't know if it's i also don't know if it's pronounced des moines well i think in america they call it des moines i was watching it des moines is how i pronounce it des moines i think is how it's pronounced but maybe sorry maybe i'm wrong okay well right and if you're from des moines slash des moines tell us how you pronounce your i was watching a a tv show and they were calling it des moines and i was quite surprised there was only recently um anyway it's also by the way the birthplace place of one of my favorite authors bill bryson and he wrote a great book about growing up in des moines uh called i think it was the life of the thunderbolt kid oh it's such a wonderful book it talks about the simple pleasures of growing up in suburban life of a city that you and i might would unlikely ever visit anyway so uh greg abel has three adult children from his first marriage and a younger son was with his current wife andrea he coaches youth hockey he very inconspicuously gives through a family foundation and is very famously protective of his time the guy is swiss watch like in his time now with that said inside berkshire he's fully known as a workaholic he spends uh he reads uh the operating reports of 50 subsidiaries he walks the plants uh he's very comfortable challenging managers in a way that buffett rarely was like warren buffett famously left the yeah he acquired businesses are controlling stakes in the business and famously said, let the managers do their work.

33:14I'm not here to look over their shoulder. And that was a critique of Buffett as well. It was. It was a lack of, not so much a lack of synergies, but a lack of a hands-on approach to these newly acquired businesses, which people are looking forward to Abel's influence there in terms of improving economics of these acquired businesses for sure. Yeah, you're dead right. Like Buffett trusted the managers, left them alone. unable trust them but asks probing questions that you have to expect opens up doors that otherwise were not seen yeah well it's very much the difference between a manager and an investor yeah that's true like the activist investor yes exactly yes indeed and you are my expert on that um so that is absolutely true so he's likely to run the operation differently and buffett was fundamentally an investor who happened to be a ceo and he he sat in his office and he read 5ks he allocated capital and very famously didn't bother visiting subsidiaries he didn't hold management meetings he he actually didn't even use email um he had someone come in and kind of hand him printouts of the most important things he needed to read and you may bet that that person knew well what he didn't want to read um but abel is fundamentally an operator who happens to be a ceo and he he came up through utilities and um these are really the most operationally complex businesses that berkshire owns uh where like missing a maintenance window or messing up some regulatory rate case can cost billions of dollars so like he he was trained and grew up in a world where deadlines and targets were something you obsessed upon.

35:01So it's very interesting. But the expectation among long-time Berkshire watchers is that Abel will keep the decentralized culture. I would suspect to try and bring it into the center would break what's wonderful about Berkshire. I agree. I think it's too vast a portfolio to really be physically capable of being everywhere at once. that that that's just not possible um but i do think that the portfolio as a whole could very much be optimized and that's what investors i look forward to yeah because that hands-off approach was almost a bit too laissez-faire from buffett yes over the last 10-15 years and like give or take he the the opportunities outperform wasn't really there versus the wider market um for berkshire now it's always chocking along and it's that safe space and I don't think it's ever not going to be that kind of safe haven for investors in terms of just a very solid diversified portfolio businesses that are always going to take a long bush but yeah I do think people might be looking at this as an opportunity to to optimize because as you said you know all all Buffett did all day was read like you know what a brilliant oh what a great way to end your day lucky i know but but there is definitely like uh there's definitely something being left on the table and that when that's your role as a ceo and and i think we will see some changes i think we might see some consolidation might be some divestments um i think there's going to be a slightly different approach to investment as a whole um we'll see now already with in terms of their public holdings but it's definitely going to change.

36:48And I think that's the obvious thing. He's not Warren Buffett. And he can't pretend to be Warren Buffett in this role either because that's not how it works in this game. He's going to build his own legacy with Berkshire. And look, it's an expensive market. It's just hitting all-time highs despite all the geopolitical risks and everything. So it's a market that Buffett would hate. You'll see if Abel is the same. I think his deals won't be flashy. I don't think he's going to go out and buy Tesla shares. But it is very interesting to see just the kind of the potential of that portfolio right now.

37:28You know, will he start like as in how much? He's on three or four hundred billion worth of T-bonds. Will he start minnowing down that? Will he start opening that up for areas of new, more exciting investment? Like there's a lot there that could be optimized. And I think that's the main sticking point for a lot of people is that Buffett failed to do that. So I am excited for Abo's tenureship and to see what he can do because there's so much at his disposal. I think that's a point very, very well made, Mike, because it brings me back to when Tim Cook was appointed. We all knew Steve Jobs was the man.

38:08And how could this guy fill such big shoes? But sure enough, he did. and he managed to uh i don't have the word reignite is it's probably the wrong word but continue to fire charge growth in a business that looked like fire charge growth was less likely and even harder but tim cook did what at the time i wouldn't quite say impossible but he managed to bring that thing to new places and i'm sure i have suspicion anyway that abel will do this do the same and you're absolutely right i think he's going to uh he's going to be far more direct with the businesses buffett kind of tolerated certain things out of loyalty but i know abel won't be giving them this kind of forever pass so he did before i kind of shut up and we wait and see what happens on saturday um there are three moves that stand out in abel's first four months as ceo first on his first day as ceo on the second of january he closed berkshire's 9.7 billion acquisition of oxy chem occidental's chemistry subsidiary second on the 4th of march berkshire resumed share buybacks for the first time since may 2024 and they were repurchased about 226 million of stock which by berkshire's wealth pile isn't huge but it does signal that occurring And I mean, Abel just clearly sees Berkshire itself as a buy and would not deploy a quarter of a billion in cash if he thought it was anything but that.

39:39And then the third thing, and the most interesting of all, if you ask me, is he personally invested his entire 15.3 million after tax 2026 salary into Berkshire Class A stock. and then at a corporate level he pumped 1.8 billion into japan's tokyo marine taking total japanese equity exposure above 46 billion dollars and as i recall at the time headline writers were saying something like buffett's successor places his big first bet and it isn't on america but i think that totally overstated it abel is not bearish on the u.s he's doing what buffett taught him to do which is looking where the prices are dislocated and right now or at least at that point dislocation was in tokyo as opposed to wall street so and and that's that's following buffett's footsteps completely like it is yeah yes i can't remember when he first started making that trade but essentially he would it's one it's one of buffett's best ever trades and it's it's probably not talked about enough he was buying five major japanese trading companies which are kind of these huge conglomerates uh i'm not going to be able to remember names i know mitsubishi is one and there's four more but he was buying them he would get basically zero interest loans in japanese yen by these stocks which were yielding much higher dividends than the interest on the loans he was taking yeah so he's essentially de-risking completely from the start in terms of the interest rate risk and then these japanese stocks absolutely took off there was so much more involved that if you predicted, you know, he's even more of a genius, then we give him credit for, and he probably gets the most credit out of anyone ever on Wall Street.

41:24But in terms of governance changes over in Japan, in terms of being more shareholder friendly, everything kind of really rolled downhill from there. And he's up a crazy amount on those trades. It's worth looking up the other five stocks, but they are all up significantly. They're huge dividend payers. And then from his initial payment dividend would be even higher and he got it all for basically at more or less risk-free rate in terms of he borrowed cheap japanese yen to do it so that's one of the all-time trades of him following him in tokyo marine is quite interesting because it's kind of just a continuation of what puff it's already done here here so this weekend will make for an interesting one i'm sure i know loads of people going i usually get text messages from plenty of people who are there um so i never made the pilgrimage alas when moran was with us so there you have it uh mike an interesting show uh if you had ten thousand dollars how would you split it between intel and berkshire i i'm quite intrigued by berkshire at the minute um of what they can do the potential there maybe i'd go six and a half three and a half berkshire I'd go 8 Berkshire 2 Intel and they're not, neither I don't think would make a bad investment right now, I do think Intel would be a very hypey time to buy Intel right now but the future pathways for both stocks look quite interesting and look relatively protected in terms of risk, I think the US government is out to make Intel succeed and in terms of Berkshire I think it's just the most diversified not safe business because no business is safe but just in terms of owning a stock that's an easy stock to own so both would make good investments from here i do believe amen brother okay so look uh i'll see you in paris said nobody yeah maybe bump into you in paris there's going to be someone's watching us and staring okay abiento emet we'll see you there and we'll talk to you all next week thank you for tuning in