The latest 2024 Buffett shareholder meeting transcript, 40,000 words full text

Author: New Economist Think Tank

Buffett spoke at the 2024 shareholders' meeting. This article is compiled from Tencent Finance, Sina Finance, First Financial News, Wall Street News, etc.

Full text of the 2024 Buffett shareholders' meeting, 40,000 words complete version!

Key points:

1. Response to the reduction of Apple holdings: Apple is very likely to remain Berkshire's largest single stock at the end of 2024, and we will still hold Apple, Coca-Cola and American Express for a long time.

2. Invest in BYD: BYD's investment is similar to the investment in Japan 5 years ago, which is a rare large investment outside the United States.

3. Talking about artificial intelligence: I know nothing about artificial intelligence, but this does not mean that this technology is not important. The development of AI makes me a little nervous. AI will cause fraud.

4. Missing Munger: Munger has disagreed with me twice, suggesting investing in BYD and COSTCO. Both times Munger slammed the table and strongly demanded to buy. Looking back now, both decisions were correct for Munger.

5. Talking about huge cash reserves: There are no attractive targets to allocate assets now.

6. About stock recommendations: Although I fully trust my children and wife, it does not mean that I have to recommend them what stocks to buy.

7. Talking about successors: We will see how the next management of Berkshire will play a role. Fortunately, you won’t have to wait too long.

8. Loss of money case: The entire Paramount Global shares have been sold at a loss. This was entirely my decision and we lost a lot of money.

9. On investing in India: We are paying attention to India, and I believe there are a lot of opportunities in India, but my question is, do we have an advantage in our insights on India?

10. On the shareholders' meeting: Welcome everyone to attend the meeting next year, of course, I must first ensure that I can attend the meeting next year.

This year is the first shareholders' meeting after Munger's death. Only Buffett and his two deputies, Greg Abel, who is responsible for the company's non-insurance business, and Ajit Jain, who is responsible for the insurance business, attended the shareholders' meeting.

On Saturday, May 4, the "stock god" Buffett, who will be 94 years old, led a five-hour question-and-answer session at the Berkshire annual shareholders' meeting.

He joked that he might not sign any four-year employment agreements again:

"My reading speed, physical strength and operational efficiency are all declining, much lower than they were 30 years ago. If the subsidiary management has better people to report to, why come to me?"

Bad experiences such as being impersonated made Buffett nervous, and he compared AI to the invention of nuclear weapons:

"I have no advice on how the world should deal with it. As someone who knows nothing about it, I do think it has huge potential benefits and huge potential harms, but I don't know what the outcome will be."

Buffett confirmed that Apple will remain Berkshire's largest stock position:

"Unless something dramatic happens that really changes capital allocation, we will keep Apple as our largest investment." He also hinted that the sale of Apple was due to the desire to avoid much higher tax rates in the future: "The fiscal deficit will be the problem, and the US government may raise taxes to deal with it." Buffett confirmed for the first time that the next CEO Abel will take full control of investment decisions: "Berkshire's capital allocation should be entirely his responsibility. I don't want 200 people managing $1 billion each." Abel said that the capital allocation principles that Berkshire follows today will continue to exist during any transformation.

Buffett reiterated that Berkshire's investment focus is still the United States:

"I understand the rules, weaknesses, strengths, etc. of the United States, but I don't know much about other cultures. If Berkshire sticks to its U.S.-oriented stance, it is unlikely to make major mistakes."

Buffett is "very satisfied" with the returns on investment in Japan, and will hand over investment in India to the next management, and is now investigating investment in Canada.

He is not in a hurry to trade for the sake of trading, "we only swing in the direction we like", and predicts that cash will rise to $200 billion by the end of the second quarter.

The following are highlights:

30,000 shareholders stood up and applauded for Munger

At the end of the Berkshire annual meeting video, Buffett asked the staff to turn on the lights in the venue for the late Charlie Munger. About 30,000 shareholders in the conference room stood up and applauded Munger, paying tribute to Buffett's business partner for more than 60 years.

Only one book was sold at this year's shareholders' meeting, a book about Munger

Buffett said that Charlie Munger's book "Poor Charlie's Almanack" sold about 2,400 copies on Friday. The book is the only book sold at the annual shareholders' meeting this year to commemorate Munger's death. Buffett said that in previous years' shareholders' meetings, about 25 books were sold.

If you have the chance to spend another day with Munger, what would you like to do? Buffett's response

Buffett admitted that if he had the chance to spend another day with Munger, "it would not be much different from all our previous days", but not knowing when we would leave was also a great blessing. Charlie kept saying "I will die soon, so I don't want to go to that place."

"Buffett's successor" Abel answered questions and was called Munger

Sitting next to Buffett at this year's Buffett shareholders meeting was "Buffett's successor", Berkshire Vice Chairman Greg Abel. Buffett habitually called out "Charlie (Munger)", and the audience laughed for a moment before continuing.

Buffett commented on his successor Abel: He knows business very well

Buffett said that if he were a member of the board of directors, he would leave the decision on capital allocation to Greg Abel because Abel knows business very well. Buffett said that Abel knows how Berkshire's business works, and he knows exactly what to do about the company's common stock.

Buffett: I know nothing about AI, but that doesn't mean this technology is not important

When asked about his views on generative AI, Buffett said: "I know nothing about artificial intelligence." He then added, "That doesn't mean it's not important." Buffett explained that it is impossible to estimate the prospects of AI. It has great potential, but its development makes him nervous.

Buffett: There is no real alternative to U.S. Treasuries and the dollar

When asked if he was concerned that rising debt levels would undermine the status of U.S. Treasuries, Buffett said his "best guess is that U.S. Treasuries will be acceptable for a long time because there aren't a lot of alternatives."

Buffett praises Powell

Buffett praised the work of Federal Reserve Chairman Jerome Powell in guiding the economy over the past few years. Buffett called Powell a "very smart guy." But he noted that the Fed needs help from lawmakers to control the growing U.S. deficit.

Buffett: US taxes may increase

When asked why Berkshire cut its position in Apple, Buffett said it was for tax reasons because the investment had made significant gains, rather than for his long-term judgment on the stock. He also said it might be related to his personal view that US tax rates would increase to finance the ever-expanding US fiscal deficit.

Buffett: Apple will be the largest investment unless major changes occur

When asked about the topic of reducing Apple shares, Buffett said that Apple will most likely remain the largest stock held by Berkshire Hathaway by the end of 2024. Buffett said that unless major changes occur, Apple will be the largest investment, and we will still hold shares of Apple, Coca-Cola and American Express for a long time.

Buffett praised Cook: the "best partner" after Jobs

Today, the Buffett shareholders meeting was held grandly, and Apple CEO Tim Cook also attended the event. Buffett praised Apple at the meeting and said that Cook was the "best partner" after Jobs. Speaking of the iPhone, Buffett said: "It is one of the greatest products, and it may be the greatest product ever."

Buffett talks about huge cash reserves

Buffett said that at the end of Q1, Berkshire's cash and treasury bonds totaled more than $180 billion. He believes that it is a reasonable assumption that the company's cash and treasury bonds will reach $200 billion at the end of this quarter. They would like to spend the money, but they will not spend it unless they think that what they are doing has little risk and can bring great returns.

Buffett: Munger once slammed the table to ask for investment in BYD

Buffett said at the shareholders' meeting that Munger had disagreed with him twice, suggesting investment in BYD and COSTCO. Both times Munger slammed the table and strongly demanded to buy. Looking back now, both decisions were correct for Munger.

Buffett on overseas investment: Berkshire's main investment will still focus on the United States

Buffett said that our main investment targets will be in the United States, and we firmly believe in it. You can see that the Coca-Cola or American Express we invested in are companies that are expanding their businesses globally. And companies like American Express or Coca-Cola that have global businesses are hard to find in the world. This is a global consensus. And I think the investment in BYD is similar to the investment we made in Japan five years ago: we quickly invested in five trading companies in Japan, and you rarely see us making such investments overseas in the United States.

Buffett: No more large-scale stock purchases

Buffett said that there will be no more large-scale stock purchases, because many companies will not sell and issue stocks in large amounts. In the repurchase of stocks, they will also be cautious enough.

Berkshire will try to reduce the number of shares

Buffett said at the Berkshire Hathaway annual meeting that Berkshire Hathaway will try to reduce the number of its shares if it makes sense to do so.

Buffett said that paying attention to stocks every day will not make money

On May 4, during the live broadcast of the 2024 Buffett Shareholders Meeting, Buffett said that judging from the situation in the past five years, we have no way to issue as many shares as other companies. We have so many investors and need to control the number of outstanding shares. Investors don't think about selling our stock, or they don't pay attention to the stock price every week. Those who pay attention to the stock price every day can't make money. Many times people buy our stocks and leave them there, and don't even look at them too much. This is the story of Berkshire in the past.

Buffett hints: evaluating a Canadian investment

Buffett hinted that the group is evaluating a possible investment opportunity in Canada. He said, "We don't feel uncomfortable putting money into Canada in any shape or form. In fact, we are only focused on one thing now." Buffett did not disclose what the investment is, nor did he say whether it is a public or private investment.

Are you considering investing in India? Buffett responded

Buffett said that indeed, we are paying attention to India, and I believe there are a lot of opportunities in India. But my question is, do we have an advantage in our insights on India? Are our investments what India wants us to participate in? Maybe there are some opportunities in India that we haven't noticed yet. In the future I think we may find some opportunities, but now our question is whether Berkshire can pursue this opportunity?

Who will take over Berkshire's investment decisions? Buffett's response

When asked about the division of responsibilities between Abel and his two investment deputies Todd and Ted when he took over Berkshire, Buffett said that the decision would be made by Berkshire's board of directors, and when he was gone, he might try to "come back and see if they have done it differently."

Buffett: AI is similar to nuclear weapons

At Buffett's 2024 shareholders meeting, Berkshire Hathaway Chairman Warren Buffett talked about, I know nothing about artificial intelligence, but that doesn't mean this technology is not important. When we invented nuclear weapons before, we had "let the genie out of the box", and I think it's a similar situation with artificial intelligence.

Buffett: Any labor-intensive industry will be threatened by AI

Buffett said in response to investors' questions that I think any labor-intensive industry will be threatened by AI, and of course more entertainment time can be created at this level.

Abel: Will transition to new energy, but natural gas is still important

When asked why Nevada Energy under its umbrella does not invest more in solar energy and renewable energy. Abel said that solar energy is a huge opportunity for Nevada Energy and the company will continue to invest in the solar energy field. He said that the company is transitioning to renewable energy, but it will not happen overnight. He said that at this point, the company cannot completely get rid of carbon resources. In Iowa, 100% of the energy comes from wind energy, which he said made him excited. "We will continue to transition to renewable resources and solar energy in Nevada and other regions," he said. But in the foreseeable future, if there is no other energy, natural gas will be an important resource and backup.

Abel responded to "Why invest in fossil energy"

When asked "Why does Berkshire continue to invest in fossil energy in a place where the sun is so good in Las Vegas", Abel said that when you think about the ongoing transformation within the energy sector, we are moving from carbon resources to renewable resources, but this transformation will not happen overnight. This transformation will take many years. And when we use renewable resources like solar or wind energy, they are intermittent. Buffett gave an example that you can't give birth to a child in a month by getting nine women pregnant. There are some natural laws you have to follow.

Buffett: Berkshire has sold all Paramount shares at a loss

Buffett said that the entire Paramount Global shares have been sold at a loss. "It was entirely my decision, we've sold them all, and we lost a lot of money," he said. Buffett added that the experience made him think more deeply about what people prioritize in their free time.

Berkshire's comments on Tesla's entry into the insurance industry: Whether it will succeed or not is still unclear

Berkshire Vice Chairman Ajit Jain said that Tesla is about to enter the insurance market, but today it is still unclear whether it will succeed or not, because if the insurance of cars is to be completely transformed, the cost is still very high.

Buffett: The possibility of investing in real estate in the future is very low

As for whether he would consider Berkshire brokers when buying a house, Buffett said that he does not buy houses so frequently, and the possibility of investing in real estate in the future should be very low.

Berkshire decided not to touch cyber security insurance for the time being

Vice Chairman Jain said that the global cyber security insurance industry is "at least a market worth $10 billion" and has "quite high" profitability, but Berkshire is often "very, very cautious" when assuming cyber insurance responsibilities.

Buffett: I won't seek stock investment advice from my wife and children

Buffett said that although he fully trusts his children and wife, it does not mean that he will seek stock investment advice from them. Buffett said that his children and wife have become smarter and smarter over the years, and sometimes he will listen to them (especially his daughter) talking about many things. Although some details may be overlooked, these contents are very important.

Buffett: Hedge funds and index funds are too greedy

At the shareholders' meeting, Buffett said that he and Charlie Munger both felt that it was very happy to work with such a group of selfless people, rather than people who might be too greedy for money like hedge funds and index funds. Seeing what Berkshire Hathaway shareholders have done will restore confidence in humanity.

Buffett said he wanted to deal with the right people

When Buffett was asked what he thought each of us needed to hear most, he said, I would like to use Charlie Munger's previous advice, just like I was reading his eulogy. "First, do a good job of education, and deal with the right people according to your own personal situation."

Buffett: My best skill is to escape bad luck

At the shareholders' meeting, Buffett answered questions and said that luck is very important. His best skill is to escape bad luck. Everyone should make full use of their luck. He joked that (if you are not lucky enough) your living habits alone are not enough to live to 93 years old.

Buffett advises not to be too hard on yourself

Buffett said he is very happy with the current situation and hopes that he can find a better way to use the best resources where they should be used to solve the problems that need to be solved most in the world. Now this money can be used in the most needed places in the world. Buffett also said that people are people, and they all have their own weaknesses and defects. Don't be too hard on yourself, but you can't completely relax, because you can change the future.

Buffett: Munger taught me that consumer behavior is important

Buffett said that investment is influenced by many factors. I started buying stocks in 1942. Munger and I sometimes make decisions quickly. We will think about what factors make us make decisions quickly, and we think these factors are obvious. One thing Munger taught me is that consumer behavior is very important. If we buy a furniture store, we may soon realize that this is a mistake, but this mistake will make us better consider the process of asset allocation. In this process, we slowly learn about consumer behavior.

Buffett: Missed a lot of investment opportunities but rarely regretted

Buffett asserted that he and Munger must have missed some investment opportunities over the years, but regretted only a few. "We missed a lot of things, and what we really regret is missing something very important. We never worry about what we don't understand," Buffett said. "Why do we need to predict the future of every business, just as we can predict the wheat production next year?" he added.

Buffett: I hope I can come to the meeting next year

Buffett's closing remarks: We only answered about 30 questions today, but thank you all for coming here from afar. We also welcome everyone to come to the meeting next year. Of course, I must first ensure that I can come to the meeting next year.

First Half:

Warren Buffett:We are now in the first part. The people in front are all related to us, and we will introduce them one by one later. (Introducing people)

There are two people I want to thank in particular. Before we start, let me introduce them briefly. For the first quarter, I would like to thank Morgan first. All of our conferences today are attributed to him. He just reported to me that we have set a new record today. Today, the amount of See's candy sold may be more than before, and it has reached 6 tons. Of course, there are some bookworms. Usually, there are about 25 books on sale. In the current Charlie Almanac, the fourth edition will be released, which is also to commemorate Charlie.

At the same time, I would like to introduce the following person to you. This person is the one who put together the documentary you just saw. You can imagine all the scenes today and the journeys that have been experienced in the past. There are also Hollywood stars involved in it, and there are also all kinds of different people involved. He just told us that we can only broadcast it in the studio now. Later, I told CNBC that we still have to do this. You can see that they really put a lot of effort into all the cooperation and integration work.

Today at 7 o'clock, some very smart analysts have also started to select certain items for corresponding reports, so I will continue to communicate with you later.

The first slide you see now is the first quarter report. Berkshire's operations and all operating income are also some results obtained during the operation. There are also some other changes in the integration after our market turmoil. For example, we have seen that all of our first quarter is better than the average quarter. Mr. Jain asked me to tell you today that he talked about the calculation of insurance in the first quarter. It is impossible to make corresponding analysis on insurance. Of course, we have also had corresponding storms around the world, which will also affect our income. This is the first and most important reason now. Maybe according to our standards, the timing may not be right. Especially what happened on the East Coast, this is also the first point that I think must be evaluated when the most risky items, in addition to earthquakes.

The results of the first quarter, we can't say it is the best quarter, but we can't say it is the worst quarter either. In the insurance industry, there are always times when you are lucky or when you can't consider anything. But we will definitely make improvements in the underwriting and insurance industries. In every annual report, the income is very high. So in the report, we can see that we have fixed short-term investments and some changes in interest last year. Such figures look very impressive. I can tell you that we can invest more money now than before. This is the current phenomenon. Moreover, I think it is reasonable and predictable.

Looking at the income of the railway, I think its decline is relatively gentle. Of course, we can't make guesses immediately. Sometimes, some income, for example, we can see some actual changes or some immediate situations. The impact on the railway you mentioned now still has potential income. For example, how many carriages did we load in the previous week? The scale in the middle of the previous week may also change again. So every week, we will have different earnings results. But I tell you, these are still relatively average. These earnings are some of the numbers we expect. But within our expectations, we should earn more earnings.

Especially as I just mentioned, in addition to energy companies, we have relatively good earnings, but sometimes due to environmental impact, we must indicate it in the annual report. For example, last year, it rose sometimes, but when we got the final number, it was 11.2 billion (note: US dollars, the same below), which was still an increase over last year. We expect that earnings should be very stable, rising year-on-year every year, and can also maintain 37 billion, which is within last year's earnings. I think this situation, that is, Berkshire's goal, also hopes to satisfy everyone. Under the economic goal, this is an example I just gave, which can increase our operations. It's very simple, but this is what we have been trying to maintain.

We have some history like this, and I have talked about the example of the epidemic before. At that time, we already had 24 billion, but the epidemic happened, and our figures went from 27 billion to 30 billion, etc. These gains are very interesting, but we also have to take into account depreciation, amortization, taxes, etc. What I want to say is that Berkshire has at least 100 million in and out every day, including weekends and holidays, and all these deployments are happening. But we have responsibilities, such as turning to the next page to see this number and you will know why I explain it this way.

Today, when you see all the shareholders' equity, the date on it is until March 31. By maintaining some of the current revenue, we have tried our best to control it accordingly, except for one day. For example, maybe in 1968, its dividend was only about 10 cents at that time. If you exclude that day, the other dates are always in very good condition. Sometimes we may make mistakes in some things we do. But I think some mistakes were made, sometimes not very painful. There were at least five or six times, or more than a dozen times, in the past 57 or 58 years. No matter how we do it, I think the most important thing is to make big decisions, which can continue to be our guiding principle. We have accumulated at least 571 billion results. Now we are talking about JPMorgan Chase. Among them, 327 billion has risen to 338 billion in the current year, and their dividends are also very good. We can see the return on investment. And there is no sign of retreat. So what we can do is not the miracle we said. But when you save all the expenses, there is a group of really great shareholders and partners who are always hoping to save us money. We also let them do their work. They are the group of people I just introduced, the David family, and their sons, grandsons, and great-grandsons. They left us a lot of luck. They gave us good tools here to keep us going. But their lifestyle is not like that of a royal king or queen. The houses they built before are in New England, and they eat and drink like ordinary people every day. I can tell you that you can see that he is a group of people similar to me. Sometimes they go to other places and spend some incredible money. But I can tell you that no one has missed anything in the past. In addition, there are some integrated results. On the long runway we see now, there are things that we often talk about later. You will hear me explain it again after lunch.

Our cash and treasury bonds account for about 182 billion, which may increase to 200 billion by the end of this year, or reach 200 billion by the end of this quarter. We want to spend this money, but if we spend it, we have to find the right target, hoping that the risk is small enough and the return can be large. The value of the stock has also increased slightly compared to when we bought it. We will not buy stocks in a large way, because many companies will not sell in large amounts, so we will be cautious enough in stock repurchases.

Let's go to the last slide. In the past five years, we have not been able to issue as many stocks as other companies. We have so many investors, we need to control the number of shares outstanding. They won't think about selling our stock, right? We may not pay attention to the stock price every day or every week. Those who pay attention to the stock price every day, on the contrary, can't make money. Many times, people buy our stocks and leave them there, and don't even look at them too much. This is the story of Berkshire in the past. We will bring you revenue growth in the long run. We also hope to reduce the number of shares outstanding, and hope to occasionally see investment opportunities and have a suitable high-quality position.

That's all for the background information for the first quarter. I will hand the microphone to Becky Quick for the next question and answer session. Becky Quick and the audience will alternate questions.

Becky Quick: Thank you, Warren! There was some news this morning. Berkshire sold another 125 million shares of Apple, which is now Berkshire's largest holding. A 27-year-old B-share shareholder from Malaysia said, "Last year, you mentioned that Coca-Cola and American Express were the two companies Berkshire has held the longest, and you also said that these businesses have brought good returns to our shareholders. But you did not include Apple in their ranks. Do you think that Apple's attractiveness and investment appeal may have declined compared to when you invested in 2016?"

Warren Buffett: We still have a lot of Apple shares. I would say that by the end of this year, Apple is likely to be our largest common stock holder in history. Charlie and I will look at these common shares and interests. We regard them as businesses, not just stocks. We also have Dairy Queen shares, and we also regard them as businesses. Coca-Cola is also a company, and American Express is also a company. We regard them as businesses and companies. We can buy great companies, but we can't buy all of them or more than 80% of their shares. But when we look at Apple, American Express, and Coca-Cola, we see them as companies, but there are some differences in taxation, management, and other factors. But when we allocate funds, we will look at each company, not just as a stock investment. We will not try to predict the market or try to pick stocks alone.

I have done some wrong things for many years. I have been interested in buying stocks for a long time. I think the stock market is full of charm. But in the end? I heard a wise investor give me a few words of advice. He said it better than I did at the time, but the meaning was roughly the same. He said that when you look at stocks, you have to look at it as a company or a business. Sometimes, you should not look at these markets as if they bring you returns, but how to serve your portfolio in the long run. So, this sentence inspired me deeply at the time. Charlie and I have been thinking about this sentence when allocating assets. Our investment philosophy has actually changed over the years with the increase of capital. It has changed a lot. But the most basic principle is still there, which is Graham's philosophy. If you just pick stocks, it is a waste of time. You need to put your funds in better places. Charlie gave me better advice, allowing me to allocate money to more appropriate places, which is why we have always had such excellent businesses as American Express and Coca-Cola, and Apple is even a better business and company.

We will still hold the shares of these three companies for a long time, and we have achieved a lot of success in the past. The method is actually very simple, that is, we must continue to work hard, and in the process of working hard, we have learned how to do mathematics and how to calculate. I think as investors, we should have a correct mentality. When something happens, it may greatly change our capital allocation strategy. But in the case of Apple, it will still be a large long-term investment for us. But in some cases now, I don’t mind continuing to grow my cash holdings and will look at what alternatives there are in the stock market and equity market.

One ​​thing may surprise everyone. Almost everyone I know focuses a lot on how to avoid paying taxes. Of course, I think tax avoidance is reasonable. Although we don’t mind paying taxes at Berkshire, we are now taxed at a federal tax rate of 21%. At Apple, it is 35%, and it has been 52% in the past. The federal government has a certain ownership of our revenue, that is, a portion of our revenue must be paid to the government. And such a tax rate may change its percentage any year. Now the tax rate is 21%, and because of the current fiscal policy, I think this tax rate is likely to increase in the future, and a high tax rate is likely to occur in the near future. The government will want to take a larger portion of Berkshire's revenue, and they may also decide that they don't want their fiscal deficit to be so large. We know that their expenses are indeed very large, and they may take a larger portion of our large company. But we will still pay taxes, and we also hope that Berkshire can contribute to federal taxes.

For us, for this country, this is appropriate, because the country's economic development has brought generous development to our shareholders, and we are fortunate to be a member of an American company. Last year, we paid more than $5 billion in taxes to the U.S. federal government, which also makes us very proud. I don't think any American company can be as rigorous as we are in paying federal taxes. And this does not include property tax and social security tax, which I think may appear in the future. I hope to continue to maintain this market value of more than 800 billion, because with such a market value, paying a large amount of tax will not bother me too much. I hope that every company in the United States can be like this. If I pay 21% tax this year, I will not mind if the tax rate rises in the future.

Question:Hello Buffett, I am from Hong Kong, China, and I have my own investment company. We feel that it is a very precious opportunity to learn from you. You have invested in BYD's company before, and now you have reduced your position. Do you think there will be opportunities to invest in Hong Kong or Chinese companies in the future?

Warren Buffett:Our main investment targets will be in the United States, which is our firm belief. You see that some of the companies we have invested in the United States, including American Express and Coca-Cola, have global businesses. They are the first choice for consumers around the world, such as beverages or payment methods. There is a consensus in the world that there may not be any other companies that can compete with American Express and Coca-Cola. I think their business is very strong, and I think this situation has been going on for the past 20 years. I think BYD's investment is similar to the commitment we made in Japan five years ago. I think such an investment would be very convincing to us. We invested quickly and invested in five important Japanese trading companies in one year. You may not see such a large investment outside the United States, especially in the current world economy. But I understand your question. We understand the role the United States plays now and our strengths and weaknesses. I feel that I cannot fully understand the economy of the world today in any culture or other international or national culture. For example, some smaller countries may not have such a strong economy, but they already have some corresponding economies in their own countries.

What I want to say now is that about half of the countries in the world (50%) can produce more than 20% of the world's output, and it is very gratifying. But I think the United States is still the main focus, and investment in the United States is the main direction now. At the same time, in the past few years, Charlie also told me. He often told me these things. Sometimes when I gave him some suggestions, he said that this was not very good, but maybe it was the best idea you could come up with at the moment. Sometimes he would still agree with me. But Charlie often told me that you have to think twice before you act, so BYD is what we just talked about, and there is also Costco. Looking back, he was still very positive at that time. But I should have been more positive than him at that time, but I didn't. So for us, it was still a big deal at that time, and many companies considered it. Of course, I still understand some of the situations that happened in most markets. But my idea is that we don't have such plans for some huge commitments or in any certain countries, but of course it is not impossible. I feel quite satisfied with the position of investing in Japanese companies.

But you have to look at the overall situation. The situation in each place is different. We also need to be able to truly take care of the money you invest. We absolutely cannot tolerate some situations where you lose money. So at present, we hope that no major mistakes have been made in the United States.

Becky Quick: We know that in the 2024 annual report, you have already explained it, but Berkshire may have some disappointments in the energy sector, especially now that we are seeing these situations. So our investors are of course more worried about some changes in the current environment and some regulatory measures. Under this situation, have we accepted the so-called public utility model for electricity, and then we also move in their direction? In addition, we know that the regulators in Utah have also enforced the plan to purchase energy. In other words, do we have to reconsider whether to buy energy investments before retirement? Or invest in some power plants? What I want to ask now is that in terms of Berkshire's power companies in the Rocky Mountains and some of the jurisdictions it is currently doing, can the decisions made by Berkshire Energy in Utah reduce future losses? Because some states have begun to control electricity or in public utilities.

Warren Buffett: I feel that some of the things that happened in Utah should be fair to us, and their work still gives us some respectable returns, because these things are still our own assets. If we talk about some public electricity, in 1930, Mr. George Moore was our senator, and we also encountered some different experiences at that time. I must point out that free economy and free competition still play a role now. Some privately owned power companies or public utility companies may be more efficient in operation and better than states or countries. But we know that when it comes to public utilities or public electricity, there may be a lot of investment in many places, and we must spend a lot of money on power companies. Sometimes private investors may not be able to do it in these situations, so Berkshire's company is quite satisfied with the current participation and some places in the country that are in great need, and we will get returns. But the rate of return may not make us very rich, and there is still sensitivity to the rate of return. Of course, if we can't get a return on investment at all, we won't work in this area. If we really do this, it would be crazy. You will see some of the activities we have been doing for a few weeks, and its costs, and some of the work we are doing, may be related to the current environmental changes. Of course, today's electricity bills or some public expenditures, especially in vehicles or other supplies, are very surprising. But I think we still have some funds, and we also have some support for large projects that we are involved in, which are very important actions for us in this country. I think we will still do it, but we won't really throw the money into the water.

In Utah, the current environment is not so friendly. I would like to ask Greg to answer now.

Greg Abel:I am also very honored to take this position today, when you mentioned the part about energy in this letter. The challenges facing the industry today, I think this is due to the huge investment we have now. For energy, there are also more public utilities, and there are still many years to go by. I think you just mentioned that Utah must have been affected. But looking at the underlying demand, in the state of electricity, the amount of money invested in public utilities today is very important and very eye-catching. The situation mentioned in the letter, there are also public utilities, such as Utah, which may become a company on public power in the future, and perhaps the state will plan it as a state-owned company. Do we continue to invest heavily? We are very careful and continuous about public policies. In addition, we also have specific regulations that we feel are worthy of encouragement. Especially within 100 years, regarding these public affairs in the United States, there are public power in Iowa, and more than 20 different related regions. Especially now that AI has been developed and demanded accordingly, and there will be double growth in the future.

During this period of time, I think doubling will definitely happen. We now require greater investment in today's American community and our shareholders, and these will perform corresponding functional operations. If we talk about Nevada now, this is another example. We have two different public utility projects there, and the lines in Nevada cannot be ignored. After 2030, I think these required lines and all the needs will definitely change by at least more than a billion. The money to be invested in the middle is also not negligible.

Just before I talked about the real growth in Utah, it has exceeded more than 10 billion, so these growth rates have also begun to occur in the corresponding places. But when we talk about the rate of return, we just talked about the situation of wildfires, and there have been active discussions in the local or corresponding areas, because this is a very serious matter, and wildfires have also caused very significant losses. This is also a very important situation in our conversation and communication with each other, and it must be properly communicated. Wildfires have also occurred in many places. And as for our claims, we knew last week that they had exceeded 30 billion. Of course, this is not a very ignorable situation that has already occurred.

The first thing is also the most important thing, all of these lawsuits or challenges related to the rule of law, because I think we all think that we will continue to operate under unprecedented challenges and solve these problems, especially in the Pacific region.

Another thing is how to operate our assets in this situation? We have been working with the local state government for many years and coordinating across state governments. The basic goal is to keep the power flowing. In addition, all the corresponding teams and employees can work day in and day out without any interruption. During the wildfires in 2020, we also knew that we had to allow the fire brigade and hospitals to respond and work without interference. So the first thing we must do. At that time, we took a step back and thought that we must change some of the current culture in this regard and start to rethink about electricity and public utilities comprehensively. We must start to really re-understand the current status of all assets, which is something we have never encountered before and is completely unknown to us before, so we start with culture.

The second thing is to change the current operating system, that is, when a fire occurs, all power can be turned off immediately, so that the system can be directly operated without interference and without crossing some restrictions, and the disaster area will not interfere with the normal area.

The third thing is also very important, and it is also what we must allow us to do in investment to reduce risks. But you mentioned Utah and the Pacific region, which are very challenging situations. When we respond to the lawsuit and execute this company, we will also have a certain amount of capital and profits to continue to remain in this company, and we will also reinvest in these businesses. But from a fundamental perspective, I think there will be a need for legislative and regulatory reforms in the future, which must be carried out in all Pacific coastal states, so that we can contribute to these businesses with gradual capital investment. Because we don’t want to simply invest money and let the money go to waste, so we need to be more disciplined.

But now we also see some opportunities, that is, some methods are introduced in legislation and supervision. The best example we have now, I think it should be the gold standard of the whole country, which is in Utah. Warren mentioned that Utah's investment feels very reassuring. Of course, they are not on the Pacific coast, but they have some space and buffer zones. Their latest legislation, Utah passed this bill, and did several very important things. The first is to set a cap on the insurance coverage of non-economic wildfire losses. Let's look at Oregon. Everyone hears about these insurances, not just economic losses, and these economic losses must be insured. But although there are some lawsuits in Oregon, non-economic losses related to wildfires are not compensated by insurance. Utah has been very proactive in this regard. He said that a cap was set on the insurance coverage of these non-economic losses, and returned to this environment to see if there are any places to invest. Gradually, they have also established a relatively large fund to support Utah's wildfires. First of all, it helps liquidity, and the other is to solve problems in other aspects. So in Utah, it's not just legislation, I think this should be our gold standard in this regard in the future.

For Berkshire Energy, this is very important. In addition, this is also a problem on the Pacific Power side. The regulators can't respond on this large scale, which has always been a concern for us, so I think Pacific Power will also have some other opportunities to make improvements here. The same is true for Berkshire Energy.

Warren Buffett: In terms of equity investment, its returns have been realized over the years, especially in recent years. This equity investment has a very rich return in the entire United States. So what is your return in percentage? Sometimes, some states have greater returns than other states. Whether you are bankrupt or profitable, we will not throw away all the money given to us by shareholders. Of course, we hope to have some returns in the middle, but the power side will definitely not bring us such rich returns as some other businesses. If you look at these tangible equity, like Coca-Cola, American Express, or like Apple, it is completely different. Utilities, especially energy, can only get some very moderate returns at best. And now there is the threat of climate change, which brings us more wildfires, so this is the price of doing business. But this does not mean that we can't take some measures to mitigate the threat of fire in the future, such as some policies that allow you to cut off power when there is a fire. But before that, trillions of dollars are still being invested in climate change, which can be done through public power and private enterprises. We will definitely invest more than 100 billion in this, but we can't simply throw money in and let it go to waste.

Question:I am from San Francisco. How much advantage do you think technological progress, especially generative AI, brings compared to traditional industries?

Warren Buffett:I asked the fourth question, and now I regret it. I should have asked the second question. I know nothing about AI, but that doesn't mean this technology is not important. I also mentioned last year that we have let the genie jump out of the bottle, especially when nuclear weapons were invented before, and it is now doing some bad things. The power of this "genie" sometimes scares me, and it can no longer be put back into the bottle. I think AI may have some similarities, and it has already jumped out. It is of course very important and has a great impact on many people. But we hope that such a genie will do good things in the future, but I have no way to evaluate it, especially I have no way to evaluate it at all. For example, during World War II, when we had nuclear technology and invented the atomic bomb, we felt that it was necessary to stop the war. For the United States, it could save lives in the long run. And Einstein also mentioned that if you do nuclear experiments, you may end civilization, but the United States finally decided to let this "genie" out of the bottle. I think such decisions will affect the next generation and the future, which is what we are seeing now.

To be honest, the development of AI still makes me a little nervous, especially some recent developments. Sometimes I have a picture like this in front of my eyes, and I appear in that picture and scream at me. What does this mean? I was in trouble at the time, and no one came to save me. So when you think about the future, you can use such technology to commit fraud, to regenerate such a picture, for example, the picture is also me, and then I come to you and say I need money, that is, generative AI can do this kind of thing, so that I suddenly appear in a picture, and you can't tell whether it is true or false, and ask how much money I need. Fraud has always been a situation in the United States, so if I was interested in investing in the fraud market before, it might grow very fast. I think AI certainly has the potential to do good things, but the examples I just mentioned and some phenomena I have witnessed before, I think they may be a little scary. I may even find it difficult to tell whether it is true or false after seeing this photo, and even send money to myself who deceived myself. So like nuclear technology, I think this "genie" has been released from the bottle, and I know nothing about it. I think AI still has great potential to do good or bad things, and we can only let it happen naturally in the future.

Becky Quick: If you have questions about insurance today, please ask in the morning. A shareholder in Minneapolis had an interview last year. He said that Geico is better at branding and marketing. Now that Geico has a new strategic direction, will you still let them do it? Will this bring them some vulnerability? Berkshire's current CEO also mentioned that these business departments have been off track. Can Ajit Jain answer this question?

Ajit Jain:Warren has mentioned in the past that some of Geico's current disadvantages are that the ratio of insurance rates and analysis is not very good. This has been the case for Geico for several years, and we are still catching up. And technology is also a big bottleneck for us here, but we are still making progress. It is also very important that the employees we employ now are better at data analysis and data pricing than before. We are also taking some measures to narrow our gap, especially by the end of 2025, we should become one of the best companies in the industry in data analysis. In terms of pricing and insurance, we still have a long way to go.

Warren Buffett: I think the ratio of premium to risk must be appropriate. Sometimes we may only risk losing some small money, and sometimes we risk losing big money. We still have its advantage at Geico, that is, the insurance cost is the lowest in the industry. We hope to reduce the underwriting risk rate to below 10%. This is not just a matter of survival, it is also related to profitability and profit. In March, we did not lose too many policies, and we are also operating at a low cost, so I don’t think this is a threat, and it is not enough to pose a threat to survival now. It does not pose a threat to profits, but in the long run, our growth is to hope to be based on the best insurance industry model and continue to deliver value to customers at a low cost.

This company was founded in 1936, and the routine principle has remained unchanged for a long time. The amount of insurance has always been lower than that of other competitors in the industry. This is our competitive advantage. Geico Insurance Company is also a very attractive business. Of course, this kind of slow cost advancement sometimes needs to be completely matched with the risk ratio today. When a large event occurs locally, I think we can still do it in a gradual way, but we still need to consider the risks at that time. We are currently carrying out rigorous work and are making the necessary evolutions. I think we should still be able to make profits compared with other companies in the insurance industry.

Now let's ask questions from the second area.

Question:I am from Munich, Germany, and I am from a very respected German company. We just saw your wife and children, and you also asked what is the highest value for them?

Warren Buffett:As for advice on investing money, of course it depends on other things. I believe in my children and my wife, and I trust them completely, but it does not mean that I will recommend them to buy stocks. Regarding the topic of managing your money, I think if you want to talk to me, I may not be the most ideal person in the world to talk to, but it does not mean that I will not consult other people's opinions. In addition, if I am doing it alone, I certainly will not participate in such a work. Sometimes, of course, I will talk to myself, and I will do so when investing. My children have become smarter and smarter over the years, and so has my wife. Sometimes I will listen to them talking about a lot of things, especially my daughter, who also lives nearby. She actually knows a lot more than I do. Sometimes I will listen to what my wife says, and sometimes I will ignore the details they talk about, but this is very important.

You live in the present or pay attention to the life around you, of course, you can't limit it to only yourself or the people you trust. In this way, this life will not be so interesting. Like me in my real position, when I was 20 years old, I believed in the people around me. But sometimes, I found that I would make mistakes. For example, when I met Charlie at that time and got to know him, I felt that everything was very important to me, especially in terms of investment. Charlie has never lied to me in all the years we've been in business together, but only once. And he never rehashes things, so he doesn't force me to do anything. Sure, he asks me to think about a lot of things, and he never lies. Of course, he sometimes makes little mistakes when we're having dinner or parties, and everyone in the room can actually hear it.

But from a partner perspective, I can't think of any conversation I've had with Charlie that wasn't important, so you talk about your life, especially these very important people you mentioned, and of course my advice is the same.

Becky Quick: The change in the environment has played a very important role in the insurance industry now. What changes do you think have occurred in expanding the risk business of insurance and all investments?

Ajit Jain: I know that some changes in the environment and the increase in some risks in the environment are definitely playing a very important role now, and this is a very big issue. To alleviate these problems, especially the liability insurance or some disaster insurance mentioned now, these are some of our most important issues. At the end of last year, we had already begun to seize the opportunity to re-price and make corresponding decisions, which is very important. This industry is an industry of pricing. Some factors will also make us begin to feel that when we make such considerations every year, we must consider all possibilities. Of course, when it comes to changing prices or some changes in the environment, how much should we increase, or should we consider it in a very scientific way? These prices, and we must increase prices to maintain the status quo.

In addition, regulators will not make it easier for our industry to live, because there are still many regulations. When changing prices, sometimes we must refer to more results. Especially insurance, and some insurance companies, and some changes in today's supervision. My point is, which company do you choose to insure today? Do you care about its return? And the company must have a corresponding rate of return in the allocation of assets. You mentioned asset allocation, and whether every company has started to make money in the past few years? Of course, not every company will do so. In our insurance industry, whether it is the current environment, or some fires, wind disasters, or floods, these situations will have an impact.

Warren Buffett: I think the change in the environment will really increase our risks, this is for sure, and everyone knows it. In addition, in the end, we have to consider whether the business can become larger, and after a period of time, will we go bankrupt or lose more profits? These are all things we have to consider. This is true in a certain year, but not necessarily in the future. I usually re-evaluate these results, or conduct more analysis proposed by managers. I will also consider reaching the Western region, where wind disasters have begun to occur. Is this the biggest risk? So you know, can we do more of what we are doing today? And in the case of a hurricane, what do you know? What is the most needed, the best, or the worst? In addition, has the degree and frequency of occurrence changed? This may happen once a year, so I can't tell you whether it will happen in five or ten years.

People sometimes don't have a so-called neighboring mentality related to our insurance. And some people don't expand their knowledge. Sometimes, we also receive some letters from many people, of course, we are also skeptical about their IQ. But we don't know, maybe you understand these insurance businesses, but you can't completely believe whether the changes in today's environment will happen.

Our climate change is not completely risk-free. We can do this in a certain year, or we can make some exceptions, but can we do so in the future? Can these decisions be delayed for a longer period of time? These must be considered in the future, or can we avoid certain things. Now we are talking about that you have to analyze and do more, thousands of things, understand some of the current water, or some other rainfall things, so this must be very smart.

Ajit Jain: Today's climate change is the same as inflation.

Warren Buffett: That's right, now you mentioned Geico Insurance Company, we now have 7,500, the result in 1950, now the value of a car can reach 40,000 or 50,000, so now there are 2,000 dollars or a fierce attack on technology and in any matter. In the past, 4 dollars could do a lot of things, but now the car is very safe, but the cost of repair is getting higher and higher. In addition, there are some effects of inflation. We talked about 40 billion business, all from such a situation. Whether the 7 million recovery can support and operate, if there is no inflation, it is very good, but Geico cannot ignore other factors.

Question:Hello everyone, I am from Ontario, Canada. At that time, my father introduced Berkshire's stock to me, so in the past 27 years, the job I held has been changing. Some thoughts on Canada, my question is that Canada's economy now has some issues in the middle, such as the banks and stocks we talked about. My current thought is that in the 1990s, if the rumors at that time were true, that is, you said that you invested in McDonald's at that time, I think people would still eat McDonald's and drink Coca-Cola for more than 90 years.

Warren Buffett:Our gentleman is from Canada, and he may answer better. But you can tell what I eat by looking at what I eat. Now I will give the floor to Mr. Greg Abel.

Greg Abel:I am very fortunate to tell you that there are several projects operating in Canada, but the operation of the entire company and the investment in Canada are still acceptable. We are also observing whether we can make corresponding additional investments in Canada, because this is an environmental consideration. We are very humble and need to truly understand the environment and some of the businesses in the United States. Of course, we will have the same considerations for Canada. You have to understand that there are different businesses in Canada, and of course there may be considerable differences between the operations in the United States and Canada. In addition, in the energy sector, we have made a lot of investments in Alberta, Canada, and it continues to grow. We have also seen it in the past few years.

Warren Buffett: That's right, there are also many large companies in Canada, just like in the United States. But what we see now in Canada, in the past few years, if something is suggested, should we consider it? Regardless of its scale or whether we are interested in it. If it can meet our requirements or there is no risk to invest more money, whether in Canada or anywhere else, we will do so. Canada can benefit from some of Berkshire's investments. We have invested, but there are also financial institutions there, and they have some problems of their own. I remember the problems that occurred there, sometimes they snowballed and were not even fundamental problems. Once we had a problem there, we went there together and quickly solved the problem. At that time, the problem was on the verge of collapse. I think no matter how we do it, we don’t feel that we are so comfortable putting our money in the Canadian market. They must meet our investment criteria. Of course, in addition to Canada, there are many other countries that we can’t understand. Canada has a very solid economy, although the economic volume is not as large as that of the United States. But overall, the economy is good. I think after we slowly figure things out, we will also have confidence in our operations in Canada. Becky Quick: Warren mentioned that he would rather let Ajit Jain do insurance assessments on the insurance side, which is more convenient than other insurers. For many years, Ajit Jain’s influence on Berkshire has been talked about, and even joked that you and Ajit Jain were on a sinking ship and only one person could be saved, and you asked everyone to save Ajit Jain. Regarding Berkshire's future CEO, you did not mention whether Ajit Jain will have a successor. There are so many challenges in the insurance sector in the future. How do you think Ajit Jain's successor will be decided?