Source: Wall Street News

The Berkshire Hathaway annual shareholders meeting, the investment world's most important annual event, kicked off this weekend in Omaha, Nebraska. This is the first time in 60 years since Warren Buffett took the helm that Berkshire has held its annual shareholders meeting "behind the scenes," and it is also the first public "stress test" for Buffett's "successor," Greg Abel.

During the Q&A session of the annual shareholders' meeting held on Saturday morning, May 2nd local time, Buffett sat with other board members. For the first time, Abel took center stage, presiding over the entire Q&A session as CEO. In the first half, he co-chaired with Ajit Jain, Vice Chairman in charge of insurance operations. In the second half, he co-chaired with Katie Farmer, CEO of Burlington Northern Santa Fe Railway (BNSF), and Adam Johnson, CEO of NetJets.

Having the heads of Berkshire Hathaway subsidiaries sit on the stage alongside Abel to answer questions is the most symbolic adjustment at this year's shareholders' meeting. This move sends a signal to the outside world: Berkshire's authority will no longer rely on personal charisma, but will be built on a more diversified operating system.

Media outlets believe this shareholders' meeting is a crucial test of whether Abel can justify the "Buffett premium." Berkshire Hathaway has long been characterized by a core culture of "decentralization and perpetual ownership," while Abel's management style leans more towards operations. Analysts generally believe that Abel's appearance this time needs to answer a core question: how to demonstrate his own strategic vision while maintaining Berkshire Hathaway's unique culture.

Berkshire Hathaway reported first-quarter operating profit of $11.346 billion, up 18% year-over-year, according to its earnings report released earlier this Saturday. Insurance underwriting profit increased by 28%, and profits from its railroad subsidiary BNSF rose by 13%, with a significant turnaround in foreign exchange gains. Net investment losses narrowed to $1.24 billion from $5.038 billion in the same period last year, driving GAAP net profit up by approximately 120% year-over-year. Cash reserves reached a record high of $397 billion in the first quarter.

On Saturday local time, at his first annual shareholders meeting chaired as CEO, Berkshire Hathaway CEO Greg Abel shared his views on a wide range of topics, from artificial intelligence to corporate expansion.

Abel stated that the Omaha-based conglomerate is carefully considering how to leverage AI to create value, making it clear that Berkshire "will not pursue AI for AI's sake." He also outlined specific initiatives to improve its railroad and insurance businesses at this annual event, long known as "the Woodstock of capitalists."

Abel's leadership team took to the stage, while Chairman Warren Buffett sat in the audience and delivered a speech. Abel paid tribute to his predecessor by hanging a Buffett jersey from the dome of the CHI Health Center, the annual venue for the conference. Additionally, an AI-generated deepfake video of Buffett raised a question, sparking an in-depth discussion about the cybersecurity risks of AI.

In a special off-site interview that day, Buffett told a CNBC anchor that he did not believe the current investment environment was ideal.

Prior to the meeting, the market anticipated that the Q&A session would likely focus on whether Berkshire Hathaway, with its vast cash reserves, would increase its acquisitions, share buybacks, and allocation to technology and artificial intelligence (AI) assets. UBS stated, "Given Berkshire's historically low allocation to technology, we expect the discussion to concentrate on how the company, under Abel's leadership, will address technology and AI issues."

Similar to last year's live Q&A session , Wall Street Insights will be publishing the highlights of this year's Berkshire Hathaway Annual Shareholders Meeting in real time, arranged in reverse chronological order (Beijing time), with the latest updates at the top. Below is a transcript of the key points from the 2026 Berkshire Hathaway Annual Shareholders Meeting.

02:15 Question 14: Who is Abel's "Charlie Munger"?

Question: Warren has had Charlie's partnership for most of his time as CEO, which naturally reduces the risk of us making wrong investment decisions. Who will be Abel's Charlie?

When asked who would become his "Charlie Munger," new CEO Greg Abel didn't name anyone, but instead spoke of the entire team surrounding him. "You surround yourself with great people, and they're already here."

Abel mentioned Adam Johnson, president of Berkshire Hathaway's consumer products, services, and retail businesses and CEO of NetJets, as well as Ajit Jain, vice chairman of the insurance business, and Katie Farmer, CEO of BNSF Railroad. All three executives appeared alongside Abel on Saturday.

He said, "We are very fortunate to have a group of outstanding people in our CEO group. No matter what the specific situation, I will take the initiative to contact any of them to seek their opinions."

Abel: We are very fortunate to still have Warren as our chairman, which has created conditions for a great transition. We have a very good board of directors, and I can easily reach any of them on a case-by-case basis. When I answered Warren's question in Omaha, I said we want Berkshire to last. I want to lead Berkshire, and I will be a strong leader. But you have to surround yourself with good people, and they are already here.

In non-insurance business, I've been fortunate to work with the 32 companies Adam manages, along with 18 others. Clearly, I have an excellent working relationship with Jain and am lucky to frequently seek his advice. Then there are our CEOs; we're fortunate to have such a brilliant group of people, and I'll contact any of them for specific situations to get their opinions.

Fortunately, thanks to Berkshire and the way we were created, we have an abundance of resources around us. Berkshire will endure, and will endure as a team.

02:10 Question 13: Safety first or seizing more investment opportunities? Preferring technology companies or companies with strong cash flow?

Question: Compared to Warren, what has been the most significant evolution in your personal framework for assessing cash flow certainty and margin of safety? Specifically, do you have a stronger preference for tech companies that demonstrate equally strong cash flow?

Abel: Regarding Warren's perspective on investment approaches, our so-called margin of safety in investments, and how we handle things, we are absolutely aligned. It stems from our culture and values, and the way we've handled everything over the years.

If I go back to examining opportunities in the energy sector, it quickly turns to: Do ​​we really understand the risks involved? At the time, we were acquiring Nevada Energy, and I had three major risks clearly in mind, eager to discuss them with Warren. Our immediate conversation was: we fully understood the economics, and then we went straight to the biggest risks. One of those risks was rooftop solar, and how it would disrupt the business. That risk did surface 12 months later, 18 months later, and we successfully addressed it. We think about risks differently; we look at them the Berkshire way, looking ten years ahead: What will this business look like in ten years? If we don't understand what it will look like in ten years, we don't do it. We have to have a vision of what the future will look like, and that's at the heart of our approach.

When discussing tech companies, we never say that a particular industry is something we absolutely must participate in. If there's a company in the tech industry that we understand its opportunities and risks, and whose valuation is reasonable, then simply because it belongs to the tech industry doesn't preclude us from considering it.

02:00 Question 12: Will Berkshire Hathaway divest or be broken up?

Question: Are there any future scenarios in which you can foresee Berkshire Hathaway spinning off businesses or being broken up? If so, what are they?

In response to questions from the aforementioned shareholders, Abel stated that he does not expect Berkshire Hathaway to break up or divest its subsidiaries. He emphasized the absence of bureaucratic layers in Berkshire's structure and the group's unique ability to flexibly allocate capital across its various business segments. "We are a conglomerate, but we are a highly efficient conglomerate. We do not have layers upon layers of management."

Abel stated that Berkshire Hathaway is committed to holding its acquired companies for the long term, but in some cases it may have to consider selling. "We buy something and hold it permanently. When we acquire a utility company, we tell the regulators it's a permanent holding. But it has to be a workable relationship. If the relationship breaks down, we'll look for a better way out."

Abel stated that intractable labor disputes or reputational risks could prompt Berkshire Hathaway to divest a business.

Nevertheless, Abel concluded, "We are not considering divesting subsidiaries or splitting up the group."

When we consider this issue, there are situations where we might not be the best owner of a business. If there are labor disputes we cannot resolve, or reputational risks we are unwilling to expose Berkshire to, then the company does not belong to the Berkshire family. If a business is unsustainable and no longer generates operating cash flow for our shareholders, and if someone else can run it and make it more successful, then we must consider this.

We take our obligation to ensure that capital is properly allocated very seriously. We have actually announced the sale of Pacific Corporation's utilities in Washington state. In Washington state, the policies they wanted Pacific Corporation to implement had a significant impact on costs in our other states. Our other states were bearing costs imposed by another state, so we opted to exit and found a very good buyer. When we buy something, we always treat it with a "hold forever" attitude, but it has to be a viable relationship, and if that relationship breaks down, we will find a better path.

Regarding the second part of the question, it will absolutely not be broken down. We are a conglomerate, but we are a highly efficient conglomerate. There are no layers of management, no bunch of committees telling us how to operate our businesses. Many conglomerates end up with layers upon layers of costs that don't add value to the company as a whole, but we don't do that.

Our integrated corporate structure operates without bureaucracy and bloated costs, allowing for the transfer of capital between different groups in a very tax-efficient manner. We do not divest subsidiaries or break up any groups as a result.

01:55 Question 11: Japanese Investment Portfolio

Question: Berkshire's investments in the five Japanese trading companies were passive, representing good businesses acquired at good prices and financed with yen. Your deal with Tokyo Marine is entirely different; it's a ten-year joint venture and reinsurance partnership. This level of operational integration is unprecedented for Berkshire internationally. What does this look like in practice? Does this foreshadow a shift towards more proactive international partnerships under your leadership?

Abel: Tokyo Marine has done an excellent job. I set the stage earlier by saying this is a strategic relationship, not a financial transaction. We love our 2.5% investment in Tokyo Marine; it will be a long-term investment. It's the same type of investment we have with five others in Japan that we truly consider permanent because it goes beyond the investment itself and is more about the relationship we hope to build there. You'll continue to see this, as detailed in the underwriting opportunities, where we co-participate in their risks and rewards, effectively representing 2.5% of what's currently on their books. Again, it's part of a financial transaction, but it also involves a tremendous amount of trust.

The third point discussed was the partnership, which emphasized various aspects, including how we hope this relationship will develop—that's not yet clear. So we'll continue to let it unfold naturally. This partnership shares the same culture and values ​​as us. So there's no doubt it will be excellent for many years to come. However, as for seeking absolute acquisitions in insurance or other areas, that will develop over time, and obviously that's something Jahn and the Tokyo Marine executive team will discuss. We would be very happy if such an opportunity arises.

01:50 Question 10: What is the impact of tariffs on portfolios?

Question: Is Berkshire Hathaway considering tariff reductions or compensation programs for its wholly-owned operations that face import costs? How significant is this impact across the entire portfolio?

Abel: The impact of tariffs on our entire portfolio is very similar to the discussions surrounding the Middle East situation. We experienced this during our first term in government and learned from it, so we are better prepared. That is, to work hard and manage it ourselves. We will find ways to continue serving our customers, recovering these tariffs through direct contracts with them or through the products we are producing. Our team has done an excellent job in handling this issue. There are many things that need to be clarified at the moment, and we are not actively seeking those out.

BNSF CEO: There's no compensation in terms of compensation, but I'd like to say a few words about the impact of tariffs. In early 2025, we saw some customers ship goods ahead of schedule before the tariffs took effect, resulting in increased freight volumes. Then, in the second half of 2025, things stabilized, and by 2026, our customers had indeed adapted to and adjusted for the tariffs. That said, it has certainly introduced some uncertainty. From a planning perspective, this is very difficult for our customers, causing some capital to remain on the sidelines regarding investment in manufacturing facilities. It is precisely this uncertainty surrounding tariffs that is the real impact we are seeing on our customers.

NetJets CEO: I'll use Berkshire Hathaway Automotive as an example. Its new car sales this year are slightly lower than last year, partly due to the impact of tariffs. The problem is, tariffs change every day, and simply understanding this "bouncing ball" of tariffs is a task in itself.

Of the 32 consumer goods, services, and retail companies in our portfolio, their average age is 88. When I called those CEOs, they said, “We’ve been dealing with tariffs for 100 years.” Think about the CEOs of the last seven or eight years—we’ve had to deal with a global pandemic, the highest inflation in forty years, and now these “bouncing ball” tariffs. Companies have done an excellent job of handling these issues, and I think we’re in a pretty good position for the future.

01:35 Question 9: How is Berkshire Hathaway's decentralized model managed? How does BNSF maintain its competitiveness?

Question: Berkshire Hathaway's system relies on decentralization. Each manager acts as CEO, overseeing their own subsidiary. Which operating units require more oversight, and how are underperforming managers handled? BNSF's profitability lags behind its competitors; how will it maintain a competitive edge relative to rivals and new technologies?

Abel: I emphasized decentralization, risk discipline, and capital allocation. We have a group of outstanding leaders and businesses that are closest to their customers, and if they think like owners, we will achieve very good results throughout the entire corporate group.

But decentralization doesn't mean we shirk responsibility. This autonomy means accepting it willingly, which comes with a tremendous sense of responsibility and pride in getting things done. We have many expectations—are they managing risk? Do they see themselves as chief risk officers? Are they adept at allocating the capital at hand? If we see poor performance or some bad decisions, that's when we step in and discuss it.

BNSF CEO: We fully understand that it is crucial to continue driving efficient operations, maintaining a competitive cost structure, and continuing to narrow the profitability gap with our competitors.

Our primary focus in 2025 is improving bike-sharing operational efficiency. Improving the bike network frees up resources, creates capacity, and allows you to handle the same or even more freight volume with fewer assets. In the first quarter of this year, we handled more freight volume than in the first quarter of last year, but we used 260 fewer bikes.

The second area revolves around our technology transformation. We're attracting data scientists and operations researchers, placing them alongside our operations staff in our network operations center to study digital twins and provide predictive ETAs for our customers. We achieved record fuel efficiency in the first quarter.

Regarding competition with trucks, we have the largest intermodal network of all rail companies. We used to have five people operating a train; now, most of our trains only have two. But we also need to be allowed to innovate and need regulations that support railroads competing with trucks.

NetJets CEO: I returned on June 1, 2015. I asked a question: How many people truly understand both ends of our business? NetJets is complex; we fly to thousands of airports in 150 countries. I didn't like the answer; far too few people did.

We started rebuilding the culture from there. I remember the first time I was preparing for a board meeting, I was talking about growth. Abel kindly pulled me aside and said, “Why don’t you let Warren worry less and focus on getting the debt down first?” That was a lesson I’ve learned.

We talked about security and service. Warren, who acquired NetJets in 1998 after becoming a customer, said, “I want security, I want service.” We’ve always been very focused on making sure everyone is on that track. That’s largely why we’ve been able to pay off our debt, return cash to Berkshire Hathaway, and become a leader in the service industry.

01:25 Question 8: How does geopolitics affect Berkshire Hathaway's subsidiaries?

Question: How has the current geopolitical situation in the Middle East affected Berkshire Hathaway's subsidiaries?

Abel: It certainly affects all of our businesses in many ways. But what I'm most proud of is that we run these businesses with a long-term perspective. When the phone rings, you know there will be some challenges, but that's okay. We'll discuss it, we'll work hard, and we'll always find a way to overcome them. As for the situation related to the war with Iran and the Middle East conflicts, I see the team once again adopting this attitude: this is the reality we face. What is the best solution for our clients? How can we continue to serve them as we have in the past?

I mentioned LSBI Pipeline's drag-reducing agents; they don't typically sell large quantities to the Middle East, but when they started figuring out how to address this challenge, a lot happened. This doesn't mean our business wasn't directly affected. Our chemical group's input costs actually doubled in a very short period. Over time, prices will rise according to our contracts, and this will rebalance. As far as running our business is concerned, we really just keep working hard and sustaining everything in the long run.

BNSF CEO: Railroads are a very good reflection of the state of the industrial and consumer economy because our cargo volume covers a wide range of commodities. We've seen several different impacts from the Middle East conflict. Supply chain disruptions have created opportunities for some of these commodities, with increased demand for aggregates, steel, and other commodities. The largest part of our business is intermodal transport, and as fuel prices rise, our intermodal business becomes more competitive. But overall, if fuel prices remain too high for an extended period, it will affect consumer demand, impacting all of our businesses.

Yes, we're seeing some impact. Some large retailers are saying that consumers are now having to make choices, to decide what to buy. If the high fuel price environment persists for a long time, I do believe we'll see this customer impact ripple through our business.

NetJets CEO and President of Consumer Products Services and Retail, Adam Johnson, stated that rising costs, including oil prices that once climbed to $100 per barrel, have begun to suppress demand in some sectors.

This has indeed affected some demand in the consumer goods and physical retail sectors.

While acknowledging these pressures, Johnson stated that his businesses are accustomed to finding solutions amidst volatility. "We are prepared to handle these situations and make adjustments as necessary. But this is indeed affecting parts of our retail and consumer goods businesses."

01:20 Abel returns to the stage to preside over the afternoon session of the shareholders' meeting.

Greg Abel returned to the stage at CHI Health Center in Omaha, Nebraska, to host the afternoon session of Berkshire Hathaway's annual shareholders meeting.

Accompanying Abel were BNSF Rail CEO Katie Farmer and NetJets CEO and President of Consumer Products Services and Retail, Adam Johnson.

23:55 Question 7: When will Berkshire Hathaway's utility companies phase out fossil fuels?

Question: When will Berkshire Hathaway's utility companies phase out fossil fuels, switch to renewable energy alternatives, and stop causing irreparable damage to the environment and the future of my generation?

Abel: We operate as stewards of these assets, serving our states and clients. First and foremost, we absolutely need to comply with existing laws, including federal law. Our team is dedicated to both compliance and doing things right. We have plans regarding the resources and when to phase out coal-fired and gas-fired units, which are largely driven by state policy. The state government will decide how we operate and how long these assets will remain operational, because ultimately, it is the clients who bear the costs and risks.

Look at our Iowa Public Utility: approximately 93% of our energy comes from renewable sources, leading the nation, and at an affordable cost. But we still operate coal-fired power plants, which we need to stabilize the system during peak periods, and we don't use them unless absolutely necessary.

The challenge lies in the significant stress placed on the system by hyperscale data centers. If artificial intelligence continues to advance, the number of carbon-based servers used will increase, further straining the system and the entire industry.

23:50 Question 6: Jain and the succession planning for the insurance business, Abel's succession plan.

When asked about Jain and his successor plans, Abel said the board takes such matters very seriously: “They have developed a plan and are continuing to discuss it. So if Jain is unable to fulfill his duties today, or if I am unable to fulfill my duties, our board knows exactly what action to take.”

These two succession plans are obviously important topics. Jain joined Berkshire in 1986 and was the architect of our insurance business, where we created an unparalleled franchise with an exceptional culture and discipline.

When Warren announced the transition plan last year, the first thing he did was gather our top five insurance managers together to sit down and talk about the business and the culture. This was an exceptional opportunity for me to expand my knowledge base in insurance. What I saw in that team was very deep management and insurance experience, and they shared the same values ​​and culture that Jain emphasized.

Maintaining a disciplined culture is challenging. In the insurance industry, telling an underwriter accustomed to being active to "take a few months off" is no easy task. But Jain has an excellent team, and our board takes succession very seriously. We have a well-defined plan in place, so the board knows what action to take if Jain or I are unable to fulfill my responsibilities.

Regarding culture and underwriting orientation, I follow some simple rules. Very few people are actually involved in decision-making; my top three have been together for over 35 years. Compensation plans are fixed salaries, not complex formulas that allow individuals to gain upside while Berkshire bears downside risk. We shield them from market fluctuations so they can focus on doing the right thing.

I've seen all these compensation plans over the years. I once told Warren: Give me a compensation plan, and I can exploit loopholes in it, and you won't find out for years. Add to that the fact that employees who lose want to renegotiate, and those who win are happy to take everything and leave. It's a huge challenge.

23:45 Question 5: How to manage the investment portfolio built by Warren Buffett?

Question: How do you manage the investment portfolio built by Warren Buffett?

Abel: Regarding managing the existing portfolio and its contents, as you mentioned, it was built by Warren, but it's a group of companies Warren knows very well. And I'm very confident that I understand these businesses and their economic prospects. So, that's why when I outlined it in the letter, I really wanted to convey one message: Yes, we are very happy with these companies, we understand them, and yes, it's a concentrated portfolio, but you know, their businesses will evolve, and there can be risks. So we will continue to evaluate it, but it's a portfolio we are very happy with.

Warren has mentioned Tim Cook's phenomenal success at Apple. Warren and Tim recently discussed this, and they mentioned that Warren's investment in Apple wasn't because it's a tech stock. He saw what the product was and how much individual consumers valued it. That's a remarkable perspective, but it's also a very similar one that I think many of us would apply.

For example, in the power business, I know a lot; I know how to ensure power generation, how to transmit it, and so on. But am I really that interested in how Apple phones are made? I'd be curious about where they're manufactured and some of the risks and challenges surrounding that. But I have complete trust in our team when we discuss it on a broader scale. We examine ourselves and ask: Do we understand its value and why the product is valuable? That is, in essence, its value to the consumer.

I believe we have a unique opportunity, and I'm very fortunate that Warren comes to the office every day. Luckily, we can discuss other potential opportunities that might exist, bringing different skill combinations. But ultimately, we quickly narrow it down, identifying what the opportunity is, why it's valuable, why the consumers, or users in any industry, will benefit, and why that company and that product will be sustainable. Then, related to this, we consider where the associated risks lie. That's basically Warren's approach, and it's mine too.

Regarding our current portfolio, we will always be clear about what we have invested in. However, we are very confident in our clear understanding of the opportunities and risks involved, and we are satisfied with our current situation.

23:40 Question 5: Providing insurance for ships transiting the Strait of Hormuz

When asked when and how Berkshire Hathaway insures ships crossing the war-torn Strait of Hormuz, Ajit Jain, vice chairman of Berkshire's insurance business, gave a concise answer: "Simply put, it depends on the price." Laughter and applause erupted in the room.

Jahn stated that Berkshire Hathaway is involved in a program to insure ships transiting the Strait of Hormuz, but has not yet signed any policies. The Strait of Hormuz has been closed or heavily controlled multiple times during the wars between the US, Israel, and Iran. "We have participated on a small scale in a program aimed at insuring ships transiting the Strait of Hormuz, but have not yet signed any policies."

Jain stated that U.S. Navy escort for transit vessels would be one of the conditions for coverage under the program. "The plan is still being refined. But if we can secure satisfactory terms—including conditions at the underwriting decision-making level and the guarantee of U.S. Navy escort—we have offered an underwriting price that we believe is acceptable. However, there has been no substantial progress so far."

23:35 Question 4: Patience has an opportunity cost. How should long-term investors think about capital allocation?

Question: When patience has a real opportunity cost, how should long-term investors think about their capital allocation today? How can individuals balance patience with action, especially given that Mr. Buffett's decades-long track record has set the standard?

Abel: Again, regarding our capital allocation approach and our long-term strategy, it aligns very well with our owners and shareholders here today. They take a very long-term approach to investing. We are fortunate to have this unique owner base in our holdings. And, in the long run, Berkshire will have significant opportunities. This comes back to patience and discipline in capital allocation. Do we know what will happen tomorrow? Or that event will happen in three years, two years? But market misalignments will occur, which will again allow us to act. This is where our disciplined approach comes in—knowing what our investment philosophy is around these activities.

It's not that we don't see excellent companies today. We'd love to own many. I'll be careful. In the long term, we'd be happy to hold those companies because there are excellent companies with great management teams, and we evaluate those. I'd say that when you think about the world, it doesn't mean there are dozens of such companies, but they exist. But relative to the opportunity, the company's economic prospects, and the price of the associated risks, we're not interested in acquiring those companies at that price, whether it's a partial or full stake. This doesn't mean that the opportunity won't arise in the future.

This is what we spend time preparing for: first, maintaining discipline; second, recognizing core opportunities that we value or are willing to pay the right price. It really comes back to discipline.

You asked me how I personally balance patience and action. Again, it's consistent with my role in this company. I'm fortunate to work with Warren, Jain, and others because we do so because we love and believe in Berkshire. Warren brings a tremendous commitment to Berkshire, a deep understanding and passion for the company. Based on that, he wants to create something very long-term, including the opportunities it might create. Personally, and I know all of us, we bring the same passion, and we are fully committed to doing so in a way consistent with the past.

Jain: You know, insurance, like investing, is a game that requires patience. It's very difficult to get people to stand idly by and do nothing. When I recruit people, my usual approach is to tell them directly. I say, your job is to say "no." You'll be bombarded with all sorts of deals day after day, but your basic responsibility is to say "no." I say, occasionally you'll come across a deal that's like being hit by a plank, it'll scream "Money's here!" Then come back to me, and we'll decide together whether or not to proceed.

You know, just kidding, it's really hard to sit there doing nothing while everyone else is being swayed by brokers and taken to London. I think the real test of success in the insurance industry, and certainly in the investment world, is the ability to say "no."

23:25 Question 3: How to balance overseeing wholly-owned subsidiaries and stock investments, and how to view a large stock portfolio?

Question: Abel, given your background as a business operator, which differs from Warren's background as a public market investor, could you share how you balance your time between overseeing wholly-owned subsidiaries and your current $288 billion stock portfolio? Furthermore, does your operator's perspective change how you evaluate new investment opportunities compared to Warren's historical approach?

Abel shared new insights into how he views Berkshire Hathaway's massive stock portfolio, emphasizing a concentrated investment strategy anchored to a few core holdings.

He referred to Apple, American Express, Moody's, and Coca-Cola as his "core four," considering them the cornerstones of Berkshire Hathaway's stock investments. He also highlighted the company's large holdings in Japan's five major trading companies, listing them as another key pillar of the portfolio and emphasizing his long-term commitment to these companies. In addition to these core holdings, Abel named several other significant investments, including Bank of America, Chevron, and Alphabet. Berkshire Hathaway purchased approximately $4 billion worth of Alphabet stock in the third quarter of 2025.

Abel stated that he will take a more proactive role in investment management, adding to or adjusting positions as needed. He added that he is "fully collaborating" with Buffett on investment decisions.

Abel: I had many years running various businesses at Berkshire Energy, and then served as vice chairman of non-insurance businesses. Fortunately, Jain and I have been in these great positions for the past eight years, and now nine. But this has created a very important opportunity for me to understand these businesses.

As I've already mentioned, we have an excellent business and excellent leadership, but there are still opportunities there. This does remind me that I'll be spending time on these businesses, ensuring we allocate capital appropriately, that we're still thinking about the risks involved, and encouraging operational excellence. Because, look, as an insider, it's easy to look at your internal metrics and convince yourself you're doing well; you have to look outward and ask: What are our customers seeing and feeling? What are our competitors doing? I believe that's precisely the value we can bring to our operations.

I've mentioned giving Adam Wright more roles, or more responsibilities in the 32 business units. He brings excellent operational knowledge, and we also have the team on the insurance side.

Now let's talk about our stock portfolio and time allocation. There's still a huge opportunity there when it comes to using the capital on our balance sheet. I've shared our cash and U.S. Treasury holdings. I want to emphasize that if you look at our current stock portfolio, as I explained in the letter, we have a concentrated portfolio. We emphasize this by calling it the core, but the best way to put it is that it truly is a concentrated portfolio. We have what we call the core and concentrated investments.

In my letter, I highlighted our investments in Japan. Interestingly, if you look at some of the companies where we hold very significant positions, I'd like to add that for these companies, we may still be buying stocks or rationalizing appropriate positions in our portfolio. So the first group, which I emphasized, is slightly under $200 billion and remains at that level. We now have close to $100 billion, or $85 billion. Then add Berkshire's other investments, such as Bank of America, Chevron, Google, etc., and that's another $70 billion invested. This highlights that a very large portion of our total investments is highly concentrated in a limited portfolio, and active management of these investments is actually limited, which is what I really wanted to emphasize.

We understand those businesses too. We understand the management teams. These are things Warren and I will still absolutely work together and discuss. You don't need to talk about them every day, but if something goes wrong in those businesses, we'll discuss it that week or that month. Maybe it's about their direction, or what we've learned. The Japanese company just released its results in the last 48 hours, which is a hot topic of discussion, and Warren and I discussed their results and what we've seen there yesterday morning. So, these are the core issues, but that doesn't mean we've put them aside, or that they're just focused investments we continue to monitor during our evaluations.

Ted manages another $20 billion, or slightly less, of capital, but his responsibilities extend far beyond that. He clearly helps us with a variety of other opportunities, or helps us assess risk or capital allocation in our business. So we are fortunate to have these, but when you consider the management and the amount of work required around it, it is a very manageable portfolio.

As we have already mentioned, the opportunity to deploy these cash and U.S. Treasury bonds at the appropriate time is a very significant opportunity, including stocks, including what we may see in our operating businesses, as well as in insurance.

Regarding time allocation, yes, we will dedicate a certain amount of time to operations; we will prioritize this because we see significant opportunities to continue improving and closing the gap in operational excellence. We see opportunities in our existing portfolio, but this will either involve increasing holdings or scaling up. Then we will continuously evaluate what other opportunities exist in the market, whether it's a full acquisition of a private or public company. Similarly, we are also considering what incremental opportunities exist if we were to own a partial stake in a company. These opportunities are evaluated in the same way, as I mentioned, we look at the economic outlook. And this is closely related to the previous answer.

Jain: I truly believe that capital allocation and operations are two sides of the same coin. There's something Warren said years ago that I think makes a lot of sense. He said: A good capital allocator will be a good operations manager, and vice versa.

Abel: When you consider our operating company, as I mentioned before, we have a very deep talent pool. We have exceptional operators who understand their business. They understand their industry, their customers. Yes, is there still room for improvement? Yes, it's a continuous improvement process, and we will close those gaps. But we have an exceptional team out there. Whether it's Jain, myself, Adam Wright, we take the time to make sure we're happy with how we allocate our capital, we understand the risks, and then we're aware of those gaps.

23:20 Second question: How to balance patience and action?

Question: As a young investor navigating uncertainty and rapid technological change, I often struggle to balance patience and action. How do you personally differentiate between these two?

Answer: One of our greatest strengths at Berkshire is patience and discipline in allocating capital. Opportunities will always arise for you over time. This doesn't mean there aren't opportunities now, but it also doesn't mean you need to deploy all your capital or spend all your money right now.

This is indeed our approach every day. We recognize that we hold a significant amount of cash and U.S. Treasury bonds—a crucial asset, for example, in our own case. I would consider this cash holding an asset, and it represents a tremendous opportunity. You sense that moment when you feel an opportunity has a strong value proposition. When will we see those?

We've outlined our investment philosophy, and a crucial element of it is that we must thoroughly understand the companies we invest in. We want a deep understanding—you mentioned technology and the rapid pace of technological evolution and change you've witnessed. I always start from this point, and I know we've always done it at Berkshire: Do we understand this business? Do we understand this opportunity? More importantly, do we understand the risks involved?

Then, we want to have a very clear view of the economic outlook for the next 5 to 10 years. Yes, next year is important, but we don't invest for the sake of investing in one year. We must have a long-term view of where the opportunities are heading. And we'll go even further—we will hold these investments forever.

So we think like this: we want a strong impression of the management team there, someone capable and operating with high integrity. But most importantly, ultimately, the value must first justify deploying our capital. We're not in a hurry to invest capital in suboptimal opportunities.

We want to know if it aligns with our principles, and then, as I said before, we will act decisively, swiftly, and with significant capital investment.

23:15 The first question in the real Q&A session: Where does human judgment still remain a competitive advantage for Berkshire Hathaway?

Question: Given current AI tools, where does human judgment still remain a competitive advantage for Berkshire Hathaway?

Jain: Artificial intelligence is also very popular right now. People are flocking to it in both the insurance and non-insurance sectors. Obviously, if artificial intelligence really becomes a reality as people expect, then there is no doubt that it will be a huge game-changer.

Currently, we see artificial intelligence being used as a productivity tool, a mechanism to reduce labor costs and perform routine, repetitive tasks. I don't think AI will reach the point where it can make decisions on things that require trade-offs, such as pricing and claims. That will take many years. Moreover, I tend to be skeptical. I would be surprised if someone told me it could solve that problem. So, if you're expecting AI to tell you which stocks to buy and which to sell, I don't think that's going to happen.

Jain said that a few weeks ago, he was with Abel, discussing this issue, when Abel called his team on the phone and immediately brought up cyber risks, something they had already discussed. Then they quickly went on to how they could improve the efficiency of writing and managing code, actually across the entire insurance business and within the building philosophy they were very focused on. They immediately brought that up. Then, as you mentioned, how to become more efficient. They also gave what I thought was a very good example. I mean, if we were looking at a risk, and it were a traditional underwriter doing it, we might only focus on the five biggest risks, as your team pointed out. Now, we can be quite quick to see those big risks we're looking at, but with technology, we can also quickly see other risks. We might be looking at 15 other risks and have a strong judgment about them.

23:05 The first question in the Q&A session was from Buffett: Why hold Berkshire Hathaway for the long term?

Shareholders unexpectedly received a vivid lesson on the risks of artificial intelligence at this year's annual meeting. At the start of the Q&A session, Abel played a video featuring a familiar-looking face.

On the big screen, a man dressed in a suit, posing as "Warren Buffett," introduced himself and asked Abel: Why should investors hold Berkshire Hathaway stock for the long term?

Hi everyone, my name is Warren, and I'm from Omaha. Abel, I've been following this company for a long time, a very long time. My question is simple. I'm 95 years old, and I have everything except time and cherry cola. I want to know—just so I can tell my shareholder friends—why they should hold Berkshire Hathaway stock for the long term?

Abel then revealed the truth: the video was not real footage, but a "deepfake" video generated using AI technology. He took this opportunity to emphasize the cybersecurity risks to the shareholders present.

In response to Warren Buffett's question, "Why should investors continue to hold Berkshire Hathaway stock?", Abel emphasized the company's massive $397 billion cash reserves, which he stated gave Berkshire ample freedom of action. "We hold cash and U.S. Treasury bonds, which serve several purposes, and we do not intend to be controlled by anyone."

Abel reiterated the core investment and business principles that his predecessor, Warren Buffett, had long upheld.

He told investors that holding cash in the form of U.S. Treasury bonds, maintaining financial independence, flexibly allocating capital, focusing on tax efficiency, and remaining highly vigilant against the “ABCs”—arrogance, bureaucracy, and complacency—remain Berkshire’s top priorities.

We have heard countless times that arrogance, bureaucracy, and complacency—these "three poisons"—can quietly erode a company and ultimately destroy it. We will never allow this to happen at Berkshire.

He described Berkshire as a unique company—capable of integrating a variety of diverse businesses while possessing the ability to deploy capital quickly and flexibly.

Berkshire is a conglomerate, and we are fully aware of that. But we are a different kind of conglomerate because we can allocate capital very efficiently. We can move funds from insurance to non-insurance businesses, invest in the stock market, or hold cash when we deem it appropriate.

Abel stated that this deepfake video of Buffett profoundly reveals the AI-driven cybersecurity risks that Berkshire Hathaway is facing:

This serves as a stark reminder for our team. It's a significant risk that we deal with every day, throughout Berkshire Hathaway.

Berkshire Hathaway will focus on using technology to identify cyber threats, particularly in its insurance business.

Abel also specifically stated that the production of this deepfake video of Buffett was completely unauthorized and without the participation of the "Oracle of Omaha" himself.

22:50 Prefabricated home builder Clayton is hit by interest rate levels.

Abel stated that prefabricated homebuilder Clayton Homes has been hit hard, with potential homebuyers facing multiple pressures, including high mortgage rates. This is clearly driven by current interest rate levels. Consumers also face several other challenges.

Abel stated that the company's goal is to provide "affordable housing" for American consumers, a statement that drew enthusiastic applause from the audience.

22:40 Abel believes that data center construction will bring huge growth to public utilities.

Abel stated that the large-scale construction of data centers and the resulting demand pressure on the power grid are creating considerable growth opportunities for the utilities sector.

Abel cited the expansion of hyperscale data centers in Iowa as an example, pointing out that current energy demand still has considerable room to fall short of peak load capacity:

Currently, peak load—that is, actual electricity consumption—accounts for about 8% of data center usage. Industry experts generally hope to reach 5% to 10%, while we have already reached 8%. Therefore, we expect this percentage to grow by another 50% or more over the next five years.

Abel stated that it is crucial to isolate the electricity costs of data centers from those of regular grid users and ensure that these costs are borne by the electricity-consuming companies themselves. "Hyperscale data center operators, data centers, and all types of electricity users—must bear all costs themselves."

During the AI ​​boom, the pressure that data centers put on local power grids has become a focus of attention for many environmental and consumer advocacy groups.

22:20 CEO refuses to follow the trend and bet on AI, continuing Buffett's investment philosophy

Berkshire Hathaway CEO Abel spoke about AI: "We won't use AI for the sake of AI. We'll only invest when we see real value. AI must provide a substantial benefit to our business. The application of AI brings opportunities to all our businesses."

Abel stated that Berkshire Hathaway's cautious approach to the application and management of artificial intelligence stands in stark contrast to CEOs of other companies who are eager to reshape their business direction or rebrand around this technology.

Abel stated that Berkshire Hathaway will deploy AI in a focused and value-creating manner, while also noting that the technology poses potential risks to "humans," which the company is paying close attention to.

22:00 Abel explains the financial report

Abel stated that the insurance market is "becoming more relaxed" as competition intensifies. Auto insurance customers are exhibiting unprecedented price comparison shopping.

21:50 Buffett praises Apple CEO Tim Cook

In his opening remarks, Buffett asked outgoing Apple CEO Tim Cook to stand and salute him, a statement that echoed the power transition within Berkshire Hathaway itself, from Buffett to the new CEO, Greg Abel.

Warren Buffett discussed the immense pressure Tim Cook faced after taking over from Steve Jobs as Apple founder, and how he lived up to expectations and delivered outstanding results. Buffett said:

Just think, how much courage does it take to succeed Steve (Jobs) and surpass his achievements? It's truly one of the miracles of American business history. Thank you, Tim.

After Steve's passing, we made the investment decision to bet nearly 10% of Berkshire's resources on Apple, effectively handing it over to Tim, who turned that investment into a pre-tax return of approximately $185 billion.

Cook announced earlier this month that he would step down as CEO, and Apple's hardware chief John Turner will take over his position.

21:45 Buffett praises Abel: CEO choice "100% successful"

Buffett took the microphone from his seat and once again praised Abel. He pointed out that today marks the anniversary of when he announced Abel would take over as CEO. Buffett said, "This was the best decision we've ever made, 100% successful. He did everything I've ever done, and even more. He's the right person."

21:20 Opening remarks for the 2025 Annual General Meeting of Shareholders

95-year-old Warren Buffett was led to his seat in the front row of the boardroom, where he was greeted with enthusiastic applause from the shareholders. This marked the first time in sixty years that Buffett had not been the undisputed star of Berkshire Hathaway's annual shareholders' meeting.

The Berkshire Hathaway annual shareholders meeting opened with a tribute to Warren Buffett. A video montage reviewed precious photos and footage of the "Oracle of Omaha" over the years, set to Huey Lewis and The News Band's classic "Back in Time," and interspersed with highlights from previous shareholders meetings.

Abel introduced the company's key personnel in alphabetical order, and when he introduced Buffett, the audience erupted in applause.

At the opening of the annual shareholders' meeting, Abel officially retired Warren Buffett's jersey bearing the number "60," permanently commemorating the "Oracle of Omaha's" decades-long service to the conglomerate. Retiring a jersey is a tradition in the sports world and is considered the highest honor bestowed upon an athlete.

This jersey hangs high on the roof rafters, alongside the retired jersey of the late investment guru Charlie Munger—Munger's jersey has the number "45" printed on it, representing the number of years he worked at the company.

Abel said, "I am happy to announce that these two jerseys will hang there forever."

Before the start of the meeting: Berkshire Hathaway shareholders' meeting "Taobao Festival" saw a slight decline in attendance.

Inside the spacious exhibition hall of the CHI Health Center in Omaha, the annual "Berkshire Hathaway Sale" was held as scheduled, attracting as many visitors as ever, although the crowds were noticeably thinner than in previous years.

This shopping event, covering approximately 2,000 square meters, was held concurrently with Berkshire Hathaway's annual shareholders' meeting. Familiar faces were all present: Buffett-themed merchandise from Brooks Sports, chocolate coins from See's Candies, and various souvenirs from dozens of subsidiaries. However, compared to previous years, the queues were shorter, and the crowds were noticeably thinner.

Abel made a point of visiting each booth in the lobby, greeting employees and shaking hands with shareholders. Wherever he went, shareholders lined up to take photos and chat with him.

The Squishmallow plush toy—a blockbuster product from Jazwares acquired by Berkshire Hathaway through its 2022 acquisition of Allegheny—is experiencing a resurgence in popularity, with a new design based on Abel's work particularly eye-catching. Abel was "dedicated, passionate, and fully involved" in the project, even personally contributing to the design of his own Squishmallow. The company has also collaborated with other Berkshire brands such as BNSF Railway, NetJets, GEICO, and See's Candies on numerous limited-edition toys.

See's Candies, one of Berkshire Hathaway's most iconic brands, launched a number of themed chocolate products and displayed cardboard cutouts of Buffett and Abel playing ice hockey – a tribute to Abel's Canadian background and a reflection of his well-known passion for ice hockey.

Brooks running shoes also capitalizes on the fan economy, releasing a limited edition running shoe for the 2026 Berkshire Hathaway shareholders meeting, with "Berkshire Hathaway" printed on the side and insole.

On Sunday morning following the shareholders' meeting, nearly 2,000 shareholders are expected to participate in Brooks' "Invest in Yourself" 5km fun run, which features a brand-new race route this year.

Before the conference began: The number of people queuing has decreased significantly this year.

Compared to previous years, the lines outside the CHI Health Center were noticeably shorter on Saturday mornings. This may indicate a decline in shareholder enthusiasm for attending meetings in person, now that Buffett is no longer chairing them.