He doubles down on his words of warning last year, Buffett told the crowd that he had recently been confronted with the drawbacks of AI. And it looked and sounded just like him. Someone made a fake video of Buffett, apparently convincing enough that the so-called oracle from Omaha himself said he could imagine it would tempt him to send money abroad.
The billionaire investment guru predicted that fraudsters would take advantage of the technology, potentially causing more harm than good for society.
“As someone who doesn’t understand anything about it, it has enormous potential for good and enormous potential for harm, and I just don’t know what the impact will be,” he said.
Merit before pondering
The day started early Saturday with Berkshire Hathaway announced a sharp decline in profits as the paper value of its investments fell and it reduced its Apple holdings. The company reported first-quarter profit of $12.7 billion, or $8,825 per A share, down 64% from $35.5 billion, or $24,377 per A share, in the corresponds to the previous year.
But Buffett is encouraging investors to pay more attention to the conglomerate’s operating profits from the companies it actually owns. These rose 39% to $11.222 billion, or $7,796.47 per Class A share, led by insurance company performance.
None of this took away from the fun.
Crowds flocked to the arena to buy squishmallows from Buffett and former vice chairman Charlie Munger, who died last fall. The event attracts investors from all over the world and is unlike any other corporate meeting. Those attending for the first time are driven by an urgency to get here while the 93-year-old Buffett is still alive.
“This is one of the best events in the world to learn about investing. Learning from the gods of the industry,” said Akshay Bhansali, who spent nearly two days traveling from India to Omaha.
A notable absence
Devotees come from all over the world to absorb the wisdom of Buffett, who famously called the meeting “Woodstock for capitalists.”
But one important ingredient was missing this year: it was the first meeting since Munger died.
The meeting began with a video tribute that highlighted some of his most famous quotes, including classic lines like “If people weren’t wrong so often, we wouldn’t be so rich.” The video also included skits that investors did along the way over the years with Hollywood stars, including a “Desperate Housewives” parody in which one of the women introduced Munger as her boyfriend and another in which actress Jaimie Lee Curtis had a crush on him.
As the video ended, the arena erupted in a sustained standing ovation in honor of Munger, whom Buffett called “the architect of Berkshire Hathaway.”
Buffett said Munger remained curious about the world until the end of his life at age 99, hosting dinner parties, meeting people and holding regular events Zoom Calls.
“Like his hero Ben Franklin, Charlie wanted to understand everything,” Buffett said.
For decades, Munger and Buffett functioned as a classic comedy duo, with Buffett providing lengthy productions to Munger’s witty one-liners. He once called unproven internet companies “piles of shit.”
Together, the two transformed Berkshire from a failing textile mill into a massive conglomerate made up of a variety of interests, from insurance companies like Geico to BNSF Railroad to several large utilities and a range of other companies.
Munger often summarized the key to Berkshire’s success as “trying to consistently not be stupid, rather than trying to be very intelligent.” He and Buffett were also known for sticking to businesses they understood well .
“Warren always did at least 80% of the talking. But Charlie was a great contrast,” said Stansberry Research analyst Whitney Tilson, looking forward to his 27th straight meeting.
Next generation leaders
But Munger’s absence gave shareholders a chance to get to know the two executives who directly oversee Berkshire’s businesses: Ajit Jain, who heads the insurance units; and Abel, who takes care of everything else and was named Buffett’s successor. The two shared the main stage with Buffett this year.
The first time Buffett asked Abel a question, he mistakenly said “Charlie?” Abel shook off the error and pounced on the challenges facing utilities from increased risk of wildfires and the reluctance of some regulators to give them a fair profit to enable.
Morningstar analyst Greggory Warren said he believes Abel spoke out more on Saturday and showed shareholders some of his brilliance Berkshire executives talk about it.
Abel put a twist on Munger’s classic line, “I have nothing to add,” often beginning his answers on Saturday with the words, “The only thing I would add.”
“Greg is a rock star,” said Chris Bloomstran, president of Semper Augustus Investments Group. “The bench is deep. He won’t have the same sense of humor at the meeting. But I think we all come here to be reminded every year to be rational.”
A look into the future
Buffett has made it clear that Abel will be Berkshire’s next CEO, but said Saturday that he has changed his mind about how the company’s investment portfolio should be handled. He had previously said it would be left to two investment managers who would now manage small portions of the portfolio. On Saturday, Buffett supported Abel for the appearance and also oversaw operations and possible acquisitions.
“He understands companies very well. And when you understand companies, you also understand common stocks,” Buffett said. Ultimately, the decision rests with the board, but the billionaire said he could come back and pursue them if they try to do it differently.
Overall, Buffett said Berkshire’s system, where all non-insurance companies report to Abel and insurers report to Jain, is working well. He hardly gets any calls from managers anymore because they seek advice more from Abel and Jain.
“This place would work really well the next day if something happened to me,” Buffett said.
The best applause of the day, however, was Buffett’s closing remark: “Not only do I hope you come next year, but I hope I come next year.”