Berkshire's 2024 annual shareholder meeting: Watch the full morning session

Yeah, don’t wear out all your clapping on Charlie. I mean we got in addition, well we have first of all Greg Abel the director and and AG Jane sending a stem with funds insurance and moving then to this back of this first section If if each of the directors there would remain standing till we finish, we’ll we’ll go alphabetically down the line. And we’ve got Howard Buffett. We have Susan Buffett, Steve, Steve Burke, Ken Chenal, Chris Davis, Sue Decker, Charlotte Diamond, Tom Murphy Junior, Ron Olson, Wally Whites and Meryl Whitmer. OK. There are two people I would like to thank and then we’ll get on to the brief description of the results of the first quarter. First of all, I’d like to thank Melissa Shapiro, who put this whole event together. You can’t imagine the work that goes into it, but she just reported to me that we set a new record for See’s Candy. I think they brought along 6 tons and they will sell out. And one thing I do want to mention, we have only one book as a bookstore, The Bookworm this this year. Normally we have about 25, but we have poor, poor Charlie’s Almanac 4th edition and I think we sold about 2400 of them yesterday and that will be the only book next. Next year we’ll go back to having our usual selection, but we thought we would just turn it over to Charlie this year. And then I would like to introduce one further person and that’s the person who put that movie together. And you can’t imagine the amount of work it is because for example on those scenes that we’ve used from the past if they involved Hollywood stars or various people we needed to get permission all over again to show it because we’re we told them originally we would only show it within the confines of our auditorium here. And of course it went out on CNBC and and you just can’t imagine how much effort but also the the the great cooperation we got from all those Desperate Housewives and Jamie Lee and and with the Desperate Housewives we we had to get Disney’s OK and and that was easy to get but running down five Desperate Housewives that one came on came in toward the end. But we that that the job of putting this together has been handled by the same fellow that handles us, been doing these for years and years and years and years And I just would appreciate it if you could just put the spotlight on Brad Underwood for just a minute. OK. We we put out some results for the first quarter this morning at 7:00 our time and some few sharp white analysts and and press people already picked up one or two items from it, which I’m sure we’ll get some questions on later. But if we could start out with Slide #1, which is that should be showing now you’ll see that that in the first quarter the way and we talk about operating earnings at Berkshire, we we’ve explained that many times. This is why we think these figures that we give you are the most descriptive of what’s really going on in the business and and take out the wild swings in the market. But that otherwise just and that was reporting big earnings 1/4 and big losses another quarter. We we pay no attention to those at Berkshire, but you will see that that we had a better than average quarter. And Ajit, Jain wants me to point out to everyone that you cannot take the insurance earnings of the first quarter and multiply by 4. It just doesn’t work that way and insurance and while we ensure storms around the world the major storms for example that would affect our earnings would be probably #1 would be something that went along the that came in at the wrong place from our standpoint and that just kept going up the East Coast. And that’s our that’s that’s our number one risk as we evaluate things but we’re in all kinds of risks. There can be an earthquake tomorrow. There can be an earthquake 10 years from now and then they’re yeah we we’re in that sort of business but the first quarter does it does hit the should be our best quarter certainly shouldn’t be our worst quarter, the most likely quarter to be the worst quarters of the third quarter but anything can happen insurance but fortunately nothing much happened in insurance during the first quarter. So we had much improved earnings and in insurance underwriting and then our investment income is was almost bound to well it was almost certain to increase and I said that in the annual report because yields are so much higher than they were last year and we have a lot of fixed short, short term investments that are very responsible to the changes in interest rates. So that figure is up substantially and I can predict that that one will be up for the year. We’ve got more money to to invest as we’ll get to in a minute and that’s fairly predictable. So that number will be up when you get into the into the railroad. The railroad earnings we’re down modestly and and but we should not immediately but we we we should be earning somewhat more money than we are earning under present traffic conditions and then traffic conditions can also hit the earning. It’s a potential earnings of the railroad and if you want every Wednesday you can get car loadings from the previous week and I’ll regard goes a little deranged if you do get them, but I get them every week they’re available and you’ll see that car loadings have been running for the industry have been running down modestly and these earnings are were as is expected, but but we should earn somewhat more money than that on the equivalent of the model card holdings. And when the energy company we had better earnings but our earnings were distorted. Well they were affected by conditions that I wrote about in the annual report and we’ll undoubtedly discuss more this morning. But a off a low base of last year they were up somewhat and so you get down to the final figure and 11.2 billion is it’s quite an improvement from last year. But we would expect our earnings should go up modestly from year to year because after all over we’re retaining like 37 billion last year of earnings. So if we put 37 billion more you left it with us, we should do something that satisfactory. And the goal of Berkshire economic goal is to increase the operating earnings and decrease the shares outstanding. It’s that simple to describe. It’s not quite so simple pull off necessarily but that that that’s what we’re attempting to do. And if we’ll turn the slide too please. I’ve got the history and I I just picked the pre pandemic the year of when we hit 24 billion and then we fell off in the first year of the pandemic. And then as you see we’ve moved up from 27 to 30 to 37 billion. And interesting thing about these earnings is they’re after depreciation and amortization and taxes and all that sort of thing. So you can figure that essentially Berkshire has a little over $100 million per day including weekends and holidays coming in to deploy. And we’ve set out many times what we’re attempting to, we’re attempting to deploy that money. But but we have that responsibility and sometimes if you’ll turn to the next page, well you’ll see how that’s built up the shareholders equity. So that Berkshire had that March 31st, 574 billion and through retaining earnings and we’ve been retaining earnings ever since we took control of Berkshire Hathaway. Except one day as I remember I think it was maybe 1968 or 9. I I the director’s declared a $0.10 a share dividend and I I think I must have been in the restroom or something at the time. So if you leave out that period of madness we’ve been retaining our we’ve been saving our money putting it to work and sometimes sometimes we’ve done things that were big mistakes and but but never we never get close to fatal mistakes and every now and then we do something that really works and as Charlie had pointed out in the past you know it’s really it’s probably been a half a dozen to a dozen over 57 or 58 or whatever it would be really important big decisions and there’s been nothing close to fatal. So that continues to be the guideline and we have accumulated 571 billion and I I couldn’t help but look at who’s 2nd and JP Morgan at 327 billion at year end and and they’re up to 338 I believe at the end of the quarter. And but they pay significant dividends. They repurchase shares that they’ve got a business that earns better returns on equity. But they they don’t follow it and they shouldn’t, they don’t follow it back exactly like we have. And it this does show what can be done really without any miracles. If you if you save money over time and we have a group of shareholders. We have a group of partners originally Charlie and I did that wanted to save money and left their money with like in that film you just saw you saw Eddie and Dorothy Davis and the Davis family and the children and the grandchildren periodically did some other things with the money but they also basically left it with us and and we were a savings vehicle and they were able to do live very well but they weren’t they weren’t trying to to live like the the kings and Queens of earlier in capitalism and used to build the houses in in New England and you know have a servant but standing behind everybody eating and all that sort of thing. So we’ve had very few what I would call look at me type people that are attracted, there’s nothing wrong with it but but but they just go someplace else and and they are spending sort of unbelievable sums after a while by the standards of the past and our people nobody we’ve had nobody that’s that’s a miser or a hoarder or anything like that in our group. They live very well. But the math of compounding and a long long runway have done wonders and we will talk a little later right before lunch, we’ll we’ll give an illustration of that of what can be done with that sort of philosophy. So our cash and treasury bills were 182 billion at the quarter end and I think it’s a fair assumption that they brought probably about 200 billion at the end of the this quarter. We’d love to spend it, but we won’t spend it unless we think we’re doing something that has very little risk and can make us a lot of money. And and and our stock is at a level where it’s, it’s adds slightly to the value when we buy in shares. But we would, we would really buy it in a big way except you can’t buy it in a big way because people don’t want to sell it in a big way. But if under certain market conditions we could deploy quite a bit of money in and in repurchases and as you’ll see on the final slide, we have bought it in the last five years. We can’t buy them like a great many other companies because it just doesn’t, it doesn’t trade that way. The volume isn’t the same because we have investors and we and the investors, the the people in this room really they don’t think about selling. They probably would hope. Many of you don’t even check the price daily or weekly. You know it. The people who check the price daily have not made the money that the people have forgotten about it basically have over the years. And that’s sort of the story of Berkshire. We’ll try to increase operating earnings and we will try to reduce shares when it makes sense to do so. And we will hope for an occasional big opportunity and we’re quite satisfied with the position we’re in. So with that background, I think we’ll turn it over to Becky quick and we will alternate questions between Becky and those of you in the audience. And Becky, do you want to start with the first question? Sure. Thanks, Warren. Let’s start just given what you mentioned, there was some news that came out in the 10 Q this morning. It shows that Berkshire sold another 115,000,000 shares of Apple in this last quarter. That’s Berkshire’s largest holding. And I I think in that vein, we’ll start with a question from Sherman Lamb. He is a 27 year old Berkshire Hathaway Class B shareholder from Malaysia and he asks last year you mentioned Coca-Cola and American Express being Berkshire’s 2 long duration partial ownership positions and you spent some time talking about the virtue virtues of both these wonderful businesses. In your recent shareholder letter I noticed that you have excluded Apple from this group of businesses. Have you or your investment managers views of the economics of Apple’s business or its attractiveness as an investment changed since Berkshire first invested in 2016? I know I would the but we have sold shares and I would say that at the end of the year I would think it extremely likely that that that apple is the largest common stock holding we have. Now one interesting thing is that Charlie and I looked at common stocks or marketable equities or the things that people love to look at as being businesses. And so when we, when we own a Dairy Queen or we own whatever it may be, we look at that as a business. And when we own Coca-Cola or American Express rapper, we look at that as a business. Now we can buy really wonderful companies in the market. As businesses, we can’t buy all of them. I mean all of the their shares. We can’t buy 90% or 80% or anything like that. But when we look at Coca-Cola and American Express and Apple, we look at them as businesses. Now there’s differences in tax factors, there’s difference in managerial responsibility, a whole bunch of things. But in terms of deploying your money, we always look at every stock as a business and we don’t. We have no way, no attempt made to predict markets. We have no attempt made to pick stocks. I went through many, many years doing the wrong thing. I got interested in stocks very early and I was fascinated by them and I wasn’t wasting my time because I was reading every book possible and everything else. But finally, I picked up a copy of The Intelligent Investor in Lincoln and and there was a few sentences in there that that said much more eloquently than I can say it. But if you look at stocks as a business and treat the market as something that doesn’t tell you, isn’t there to instruct you, but it’s there to serve you, you’ll do a lot better over time. Then if you try to take charts and listen to people talk about moving averages and look at the bad pronouncements and all of that sort of thing. And so that made a lot of sense to me then the way I’m the way I’ve been allowed to deploy it. Charlie and I talked about this of course constantly. It’s changed over the years is the amount of capital we have and it kind of has changed and all of that. But the the basic principle was was laid out by Ben Graham in that book which I picked up for a couple of dollars and and which basically said to me you’ve been wasting your time now but maybe you can use what you’ve learned or been reading about and put it to better use. And then Charlie came along and told me how to put it to even better use. And that’s sort of the story why we own American Express, which is a wonderful business. We own Coca-Cola, which is a wonderful business and we own Apple, which is an even Better Business. But and we will own us. Something really extraordinary happens. We will own Apple and American Express and Coca-Cola When Greg takes over this place and and it’s it, it it’s such a simple approach that it’s almost deceptive. Most things if you keep working harder and harder at or you know you learn a little more math or you learn a little more physics but investments you don’t really have to do that. You really have to have your your mind set properly. So. So we will, we will end up in plus something dramatically happens that really changes capital allocation a strategy and we we will we will have Apple as our largest investment. But I don’t mind at all under current conditions building the cash position. I think when I look at the alternative of what’s available then the equity markets and I look at the composition of what’s going on in the world, we find it quite attractive. And one one thing that may surprise you, but we almost everybody I know pays a lot more attention to not paying taxes and I think they should. We we we we don’t mind paying taxes at Berkshire and we are paying a 21% federal rate on the gains we’re taking in in Apple and that rate was 35% not that long ago and it’s been 52% of the in the past when I’ve been operating. And it the government owns, the federal government owns a part of the earnings of the business we make. They don’t own the assets, but they own a percentage of the earnings and they can change that percentage any year. And the percentage that they’ve decreed currently is 21%. And I would say with the present fiscal policies, I think that something has to give. And I think that that higher taxes are are quite likely and the government wants to take a greater share of your income or mine or Berkshire’s. They can do it. And they may decide that someday they don’t want the fiscal deficit to be this large because that has some important consequences and they may not want to decrease spending a lot and they may decide they’ll take a larger percentage of what we earn and we’ll pay it. And we always hope at Berkshire to pay substantial federal income taxes. We think it’s appropriate that a company, a country that’s been, as has been as generous to our owners, it’s, it’s, it’s been the place. I was lucky, Berkshire was lucky was here. And if we, if we send in a check like we did last year, we send in over $5 billion to the US federal government. And if 800 other companies had done the same thing, no other should Person in the United States would have had to pay a dime of federal taxes or their income taxes. No Social Security taxes. No. Estate taxes. No. It’s open down the line now that’s that’s I would I would like to I I hope things develop well enough with Berkshire that we we say we’re in the 800 club and and maybe even move up a few notches. It doesn’t bother me in the least to write that check. And I would really hope with the all that America’s done for all of you, it shouldn’t bother you that we do it. And if if I’m doing it at 21% this year and we’re doing it at a higher percentage later on, I don’t think you’ll actually mind the the fact that we sold a little apple this year. OK, let’s go to Section 1. Hi, Mr. Buffett, this is Matthew Live from China, Hong Kong. I’m running my last listing company called FF Dub and we are so grateful that you learn from you and you really inspire us. My questions is besides the electrical car company BRD, under what circumstances you will reinvest and reconsider to invest Hong Kong and China Company? Thank you. Well, our primary investments will always be in the United States. We do think it the companies we invest in the United States. American Express does business around the world and no company hardly does business around the world like Coca-Cola. I mean they’re they are the preferred soft drink you know and something maybe like 170 or 180 out of 200 company at 200 countries. Those are rough approximations from a few years back probably but but at degree of acceptance worldwide is I think it’s almost unmatched. I can’t really think of any company that has an American Express has a position and the credit card deal which I think is extremely strong and and part of that was one of the director. Part of the reasons for that is one of the directors that introduced a few few minutes ago Kensh and all but it it it is it is strengthened dramatically over the last 20 years for a lot of reasons. So we will the the BYD investment was A and and well we we made them, we made the commitment in Japan which I did five years ago and and that was just overwhelmingly was compelling. It was extraordinarily compelling and we put we bought it as fast as we could and we spent a year and you know we got a few percent of our assets in five very big companies. But that’s the problem of being our size. But you won’t find us making a lot of investments outside the United States. Although we’re participating through these other companies in the world economy. But I understand the United States rules, weaknesses, strengths, whatever it may be. I I don’t. I don’t have the same feeling for for economies generally out around the world. I don’t. I don’t pick up on other cultures extremely well and and the lucky thing is I don’t have to because you know, I don’t live in some tiny little country that has no, just doesn’t have a big economy. But I’m in an economy already that has, you know, after starting out with a half a percent of the world’s population has ended up with well over 20% of the world’s output in in an amazingly short period of time. So, so I we will, we will be American oriented. I mean if if we do something really big, it’s extremely likely to be in the United States. Charlie in all those years there’s only two times he’s told me that you know this one is really you know he he would he would always go along with me and don’t say well when I was suggesting something you say, well this is really not that great but but it’s probably the best you’ll come up with. So I’ll go along with the idea. But CC twice has pounded the table with me and just said you know bye, bye, bye. And BYD was one of them and and Costco was the other and we bought a certain amount of Costco and we bought quite a bit of bought BYD but but but looking back he already wasn’t as aggressive but I should have been more aggressive And in Costco it wasn’t fatal that we weren’t but but he was right big time in both companies and I will I’m aware of what goes on in most markets but I think it’s unlikely that that we make any large commitments in almost any country you can name. Although you know we don’t rule it out entirely and I feel extremely good about our Japanese position and we’ll have that. I don’t know how many years Greg will be sitting with that at some point and and we couldn’t be happier with that. But you really have to, we really have a different outlook in looking at at at, well, we look at your money, which we couldn’t bear to lose and we feel that we we’re very less likely to make any truly major mistakes in the United States and in many other countries. OK, Becky, this next question comes from Stanley Holmes, who is a Berkshire shareholder from Salt Lake City. He asks in his 2024 annual letter to shareholders. Chairman Buffett noted the severe earnings disappointment experienced at Berkshire Hathaway Energy last year and expressed concern about earnings and asset values in the utility industry. Recognizing that investors are worried about climate change related expenses and that new uncertainties cloud the regulatory environment, the Chairman suggested that some jurisdictions may adopt the public power model. There are now signs that policy makers in Utah stating, citing state serenity, may already be poised to move in that direction. The Utah legislature recently mandated the state’s right to serve as sole purchaser of energy from an in state power plant and under some some circumstances, purchase the power plant before it can be retired. The state utility regulator will be legally bound to prioritize public purchases of power and facilities that could include assets owned by Berkshire Hathaway Energy Specific Work utility Rocky Mountain Power. Will Berkshire, through BHE, continue to invest resources and jurisdictions where corporate assets may be subject to confiscatory state policies and actions? And how is Berkshire Energy working with officials in Utah to minimize potential corporate losses if and when state control is asserted over its electrical utility sector? No. I will let Greg join it with me and the answer on this. But but I would say our, our feeling is that Utah is actually very likely to treat us fairly. Whether the action is in, in granting appropriate rates that give us the return we expected, generally expected in in terms of our own properties or if they decide for some reason to go to public power. I think they would compensate us fairly in the 1930s. George Norris, the Senator from Nebraska just turn Nebraska into a public power state and our experience in Iowa would indicate that that free enterprise has its role and that we can run a a privately owned utility company that will be more efficient for society. Then at least in most states people can do with public power. But what has happened is that there’s going to be enormous amounts of money enormous amounts of money spent on power. And we’ve been we’re if you’re going to do it with with private owners, there’s nobody better situated than Berkshire to satisfy the the portion but a a large portion of the needs of the country and and we will do it at at at a rate of return that is is not you know it’s not designed to make us I think it’s rich or anything like that. It’s it’s it’s a sensible rate of return but we won’t do it if we think we’re not going to get any return it’d be kind of crazy and we’ve seen actions in a few states where some of the costs associated with climate change you’re not being regarded as as cost of the utility shouldn’t incur. Well believe me if it was publicly owned they would have incurred it too but but we will we’ll do what societies tells us and we have got the money and we’ve got we’ve got the knowledge to participate big in something that is enormously important for the country. But we’re not going to do. We’re not going to we’re not going to throw good money after after bad and feel I don’t worry about. My understanding is and Greg’s can elaborate on this now immediately. But I don’t regard Utah as being unfriendly to the idea of utilities being treated fairly CC. I’m so useful. I had actually checked myself a couple of times already, but I’ll slip, I’ll slip again that’s a great honor when. Yeah. When we well warn you touched on it initially in your letter relative to the the challenges in the industry and then you’ve just alluded to the significant investment that has to go into the energy industry, the utility sector for for many years to come. And and I think if we start there, if I think of our different utilities, it will definitely come to to Utah and Pacific Corp. But if you look at the underlying demand that is building in each of those utilities and the amount of dollars that are going to have to go in to meet that demand, it’s absolutely incredible, so. When you raised it in your letter, it’s a really important issue. We have to have a regulatory compact that works between if it’s a public utility it has to work in in concert with the the state, Utah being an example or it ultimately becomes potentially a public power entity. So it just to just to set the the frame a little bit, if I think of Iowa which you mentioned and the underlying we’ve made substantial investments there. It’s been very consistent with both the the public policy that the state and legislator wanted and they enacted very specific laws to encourage that. But that utility is more than 100 years old right now. And if we look at the demand that’s in place for mid America and Iowa, Iowa utility over the next say into the mid twenty 30s associated with AI and the data centers that that demand double S in that short period of time and that happened and it took 100 years plus to get where we are today and now it’s going to double and for and that will require substantial amounts of capital from the from mid American and its shareholders. And how that will function is if we have a proper regulatory compact in place which which you’ve highlighted. If we then go to say Nevada where we we own two utilities there and and cover the lion’s share in Nevada. If you go over a similar time frame and you look at the underlying demand in in that utility and say go into the later twenty 30s, it triples the the underlying demand and billions and billions of dollars have to be put in. Our rate base will literally go from. It’s not a modest level now, but you’re talking probably an incremental 6 to 10 billion at least of rate base going into that type of entity, which requires again alignment with the the state and their policies and a proper recovery of our underlying both capital and a return on capital. So when we come to the wildfires that’s been a substantial challenge because it’s the first time there’s been a lot of discussion around one of our utilities, one experienced significant losses associated with the the, the wildfires, what portion of those costs will be recovered and that’s really the the dialogue we’re in and does that properly, properly work. When I think of the wildfires were there’s been many claims in a a recent additional claim last week for $30 billion and it’s we we don’t take that lightly, but it is an incremental claim to an already existing lawsuit that’s in place. And when I think of Pacific Corp, we’re we’re in a place where first and foremost all the litigation will be challenged because the basis for it at least we believe there’s places where it’s unfounded and we’ll continue to challenge it and it will take many years to be resolved as as Warren highlighted in the letter. But if you think of Pacific Corp and the litigation there, number one, how we, how we think and operate those assets have to change because we’ve had a regulate. We, we have worked with the states across all our states for many years with the fundamental goal to be to keep the power on. And our our teams and our employees worked incredibly hard to keep the power on day in, day out through storms. Unfortunately, through the 2020 fires, the instincts were not to turn off the power. The instinct was to keep the power on to keep hospitals, fire stations responding. And it’s not in their mind or at least culturally it wasn’t in our minds to de energize. So the first thing we had to do was step back and say we’ve got to fundamentally change the culture, not just at Pacific Corporate across all our utilities. The first thing we have to recognize is that there’s now going to be situations where we prioritize de energizing the assets and that’s completely different than we’ve how we’ve operated those assets as I’ve highlighted for 100 plus years. So we we start with the culture we had to change that. The second thing is we’ve now changed our operating systems so that we can turn off the power very quickly. If there’s a fire that’s encroaching, we will turn off our systems now and we’ll go the minute the the the conditions are safe. Again we’ll re energize it, but we’ve had to do that. And then the third thing is continuing to invest in a way that allows us to try to minimize the risk of the fire. But when you get back to Utah and Pacific Corp, the challenge we do have is within Pacific Corp as we go through both the litigation and through continuing to operate that entity, it generates a certain amount of of capital and profits that will remain in that entity and being reinvested back into that business. But but fundamentally as we go forward we need both legislative and regulatory reform across the Pacific Corp states if we’re if we’re going to deploy incremental capital make incremental contributions into that business. As Warren said we don’t want to throw good capital after bad capital. So we’ll be very disciplined there. But the reality is there are opportunities to both solve the the legislative and regulatory solutions and the and the best example we actually have and I think it’s the gold standard across the country is Utah. So as Warren touched on it’s a it’s a state where we’re happy we’re investing in it is part of Pacific Corp. So there’s a certain amount of balance there as to how we do it. But in the last legislative session that that existed, Utah actually passed a bill that does a couple very important things. One, it caps non economic damages on wildfire claims. So if you go back to the wildfires we have in Oregon and the claims you’re hearing filed for, there’s economic damages associated with them and and those harm should receive the economic damages associated with that. But unfortunately and even though there’s legislature and and case law in Oregon that says wildfire non economic damages should not be awarded, there’s very substantial non economic damages being awarded there. Utah took a very proactive position to say we will cap those non economic damages and it creates an environment again it’s back to that. Is there an environment where you want to invest in? Yes. And then and then incrementally they’ve created a very substantial fund, it’s a literally called the Wildfire Fund for for fires in Utah that will help facilitate both liquidity and the ability to resolve the situation. So Utah we believe including the legislation that a lot of other things came out of it is the actual gold standard as we go forward. So very important issue for Berkshire Hathaway Energy, but at the same time it is a Pacific Corp issue the the risk of regulatory compacts not being respected, it’s a much broader one that will always evaluate and be careful how we deploy our capital. But both Pacific Corp will manage through it and I see other very good and significant opportunities in Pacific Corp. I mean in Berkshire Hathaway Energy the the return on the region on equity investment, it’s been been promulgated and been achieved over the years has been particularly in recent years well below the return on equity that has been achieved by American industry generally. And so the whether whether you earn X or X + 1/2 a percent or X -, 1/2 a percent that differs by state and some states are more attractive than other. But whether you earn X or go broke is not an equation that works. And you know we’re we won’t, we won’t put our shareholders money. They didn’t give it to us to lose it all and we might like it if it’s better when it’s X + 1/2 a percent and X -, 1/2 a percent. But the electric utility industry will never be as good as, I mean just remotely as good as you know the kind of businesses we own in other arenas. I mean you look at the return on tangible equity, Coca-Cola or American Express or and to really top it off Apple, it’s just it’s, you know, it’s just a whole different game. But in utilities, the trade has been the the, the compact has been that you get a a modest return and climate change comes along and it causes way more fires. That’s just the cost of doing business and doesn’t mean that we can’t do things to mitigate fires in the future. And you can make different policies on when you turn off the lights, but somebody’s going to do, somebody’s going to put up many, many hundreds of billions maybe in the trillions. And climate change enters into that. And it can be done through public power or it can be done through private enterprise to quite a degree. And we would be certainly good for 100 billion or more, but we’re not going to throw good money after bad. OK, Let’s do Station 4. Hi, I’m Joe visiting from San Francisco. How do you think about the role of technological advances, especially generative AI on more traditional industries? Thank you. Yeah, I made a mistake in calling on four, but I’ll get back to two later on the the I don’t know anything about about AI, but I do. I do have. I don’t. That doesn’t mean I deny its existence or importance or anything of the sort. And and last year I said you know, that we let the genie out of the bottle when we when we developed nuclear weapons. And that genie has been doing some terrible things lately and the power of that genie is what you know scares the hell out of me. And under that I don’t know any way to get the genie back in the bottle. And AI is somewhat similar it it’s out it’s part way out of the bottle and and it’s enormously important and it’s going to be done by somebody. So we may wish we’d never seen that genie or what may do wonderful things. And I’m certainly not the person that can evaluate that and I probably wouldn’t have been the person that could have evaluated it during World War 2 whether we tested a 20,000 ton a bomb that we felt was absolutely necessary for the for the United States and would actually say wives in the long run. But more we also had Edmund Teller. I think it was it was on a parallel with Einstein in terms of saying you may with this test, ignite the atmosphere in such a way that civilization doesn’t continue and we decided to let the genie out of the bottle and it accomplished the immediate objective. But whether whether it’s going to change the future of society, we will find out later. Now AII had one experience that does make me a little nervous, and I’ll just explain it that very, very recently, fairly recently, I I saw a an image in front of my eyes on the screen and it was it was me and it was my voice and wearing the kind of clothes I wear. And a wife or my daughter wouldn’t have been able to detect any difference and it was delivering a message that no way came from me. So it when you think of the potential for scamming people, if you can reproduce images that I can’t even tell that say I need money, you know, I’m, you know, it’s your daughter. I’ve just had a had a car crash. I need $50,000 wired. I mean scamming has always been part of the American scene. But this would make me if I was interested in investing and scamming. It’s going to be the growth industry of all time and it’s enabled in a way I now maybe, you know, obviously AI has potential for good things too. But I don’t know how you based on the one I saw recently, I practically would send it to send money to myself over in some crazy country. So I don’t have any advice on how the world handles it because I don’t think we we know how to handle what we did with the nuclear genie. But I do think as someone who doesn’t understand a damn thing about it, that it is, it has enormous potential for good and enormous potential for harm. And I just don’t know how that plays out. I’d, I’d like to mention to Becky that that Ajit will will not be participating in the the afternoon session. So if you could focus on any, if there are insurance questions they want to ask that he be a good one. Yeah, this next question is for both Warren and Ajit. It’s from Ben Noel, who’s a Minneapolis shareholder who’s been a shareholder since 1995 and he says in an interview this past year, Todd Comb said that in first meeting you in 2010, he told you GEICO is better at marketing and branding, but Progressive is a data company and data is going to win in the long run. But it appears you did not prioritize data analytics at GEICO until a decade later when you made Todd CEO. As business units like GEICO Age and need new strategic direction, I wonder if Berkshire’s hands off management approach is a source of vulnerability. Will you please review your thinking on changes made at GEICO and explain how Berkshire is structured to react if the Berkshire CEO sees that a business unit is strategically off track And AJI, I hope you will continue to update us on yours and Todd’s progress at remedying the data analytic shortcomings at GEICO. Aji, would you like to? Yeah, as Warren has pointed out in the past, one of the one of the drawbacks that GEICO is faced with, it hasn’t been doing as good a job as matching rate with risk and segmenting and pricing product based on the risk characteristics. This has been a disadvantage at GEICO for a few years now. We are trying to still play catch up. Technology is something that is unfortunately a bottleneck, but there again we are making progress and equally importantly we have hired people who are much better than what they they inherited in terms of data analytics and pricing and slicing data. So yes, I recognize we’re still behind. We’re taking steps to bridge the gap and hopefully by the certainly by the end of 25 we should be able to be along with the best of players when it comes to data analytics whether it’s pricing, whether it’s claims or any other factor that drives the economics of the insurance business. I would add equating rate with risk obviously is, is important in every line of insurance business. I mean that’s what you’re involved with with this deciding whether a given rate offers us the chance of the probability that we will make a little money on it. And the the sometimes we’re only risking losing a little and sometimes we’re risking losing use your mouse but but but GEICO and and Progressive has done a better job that in that recently. But but our fundamental advantage at GEICO of course is that we have lower costs than virtually anybody and that cost advantage has been dramatic. We’ve driven our underwriting expense ratio below 10% and there’s there, well, there’s just very, very, very few companies that can compete with us. So, so it isn’t, it’s not, it’s not in the least a survival question and it isn’t even exactly a profitability thing. But you know we would rather have X percent of the market than 1/2 of X percent. But, but we roughly I think in the month of March we don’t we were just we didn’t we didn’t lose policyholders and we got 16 million or whatever it is of them and and we’ve got the lowest cost operation. So it’s it’s it’s it’s not a threat it’s not remotely a threat to survival. It’s not a throat to it’s not a threat to to even profitability. But on the other hand, we would like to be growing with with something that is is the best model. Around in the insurance business of delivering at a low cost and we now have a recognition that we didn’t have back when Leo Goodwin started in 1936. But the same principle, the work then is that if you can offer somebody a good product cheaper than the other guy and and everybody has to buy it and it’s a big business. You know it’s very attractive to be in and GEICO is a very attractive business and has got its lowest cost thing and it it does have to do a better job of matching rate to risk. But but our low costs of amass the fact that for a while that we can we could do without progressing as much as we should have been the matching of right to risk And now Todd has been working intensively at that and he’s made a lot of progress. But there’s there’s still work to be do to be done. But in the meantime we’re not going to shrink and and we’re going to we should make better underrunning profits than most companies in the auto insurance business. OK. I’m going to back up and go to, I think I left Station 2 out of it earlier. So do we have somebody there? Yeah. Good morning. My name is Sebastian Zartor. I’m from Munich, Germany. Berkshire have a is very respective to this company in Germany. And my question is who are your most trusted advisors today? Is it Ted and Todd? Is it Greg and Ajit? Is it your wife, your children and what do you value about them? Thank you. Well it depends whether they’re advising me on money or on other things. I I trust my children and my wife totally but that doesn’t mean I ask them what stocks to buy the but the no, I I was in terms of managing money there wasn’t anybody better in the world to talk to for you know many many decades than Charlie and that doesn’t mean I didn’t talk to other people but if I didn’t think I could do it myself I wouldn’t have done it. I mean it. So I to some extent I talked to myself on investments and and and I I think my children have gotten a whole lot wiser over the years. And so I listen them to on a lot of things. I’ll listen to my my daughter on who to vote for locally because she knows a lot more about that than I do. And I’ll I’ll listen to my wife on a lot of things and I won’t get into details. So it it is it is important you don’t live a life where you surround yourself and limit yourself the people you trust. It won’t be much fun. I mean, I literally have been in the position ever since I was in my 20s of being able to have people I trusted around me. And I’ve made mistakes occasionally, but but they filter out over time. We learn. And when I found Charlie for example in in all kinds of matters, not just investment, you know I knew I’d have somebody that that walked. I’ll put it this way you can think about this Charlie and all the years we worked together not only never once lied to me ever but he didn’t even shape things so that he told half lies or quarter lies to sort of stack the the deck in the direction he wanted to go. He was he absolutely can. He considered a total of utmost importance. Then he never lied. Now that occasionally got him in trouble at dinner parties or something if he if he said to the woman, I really prefer the way you used to do your hair or the way that somebody over across the room does it. I mean he was, but in terms of having a partner, I I I simply cannot think of a conversation I ever had with Charlie that in the least he misled me or shaped it his way or anything of the sort. So when you get that in your life, you know you cherish those people when you sort of forget about the rest. OK, OK. This questions for AG comes from Meher Baruka. Climate change seems to be impacting the insurance industry heavily, with major players pulling out of markets like California because of wildfire and flooding risks combined with payouts increasing. How does Mr. Jane see this risk expanding to other regions and how has the thesis on insurance investments change because of it climate change, Climate risk is certainly a factor that is become has come into focus in a very, very big way more recently. Now the one thing that mitigates the problem for us, especially in some of the reinsurance operations we are in is our contractual liabilities are limited to a year in most cases. So as a result of which at the end of a year, we get the opportunity to reprice, including the decision to get out of the business altogether if we don’t like the pricing of the business. But the fact that we are making bets that tie us down to one year at a time certainly makes it possible for us to stay in the business longer term than we might have otherwise because of climate change. Clearly prices need to go up. It is difficult to be very scientific about how much the prices need to go up. They need to go up a lot and we keep increasing prices and hope we stay above the ahead of the curve. But that doesn’t happen in all cases. The regulators don’t make it any easier by tying our feet to the ground and making it difficult for us to withdraw from certain territories or to make dramatic changes in the pricing of certain products as a result of which a number of insurance carriers, including ourselves have decided to not write business in certain states. I think the regulators are getting a little more realistic about the and they are waking up to the fact that the that the insurance carriers need to make some kind of a return, a decent return for us to keep deploying our capital. It’s a constant battle back and forth. It’s been against the capital providers these last few years, but I think we are coming back into balance. If you look at the results that have been recently announced by the insurance carriers, everyone’s now making record profits. Obviously that will not last, but certainly for the next several months. I think the insurance industry in spite of climate change, in spite of increased risk of fires and flooding, it’s going to be an OK place to be in. Yeah climate climate change increases risks and you know in the end it makes our business bigger over time but not if we if we misprice them we’ll also go broke but but we do it one year at a time overwhelmingly and and I would say this I would I would rather have a Jeep assessing us than any thousand underwriters or or insurance managers in the world. I mean the the factors aren’t you know we’ll we’ll take Atlantic hurricanes that which would be our probably our biggest risk. You know, there’s no question that you can measure the temperature, temperature of the water in the Atlantic and and you know what more water does to hurricanes. But you don’t know whether necessarily whether that’s good or bad because it may cause them to turn faster, you know, and it may, it may change the path as well as the intensity and frequency of of of of losses. But we’ll, we’ll write it one year at a time and we’ll have the JEETA underwriting it then. You know, we don’t have to tell you what’s going to happen five years from now or 10 years from now. And people who don’t have sort of analytical insurance minds that comment on this subject really don’t expand our knowledge. It’s it’s it’s we got a lot of letters from people that I’m sure have good I QS, but they they don’t really know. They don’t understand the insurance business and and they’re not wrong, I don’t think in my mind about climate change. But if there was no risk, there’d be no insurance business. And and we’re in the business of evaluating it and we do it one year at a time and there’s some exceptions where you can’t do it, where your your decisions extend for a long time in the future and we try to avoid those. But again, you don’t need 1000 people analyzing water currents. I think you need, you need one very, very, very smart guy and we’ve got him. OK yeah. The the only thing I’d add is that climate change, much like inflation done right, can be a friend of the risk bearer and it has been for us. If you look at GEICO, it had 175,000 policies roughly in 1950 and it was getting roughly 40 bucks a car. So that was 7 million of of of volume and you know now we have we’re getting over $2000. Well all the advances in technology and everything like that, if we had been wedded to some formulas what we did with $40 we’d have had a terrible business. But but in effect by making the cars much safer they’ve also made a much more expensive to repair and a whole bunch of things have happened including inflation. So now we have a $40 billion bill business from something that was 7 million back when I called on it. So if if we’d operated in a non inflationary world GEICO would not be a a $40 billion company. OK, we’re we’re now finally coordinated to Workstation 3 I I believe. Hello. Hey everyone. I weren’t. I’m Liam. I’m 27 for Newmark, Ontario, Canada. I got Invest Berkshire thanks to my dad who brought me down to this meeting. I’m so excited to be here. Most 27 year old idols who are rappers but instead my idols are Warren, Charlie will miss forever. And also your cousin Jimmy who unfortunately had to go this year too. It’s been a tough year as a Canadian, similar with Greg. I always wonder about our Canadian economy and what you think about the Canadian economy. We got some beat down bank stock chart right now and I don’t know what your opinions on are on these. And I also wonder at in their 90s if the rumours are true and you’re still able to eat McDonald’s. I like Fast Moon myself, but I always wonder at 93, he’s still able to eat those and enjoy the Coca. Coca-Cola. Thanks, Warren. OK, well, we’ve got a Canadian here, so we’ll let him answer the first part. And and if you, if you if you watch me, you’ll see what I got. I like to eat. I mean, I’ll go to it, Greg. OK Yeah. Well, we’re we, we are fortunate to have a number of operations up in Canada. It goes across many of our operating entities. And then as Warren touched on all the businesses that we have a piece of that we’re invested in are are up in Canada. So the presence is significant. We’re we’re we’re always looking at making incremental investments there because it’s a it’s an environment we’re very comfortable with. Warren touched on understanding the US environment, business environment and and I would put Canada equally in that bucket that we understand it and would be comfortable. And I I would say the economy moves very closely to the to the US So the results we’re seeing out of our various businesses that report both the US and Canadian operations aren’t aren’t drastically different. And and there’s a few that we’re on the energy side for example, we make very substantial investments up there in in Alberta. But again it’s very consistent with how that economy is growing and I would see it being very consistent with what we see here warn anything to yeah no we we we couldn’t even it obviously there aren’t as many big companies up there as there are in the United States But but when we get AI got one from Canada that just the other day that I sent over to Greg too that that that when when we see anything that’s suggesting an idea that’s of a size with interest here and meets other requirements. We don’t have any hesitancy about putting big money in in in in in Canada just and there are things we actually can do fairly well that or Canada could you know benefit from from Berkshire’s participation. We did it some years ago not that many years ago but but there was a financial institution up there and and they had a problem and and they didn’t as I remember 30 plus you know various other people that were kicking it around and meanwhile the place was getting close to the edge for not a fundamental problem and Ted Weschler from our office went up there. I heard about it on a Monday or something and Ted Whistler went up there and we offered a solution in a couple of days to something that that was getting close to the brink. So it it we do not feel uncomfortable in any way shape or form putting our money into Canada. In fact we’re actually we’re actually looking at one thing now and but you know they they still have to meet our standards on in terms of what we get for our money. But they but they don’t have a, they don’t have a mental. We don’t have any mental blocks about that country and of course there’s a lot of countries we don’t understand at all. So. So Canada it’s it’s it’s terrific when you’ve got a a a major economy not the size of the US but a major economy that that you absolutely give you feel confident about operating there. OK. Lucky Warren, you just said that you’d rather have a Jeet running risk assessment at the insurance operations than any other thousand insurance adjusters in the world. So I’d like to follow up with a question that came in from Mark Blackley in Tulsa. OK. He said, Warren for years you have spoken about the incredible impact a Jeet has had on Berkshire. You’ve often joked if you and a Jeet are in a sinking boat and we can only save one of you swim for swim to a Jeet. While we often discuss plans for the next CEO of Berkshire, little is mentioned on who will one day replace Ajit. How should we think about the future of the Berkshire insurance operations given how challenging it may be to find another Ajit and like to hear Ajit’s thought on thoughts on this as well? Well, I would say we won’t find another Ajit, but fortunately he’s a good bit younger than I am. So I hope you have to worry a little bit about me first before I start worrying about the Jeep. It we won’t find another Jeep, but we have an operation that he has created and that at least part of it is. There’s certain parts of it that are almost impossible for competitors to imitate and and if I was in their shoes, I wouldn’t, I wouldn’t try and imitate them. And so we’ve institutionalized some of our advantages. But Ajit is, well, he his presence allowed us to do it, and he did it. But now we’ve we’ve created a structure that didn’t exist when he came in 1986. Nothing close to it existed with us or with anybody else. And insurance is the most important business at Berkshire. Marketable securities are important, but they’re not in the class exactly as as our insurance business and a Jeep, we we won’t have the same business if a Jeep isn’t running up, but we’ll have a very good business. And again, that’s thanks to a Jeep. You know, I’d been in the business when he came in 1986. You know, I’d first went to GEICO in 1950. We first bought National Indemnity in 1957 and it was something that we’d made quite a bit of money in the stocks of of insurance companies, but we needed we needed a jade. Unfortunately, he came into the office on a Saturday and he was tired of working at something where he really didn’t. It just in challenges, his intellect And I said, well, we got a lot of challenges. So, you know, you know, nobody’s perfect. So. So you’ve never seen an insurance policy or owned an insurance stock. But here are the keys and that’s worked out very well. Well, thank you very much, Warren. Thank you very much everyone, but the fact of the matter is nobody is irreplaceable and we have Tim Cook here in the audience I believe who has proved that and has set an example for a lot of people who follow. That’s a great observation. Now, having said that, I will also add that our board is conscious of the succession issue not only at Warrens level, but also at my level. And every year they have me sitting in front of them, answering questions and having me share my ideas with them in terms of what would happen to the operations if I get hit by a truck. We go through the various operations we have. I review with them a short list of people I think ought to be candidates for replacing me. And in addition to that, I go a step further and identify a particular individual as the person I would hand over the keys to if something were to happen to me. Obviously that could subject to change, but we take this issue fairly seriously and I think at the end of the day, as as Tim Cook has proved to us, it will be the biggest non issue of the day. The earth will keep still, keep revolving around the axis. OK, Well, we know what we we will. We know what we will. We will do. We know it’s a good answer, but we know it isn’t. It isn’t. We won’t have another agenda. Station 5. Hi, my name is Ange. Andrew Nikas. And I’m wondering if you had one more day with Charlie, what would you do with him? Well, it’s kind of interesting because in effect I did have one more day. I mean, it wasn’t a full day or anything, but but he we we always lived in a way where we were happy with what we were doing every day. I mean, CC liked learning. He liked, as I mentioned, the movie, he liked a wide variety of things. So he was much broader than I was. But I didn’t have any great desire to be as broad as he was, and he didn’t have any great desire to be as as narrow as. But we had a lot of fun doing anything and you know we play golf together. We played tennis together. We we did everything together and and and this you may find kind of interesting we we had as much fun perhaps even more to some extent with things that failed because then we really had to work and work our way out of them and and in a sense there’s more there’s more fun having having somebody that’s your partner and and digging your way out of a foxhole than there is just sitting there and and watching an idea that you got 10 years ago just continually produce more and more profits. So it it it wasn’t you know he really he really fooled me though I’m he went to to 99.9 years. I mean if you pick two guys you know he never he he publicly said he never did it a day of exercise except where it was required. When he was in the army he never did a day of voluntary exercise. He never thought about what he ate. You know, it it it, you know, we started every day and Charlie had, he was interested in more things than I was. But we never had any doubts about the other person, period. And so if I’d had another day with them, we’d probably done the same thing we were doing the earlier days. But and we wouldn’t have wanted to know that we only had one day. And there’s a great advantage in in not knowing where you’re going, to what day you’re going to die. And Charlie always said, you know that, just tell me where I’m going to die so I’ll never go there. Well it the truth is you know he went everywhere with his mind and and therefore he was not only interested in the world at 99, but the world was interested in him. It’s it’s remarkable you know they he he I wouldn’t I I told him toward that in the last few years I’d never seen anybody that was peaking you know in 99 and and and and what the world wanted to come and see him I mean they actually wanted to go out to 351 N June St. And whether it was well I could name a whole bunch of names but just I’ll start with Elon Musk but get on the list and they all wanted to meet Charlie and Charlie was happy to talk with them. And I I the only the only person I could think of otherwise was the Dalai Lama. I don’t know that they had a lot else in common but but but but it was he he he lived his life the way he wanted to do and he got to say what he wanted to say. He like I loved having a podium and and again I can’t remember any time that he was mad at me or I was mad at him It just didn’t happen And calling him was fun back when long distance rates were high and and the and we didn’t talk as often as the years in recent years as we used to be on daily for long periods and and we did keep learning and we liked learning together But you know when he. That we tended to be a little smarter because when as the years went by because we had mistakes and we had other things that where we learned something. And and the fact that he and I were on the same wavelength in that respect meant that that the world was still a very interesting place to us when I got to be 99 and I got to be 93. So I don’t have a perfect answer for you there, but I can tell you the ingredients that would go into sometimes people would say to me or Charlie at one of these meetings, you know, if you had only have lunch with one person that I’ve lived over the last 2000 or so years, you know, who would you want to have it with? Charlie says I’ve already met all of them. You know, because it he he read all the books. I mean he he he and he eliminated all the trouble of going to restaurants to meet him or anything like that. He just went through a book and he met Ben Franklin and he he really, it was remarkable. He said he had no one else to meet because he he’d read all their stuff and he liked Ben Franklin’s stuff but wasn’t he liked mine but but but with Ben Franklin he just had to read about it and didn’t have to. They didn’t have to go have lunch with them or anything of the sort. But it’s an interesting question. What you should probably ask yourself is that who do you feel that you’d want to start spending the last day of your life with and and then figure out a way to start meeting them tomorrow and and meet them as often as you can. It’s Why wait a little last day and don’t bother with the others, OK, Becky, This question comes from Carol Degend in Switzerland, in Europe. And this is for both Mr. Buffett and Mr. Jane. As political instability in the world is growing with a rise in the number of armed conflicts and trade tension, there is also increasing risk of cyber attacks. What are your views on cybersecurity insurance? Asking this question in general for retail, small businesses and large companies including critical key infrastructure such as power plants, harbors, airports, nuclear plants etcetera. Do you see a potential for profit making in cybersecurity insurances and what are the key challenges? OK, let me start. Cyber secure cyber insurance has become a very fashionable product these days over these last few years. It is at least a $10 billion market right now globally and profitability has also been fairly high. I think profitability is at least 20% of the total premium has ended up as profit in in the pockets of the insurance bearers. Now having said that, we at Berkshire tend to be very, very careful when it comes to taking on cyber insurance liabilities for the part of actually for two reasons. One is it’s very difficult to know what is the quantum of losses that can be subject to a single occurrence and the aggregation potential of cyber losses, especially if some cloud operation comes to a standstill. You know that aggregation potential can be huge and not being able to have a worst case cap on it is what scares us. Secondly, it’s also very difficult to have some sense of what the, what we call loss cost or the cost of goods sold could potentially be. It’s not just for a single loss, but for losses across overtime. They have been fairly well contained out of 100 cents of the dollar. Of the premium. Losses over the last 4-5 years I think have not been beyond $0.40 of the dollar, leaving a decent profit margin. But having said that, there’s not enough data to be able to hang your hat on and say what your true loss cost is. So in our insurance operations, I have told the people running the operations is I’ve discouraged them from writing cyber insurance to the extent they need to write it so as to satisfy certain client needs. I have told them no matter how much you charge, you should tell yourself that each time you write a cyber insurance policy, you’re losing money. We can argue about how much money you’re losing, but the mindset should be you’re not making money on it, you’re losing money and then we should go from there. So it is good. It’s projected to be a huge business. My guess is at some point it might become a huge business, but it might be associated with huge losses and our approach is to sort of stay away from it right now until we can have access to some meaningful data and hang our hat on data. Well you’ve just made, you’ve just heard why Ajita is invaluable because when you insure something, you really want to think of what how much can you lose? And the question I remember the first time it was happened I think in the 1968 when there were the riots in various cities because I think Bob, I think it was the Bobby Kennedy death that set it off for the Martin Luther King and death, I’m not sure which one. But in any event when you write a policy, you have a limit in that policy. But the question is, is what is one event? So if if if somebody that’s assassinated in some town and that causes losses of thousands of businesses all over the country, if you’ve written all those thousands of policies, you have one event or do you have 1000 events and there’s no place where that kind of a dilemma enters into more than cyber. Because if you think about it, if you know let’s say you’re writing $10 million of limit per per risk and decide that’s fine and you’re people lose 10 million, you know for some event you can take it. But the problem is, if that one event turns out to affect 1000 policies and somehow they’re all linked together in some way and the courts decide that way, you’ve written something that in no way we’re getting the proper price for and and could break the company. And I will tell you that most people want to be in anything that’s fashionable when they write insurance and cyber’s an easy issue. You can write a lot of it. The agents like it. You know, they’re getting the Commission on every policy they write, and you’ve got to have somebody in charge of things that understands that you may get an aggregation of risks that you never dreamt of and may be worse than some earthquake happening someplace just because you have a whole bunch of policies with $1,000,000 limit. And I would say that human nature is such that that most insurance companies will get very excited and their agents will get very excited. And it’s very fashionable and it’s kind of interesting. And as Charlie would say, it may be rat poison. OK, well, that’s cheerful. He’ll go to Station 6. Good morning. This question is for Warren Buffet and great Abel. My name is Maria Prentice. I am a retiree from Las Vegas, NV. I am here today as a member of Chespa, Nevada, a group developed Latin leaders for the environment of Justices. I am also, I am almost here representative Maryland families in Nevada who are struggling to pay their utility bills and want access to affordable, clean electricity. I want to add today, Why is NB Energy, which is owned by the Berkshire Hathaway, building new gas plants instead of investing in solar energy? With Nevada one and there’s sunniest state in the country, Can I expect to see future leadership take dangerous investments in the fossils levels more seriously? Thank you and thank you, Maria. Greg, one of them. Sure. Thank you. So as we touched on with Envy Energy even earlier, there’s a lot going on there. And I when I think of there’s no question solar’s a a great opportunity for NV Energy and we’ll continue to utilize it as a resource and continue to invest in it in that utility and and the other utility we have in Nevada. We’re also in a point where when you think of a transition that’s going on within the energy sector, we are transitioning from carbon resources to renewable resources as was noted. But it it it will not occur overnight that transition will take many years. And as we use be it renewable resources such as solar or wind, they are in intermittent and we do try to combine it with batteries but it at this point in time we cannot transition completely away from the carbon resources. So if I think of Nevada in the in the next two years our last two coal units are well actually in the next year our last two coal units will retire, but we are replacing them with a new gas unit which is is truly needed to make sure that system remains reliable and available to our to our customers. And that’s and that’s done in conjunction with our with the state representatives and our regulatory agencies to make sure we can serve those customers every day and every minute. We have great examples in Iowa where at times 100% of our energy comes from wind and we’re and we’re thrilled with that and I believe we hit that for example on Earth Day every we had enough wind that we could meet the demand of that state. But the next day, if the wind’s not blowing, we need our gas resources, our gas plants to to fill that gap. And really that’s the situation we still have in in Nevada. So we’ll continue the transition to renewable resources, be it solar in Nevada and wind and other areas combined with batteries. But for the foreseeable future, we do see gas being a very important resource to help maintain reliability and meet meet our customer, customer needs and and to meet it in an affordable way is also an important piece of that. So thank you for your comments. Yeah. We in in a we we’ve got the capital to do whatever makes the most sense in a place like Nevada and the Nebraska, Nevada, I don’t know each state calls their ruling Commission something different, but they probably called the Public Service Commission or something like that. And they they’re making the decision as to what they think can and should be done in terms of getting from where a vastly complicated utility business moves towards something different without messing things up in the meantime and and now having the lights go off And they they I think they would probably agree with you and very much Maria that they what they what they want to get. But they can’t, they can’t do it tomorrow, you know, because they intermittent problems and their job is to make sure the lights stay on and their job is also the move toward better sources. But solar will never be the only source of of electricity because that. Well, Greg may know more about this, but I’m borrowing some real breakthroughs in storage and that sort of thing, right. Yeah, yeah. Generally a battery right now to do it in a economical way is is a four hour battery and and when you think of the time without the the sun being available that’s that’s about that’s a challenge. Now there there’s a lot of technology advancements and that’s stretching out and you throw dollars at a lot of things you can accomplish things but the rally is that there’s a there’s a careful balance of of the reliability and also balancing as you as it was noted the rates do matter and and how much customers are paying. So delicate balance of both delivering reliability but doing it in an affordable way. My friend Bill Gates he’s working on shortening up that lengthening the time the battery works on. And so you’ve got some very smart people working on it but it isn’t something that you actually do overnight. And and I can understand why people want it then overnight, but it it is going to take a lot of money. It’s going to take a lot of good ideas and smart people like Bill and Greg, not me. I don’t I don’t understand why the damn lights go on when I even turn a switch. But those those fellows really do know and there’s plenty of them working on it and we got plenty of money to implement it. But there are there are certain things that that just take a certain amount of time. My daughter hates it when I use this example. But it’s really true that you can’t create a baby in one month by getting nine women pregnant. I mean, you know, you may want you, you may want a baby, but so there are certain laws of nature that that you have to work with. OK, Becky, this question comes from Rich McCloskey in Dunedin, FL. He says, Warren and Ajit, would you let us know what you think about the car and property insurance situation in Florida? As a resident, both seem out of control since the Florida market seems to be so mismanaged. Is this an opportunity for Berkshire? Yeah, the Florida market both for auto insurance and for homeowners insurance has had a few tough years. The two problems we face in Florida and all the risk bearers face in Florida, one is the lawyers and the amount of corruption that takes place in the Florida market is keeps skyrocketing making it difficult for us to price, price the product and make a profit. And secondly, the amount of activity in terms of storms, both the frequency and the severity is also so severe that the losses in Florida tend to make it very difficult for a risk bearer to make money. Having said that, we’ve had a, we’ve fortunately had a very good run at Florida last year. We increased our exposure in Florida as we talked about last year and fortunately nothing bad happened. So a lot of our premiums that were in the top line flew straight to the bottom line. Florida is a large market. Florida is the market that’s subsidized by the rest of the country. I don’t think those that’s going to stand the test of time. The Florida market, the legislators are trying to improve it. They have passed law that is bringing down the amount of fraud that takes place in Florida. And I hope Florida will be a fairly buoyant insurance market because at the end of the day, they do believe in the free market more than some of the other states that have insurance crisis like California and New York. So yes, Florida has a problem. Prices will go up fairly substantially. But at the end of the day, I think we’ll achieve a degree of balance so that the risk bearers can make a decent profit and we’ll be deploying capital out there. OK, Station 7, please. Hi Warren. My name is Christine Hone Garcia and I’m from Agoura Hills, CA. Thank you for being an excellent teacher and imparting your wisdom to us throughout the years. What advice would you like to share today that you believe everyone needs to hear? Well too bad you didn’t that he added that what what the rest of us would like to hear they oh they oh I would say that if if I had one piece of advice I would try to well and you’re lucky you live in this country because it it’s just to start with because you’ve got opportunities here that wouldn’t exist in much of the world. But I would like, I would, I would like the really sort of use Charlie’s advice of the thinking how you like your obituary to read and then start selecting the educational pass, the social pass. You know, the whatever may fit your particular situation in terms of associating. And perhaps certainly in my day, it would have been marrying the person that would best help you do that. Well, Charlie would say you are offering some similar benefit to the partner. And you know, the, the opportunity in this country is, you know, is basically limitless. That when you think of going back not that many centuries, you know, if you were going to be a shepherd or something like that, you know, 100 years from now you’re, you know, your grandson was a grand daughter, was going to be a shepherd. I mean, nothing, nothing really happened. And what has happened in the last 200 years with the combination of the Industrial Revolution and whether whether it’s science or education or health, you know, you name it. We are so lucky to be born when we were the people in this room and and many of us were lucky enough to be born in the United States as well. That you, you, you have had the you’re entering the best world that’s ever existed and you want to find the people to share with and the activities to participate in that fit you. And if you get lucky, like Charlie and I did, you find things that interest you young. But if you don’t find them right away, you keep looking. And I always tell the students to take the job that you, I mean find the job that you would like to have if you didn’t need a job. And sometimes you can find that very early and sometimes sometimes you go through various experiences but don’t forget what you’re trying you actually are trying to do and there’s no place to do it like this country and find the person that you like to share your life with in many cases and and and you know sometimes you get lucky into that early and and sometimes you make mistakes and but I would I would try to run in a very very general way. I would try to figure out how you’d want to look back on your life and think about yourself and and and start today to go on the path that leads to to that goal and expect expect some some difficulties along the way But if you’re if you’re thinking that way you’ll you’re more likely to get there. Becky this question comes from Axel Meyer seek in Hamburg Germany. What has changed for Berkshire’s operating CEO since Greg Abel and Ajit Jain became Vice chairman? For example, can and do the operating CEO’s still reach out to Warren Buffett directly? Well, let’s my The answer might surprise you, but they they overwhelmingly the operating executives. Well, they they prefer to talk to to Gregor, to to Ajit, and that didn’t. That’s understandable because I don’t really do much and I don’t operate at the same level of efficiency than I would have 30 years ago or 40 years ago. I don’t know the managers as well as I would have when we were smaller and when I could get more accomplished in the day than I can now. And you’ve got when you’ve got somebody like Greg in the Jeep, you know why settle for me, I mean basically. So it’s it’s it’s worked out extremely well and I almost can’t imagine anything working better because Greg and the year accomplishes I mean he sees more of them, understands more about their problems you know can give him suggestions he’s got incredible amounts of energy and and and nobody has more wisdom than AG about insurance and they’ve got access in the insurance to him now they had it before we stuck some of those titles on insurance whereas with Greg he much expanded things when when when he became the vice chairman in charge of of really everything except insurance. So he is if you polled our managers that fall under his jurisdiction which would be a lot of them, they they would much preferred unless like a few they weren’t paying as much attention their business and I wouldn’t do anything about it but but Greg would and and they still like it when he does it. He can deliver. He can, he can deliver news very well to the people who you know there’s some there’ll be some people if you have if you have 20 children and you’re very rich you’ll have some that will be go getters anyway and you’ll have some that that won’t. And we are very, very rich company and we don’t we we haven’t had a history of being very tough on on people that coasted and we’ve had some that would do that and Greg will do something about it and Charlie and I wouldn’t have not because we didn’t know it should be done but because we were doing so well ourselves and everything. But it just wasn’t we didn’t, we wouldn’t make the effort. We didn’t want to change our lives that way plus we slowed down in various ways physically and everything. So, So I would, I would I would say that the number of calls I get from managers is is essentially an awfully close to 0 and Greg is handling those. You know I don’t I don’t know quite how he does it but but but we’ve got the right person I can tell you that and with the Jeep he he he he does less physical moving and and the insurance people are more used to working with the Jeep obviously over the years. So I wouldn’t say that changing the title will be the changed as much there because he was in charge of insurance anyway. And so that’s, you know, you can you can go to a Business School and and they can give you way better answers than I’ve just given you. But but that’s the way we do it at Berkshire. Has she raised his hand? Yeah, if I can add a comment from my perspective, the transition has worked out very, very well, but I think the credit really goes to how Warren has handled the situation. Now what I mean by that is after the transition was announced and a lot of the operating managers used to be they were used to calling Warren directly on some issue or the other. When they after the transition, when they would continue to do so, Warren would very skillfully in his, in his manner handle them such that he would not answer what they were looking for but at the same time made them feel good and told them that he sort of enjoyed hearing from them and talking to them. So as a result of which you know the transition took place, people got the message, they got the message and were very responsive to it and it’s a non issue as far as today is concerned. I would probably add, yeah the only thing I would add is we do have an exceptional set of managers across both the non insurance and insurance and yes Warren made it incredibly easy but so did they it it was a very easy transition because they care deeply about Berkshire, they care deeply about the culture and they very much wanted it to be a a success and we’re fortunate to have those managers and insurance and non insurance. So thank you. Yeah. What what Greg is talking about is they really wanted more direction in in in some cases than than I gave them. You know I mean I just sat there reading the Wall Street Journal or whatever and then Greg is I don’t you know there are one way or another there are more than 24 hours in his day. You know and I I I just don’t know how he covers the ground he does but but he knows more about the people the we got the same feeling in terms of judging the attractiveness of businesses and making capital decision and that sort of thing But but he’s willing to work I mean I’m you know I’m I I you know and I couldn’t get as much done anyway you know what I could do in in a couple of hours you know may may take it hours now it it it I just don’t read as fast and everything said but it’s it’s working very well and and this place anything happened to me it would be working extremely well the next day. I don’t get any phone calls. You can actually, we can, we can bring something up. So we got some answering machine that people think I’m still around, you know, or something in terms of it. So anyway, that’s that’s much, much less than you’d learn in Business School, but that’s the way we do it at Berkshire. OK, Station 8. Dear Warren, Greg and Ajit, thank you for having us. Your teachings have not only made us better investors but more importantly better people. Thank you for that. My name is Rajiv Agarwal and I am from New Jersey. I run an India focused fund called Doodharshi India Fund. My question is related to India. Indian economy and Indian equities have done quite well in the last five 1020 years. It is the 5th largest economy and will be the third largest in the next few years. My question is, is Berkshire actively looking for opportunities in the Indian equity market and what will allow you to buy anything meaningful there? Thank you, Sadhguru. Yeah, well, that’s a very good question. And obviously India, you know, I’m sure there are loads of opportunities in a place like India and. The question is do we have any advantage in either insights into those businesses or contacts that will make possible some some transaction that might when the parties in India would particularly want us to participate. I would say that that’s something that a more energetic management at at at at Berkshire could pursue because we do have the reputation now Berkshire is known, not like there’s known in the United States, but it’s known around the world and and you know, our Japanese experience has been fascinating in that respect. So there may be an unexplored or unattended to opportunity in that area. I’m not the one to do it, but that may be something that in the future it might be opportunities there, there there, there are opportunities. The question is, is, is does Berkshire have some kind of advantage in actually pursuing those opportunities against particularly against people that are using other people’s money that that where they get paid based on asset, on assets managed or something of the sort. I mean there are there are plenty of people in the game who are buying and running businesses that do not really have our philosophy. I mean they they they’re going to get rich no matter what happens and and the their payment may be based on on how much they buy rather than what they buy. So we’ll see how the next management plays the game out at at Berkshire and fortunately you don’t have too long to wait on that. Generally I feel fine but but but I, I, I know a little bit about actuarials at tables and I just well I would say this I shouldn’t be taking on any four year employment contracts like several people are doing in this world at an age where you can’t be quite that sure where you’re going to be in four years OK, but you’re dead. You’re absolutely right about about if you were energetic, had some way to become a a buyer of a or a a a a party that people particularly wanted to do business with. Japan was great and and you could be great. But India and Japan aren’t the same. I mean, I don’t adapt myself terribly well to different different cultures and some people are really good at it and almost anybody’s better than I am. But I stumbled into one or two. But that could happen in the in, in, in, in, you know, act two of Berkshire Hathaway. Becky. This is a question from Rafael Depino from Spain. Berkshire has grown tremendously thanks to and among other things, it’s architect Mr. Munger and you, it’s general contractor. We’re all tremendously thankful to you for taking us along the way. We are aware that both of you and many others have spent an enormous amount of time ensuring Berkshire’s culture provides a solid footing on which to grow the building. You also currently have a very talented bench of what we may label as subcontractors and Mr. Abel, Mr. Jane, Mr. Combs, and Mr. Weschler. However, for a long time you’ve had the advantage that talented subcontractors have wanted to work with a once in a generation architect and general contractor. How do you envision Berkshire will overcome the loss of set advantage when the contractor bench needs to be renewed again and what are what are potential renovation works in this great building that may necessitate a new architect. Yeah. Well that’s a great question to which the Charlie and I obviously talked a lot about over time and of course we we will not Berkshire to the extent it remains the sort of entity that it is, will not need to attract people very often. It would be absolutely crazy for anybody for our Board of Directors to ever pick anybody to run this business. I thought you should retire at 65. It may be that they should retire the next day. You know when you learn what they’re really like managing something or it may turn that you want to keep them around till they they really started being affected by old age which hits different people at different times but it hits everybody eventually And so we it’s very likely that if it’s if the directors and it’s very tough because they will be acting against conventional wisdom which which is always difficult and but I think we’ve got the group on that and they they will not have to make a decision very often if they if they pick the right CEO that’s 99% of the job of the directors and if they the other 1% is is you do you have a good method to correct it if you’ve made a wrong decision and that’s extremely hard to do in in our present system. It’s not impossible but it’s just not something that happens It’s too good a job to be a director to to to try and throw over somebody at particularly if you can use the money from directorships and you want to be on other boards and everything. We, we, we do not have a perfect system and in terms of boards or directors at all and it’s it doesn’t operate at all well, I shouldn’t say at all, but it doesn’t it it doesn’t operate as as people may think it generally operates. So we will, you know we’ve really got the problem solved for the next 20 years unless something untoward happens and if something untoward happens then then the directors need to find probably within our own organization somebody that they’ve got confidence in to maintain the special advantages we have over another 20 years period. It’s there’s various things that are low probabilities, but you still have to think about them and and we are in that position now. Now, if you asked me whether if something happened to Greg today, everybody says don’t travel on the same plane. The thing to do is not travel on the same auto planes don’t go down that often. Autos crash all the time. I’ve seen all these corporate policies on that ’cause you’re kind of crazy when you think about the real risk, but in any event we do. Greg is going to have to tell the directors about, but if something happened tomorrow, he has to tell the directors about what should be done if anything happens to him. And that’s not an easy thing to do and I don’t have well, it. It will be his decision and then the directors really to decide whether he’s made the right one. But he will. He will make the right one. And what you really have to hope is that you get lucky on how long managers stick around the million. You might need three in a century and you might need six or seven and but the the the answer is you need a little luck and you need some break in the mortality tables. But we’ve we’ve got an entity that if you really aspire to be a certain kind of manager of a really large entity there’s nothing like it in the world. So we’ve got something to offer the person who we want to have. You know it said sort of like Charlie said about marrying the best person that will have you. Well, we we have, we’ve got something that the right person would want to marry, you know, basically in terms of Berkshire. And if we get the wrong person, then the directors have to do something about it. And that probably won’t happen. But it’s always a contingency, a possibility, I should say. Greg, having been put on the spot like that, didn’t you don’t have to name anybody now, but I’m sure the crowd would love it, make news. Well, the only thing I would add, Warren is and it’s really how the comments started, was around culture, the culture we have at Berkshire and that being our our shareholders, being our partners and our managers of our business, having that ownership mentality, that’s never going to change and that will attract the right managers at every level. So I think as Warren said, we have a very special company in Berkshire, but it’s that culture that makes it special and and that’s not going to change. OK. Station 9, I’m never sure where nine is. Hi, I’m Sherman Lam, a Berkshire shareholder and I work for family office in Kuala Lumpur, Malaysia. Just really happy to see you Warren and the team and where I come from, your hero and both you and Charlie have positively transformed mine and many, many other Malaysians and SE Asians lives not only financially but also in how we navigate our lives and relationships. Thank you very, very, very much. Well, thank, thank you. Thank you that that that makes us feel good. Question is what have your team’s greatest learnings been on business capital allocation, stock picking and portfolio allocation throughout the COVID-19 pandemic period over the last five years? And Wara, appreciate it if you can get your views as well as your your representations on Ted and TOT as well as directly from Greg and Ajit to on their respective businesses. Thank you. Yeah, I I don’t think I want to give individual appraisals and but but what really what you’re doing is in terms of capital allocation which is is my job, I don’t go out and sell insurance policies or anything of the sort and you represent a group of shareholders like we do represent. We we are totally clear on our mission and you know it it may be that other people don’t agree with them. But I would say that in a great many places, you know, I I I just don’t agree with our mission. And you know I would say that for example that anybody that wants to return retire at 65 would be disqualified from being CEO of Berkshire. Then they might get, they might get retired the next day if they were the wrong person. But then there’s just certain things we don’t want and the we’re well fixed now and that the odds are very good but far from certainty that that takes care of the next of my ears. Now the but you have to provide for the contingency and and I there’s several people on the board that know what I would do on that but it’s up to Greg. But if Greg and I go at the same time, then then then you’ll move into making another decision. And and there are a few people that know my thoughts on that. But but they did the job of the director is just then to come up with the right CEO. And the right CEO can’t make a terrible business. Great. Tom Murphy, who was the best, he was the best business manager I’ve ever known. And Tom Murphy, you know, he said the real key was buying the right business. And now Murph brought a million other attributes to it after that. But you know it. It’s Charlie, you know said we, we, you know what was this? He had a saying on that but but basically we could have brought in Tom Murphy and told him his job was to run the textile business and it would have done a little bit better, but it still would have failed. And one of the reasons I stuck with the textile business as long as I did was that I liked Ken Chase so much. And I thought he was a terrific guy and he was, he was a very good manager and if he’d been a jerk, you know, we’d quit the textile business much faster. We’d have been better off. But. So. So the answer was for him to get in the in the TV business like Murph had done and AD supported the, you know, Murph. Murph figured that out early, and he started with a pathetic operation which was a VHF in Albany, NY, competing against GE and everything, and he was operating out of a home for retired nuns, and he only painted the side that faded the faced the street. He had one car dashing around town, and he called the news truck number six. But from that he built an incredible company and he built it because he was the best manager I’ve ever met. But beyond that who’s in the good business And the the key will be that the key will be in to find another Tom Murphy and then hand them a bunch of good businesses and and he or she will know what to do with it. Now that’s not as precise as you would get on in most companies, but you really can’t get more precise than that. I mean you can have committees and management consultants and everybody, but it wasn’t a management consultant that hired Tom Murphy. And and I forget whether he was doing. His sales volume was a couple thousand a week at 1st and then soon as he had, that was his goal or I got the 2000, he says. Now my goal is 3000. He kept doing that and he surpassed all these people like CBS and ABC that only had the world by the tale. And it was just a wonderful lesson in life to get just to be able to view something like that. I learned an awful lot from when he said to me, but I just learned by watching it somebody like him operate. I mean it’s it’s it’s like watching a great golfer, a great Ellis player, then you know learn something about the kind of swing you’re trying to developers of these sorts. So that’s that’s not a great answer for you. But it’s it’s so far it’s worked and I think it works. I’m very sure it works with Greg and it’s up to people in the future when you know I’m underground or wherever they put me to really make a decision every 20 years or something like that. On average, it’s the right decision, but corrected if it turns out to be the wrong decision. That’s what a Board of Directors is for and and we’ve got the people on the board that really understand that responsibility. They take it seriously, but they don’t take themselves too seriously And so therefore they don’t, they don’t want to, they don’t necessarily want to do a lot of things just to look busy and they aren’t using us as a stepping stone to get on other boards. But we’ve got people that that really believe in what we’re doing and and they’re the ones that are going to have to make this place work. And if they got lucky on Greg’s mortality, they they can do just what Reverend will go, doesn’t go to sleep for 20 years or so and and then make another decision and and and Berkshire has a great tool in the world available to be. What it is now and continue to be what it is now. I mean that that we’ve gotten from from 20 million of net worth to 570 billion and you know we there aren’t as many things to do, but we can do a few big things better than anybody else can do. And there will be occasional times when we’re the only one willing to act. And at those times we want to be sure that the US government thinks we’re an asset to the situation and not a liability or a supplicant. Unless the banks were will say in 2008 and nine that they were they were all tarred with the same brush. But we want to be sure that the brush that determines our future. But you know it’s not hard and and I think we’re in the I don’t think anybody’s got a better position to do it than Berkshire Becky. This question is from Johann Halen who writes You’re sitting on 168 billion of cash, which you told us today is now more than $182 billion. His questions are one, what is Buffett waiting for? And two, why not at least deploy some of it? Well, I think that’s pretty easy to answer. I don’t think anybody sitting at this table has has any idea of how to use it effectively and therefore we don’t We don’t use it and we don’t use it now at 5.4% but we wouldn’t use it if it if it was at 1%. Don’t tell the Federal Reserve that but but but prefer it but the we don’t we only swing at pitches we like and if anybody tried to swing at every pitch or felt that because they hadn’t swung at a pitch for two for the last two pitches they ought to swing at the third one or something like that. It’s just it’s there are times and obviously but I would say this I I would not like to be running 10 billion now 10 million. I think we could, I think Charlie or I could earn high returns on because I think there’s there’s just a few things that happen on a very, very small scale. But but it it it if we had 10 billion we wouldn’t, I wouldn’t basically see many more opportunities than we found. Now it’s true that something like Japan we could have done it’s a company that of 30 or 40 billion and we’d make we’d have had great returns on equity. But if I saw one of those now I’d do it for Berkshire that you know it isn’t like I’m got a hunger strike or something like that going on it. It’s just that they things aren’t attractive and and there’s well, there are certain ways that can change and we’ll see whether they do. OK, Station 10. Mr. Buffett, this is an incredible meeting that you host every year. My name is Sean Cawley. I am a real estate agent with Berkshire Hathaway Home Services in Arizona and California. My mother, Cindy, my brother and my two sisters all sell real estate with Berkshire Hathaway Home Services for many years. We love being a part of the Berkshire family and along with the 70,000 other agents that sell real estate for the company Mr. Buffett Home Services of America recently sell our class action lawsuit regarding commissions for $250 million last week. This is this dollar meant about 100 million more than Keller Williams 166.5 million more than anywhere real estate which is better? Homes and Gardens in Coldwell Banker as a realtor with Berkshire Hathaway Home Services in multiple markets and a shareholder who’s been coming to this meeting for 15 straight years, that’s one of the reasons I got involved with real estate is because this meeting. What are your thoughts on buying and selling a home in light of this recent settlement and may be asked to note to Greg and Ajit too, Would you consider a Berkshire agent when buying your next home? I don’t buy them that often as some people have noted but I I certainly would consider them but I say the probability of that happening is low but and I I really appreciate the fact you’ve joined up with us, but I’m gonna in in terms of the the settlement, I mean Greg kept me informed but I I turned it over 100% to him. So Greg, you want to talk about it? Sure. So thank you for you and your family for being an agent and working for our, for our company Berkshire Hathaway Home Services. I think there’s a few questions in there. One, there’s no question the industry will go through some transitions because of that settlement. Ours and the every other major player in the industry settled, the National Association of Realtors settled for more than 400 million. So effectively everybody was swept up in in that settlement and it did set the grounds for the both home services and for the industry to move forward there. There’s a lot of changes that happen in or are being proposed associated with that settlement. But the the one thing that I I think you hopefully would absolutely agree with that the the real estate agent is still an important part of of these transactions. It’s the one time in our lives where we make these massive investments and having that counseling guidance is, is critical and that’s really what our business and those other businesses rely on how the Commission structures change and how it’s negotiated which is really what the settlement was. It was no longer that a buyer would automatically pay a a Commission agent to the to the selling agent. That how now has to be negotiated. That’ll impact things. But I think the Realtors will continue to be a very important part of that and I think home services in the industry will remain very relevant. And then the only thing I would share with our shareholders on a broader basis is that obligation resides with Home Services and can be met by Home Services And that was an important condition because they were also pursuing Berkshire and Berkshire Hathaway Energy and we said you can prove it, pursue us separately. But that settlement will reside with Home Services and be an obligation of that and they decided the the ultimate settlement and and and we’ll go forward from there. So warn any other Well yeah I’ve I’ve sold two houses in the last well the last 93 in a fraction years and and I’ve and I’ve and I’ve bought 1 that I still have but I obviously bought the other to it and I I have I have not negotiated down the Commission even though but the last one sold for 7 million or something like that people do negotiate down commissions to some extent but I can tell you I’ve looked at the figures and I I think the system has really worked out very well They when I when I got out of school they had you know what they called Fizbo you know what what for Sale by owner and so I’ve I’ve I’ve been involved to some degree and watching the whole system operate and and I know what our average agent makes. I know I know how long they work on things sometimes that get don’t materialize I mean it it it I don’t think we’ll we’ll end up with a a better system and but you know it’s up to it’s up to Greg and them the people at home services are we working through here but I I I I like our agency group and I we’ve got a very large number of of of real estate agents and I’ve encouraged us the expansion we’ve done in the real estate agent the real estate brokerage business. Now it was just one or two operations when we bought Berkshire Hathaway Energy and we we’ve really built built up quite a company and and I think it’s a very fundamental business you need help 90% of the people need help you know in buying them buying a a home or selling one and and I’ve watched it operate all my life and been involved with lots of people who been in the business but there was a decision in court and I told I told Greg to handle it whatever they seem best to him and I’m quite I’m I’m I’m perfectly happy with the way we’ve handled. I think I’m surprised that the the decision but but that we get surprised in decisions in in the insurance business lots of times. I mean just just think of the the various things we faced and and you know when 911 came along you know we never thought something like that could happen but it happened and then we didn’t know what was one event or more events. I mean if you if they close down the New York Stock Exchange and a bunch of brokers well every all kinds of people lose their jobs and or or lose their income for a while. Is that one event or multiple events. Well there’s all kinds of things come up in business and and we just we we we we play the play the ball wherever we find it. Then the and I was surprised by the decision was it in Missouri, Missouri, yes. Yeah. But we’ve gotten surprised by some other decisions and we’ll keep doing sensible things as we move forward. Greg do you want to. No. I think the only thing I would add back maybe to how the model has changed and he asked one Yes, we’ll always, I can’t speak for Jeep, but we’ll always use home services agents. But it’s interesting. I have bought a home abroad because I I lived over in the United Kingdom, in Newcastle, running our utility over there. And it is a completely different experience to buy a home outside of the US Our agents take great responsibility for the the whole transaction. In the US they put, as Warren said, time and capital at risk to ensure the transaction closes. And when you do close it, they make sure what you bought you actually what you thought you were purchasing, you end up with. And and that’s not the way it is always around the world and there are more affordable models, but it’s the old saying you get what you pay for. So I I think our real estate agents still provide incredible value within our business. And and as Warren touched on it, it’ll, it’ll survive the the, the form, maybe it’s a little bit different, but there’s no question it’ll, it’ll, it’ll continue to thrive. Yeah. We still, we, we still will want to buy real estate brokerages at the right price. And I hope we’re bigger in the industry 10 years from now and 20 years from now than we are currently. And I did sell a house for 7 million. I did not negotiate the 6% down and I feel I got my money’s worth and then some and I’m cheap by nature so it is it is I’m careless about it. I I just I I got my money’s worth. And so let’s move on to Becky. This questions for Warren Energy. It’s from Jeff Oyster. As a Berkshire and Tesla shareholder, I would like to hear your thoughts on the potential financial effects to GEICO, assuming Elon Musk’s delivers on his fully autonomous driving goal. On Tesla’s most recent earnings call, Elon said if you’ve got its scale, a statistically significant amount of data that shows conclusively that the autonomous car has, let’s say, half the accident rate of a human driven car. I think that’s difficult to ignore. Assuming Elon succeeds in reducing accidents by 50% versus human drivers, wouldn’t auto insurance rates fall to reflect the reduced underwriting risk, thereby adversely impacting Geico’s revenues and float and perhaps margins too? Well, yeah, if it, if it, if it if. Well. Let’s just take the extreme example. Let’s say there are only going to be 3 accidents in the United States next year for some crazy reason that that anything that reduces accidents is, is going to reduce costs, but that that’s been harder to do than people have done before. But obviously, but if it really happens, the figures will show it and our data will show it and the prices will come down. I wouldn’t, there have been a lot of people talk about doing that in the past. I mean, General Motors used to be very big in the insurance business and and when Uber first started, they they used some firm, which now is I think a Jetal confirmed. They’re close to bankruptcy now, aren’t they, because of taking things out at the wrong prices. Is that true? Yeah. Yeah. Insurance always looks easier than it is. And it’s so much fun because you get the money at the start, you know, and then you find out whether you’ve done something stupid later on. But but you know it’s it’s it’s it’s a very tempting business when somebody hands you money and you hand them a little piece of paper but really knowing whether you’re I mean if if if accidents get reduced 50% it’s going to be good for society and it’s going to be bad for insurance companies volume but but but but you know good for society is is what we’re looking for so far this you might find kind of interesting I mean the the number of people killed per 100 million passenger miles driven. I think it actually was. When I was young it was like 15 but even post World War Two and only felt like 7 or thereabouts. And and Ralph Nader probably has done more for the American consumer than just about anybody in in history because at 7 or 6 has now come down to under two and. And I don’t think it would have come down that way without him. There have been some kind of fluke figures of what people did during the pandemic which are quite interesting because they they didn’t drive immediately. They didn’t drive as many miles, but they they drove more dangerously, didn’t they? Is that right, a Jean? Yeah. Yeah. So the point I want to make in terms of Tesla and the fact that they feel that because of their technology, the number of accidents do come down and that is certainly proof, proof of Bill. But I think what needs to be factored in as well is the repair cost of each one of these accidents has skyrocketed. So if you multiply the number of accidents times the cost of each accident, I’m not sure that total number has come down as much as Tesla would like us to believe. Tesla has been toying with the idea of writing insurance directly or indirectly. And so far it hasn’t really sort of been much of A success. Time will tell. But I think, you know, automation just shifts a lot of the expense from the operator to the equipment provider. Sadhguru, OK, we’re getting close to noon when we’re going to break for lunch. I just want to tell everybody that I would appreciate it very much if they will get in their seats and be ready at at 1:00 when we reconvene because we will have another very short little movie and we’ll just have a a little explanation of something that I think will be of interest, certainly of interest to me, but it. So I would like them. We will break promptly at 12 and I would like everybody to really make an attempt to be in their seat and quiet at 1:00 and if you can’t do that, if you’ll wait a few minutes and watch in the halls all that. But we will. We do not want to be seating people and that people knowing here at 1:00 and just like a play in New York or something, we’ll it’ll take a few minutes and only a few minutes to cover what we’re going to at at at 1:00. But we don’t want to be seating people during that period. But now, now let’s we’ll go on till 12:00 and then we’ll have a break until 1:00 and we will go to station 11. My name is Humphrey Liu and I am from Charlottesville, VA. I asked the question last year and wish to pose it again. It can be considered a follow up. There is something to be said for traditions. It is the same question, but it is a changing and different world. We are in. Looking at global trends, it increasingly does seem that zero emission vehicles may have finally reached the cusp of massive adoption. Do you see any opportunities in this space, either in specific vehicle manufacturers or in related technologies? As an addendum, I will note that Berkshire has very relevant interest in Energy Pilot Flying J and BYD. Thank you. Yeah, well, we will. I hope you’re right and massive adoption is has been sort of a moving target so far, but I hope we get there. But Berkshire would not be. I don’t think that we bring any special talent to that field. You’ve got vehicle manufacturers and I would certainly not know how to pick the winners in an industry like that. But I’ll be delighted if there there are some winners. But don’t count on us for seeing who the winners will be and don’t count on us for predicting when something will happen. It obviously has been a moving target so far and it is an incredible problem that society faces and and it it may be that that it may be that the governments are not very good at solving it for a while. It’s it’s it’s all of climate changes have got a terrible problem just in the fact that you know in effect that the United States particularly has been the one that’s caused the problem the most. And then we’re asking poorer societies to say, well you got to change the way you live because we lived the way we did. And you know that that really hasn’t been settled yet. It you know, it, it it, it’s a fascinating problem to me, but I don’t have anything to add to how you really sliced through the world. When I was born in 1930, there were just essentially 2 billion people in the world population statistic. Now there’s 8 billion. Now, if you’d asked anybody in 1930 if you’d take the 50 smartest people in the world and you said, what’s the optimum population for the world when you’re 93 years old, they would have not said 8 billion. It wouldn’t be anybody who would have been close to it. But we did it. Now we’re reaping some of the consequences of having having done that, and we got the benefits in the United States. I’m exaggerating here to some extent, but the developed world basically got it. And then we’re telling a whole bunch of other people that we want them to change the way they’re live, live because of the way they live. We we lived the way they lived. So we will see what happens with it. But that’s that’s a problem that that be very, very, very hard to solve to solve among a couple hundred countries. And I really don’t have anything to be to be to contribute on it. And now I’ve got instructions from the thing the the, the, the monitor in front of me. I would like to introduce one person here that has you, you all know, because she’s been there so many times. But my friend Carol Loomis, who is now, well, she’s going to be 95 on June, June 25th, you can send President’s care of our office. And Carol has edited the Berkshire Annual Report since since 1977. I There we are. And and there’s there are two points I’d like to mention. Every year I give Carol a little item for a bracelet that is a replica of the front page of the report that year and they’re different colors and all of that sort of thing. And so she now has what since 1977 what, 47 of them? And she, I think she’s put 10 on each one. But I I I’ve always wondered, you know if she put them all on one one arm, whether one arm would now be four or five inches longer than the other and but I’m sure she’s she foresaw that. But I want to reveal one other. I want to reveal. Well, I want to ask one more question while Carol was here, because I’m sure most everybody in this audience grew up like I did, knowing that Ty Cobb’s lifetime batting average was 367. I mean, he’s the leader among everyone, and it may be that that record is never broken and Ty Cobb 367’s immortal, but Carol has a distinction that probably most of you don’t know. But she dated Ty Cobb and and Carol was was officed at 6th Ave. and and 50th St. in the Time Life building and NBC was right across the street in in Rockefeller Center and the quiz shows became the head of TV. And Carol, being the kind of person she is, walked across the street at lunchtime and went on the quest show of the late 1950s and they gave her the industry or they gave her the questions regarding baseball and Carol answered them all correctly. Of course she is encyclopedic and all kinds of things, but so she knew all the answers and she proceeded and she was single over the time and she proceeded back to her office at Fortune. At some point she got a phone call from sounded like a fairly young man in Georgia and he said my uncle is Ty Cobb and he would like to take you to lunch at 21. And so Carol went to lunch with Ty Cobb at 21, and and I think he subsequently had one more lunch. And then she decided to call it off. But those of you who follow baseball may have noticed that in the 1990s they found that the statistics have been faulty. When time Cobb played and that he actually only batted 366, that there were a couple of bad bats, they didn’t count. So the real question I want to know whether from Carol, and I think she should maybe tell us, is that would she have dated Ty Cobb if she not? I mean, I I know she wouldn’t have. I know she wouldn’t have dated Ty Cobb if his batting average had been 300 or something like that. But where was the cut off point at which she would have told Ty Cobb to stay in Atlanta and forget about coming up to New York? And if Carol would, if anybody has a microphone, Carol would care to express herself on on that question. It’s the unanswered question that I’ve had and all inquiring minds have had, and only she knows the answer and she’s with her daughter. But she married a wonderful guy, John Lewis, and Barbara’s. Barbara’s with her. I’m I’m sure Barbara’s been always wanting to ask this question but I’ve it’s it’s kind of tough when you’re in the family, but I am. I’m sort of a non anxious guy who’ll do it in front of a lot of people. Carol, they will. Or are we going to have Barbara as a guest? Either one will she she she would have been happy to go either way, right. She would have gone. Thank you, Carol. Carol is the best business writer. She comes up a town of Cole Camp, Missouri. You know, I don’t know about places Around 1000, probably. She never took an accounting course and she ended up becoming the best business writer in the United States. And we, you know, she didn’t want to be an editor, actually. I mean, she could have none of the things that fortune, but she’s just plain like writing business stories. And like I say that nobody came close to her and she started from scratch. But in 1977, I asked her to edit my report and she turned out to be just as an editor. She was a writer and it all the way through this year, including this year. Carol has edited the Berkshire Report and to the extent of anybody enjoys reading them, let’s give a hand to Carol, OK. And I’ve been told to show a video right before you go to lunch because it’s only 30 some seconds. And then we’ll talk a little bit about more about it when we come. So if we’ll dim the lights, we will. We will have was showing what a Berkshire shareholder did when she sold us a billion dollars worth of stock the other day. And you’ll be somebody that I is. The hope is I know she is the prototype. She may have more zeros, but she’s the prototype of a good many Berkshire Hathaway shareholders. It’ll be the first thing we talk about when we come back. But some of you may have noticed whatever It was a few weeks back when Ruth Gottesman gave $1 billion to Albert Einstein to take care of all the and Ruth doesn’t like a lot of attention drawn to herself. But here’s how they felt at Albert Einstein when they announced that Ruth Ruth Goddess Money just made a decision to take care of of all the all of the costs of education at Albert Einstein. And it’s going to be in perpetuity. So let’s just show the film. I’m happy to share with you that starting in August this year the Albert Einstein College of Medicine will be tuition free and that’s why Charlie and I have had such fun running Berkshire. She transferred a billion dollars to other people she having to do with Berkshire stock and and you know they offered the name renamed the school after and everything like that but she said Albert Einstein’s that’s that’s a pretty good name to start with. So yeah yeah there’s no ego involved in it. No nothing. She just decided that that she’d rather have 100 plus closer to 150. Eventually students be able to start out debt free and and proceed in life. And she did it happily and she did it without somebody asking, You know, name it, you know, put my name on for all four sides of neon lights and I salute her. So let’s all have lunch and we’ll come back and talk a little bit more about that. Thanks.