It’s a Berkshire Hathaway annual meeting like no other. For the first time, the 2024 meeting was chaired by the Oracle of Omaha Warren Buffett without his trusted business partner and friend late Charlie Munger beside him. With the billionaire investor turning 94 this year and Munger’s death last November, the succession plan at Berkshire was decidedly the most talked about subject ahead of the AGM. That apart Buffett shared some interesting perspectives on AI scamming and explained why Berkshire reduced its stake in Apple.
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Source: Reuters
Taking questions from shareholders for the first time since Munger’s passing away, Buffett paid rich tribute to his late friend and partner and called him the “architect” of Berkshire Hathaway.
Berkshire succession plan: Greg Abel to take investing decisions
Buffett had earlier named his successor in Greg Abel way back in 2021 but the exact contours of this plan had increasingly become a key concern for shareholders. The Oracle of Omaha clearly said that Abel, who is currently the vice chairman of non-insurance operations will be taking over as the CEO eventually and will be taking decisions with respect to investments. “I think the responsibility ought to be entirely with Greg. The responsibility has been with me, and I farmed out some of it, and I used to think differently about how that would be handled, but I think the responsibility should be that of the CEO.”
Why did Berkshire reduce its stake in Apple
During the course of the Q&A, Buffett answered several questions with regards to some of the key investment decisions taken by Berkshire Hathway lately. Decidedly reducing stake in Apple was one of the key topics. Buffett clarified that it had nothing to do with the long-term view on the stock and Apple will probably remain one of their largest holdings despite the recent slowdown. The stake was reduced mostly on account of tax considerations as a result of the gains on its investment, “It doesn’t bother me in the least to write that check — and I would really hope with all that America’s done for all of you, it shouldn’t bother you that we do it —and if I’m doing it at 21% this year and we’re doing it a little higher percentage later on, I don’t think you’ll actually mind the fact that we sold a little Apple this year.” Buffett was indicating towards his views on tax rates that he expects going up to support the widening of the U.S. fiscal deficit.
Praise for Powell
Even as the US is battling a ballooning fiscal deficit, Warren Buffett praised Federal Reserve’s Jerome Powell for his efforts in managing the economy. Buffett called Powell a “very wise man.” According to him, Powell “doesn’t control fiscal policy, and every now and then he sends out a disguised plea … because that’s where the trouble will be, if we have it.”
Why AI scamming is like a ‘genie out of the bottle’
Warren Buffett drew similarities between nuclear weapons and AI technology and felt it has the possibility to bring about great changes. Calling it a “genie out of the bottle” he believes artificial intelligence scamming could be the next big “growth industry.” “When you think about the potential for scamming people, if you can reproduce images that I can’t even tell, that say, ‘I need money,’ as your daughter, ‘I just 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 in scamming, it’s going to be the growth industry of all time,” he explained. “And I don’t know any way to get the genie back in the bottle, and AI is somewhat similar,” he added.
Not uncomfortable with putting money in Canada
Buffett did not share the exact details of his investment plans but said that Berkshire Hathaway was uncomfortable about putting money in any way in Canada, “We do not feel uncomfortable in any way shape or form putting our money into Canada. In fact, we’re actually looking at one thing now.”
Emotional and standing ovation for Munger
In a bid to encapsulate Munger’s contribution, Buffett paid a movie tribute to his friend and business partner. At the end of the movie, nearly 30,000 shareholders gave a standing ovation to Munger, paying respect to his memory.
The Oracle of Omaha concluded the event on Saturday with a rather cheeky comment that aptly highlighted the uncertainty of our lives, “Not only do I hope you come next year, but I hope I come next year.”