Source: Wall Street Journal
This weekend, the annual gathering of the investment world—the Berkshire Hathaway shareholders meeting—kicks off in Omaha, Nebraska. This is the first shareholder meeting since Warren Buffett took the helm six decades ago where he steps back from the spotlight, and it marks the first public “stress test” for Buffett’s successor, Greg Abel.
At the shareholder Q&A session held on Saturday morning, May 2, local time, Buffett and other board members sat together on stage, with Abel occupying the center seat for the first time as CEO to moderate the entire Q&A. In the first half, he co-moderated with Ajit Jain, Vice Chairman in charge of insurance, and in the second half, he co-moderated with Katie Farmer, CEO of BNSF Railway, and Adam Johnson, CEO of NetJets.
Having the heads of Berkshire’s subsidiaries join Abel on stage to answer questions was the most symbolic change at this year’s shareholder meeting. This move sends a clear signal to the outside world: Berkshire’s authority no longer relies on the charisma of any individual, but will be built upon a more diverse operational structure.
The media views this shareholders' meeting as a critical test of whether Abel can uphold the "Buffett premium." Berkshire has long been defined by a core culture of decentralization and permanent holding, while Abel leans toward an operational management style. Analysts generally agree that Abel must address one central question: how to preserve Berkshire’s unique culture while demonstrating his own strategic vision.
The first-quarter earnings report released earlier this Saturday showed that Berkshire Hathaway's operating profit for the first quarter of 2026 reached $11.346 billion, an 18% year-over-year increase. Insurance underwriting profit rose 28%, the railroad subsidiary BNSF posted a 13% profit increase, and foreign exchange gains significantly reversed. Net investment losses narrowed from $5.038 billion in the same period last year to $1.24 billion, driving GAAP net income up approximately 120% year-over-year. Cash reserves for the first quarter reached $397 billion, a record high.
On Saturday local time, at the annual shareholder meeting where he presided as CEO for the first time, Greg Abel, CEO of Berkshire Hathaway, shared his views on a wide range of topics, including artificial intelligence and corporate expansion.
Abel said the Omaha-based conglomerate is carefully considering how to use AI to create value, clearly stating that Berkshire “won’t do AI for AI’s sake.” He also outlined specific initiatives to improve its railroad and insurance businesses at the annual event long known as “Woodstock for Capitalists.”
All members of Abel’s leadership team took the stage, while Chairman Buffett sat in the audience and delivered a speech. Abel paid tribute to his predecessor by hanging jerseys from the dome of the CHI Health Center, the annual venue of the meeting. Additionally, an AI-generated deepfake video of Buffett posed a question on stage, sparking an in-depth discussion on AI-related cybersecurity risks.
In a special off-camera interview that day, Buffett told the CNBC anchor that he believes the current environment is not ideal for investing.
Before this event, the market anticipated that during the shareholder Q&A session, key topics might include whether Berkshire, with its substantial cash reserves, would increase mergers and acquisitions, repurchase shares, or boost allocations to technology and artificial intelligence (AI) assets. UBS noted, “Given Berkshire’s historical underweight positioning in technology, we expect the discussion to focus on how the company, under Abel’s leadership, is addressing technology and AI issues.”
Just like last year's live text and graphics coverage of the shareholder Q&A, this year Wall Street Horizon is live-publishing the highlights of Berkshire's shareholder Q&A, ordered by Beijing time in reverse chronological order, with the most recent updates at the top. Below is the official transcript of key points from the 2026 Berkshire Hathaway shareholder meeting.
02:15 Question 14: Who is Abel's "Charlie Munger"?
Problem: During most of Warren’s tenure as CEO, he had Charlie as a partner, which naturally reduced the risk of errors in our investment decisions. Who will be Abel’s Charlie?
When asked who would be his "Charlie Munger," new CEO Greg Abel did not name anyone, but instead spoke about the entire team around him. "You surround yourself with great people, and they're already here."
Abel mentioned Adam Johnson, President and CEO of Berkshire’s consumer products, services, and retail businesses and NetJets, along with Ajit Jain, Vice Chairman of Insurance, and Katie Farmer, CEO of BNSF Railway. All three executives appeared alongside Abel on Saturday.
He said, "Among our CEO group, we are very fortunate to have a remarkable group of people; I would reach out to any of them whenever I encounter any specific situation to seek their advice."
Abel: We are very fortunate to still have Warren as our chairman, which has created ideal conditions for a smooth transition. We have an outstanding board, and I can easily reach out to any of them as needed. When I answered questions about Warren in Omaha, I said we want Berkshire to endure. I want to lead Berkshire, and I will be a strong leader. But you surround yourself with great people—and they are already here.
In non-insurance matters, I’ve been fortunate to work with the 32 companies managed by Adam, as well as 18 others. Clearly, I’ve had an excellent working relationship with Jahn and have been lucky to frequently seek his advice. Then there are our CEOs—we’re fortunate to have such an outstanding group, and I would reach out to any of them for guidance on specific situations.
Fortunately, due to Berkshire and the way we were created, we have access to an abundance of resources. Berkshire will endure, and it will endure as a team.
02:10 Question 13: Prioritize security or seize more investment opportunities? Favor tech companies or cash-flow companies?
Question: What has been the most important evolution in your personal framework for evaluating cash flow certainty and margin of safety compared to Warren? Specifically, do you now favor technology companies that demonstrate similarly strong cash flows?
Abel: Regarding how Warren views investment approaches—our shared understanding of margin of safety and our methods—we are absolutely aligned. This begins with our culture and values, and the way we have handled everything over the years.
If I were to return to examining opportunities in the energy sector, it would quickly turn to this: Do we truly understand the risks involved? At the time, we were acquiring Nevada Energy, and three major risks were clearly on my mind, which I was eager to discuss with Warren. Our immediate conversation went like this: we fully understood the economics, then immediately turned to the greatest risk. One of those risks was rooftop solar and how it would disrupt the business. That risk indeed emerged 12 months later, then 18 months later, and we successfully navigated it. We think about risk differently—we view them through a Berkshire lens, looking ahead ten years: What will this business look like in ten years? If we don’t understand what it will look like in ten years, we don’t do it. We must have a vision for what the future will hold—that’s at the core of how we operate.
When it comes to technology companies, we never say that a specific industry is one we must participate in. If there is a company in the technology sector that we understand the opportunities and risks of, and whose valuation is reasonable, then merely being in the technology sector does not rule it out for us.
02:00 Question 12: Berkshire will spin off businesses or be split up
Question: Are there any future scenarios you can foresee in which Berkshire would divest businesses or be split up? If so, what are they?
In response to the above shareholder question, Abel stated that he expects Berkshire Hathaway will not split or divest its subsidiaries. He emphasized the absence of bureaucratic layers in Berkshire’s structure and the unique ability of this conglomerate to allocate capital flexibly across its business units. “We are a conglomerate, but we are an efficient one. We don’t have layer upon layer of management.”
Abel said that Berkshire is committed to holding acquired companies in the long term, but may sometimes need to consider selling. “When we buy something, we intend to hold it permanently. When we acquire a utility company, we tell regulators it’s a permanent holding. But it must be a viable relationship. If the relationship breaks down, we’ll look for a better path.”
Abel said that difficult labor disputes or reputational risks could prompt Berkshire to divest a business.
Nevertheless, Abel concluded, "We are not considering spinning off subsidiaries or splitting the group."
When we consider this issue, there are circumstances in which we may not be the best owners of a business. If there are labor issues we cannot resolve, or reputational risks we are unwilling to expose Berkshire to, then the company does not belong in the Berkshire family. If a business is unsustainable and no longer generates operating cash flow for our shareholders, and if someone else could operate it more successfully, we must consider that possibility.
We take very seriously our obligation to ensure capital is appropriately allocated. We have actually announced the sale of Pacific Company’s utilities in Washington State. In Washington, the policies they wanted Pacific to implement had a significant impact on the costs in our other states. Our other states were bearing costs imposed by another state, so we chose to exit and found an excellent buyer. When we acquire something, we always approach it with a “hold forever” mindset—but this must be a mutually beneficial relationship. If that relationship breaks down, we seek a better path.
Regarding the second part of the question, there will absolutely be no fragmentation. We are a diversified enterprise, but we are an efficient one, with no layers of management or countless committees dictating how our business should operate. Many diversified companies end up with layer upon layer of costs that add no value to the company as a whole, but we do not do that.
Our integrated corporate structure operates without bureaucracy and bloated costs, allowing capital to be transferred between different groups in a highly tax-efficient manner. We do not divest subsidiaries or split any groups.
01:55 Question 11: Japanese Portfolio
Question: Berkshire’s investments in the five Japanese trading houses are passive, involving well-run businesses purchased at good prices with yen financing. Your transaction with Tokyo Marine, however, is entirely different—it’s a ten-year joint venture and reinsurance partnership. This represents a level of operational integration that Berkshire has never attempted internationally. What does this look like in practice? Does this signal a shift under your leadership toward more active international partnerships?
Abel: Tokyo Marine has done an outstanding job. I previously hinted that this is a strategic relationship, not merely a financial transaction. We are very pleased with our 2.5% investment in Tokyo Marine, which will be a long-term commitment. This is the same type of investment we’ve made in five other Japanese companies, and we truly view them as permanent partnerships, because it goes beyond the investment itself—it’s about the relationships we aim to build there. You’ll continue to see this reflected in the underwriting opportunities we’ve outlined, where we jointly share in their risks and returns, effectively representing 2.5% of their current book. Again, this is part of a financial transaction, but it also embodies tremendous trust.
The third point mentioned is that the partnership highlights various things, but how we hope this relationship will evolve has not yet been clearly defined. So we will let it develop naturally. This partner shares our culture and values, so there is no doubt it will be outstanding for many years to come. As for pursuing absolute acquisitions in insurance or other areas, that will evolve over time—clearly, this will be a topic for Jien and the Tokyo Marine executive team to discuss. If such an opportunity arises, we would be very pleased.
01:50 Question 10: How do tariffs affect a portfolio?
Question: Does Berkshire Hathaway consider seeking tariff relief or compensation programs for its wholly owned operating businesses facing import cost pressures? How significant is this impact across the portfolio?
Abel: The discussion about the impact of tariffs on our entire portfolio is very similar to the situation in the Middle East. We went through one during the first term of the government and learned from it, so we are better prepared. That means rolling up our sleeves and managing it ourselves. We will find ways to continue serving our customers and recoup these tariffs through direct contracts with clients or through the products we are producing. Our team has done an outstanding job handling this issue. There is a lot to sort out right now, and we did not actively seek these challenges.
BNSF CEO: No, in terms of compensation, but I’d like to comment on the impact of tariffs. In early 2025, we saw some customers ship ahead of the tariff implementation, leading to increased freight volumes. Then, in the second half of 2025, things stabilized, and by 2026, our customers had indeed adapted and adjusted to the tariffs. That said, it has certainly introduced some uncertainty. From a planning perspective, this has been very challenging for our customers, causing some to hold off on capital investments in manufacturing facilities. It’s precisely the uncertainty surrounding the tariffs that we’ve truly observed in our customers.
NetJets CEO: I would use Berkshire Hathaway Automotive as an example—its new vehicle sales this year have slightly decreased compared to last year, partly due to the impact of tariffs. The problem is that tariffs change daily; just understanding this “bouncing ball” of tariffs is itself a full-time job.
Among the 32 consumer goods, services, and retail companies in the portfolio, the average age of establishment is 88 years. When I called their CEOs, they said, “We’ve been dealing with tariffs for 100 years.” Think about the CEOs over the past七八 years—we’ve had to navigate a global pandemic, the highest inflation in four decades, and now these “bouncing ball” tariffs. Businesses have handled these challenges exceptionally well, and I believe our future outlook is quite strong.
01:35 Question 9: How is Berkshire’s decentralized model managed? How does BNSF maintain its competitiveness?
Question: Berkshire’s system relies on decentralization. Each manager serves as CEO of their own subsidiary. Which operating units require more oversight, and how are underperforming managers handled? BNSF’s profitability lags behind its competitors—how will it maintain a competitive advantage against rivals and new technologies?
Abel: I emphasized the decentralized model, risk discipline, and capital allocation. We have a group of outstanding leaders and businesses that are closest to their customers; if they think like owners, we will achieve excellent results across the entire corporate group.
But decentralization does not mean we shirk responsibility. This autonomy means embracing the immense accountability and pride that comes with doing things well. We have high expectations—Are they managing risk? Do they see themselves as chief risk officers? Are they skilled at allocating the capital at their disposal? If we see underperformance or poor decisions, that’s when we step in and have a conversation.
BNSF CEO: We fully understand that it is critical to continue driving efficient operations, maintaining a competitive cost structure, and narrowing the profitability gap with our competitors.
The first thing we truly focused on in 2025 was improving single-unit operational efficiency. Enhancing the single-unit network frees up resources and creates capacity, allowing you to handle the same or even greater freight volumes with fewer assets. In the first quarter of this year, we handled more freight volume than the first quarter of last year, while using 260 fewer locomotives.
The second area is our technological transformation. We are bringing in data scientists and operations research researchers, placing them alongside our operations staff in the Network Operations Center to study digital twins and deliver predictive ETAs to our customers. We set a record for fuel efficiency in the first quarter.
Regarding competition with trucks, we have the largest intermodal network among all rail companies. We used to operate a train with five people; now, most of our trains run with just two. But we also need to be allowed to innovate and require regulatory support that enables rail to compete with trucks.
NetJets CEO: I came back on June 1, 2015. I asked a question: How many people truly understand both ends of our business? NetJets is complex—we fly to thousands of airports in 150 countries. I didn’t like the answer; it was far too low.
We began rebuilding the culture from there. I remember preparing for my first board meeting, talking about growth. Abel kindly pulled me aside and said, “Why don’t you let Warren worry less and focus first on reducing the debt?” It was a lesson I never forgot.
We talked about safety and service. After becoming a customer in 1998, Warren bought NetJets and said, "I want safety, I want service." We have always been very focused on ensuring everyone stays on that track. This is largely why we’ve been able to repay debt, return cash to Berkshire Hathaway, and become a leader in the service industry.
01:25 Question 8: How does geopolitics affect Berkshire’s subsidiaries?
Question: How has the current geopolitical situation in the Middle East affected Berkshire's subsidiaries?
Abel: It truly affects all of our operations in multiple ways. But what I’m most proud of is that we run these operations with a long-term perspective. When the phone rings, you know challenges are coming—but that’s okay. We discuss, we push forward, and we always find a way to overcome them. Regarding situations related to the war with Iran and conflicts in the Middle East, I’ve seen the team again adopt this mindset: this is the reality we face. What’s the best solution for our customers? How can we continue serving them as we always have?
I mentioned the drag-reducing agent from LSBI Pipeline Company; they typically don’t sell large volumes to the Middle East, but a lot happens when they start finding ways to address this challenge. That doesn’t mean our business hasn’t been directly affected—our chemical division saw their input costs actually double in a very short time. Over time, prices will rise according to our contracts, and this situation will rebalance. In terms of running our business, we’ve simply focused on working hard and sustaining everything over the long term.
BNSF CEO: Railroads are a strong indicator of the health of industrial and consumer economies, as our freight volumes encompass a wide range of commodities. We’ve seen several different impacts from the Middle East conflict. Supply chain disruptions have created opportunities for some of these goods, increasing demand for commodities such as aggregates and steel. Our largest segment is intermodal, which has become more competitive as fuel prices rise. However, if fuel prices remain high over the long term, it will dampen consumer demand and affect all areas of our business.
Yes, we’ve seen some impacts. Some large retailers say consumers are now having to make choices about what to buy. If the high fuel price environment persists for a long time, I do believe we’ll see this customer impact affect our business.
Adam Johnson, CEO of NetJets and President of Consumer Services and Retail, said that cost increases, including oil prices that once rose to $100 per barrel, have begun to suppress demand in some areas:
This has indeed affected some demand on the consumer goods side and in physical retail.
While acknowledging the aforementioned pressures, Johnson stated that the company’s operations have long been accustomed to navigating through volatility. We are prepared to respond to these conditions and make adjustments as necessary. However, this is indeed affecting certain retail and consumer goods businesses.
01:20 Abel returns to the stage to host the afternoon session of the shareholders' meeting.
Greg Abel returns to the stage at the CHI Health Center in Omaha, Nebraska, to host the afternoon session of Berkshire Hathaway’s annual shareholder meeting.
Accompanying Abel were BNSF Railway CEO Katie Farmer and Adam Johnson, President of Consumer Services and Retail at NetJets.
23:55 Question 7: When will Berkshire’s utility companies phase out fossil fuels?
Question: When will Berkshire’s utility companies phase out fossil fuels, transition to renewable energy alternatives, and stop causing irreversible harm to the environment and the future of my generation?
Abel: We operate as stewards of these assets for our states and customers. First and foremost, we must strictly comply with existing laws, including federal regulations. Our team is committed to both compliance and doing things right. We have plans regarding resources, as well as timelines for phasing out coal and gas units, which are largely driven by state policies. The states will determine how we operate and how long these assets remain in operation, as ultimately customers bear the costs and risks.
Look at our Iowa utility companies: about 93% of our energy comes from renewable sources, leading the nation and achieving this at an affordable cost. However, we still operate coal-fired power plants, which we only use when necessary to stabilize the grid during peak periods.
The challenge lies in the fact that hyperscale data centers place significant strain on the system. If artificial intelligence continues to develop, the number of carbon-based units used will increase, placing substantial pressure on the system and the entire industry.
23:50 Question 6: Jahn and the succession planning for insurance operations, Abel's succession plan
When asked about Jahan and his succession plan, Abel said the board takes such matters very seriously: “They have developed plans and continue to discuss them. So, if Jahan were unable to fulfill his duties today, or if I were unable to fulfill mine, our board knows exactly what actions to take.”
These two succession plans are clearly important topics. Jain joined Berkshire in 1986 and was the architect of our insurance business, where we created an unparalleled franchise with exceptional culture and discipline.
When Warren announced the transition plan last year, the first thing he did was bring together our top five insurance managers to sit down and talk about the business and discuss the culture. This was an extraordinary opportunity for me to expand my knowledge base in insurance. What I saw in that team was deep management and insurance experience, along with the same values and culture that Jann emphasized.
Maintaining a disciplined culture is challenging. In the insurance industry, telling underwriters accustomed to active roles to “take a few months off” is not easy. But Jai has an excellent team around him, and our board takes succession planning very seriously. We have a plan in place, and the board knows exactly what actions to take if Jai or I are unable to fulfill our duties.
Regarding culture and underwriting orientation, I follow a few simple rules. The number of people actually involved in decision-making is very small; my top three have been working together for over 35 years. Compensation is based on a fixed salary, not complex formulas that allow individuals to benefit from upside gains while Berkshire bears the downside risk. We shield them from market fluctuations so they can focus on doing the right thing with peace of mind.
I’ve seen all these compensation plans over the years. I told Warren: give me a compensation plan, and I’ll find a way to exploit it—you won’t notice for many years. Add to that the fact that employees who lose want to renegotiate, while those who win are happy to walk away with everything. It’s a huge challenge.
23:45 Question 5: How to manage the investment portfolio built by Warren Buffett?
Question: How to manage the investment portfolio built by Warren Buffett?
Abel: Regarding the management of the existing portfolio and its holdings, as you mentioned, this was established by Warren, but it consists of companies that Warren understands very well. I am equally confident in my understanding of these businesses and their economic prospects. That’s why, when I outline this in my letter, I really want to convey this message: yes, we are very satisfied with these companies and we understand them; yes, this is a concentrated portfolio, but you know, their businesses will evolve and risks may emerge. So we will continuously evaluate them, but this is a portfolio we are very comfortable with.
Warren mentioned Tim Cook’s remarkable success at Apple. Warren and Tim recently discussed this, and they talked about how Warren invested in Apple not because it was a tech stock. He saw what the product was and how much individual consumers valued it. It’s an extraordinary perspective, but it’s also one that I think many of us would apply in a very similar way.
For example, with power utilities, I know a lot—I know how to ensure power generation, how to transmit it, and so on. But am I really that interested in how Apple phones are manufactured? I might be curious about where they’re made and the associated risks and challenges. But I fully trust our team when we discuss it more broadly. We examine and ask ourselves: Do we understand its value, and why this product has value? Ultimately, that’s its value to the consumer.
I believe we have a unique opportunity, and we’re very fortunate that Warren comes into the office every day. It’s fortunate that we can discuss other potential opportunities and bring together different skill sets. But ultimately, we’ll quickly narrow it down to identify what the opportunity is, why it’s valuable, and why—whether it’s consumers or users in any industry—this company and this product will endure. Related to that is understanding where the risks lie. This is essentially Warren’s approach, and it’s also mine.
Regarding our existing portfolio, we always know exactly what we have invested in. When it comes to understanding the opportunities and risks involved, we are very confident in our clear perspective and are satisfied with our current position.
23:40 Fifth question: Provide insurance for vessels transiting the Strait of Hormuz
When asked when and how Berkshire would provide insurance for ships navigating the war-torn Strait of Hormuz, Ajit Jain, Vice Chairman of Berkshire’s insurance operations, gave a crisp and straightforward answer: “Simply put, it depends on the price.” No sooner had he finished than laughter and applause broke out in the room.
Jain said Berkshire is participating in a program to insure vessels transiting the Strait of Hormuz, but no policies have been issued yet. The Strait of Hormuz has been closed or tightly restricted multiple times during conflicts between the U.S., Israel, and Iran. “We have modestly engaged in a program aimed at insuring vessels through the Strait of Hormuz, but no policies have been issued yet.”
Jain stated that U.S. Navy escort for transiting vessels would be one of the coverage conditions for the program. “The scheme is still being refined. But if we can secure satisfactory terms—including conditions at the underwriting decision level and the assurance of U.S. Navy escort—we have already offered a premium we believe is acceptable. However, there has been no substantive progress yet.”
23:35 Question 4: Patience has an opportunity cost—how should long-term investors think about capital allocation?
Question: When patience carries a tangible opportunity cost, how should long-term investors think about their capital allocation strategies today? How can individuals balance patience with action, especially given that Mr. Buffett’s decades-long performance record has set the standard?
Abel: Returning to our capital allocation approach and our long-term perspective, it aligns very closely with our owners and the shareholders here. They adopt a very long-term approach to investing. We’re fortunate to have this unique owner base in our holdings. And over the long term, Berkshire will have significant opportunities. This again comes back to the patience and discipline in capital allocation. Do we know what will happen tomorrow? Or whether an event will occur in two or three years? But markets will become dislocated, and that will again allow us to act. This is where our disciplined approach comes into play—knowing what our investment philosophy is around these activities.
It’s not that we don’t see exceptional companies today—we’d love to own many of them. I’ll be cautious. In the long term, we’d be happy to hold those companies with outstanding management teams, which we evaluate carefully. I’d say that when you think about the world, it doesn’t mean there are dozens of such companies, but they do exist. However, given the price relative to the opportunity, the company’s economic prospects, and the associated risks, we have no interest in acquiring them—at either a partial or full equity stake. That doesn’t mean such an opportunity won’t arise in the future.
This is what we spend time preparing for: first, maintaining discipline; second, recognizing core opportunities that we value or see at appropriate prices. It really comes back to discipline.
You asked me how I personally balance patience with action. Again, this is consistent with my role, and I’m fortunate to work with Warren, Jay, and others—we do this because we love and believe in Berkshire. Warren has made a tremendous commitment to Berkshire and possesses deep understanding and passion for it. Based on this, he aims to build something very long-term, including the opportunities it may create. Personally, and I know this applies to all of us, we bring the same passion and are fully committed to doing it in a way consistent with the past.
Jian: You know, insurance, like investing, is a game that requires patience. It’s very hard to get people to sit back and do nothing. When I hire people, my usual approach is to tell them straight away: “Your job is to say ‘no.’” You’ll be bombarded with deals every day, but your core responsibility is to say ‘no.’ I say, occasionally, you’ll come across a deal that hits you like a board—it’ll scream, “Money’s coming!” That’s when you come to me, and we decide together whether to move forward.
You know, joking aside, it’s really hard to sit there doing nothing while everyone else is being led around by brokers and taken to London. I believe that in insurance—and certainly in investing—the true test of success is the ability to say “no.”
23:25 Third question: How do you view the large stock portfolio while balancing oversight of wholly owned subsidiaries and equity investments?
Question: Abel, given your background as a business operator—unlike Warren’s origins as a public market investor—could you share how you balance your time between overseeing wholly owned subsidiaries and your current $288 billion equity portfolio? Additionally, does your operator’s perspective alter the way you evaluate new investment opportunities compared to Warren’s historical approach?
Abel shared new insights on how he views Berkshire's large stock portfolio, emphasizing a concentrated investment strategy anchored by a few core holdings.
He referred to Apple, American Express, Moody’s, and Coca-Cola as the "Core Four," viewing them as the foundation of Berkshire’s stock investments. He also highlighted the company’s substantial holdings in Japan’s five major trading houses, identifying them as another key pillar of the portfolio, and emphasized its commitment to long-term ownership of these companies. In addition to these core positions, Abel named several other significant investments, including Bank of America, Chevron, and Alphabet. Berkshire purchased approximately $4 billion in Alphabet stock during the third quarter of 2025.
Abel stated that he will take a more proactive role in investment management, adding to or adjusting positions as appropriate. He added that he is fully collaborating with Buffett on investment decisions.
Abel: I have spent many years operating various businesses at Berkshire Hathaway Energy, and later serving as Vice Chairman of Non-Insurance Businesses. Fortunately, Jain and I have held these great roles for the past eight years, now nine years. But this has created for me a very important opportunity to understand these businesses.
As I’ve already mentioned, we have an outstanding business and exceptional leadership, but there are still opportunities there. But this does remind me that I will dedicate time to these businesses to ensure we allocate capital wisely, continue to assess the risks associated with these operations, and promote excellence in execution. Because, listen, as someone inside the business, it’s easy to look at your internal metrics and convince yourself you’re doing well—you have to look outward and ask: What are our customers seeing and feeling? What are our competitors doing? I believe this is precisely the value we can bring to our operations.
I mentioned giving Adam Wright more responsibilities or having him take on a greater role across the 32 businesses. He brings excellent operational expertise, and we also have a team on the insurance side.
Now, let’s talk about the stock portfolio and time allocation. There are still tremendous opportunities in deploying capital from the balance sheet. I shared the scale of our cash and U.S. Treasuries. I want to emphasize one point: if you look at our current stock portfolio, as I outlined in the letter, we have a concentrated portfolio. We refer to it as “core,” but the most accurate description is that it is indeed a concentrated portfolio. We have what we call our core and concentrated investments.
In my letter, I emphasized our investments in Japan. Interestingly, if you look again at some of the companies in which we hold significant positions, I would like to add that for these companies, we may still be purchasing shares or rationalizing appropriate positions within our portfolio. So, as I previously highlighted, the first group was slightly below $200 billion and remained at that level; we now have close to $100 billion, or $85 billion. Adding other Berkshire investments such as Bank of America, Chevron, Google, and others brings an additional $70 billion in investments. This underscores how a very large portion of our total investment is highly concentrated in a limited portfolio, and active management of these investments is in fact limited—this is what I truly want to emphasize.
We also understand those businesses. We know the management teams. These are all things that Warren and I would still absolutely collaborate on and discuss. You don’t need to discuss them every day, but if something happens with any of these businesses, we’ll talk about it that week or that month—perhaps regarding their direction or what we’ve learned. The Japanese company just reported earnings in the past 48 hours, which has been an active topic of discussion; yesterday morning, Warren and I talked about their results and what we’re seeing there. So these are core holdings, but that doesn’t mean we set them aside or treat them as passive investments we only revisit during evaluations.
Ted manages another $20 billion, or slightly less than $20 billion, in capital, but his responsibilities extend far beyond that. He clearly assists us with our other various opportunities, or helps us evaluate risk and capital allocation within the business. So we’re fortunate to have these, but when you consider the management and workload involved, it’s a very manageable portfolio.
As we have already mentioned, the opportunity to deploy this cash and U.S. Treasuries at the appropriate time is a very significant one, encompassing equities, what we may see in our operating businesses, and also in insurance.
Regarding time allocation, yes, we will dedicate a certain amount of time to operations, and we will prioritize this because we see significant opportunities to continue improving and closing the gap in operational excellence. We see opportunities within our existing portfolio, but these would either involve increasing our position or adjusting scale. We also continuously evaluate what other opportunities exist in the market, whether it’s acquiring an entire private or public company. Similarly, we are considering what incremental opportunities exist if we were to hold a partial stake in a company. These opportunities are evaluated in the same way—as I mentioned, we assess the economic outlook—and this is closely tied to the previous answer.
Jian: I truly believe that capital allocation and operations are two sides of the same coin. Warren said years ago something I find very insightful: a good capital allocator will become a good operations manager, and vice versa.
Abel: When you consider our operating company, I previously mentioned that we have a very deep talent pool. We have exceptional operators who understand their business, their industry, and their customers. Yes, do we still have room for improvement? Yes, it’s an ongoing process of refinement, and we will close those gaps. But we have an exceptional team there—whether it’s Jahn, myself, Adam Wright—we spend time ensuring we’re comfortable with how we allocate capital, that we understand the risks, and that we’re aware of those gaps.
23:20 Second question: How to balance patience and action?
Question: As a young investor navigating uncertainty and rapid technological change, I often struggle to balance patience with action. How do you personally distinguish between the two?
Answer: One of our greatest advantages at Berkshire is patience and discipline in allocating capital. Over time, opportunities will always arise for you. This doesn’t mean there are no opportunities now, but it also doesn’t mean you need to deploy all your capital or spend all your money right away.
This is indeed the approach we take daily, and we recognize that holding significant cash and U.S. Treasuries is an important asset—for us, as an example. I view this cash holding as an asset, and it represents a tremendous opportunity. You sense that moment when you feel a strong value proposition. When will we see these?
We have outlined our investment philosophy, and a crucial point is that we must have a deep understanding of what we are investing in. We seek profound insight—you mentioned technology and the rapid pace of its evolution and change. I always start from this perspective, and I know we’ve always done this at Berkshire: Do we understand this business? Do we understand this opportunity? And more importantly, do we understand the risks involved?
Then, we want to have a very clear view of its economic prospects over the next five and ten years. Yes, next year is important, but we’re not investing for just one year—we need a long-term perspective on where the opportunity is headed. And we’ll go even further—we will hold these investments forever.
So we think about it this way: we want to have a strong conviction in the management team there—that they are capable and operate with high integrity. But most importantly, ultimately, value must first prove that deploying our capital is justified. We are not in a rush to allocate capital to suboptimal opportunities.
We want to ensure it aligns with our principles, and then, as I mentioned earlier, we will act decisively, swiftly, and with significant capital.
23:15 The first question in the real Q&A session: Where is human judgment still a competitive advantage for Berkshire?
Question: Given today’s AI tools, where does human judgment still remain a competitive advantage for Berkshire?
Jian: Artificial intelligence is also very popular right now, with people flocking into both insurance and non-insurance sectors. Clearly, if AI truly becomes a reality as expected, it will undoubtedly be a massive game-changer.
Currently, we see artificial intelligence used as a productivity tool—a mechanism to reduce labor costs and perform routine, repetitive tasks. I don’t believe AI will reach a level where it can make decisions on matters requiring judgment, such as pricing or claims, for many years yet. I tend to be skeptical; if someone told me they could solve that problem, I’d be surprised. So, if you’re counting on AI to tell you which stocks to buy or sell, I don’t think that will happen.
Jain said that a few weeks ago, while speaking with Abel, he brought his team on the call and immediately raised network risk, which we had already discussed. They then quickly moved on to how we can improve the efficiency of writing and managing code, particularly within the insurance business and the core principles we strongly focus on. They brought this up right away. And as you mentioned, how to become more efficient. They also gave an example I thought was excellent. I mean, if we look at a risk and rely on traditional underwriters, we might only focus on the top five risks, which your team pointed out. Now, however, we can quickly identify those major risks, and with technology, we can also rapidly spot other risks—we might focus on another 15 risks and have strong insights into them.
23:05 The first question in the Q&A session is from Buffett: Why hold Berkshire long-term?
Shareholders were given an unexpected and vivid lesson on the risks of artificial intelligence at this year’s meeting. At the start of the Q&A session, Abel played a video featuring a familiar-looking face.
On the large screen, a man in a suit dressed as "Buffett" introduces himself and asks Abel: Why should investors hold Berkshire shares long-term?
Hello, I’m Warren from Omaha. Abel, I’ve been following this company for a long time—very, very long. My question is simple: I’m 95 years old and lack nothing except time and cherry Coke. I’d like to know—for the sake of telling my shareholder friends—why they should hold Berkshire shares over the long term.
Then, Abel revealed the truth: the video was not real footage, but a “deepfake” generated using AI technology. He used this opportunity to emphasize to the shareholders present the risks of cybersecurity.
In response to the AI Buffett question, “Why should investors continue holding Berkshire stock,” Abel emphasized the company’s massive $397 billion cash reserve as a key source of strength, which provides Berkshire with significant flexibility. “We hold cash and U.S. Treasuries for several reasons—we do not intend to be constrained by anyone.”
Abel reiterated the core investment and business philosophy long upheld by his predecessor, Buffett.
He told investors that holding cash in U.S. Treasuries, maintaining financial independence, allocating capital flexibly, prioritizing tax efficiency, and remaining highly vigilant against the “ABCs”—arrogance, bureaucracy, and complacency—remain top priorities for Berkshire:
We have heard it countless times: the three poisons—arrogance, bureaucracy, and complacency—can quietly erode a company and ultimately destroy it. We will not allow this to happen at Berkshire.
He described Berkshire as a unique company—capable of integrating a wide variety of disparate businesses while also possessing the ability to deploy capital swiftly and flexibly:
Berkshire is a conglomerate, and we are fully aware of that. But we are a different kind of conglomerate because we can allocate capital with exceptional efficiency. We can move funds from insurance operations to non-insurance businesses, invest in the stock market, or hold cash when we deem it appropriate.
Abel said that this deepfake video of Buffett sharply highlights the AI-driven cybersecurity risks facing Berkshire:
This was a valuable warning for our team. It’s a major risk we face every day across Berkshire.
Berkshire will focus on using technological means to identify cyber threats, particularly in the insurance business segment.
Abel also specifically noted that the production of this deepfake video of Buffett was done without any involvement or authorization from the "Sage of Omaha" himself.
At 22:50, modular homebuilder Clayton is impacted by interest rate levels.
Abel said that prefab homebuilder Clayton Homes has been hit, with potential homebuyers facing multiple pressures such as high mortgage rates. This is clearly driven by current interest rate levels. Consumers are also facing challenges in other areas.
Abel said the company's goal is to provide "affordable housing" for American consumers, drawing enthusiastic applause from the audience.
22:40 Abel believes that data center construction will bring significant growth to utilities.
Abel stated that the large-scale construction of data centers and the resulting demand pressure on the power grid are creating significant growth opportunities for the utility sector.
Abel pointed to the expansion of hyperscale data centers in Iowa as an example, noting that current energy demand still has considerable headroom before reaching peak load capacity:
From the peak load of data centers—which represents actual electricity consumption—the current share is approximately 8%. Industry professionals generally aim for a range of 5% to 10%, and we have already reached 8%. Therefore, we expect this proportion to increase by another 50% or more over the next five years.
Abel stated that it is crucial to isolate the electricity costs of data centers from those of regular grid users and ensure that electricity-consuming enterprises bear these costs themselves. “Large-scale data center operators, data centers, and all electricity users must bear the full cost.”
During the AI boom, the strain on regional power grids caused by data centers has become a focal point for numerous environmental and consumer advocacy groups.
22:20 CEO refuses to chase AI trends, upholding Buffett’s investment philosophy
Berkshire CEO Abel on AI: "We won't pursue AI for AI's sake. We only invest when we see real value. AI must provide substantial benefits to our business. AI applications present opportunities across all our operations."
Abel stated that Berkshire takes a cautious stance on the application and management of artificial intelligence, in stark contrast to other CEOs who are eager to reshape their business strategies or rebrand around this technology.
Abel stated that Berkshire will deploy AI in a focused, value-creating manner, while also noting that the technology poses potential risks to "humanity," which the company is closely monitoring.
22:00 Abel explains the earnings report
Abel said that as competition intensifies, the insurance market is “becoming more relaxed.” Auto insurance customers are engaging in unprecedented price comparison shopping.
21:50 Buffett praises Apple CEO Cook
Warren Buffett asked the outgoing Apple CEO Tim Cook to stand in recognition during his opening remarks, a moment that echoed Berkshire Hathaway’s own transition of leadership from Buffett to incoming CEO Greg Abel.
Buffett speaks about the immense pressure Cook faced in taking over from Apple’s founder Steve Jobs, and how he rose to the occasion with outstanding results. Buffett says:
Think about it—having the courage to succeed Steve (Jobs) and surpass his achievements? It’s one of the greatest miracles in American business history. Thank you, Tim.
After Steve's passing, we made the investment decision to allocate nearly 10% of Berkshire’s resources to Apple, effectively entrusting it to Tim, who turned this investment into a pre-tax return of approximately $185 billion.
Cook announced earlier this month that he will step down as CEO, and John Ternus, head of Apple’s hardware division, will succeed him.
21:45 Buffett praises Abel: CEO selection is "100% successful"
Buffett took the microphone in his seat and once again praised Abel. He noted that today marks the anniversary of the day he announced Abel would succeed him as CEO. Buffett said, “This was the best decision we ever made, 100% successful. He has done everything I did, and even more. He is simply the right person.”
21:20 Opening remarks for the 2025 annual general meeting
At 95, Warren Buffett was led to a front-row seat on the board platform, where shareholders applauded warmly. This marks the first time in sixty years that Buffett is no longer the undisputed centerpiece of Berkshire Hathaway’s annual shareholder meeting.
The Berkshire Hathaway shareholder meeting opened with a tribute to Buffett. A video montage featured cherished photos and footage of the "Sage of Omaha" over the years, set to the classic tune "Back in Time" by Huey Lewis and the News, interspersed with highlights from past shareholder meetings.
Abel introduced the company's key personnel in alphabetical order, and when he reached Buffett, the audience erupted into enthusiastic applause.
At the opening of the annual general meeting, Abel officially retired the jersey bearing the number "60" in honor of Warren Buffett, permanently commemorating the "Sage of Omaha" decades of service to the conglomerate. Retiring a jersey is a tradition in sports, regarded as the highest honor bestowed upon an athlete.
The jersey is hung high on the rafters alongside the retired jersey of the late investment master Charlie Munger—Munger’s jersey bears the number “45,” representing the number of years he served at the company.
Abel said, "I'm thrilled to announce that these two jerseys will be hung there forever."
Before the conference: Interest in the Berkshire Hathaway shareholder meeting "Taobao Festival" has slightly declined
In the spacious exhibition hall of the Omaha CHI Health Center, the annual "Berkshire Flea Market" took place as scheduled, drawing crowds as usual, though this year’s attendance was noticeably lighter than in previous years.
This shopping event, spanning approximately 2,000 square meters, coincided with the annual Berkshire Hathaway shareholders meeting, featuring familiar faces: Buffett-themed merchandise from Brooks Sports, chocolate gold coins from See’s Candies, and a variety of merchandise from dozens of subsidiaries. However, compared to previous years, there were fewer people in line and the crowds were noticeably thinner.
Abel deliberately visited each booth in the hall, greeting employees and shaking hands with shareholders, and wherever he went, shareholders lined up to take photos and converse with him.
Squishmallow plush toys—bestselling products under Jazwares, acquired by Berkshire in 2022—are experiencing a resurgence in popularity, with a new design based on Abel drawing particular attention. Abel has been "deeply involved, enthusiastic, and fully engaged" in the process, even personally contributing to the design of his own Squishmallow. The company has also collaborated with other Berkshire-owned brands, including BNSF Railway, NetJets, GEICO, and See’s Candies, to release limited-edition plush toys.
One of Berkshire Hathaway’s most iconic brands, See’s Candies, launched a series of themed chocolate products and displayed cardboard cutouts of Buffett and Abel playing hockey—both a tribute to Abel’s Canadian background and a nod to his well-known passion for hockey.
Brooks shoes also fully leverage the fan economy, launching a limited-edition running shoe for the 2026 Berkshire Hathaway shareholder meeting, with "Berkshire Hathaway" printed on the shoe side and insole.
On the Sunday morning following the annual general meeting, nearly 2,000 shareholders are expected to participate in Brooks' "Invest in Yourself" 5K fun run, which features a newly designed route this year.
Before the conference: This year, the number of people in line has clearly decreased.
Compared to previous years, the queue outside the CHI Health Center on Saturday morning was noticeably shorter. This may indicate that shareholder enthusiasm for attending in person has declined since Buffett no longer hosts the meeting.
