Interactive Investor

Best bits from Warren Buffett’s annual meeting 2024

Every year, thousands make the pilgrimage to Nebraska for Berkshire Hathaway’s annual meeting, desperate to hear pearls of investing wisdom imparted by the nonagenarian. Graeme Evans shares some of the most interesting parts.

7th May 2024 13:27

by Graeme Evans from interactive investor

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Warren Buffett waving through a car window Getty

Warren Buffett’s views on everything from Apple Inc (NASDAQ:AAPL) to artificial intelligence (AI) ensured the biggest shareholder event of its kind did not disappoint over the weekend.

The opportunity to hear from the Oracle or Sage of Omaha, who turns 94 in August, attracted the usual full house of 10,000 investors to the Berkshire Hathaway annual meeting in Nebraska, as well as many more watching the day-long event for the first time via CNBC’s livestream.

One of the biggest disclosures concerned Berkshire Hathaway Inc Class B (NYSE:BRK.B)’s huge pile of cash, which Buffett indicated is heading towards $200 billion (£151 billion) from the first-quarter’s position of $189 billion (£145.1 billion).

The combination of Treasury bills yielding north of 5.4%, geopolitical uncertainty and some elevated valuations means Berkshire Hathaway will “only swing at pitches we like”.

Buffett said: “We’d love to spend it, but we won’t spend it unless we think they’re doing something that has very little risk and can make us a lot of money.”

Part of the reason for the increase in the cash pile has been an estimated 13% cut in the Berkshire Hathaway stake in Apple since the turn of the year, having first invested in the iPhone maker in 2016.

Tax reasons following big gains on the conglomerate’s huge investment were suggested as the motivation for the disposal, rather than any reflection on the long-term outlook.

Buffett heaped praise on the company, describing it as an “even better business” than other core holdings American Express Co (NYSE:AXP) and Coca-Cola Co (NYSE:KO). Apple chief executive Tim Cook was among those present to hear Buffett say that, barring unforeseen circumstances, he expects the mobile phone giant will be Berkshire Hathaway’s largest shareholding by the year end.

The Apple holding was valued at $135.4 billion (£108 billion) at the end of the first quarter, with American Express, Chevron Corp (NYSE:CVX), Coca-Cola and Bank of America Corp (NYSE:BAC) making up the “big five” accounting for 75% of equity investments.

Apple is one of Berkshire Hathaway’s few big tech holdings, with Buffett preferring investments at the heart of the US economy. These include The Kraft Heinz Co (NASDAQ:KHC) and Duracell, as well as the ownership of scores of businesses such as railroad and manufacturing operations.

Buffett said he doesnt “know anything” about artificial intelligence, although he admitted his recent experience of an AI-generated image of himself has made him nervous about the technology and the potential for scamming people. 

He said: “We let the genie out of the bottle when we developed nuclear weapons and that genie has been doing some terrible things lately.

“I don’t know any way to get the genie back in the bottle, and AI is somewhat similar. It’s part of the way out of the bottle, and it’s enormously important and it’s going to be done by somebody...whether it’s going to change the future of society, we will find out later.”

The meeting also provided an opportunity for shareholders to reflect on the passing of Buffett’s long-time business partner Charlie Munger, who died at the age of 99 last November.

Buffett, who has already named Greg Abel as Berkshire CEO successor, told shareholders at the end of the meeting: “I not only hope you come next year. I hope I come next year.”

He has run Berkshire Hathaway since 1965, overseeing compound annual growth of 19.8% in the period up to 2023 compared with 10.2% for the S&P 500 with dividends included.

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