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Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) is expected to see “modest” growth in operating earnings in 2024 vs. 2023, Chairman and CEO Warren Buffett told some 30K shareholders at the conglomerate’s 2024 annual meeting in Omaha, Nebraska on Saturday.
And, when it’s prudent, the company will endeavor to decrease its share count, Buffett said, adding he assumes the company’s cash pile is on pace to grow to $200B by the end of June vs. $189B at the end of March.
“We’d love to spend [the cash], 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,”
11:46 AM ET: Jain said Berkshire tries to be “very, very careful” when it comes to taking on cyber insurance liabilities, as it’s hard to know the “quantum of losses that can be subject to a single occurrence, and the aggregation of cyber losses.” He added that there’s no enough data to be able to determine the true loss cost.
11:29 AM ET: Asked about the Canadian economy, Abel said Berkshire has a significant presence in the country and “we’re always looking at making incremental investments there, because it’s an environment we’re comfortable with.” The Canadian economy moves closely with that of the U.S., he added.
11:14 AM ET: Ajit Jain, vice chairman of Berkshire’s insurance operations, said that Geico is “still playing catchup” with data analytics relative to peers. “Geico is faced with is it hasn’t been doing as good of a job on matching rate with risk and segmenting and pricing product based on the risk characteristics,” he said, adding “Geico hasn’t been that good at managing risk.”
11:10 AM ET: Within its insurance business, Buffett said Geico Chief Executive Officer Todd Combs has made substantial progress in matching rates to risk.
Climate change increases risk, but it expands the insurance business, nonetheless, Buffett said in response to a separate question. “If there was no risk, there would be no insurance business,” he added.
11:07 AM ET: Buffett “doesn’t understand” artificial intelligence, though it has “enormous potential” for both good and harm.”
10:53 AM ET: Vice Chairman Greg Abel, who is planned to succeed Buffett, said Berkshire’s energy business will battle litigation tied to wildfires, while noting it “will be challenged.” Berkshire Energy faces billions of dollars in potential liabilities against its PacifiCorp unit on the back of 2020’s wildfires in Oregon.
That said, legislative and regulatory reforms would be needed to justify capital deployment, Abel said.
10:48 AM ET: Buffett, nicknamed the Oracle of Omaha, made plain that Berkshire (BRK.A) “will be American oriented” in terms of investment. “If we do something really big, it’s extremely likely it will be in the United States.” He did note that he’s “feeling really good about” Berkshire’s investments in Japanese trading houses, adding they have paid off.
Update at 10:47 AM ET: The first question in the prolonged Q&A session pertained to Berkshire’s reduced stake in Apple (AAPL). He said AAPL will remain Berkshire’s largest equity investment, “unless something dramatic happens that really changes capital allocation.”
Earlier on Saturday, Berkshire Hathaway (BRK.A) Q1 operating earnings gain 39% Y/Y, cash hits record $189B.
Check back for updates. This is a developing story.
