The legendary US investor Warren Buffett cannot find any attractive investment properties and allows his holding company’s reserves to rise to record levels. At the end of the last quarter, Berkshire Hathaway had around $189 billion (€175.5 billion) in cash and short-term government bonds. At the annual shareholder meeting in Omaha on Saturday, Buffett said reserves were expected to break $200 billion after the current quarter.
Buffett stressed that Berkshire would like to invest the money, “but we will only spend it on something that has low risk and can make us a lot of money.” Berkshire Hathaway owns the insurer Geico, the railway company BNSF and the battery manufacturer Duracell, among others. The insurance business was once again a driver for the increase in operating profit to $11.2 billion from just under $8.1 billion in the same quarter last year.
Preferences for a successor solution
The 93-year-old Buffett also revealed his preferences for a successor solution at the meeting in a packed sports and entertainment arena. If it were up to him, he would leave the final say on investment decisions to his designated successor, Greg Abel, Buffett said. Ultimately, Berkshire’s board of directors will decide on the succession plan. Buffett had already introduced Abel, who currently leads Berkshire’s energy business, as his successor to the top job in 2021. What remains unclear, however, is whether he will have as much decision-making power as Buffett did in previous decades.
At the same time, Buffett made it clear that he was not thinking about retirement. “I not only hope that they will come next year, but I hope that I will come too,” he told shareholders as he said farewell. Buffett’s long-time business partner Charlie Munger died in November at the age of 99 – and on Saturday it became clear several times how much he missed him.
In the last quarter, Berkshire completely sold off its stake in the Hollywood group Paramount – with a loss, as Buffett admitted. Both entry and exit were his decision, he emphasized. Paramount is currently in turmoil due to a bumpy sales attempt, and the stock is falling. Berkshire also divested itself of part of its Apple stake. However, Buffett made it clear that the sale of the shares was intended to raise money for tax payments and was not linked to an assessment of future price developments.
The 93-year-old is worried about the risk of fraud with artificial intelligence. He particularly referred to the possibility of creating deceptively realistic artificial photographs of people. “Artificial intelligence has enormous potential to do good – and also enormous potential to do harm,” Buffett said. He doesn’t know how this will turn out.