In his first annual meeting as Berkshire Hathaway’s CEO, Greg Abel assured the shareholders that he will invest wisely and manage the $1.02 trillion conglomerate’s cash stake without the burdens of bureaucracy.
Abel, 63, addressed shareholders in Omaha, Nebraska, four months after taking over as chief executive officer from Buffett, the investor whose presence turned Berkshire’s annual gathering into one of the most closely watched global finance events.
The meeting itself reflected the transition. Several thousand seats were empty in an arena that was once packed for Buffett and Charlie Munger’s exchanges.
‘Berkshire will avoid bureaucracy’
Abel moved quickly to underline continuity. Responding to a pre-recorded question from Buffett, he said Berkshire would not be weighed down by bureaucracy.
He also ruled out breaking up Berkshire, saying the company’s structure remained effective and its bench of expertise was strong. “We want Berkshire to endure,” he said.
Abel said Berkshire was constantly evaluating opportunities to add to its portfolio, whether through acquisitions of public or private companies or by buying stakes in businesses. But he also echoed Buffett’s long-held preference for patience, saying Berkshire would not deploy capital merely because it had cash available.
“It doesn’t mean you need to deploy all your capital and spend all your money,” he said.
The company reported first-quarter operating profit of $11.35 billion, up 18 per cent from a year earlier, helped by improved performance in its insurance businesses after wildfire losses in southern California in the previous year.
‘Knowing when to say no matters’
Ajit Jain, Berkshire’s longtime insurance chief, reinforced the message of restraint. Abel agreed with Jain that saying “no” was essential when an investment did not look right.
“It is very difficult to sit there and do nothing,” Jain said, “while everyone else is being wined and dined by brokers and taken to London.”
Abel also warned that Berkshire’s insurance businesses faced a tougher pricing environment as new capital entered the market. He said the group would be “much more cautious” across primary and reinsurance operations as premiums softened against underwriting risks.
Warren Buffett backs Abel, praises Apple bet
Buffett, who sat in the front row, used his appearance to endorse the succession. “Greg is doing everything I did and then some,” he told shareholders.
He also highlighted Berkshire’s Apple investment and praised outgoing Apple CEO Tim Cook. Buffett said Berkshire’s roughly $35 billion investment in Apple had grown to about $185 billion before tax, including dividends and realised and unrealised gains.
In an interview with CNBC on the sidelines, Buffett warned that parts of the market had taken on a gambling character. “We’ve never had people in a more gambling mood than now,” he said.
Buffett said Berkshire’s record cash pile reflected an unfavourable investing environment and high market prices. “It isn’t our ideal surrounding area — or environment, I should say — in terms of deploying cash for Berkshire,” he told CNBC, adding that Berkshire had the right management to wait and “pick our spots”.
(With inputs from agencies)
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