Buffett reassures about Berkshire's future, praises Apple even as he sells it

The meeting was the 60th for Buffett, who took over Berkshire in 1965 and turned it into an expansive company valued at a $862 billion owning BNSF railroad, Geico car insurance, Dairy Queen and other businesses. Saturday's meeting was the first since Munger, Buffett's longtime friend, business partner and foil, died in November at age 99.

Buffett, 93, signaled no plans to step aside himself, telling shareholders, "I feel fine," while joking he shouldn't take on four-year employment contracts.

Munger had been a fixture on stage with Buffett at the meetings, known for laconic and acerbic comebacks to Buffett's often lengthy appraisals about Berkshire, the economy, Wall Street and life.

Early in the meeting, shareholders watched a video paying to tribute to Munger, including photos of Omaha from 1924 when he was born and video of Buffett and Munger through the years.

Munger was the "architect of today's Berkshire," Buffett said. "The architect is the person who dreams of and designs, and finally supervises the construction of great structures. The carpenters and the beavers -- that's me -- are needed, but the architect is the genius of Berkshire."

In a downtown Omaha arena, Buffett was joined on stage by Vice Chairmen Greg Abel, who was designated Buffett's successor as chief executive in 2021, and Ajit Jain.

Abel, 61, and Jain, 72 have had direct oversight of Berkshire's dozens of operating subsidiaries since 2018, freeing Buffett and, before his death, Munger to focus on allocation. Buffett said he was happy with that arrangement.

"When you've got somebody like Greg and Ajit, why settle for me?" he said. "It has worked out extremely well."

DECREASING APPLE STAKE, GROWING CASH

Prior to the meeting, Berkshire reported first-quarter results, including a 39% jump in operating profit to a record $11.2 billion.

But in a surprise, Berkshire reported it had sold about 13% of its Apple shares, reducing the value of its stake to $135.4 billion from $174.3 billion. Apple's stock price fell 11% in the quarter.

The sale was the main cause for Berkshire's cash hoard to soar to $189 billion, also a record. Buffett said cash might grow to $200 billion this quarter, reflecting the risks from high valuations and geopolitical conflicts.

Berkshire invested in Apple in 2016, and the normally tech-phobic Buffett came to view it as a consumer goods company with strong pricing power and devoted customers.

But some investors expressed concern that Apple represented too much of Berkshire's now $335.9 billion portfolio.

Still, with Apple Chief Executive Tim Cook in the audience, Buffett told Berkshire shareholders: "Unless something dramatic happens that really changes capital allocation, we will have Apple as our largest investment."

And he said Berkshire remains committed to investing in the United States. "If we do something really big it's extremely likely it will be in the United States," he said.

Abel, meanwhile, pledged to fight lawsuits seeking tens of billions of dollars from Berkshire's PacifiCorp utility unit over Oregon wildfires in 2020, but called them a substantial challenge.

EARLY WAKE-UP

Before the meeting, thousands lined up early outside the arena in raw, rainy weather. When the doors opened at 7 a.m., many ran for the best seats.

"I was here since 2:30," said Serena Lam, 32, an investment manager who along with 40 others flew from Hong Kong. "I want to see Warren Buffett. I want to get his perspective about Japanese stocks. I flew over 25 hours for this."

Bill Gunther, 72, a retired state forester from Newfane, Vermont, said he arrived at 1:41 a.m. to get in line, with a lawn chair to sit and sleep on.

"I feel very bullish about Berkshire," he said. "They're so diversified and have a good company culture."

Berkshire's stock is up 23% over the last year. While that lags the Standard & Poor's 500's 25% gain, Berkshire has risen 218% over the last decade versus the S&P's 172% gain.

The shareholder weekend, which Buffett calls "Woodstock for Capitalists," also featured an exhibit hall for shareholders to buy goodies such as Berkshire T-shirts and Squishmallows toys at exhibits by Berkshire-owned companies.

Ruth Gearhart, 72, from Omaha, filled her bags with See's Candies plus tongs and spatulas from Pampered Chef. A Buffett, admirer, she became a Berkshire shareholder 15 years ago.

"I him," she said. "He's a brilliant man and he has a lot of brilliant people. He will get us through this. I'd hate to see him go, but I think they prepared for it well."