Warren Buffett-led Berkshire Hathaway's Q1 2024 earnings call and annual shareholder meeting included many noteworthy content, including an increase in cash holdings, adjustments to the weighting of Apple stocks, outlooks on autonomous driving technology and the insurance industry, and Buffett's views on the future of artificial intelligence (AI). This time, it was also released as a live broadcast + unedited recording.
There were three parts that I was personally interested in: the increase in cash reserves, direct mentions of companies such as Apple and Tesla, and the outlook on artificial intelligence . As always, Berkshire Hathaway's general meeting is about philosophy in addition to economics and portfolios, and I still find it amazing that a person over 90 years old can lively ask and answer questions without any hesitation. Anyway, let's talk about them in order...
I asked DALLE to draw something, and he said he couldn't draw companies or people, so I asked him to change it so I couldn't specify it, and he ended up with a medieval-style drawing like this...
First of all, it is noteworthy that Berkshire Hathaway's cash holdings hit a record high of $189 billion. This seems to be due to the massive stock sales and high yields of U.S. Treasury bonds, suggesting that Buffett and his team are finding it difficult to find attractive investment opportunities in the current market. It is also notable that they sold about 13% of their shares in Apple, one of the "Four Giants," which is interpreted as a move to diversify their portfolio and manage risk. (In fact, the cash ratio is a more meaningful point. If you look at the amount alone, it is naturally the highest ever.)
Meanwhile, Buffett mentioned that if Tesla's autonomous driving technology can reduce traffic accidents by half, it would be a great social benefit, but he also recognized that such technological advancements could have a negative impact on the insurance industry. This shows the duality that technological innovation can bring, and it is a passage that reminds us that companies should proactively respond to the flow of change and seek new opportunities. The reason this is interesting is that Warren Buffett, who has often made unpredictable and negative comments about Tesla, seems to have a positive view on the macro, which seems meaningful.
Above all, the part where Buffett spoke in depth about the potential and impact of AI at this shareholders' meeting had a big impact. He emphasized that AI technology can dramatically increase productivity and efficiency, which will lead to economic growth and improved corporate performance. He also emphasized that investment in AI technology development is very important because AI can improve the quality of life and contribute to solving social problems. Of course, Buffett did not overlook the side effects and risks of AI. He pointed out problems such as job loss due to AI, privacy infringement, and algorithmic bias, and argued that companies and the government should work together to establish ethical standards and regulatory systems for the development and use of AI. I was also impressed by his comparison of AI to atomic technology. (I was so surprised when I saw a deepfake video recently that I couldn't tell the difference, and I thought Buffett's attitude of saying that he doesn't know something he doesn't know was really great.)
In the end, Berkshire Hathaway's earnings announcement and Warren Buffett's remarks can be said to have provided important insights into how companies should respond and evolve in a rapidly changing technological environment. The development of cutting-edge technologies, represented by AI, will certainly bring about tremendous changes in our society, and Berkshire Hathaway is expected to play a pivotal role in leading these changes. This is why we are more interested in Berkshire Hathaway's future actions, which are infused with Warren Buffett's unique investment philosophy and principles. Every year, he speaks and writes well, and it seems great. It feels like the general meeting of shareholders is becoming more like a concert. This year, too, seeing a young friend ask questions made me think that they might be making a children's question time every year. It feels more like a talk show than a general meeting of shareholders. Of course, it is a very good meaning.
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