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2023 Annual Meeting

First meeting without Charlie Munger, featuring Greg Abel as co-pilot, $165B insurance float milestone, and reflections on Munger's legacy.

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2023 Annual Meeting

Date: May 6, 2023 Location: Omaha, Nebraska Attendees: Warren Buffett (92), Greg Abel (future CEO), Ajit Jain Source: Full Transcript

Overview

This was Berkshire Hathaway's first annual meeting held after Charlie Munger passed away on November 28, 2022 at age 99. The meeting served as a memorial to Munger, with Warren Buffett fielding questions alongside Greg Abel (now officially designated as successor) and Ajit Jain.

Key themes included the $165 billion insurance float milestone, expectations for lower earnings in many businesses, and the future of Berkshire without its co-founder.

Business Results

Q1 2023 Performance

Buffett reported Q1 operating earnings of "a little over $8 billion."

Earnings Outlook

Buffett set expectations:

"Most Berkshire businesses will report lower earnings next year than last year."

The extraordinary pandemic period has ended - the "incredible period since World War II" that saw unprecedented demand has normalized.

Investment Income Surge

On the benefit of higher interest rates:

"We had $125 billion in very short-term investments. Previously getting four basis points (0.04%), now getting nearly 6%."

This means investment income increased from $50 million/year to approximately $5 billion/year.

Insurance Float Milestone

The float reached $165 billion:

"The man sitting at the far left [Ajit Jain] is responsible for moving that number up from a pittance in 1986 to this incredible figure."

On float as an asset:

"Float is money that is left in our hands. It's like having a bank with no employees, no interest, and no ability to withdraw the money in a hurry."

Tribute to Munger

Opening: "King Charles"

Buffett opened with humor about Charlie:

"We were celebrating a King Charles [in the UK], and we've got our own King Charles here today."

And about Munger's absence:

"Charlie loved it. We're glad to have you here." (referring to shareholders)

Munger's Legacy

The meeting repeatedly honored Munger's contributions:

  • His 60-year partnership with Buffett
  • His direct style and wisdom
  • His role in shaping Berkshire's culture

Key Topics

Succession: Greg Abel

Buffett introduced Greg Abel:

"Greg Abel, who's in charge of all the operations except for insurance."

This was the first meeting where Abel was formally positioned as the next leader.

Ajit Jain Recognition

On Ajit's float creation:

"Ajit is responsible for building up this treasure [$165B float], which has been done by out-competing insurance companies all over the world."

Cash Position

On cash accumulation:

"In the month of April, we've probably added about $7 billion to our cash position."

Buffett explained the cash flow dynamics at Berkshire.

Share Repurchases

Berkshire continued buying back shares:

"Every year the number of our shares go down." (through repurchases)

This benefits continuing shareholders through increased ownership.

Future Outlook

Slower Growth Expected

Buffett was candid:

"Nothing is sure tomorrow, nothing is sure next year, and nothing is ever sure."

But he emphasized:

"We retain all our earnings. If we're retaining $30-35 billion a year, you should expect more operating earnings over time."

Long-Term Confidence

On Berkshire's position:

"We have more GAAP net worth [$504 billion] than any other company in the U.S."

Despite the size, Buffett expects decent returns going forward.

Notable Quotes

"Most Berkshire businesses will report lower earnings next year than last year."

"It's like having a bank with no employees, no interest, and no ability to withdraw the money in a hurry."

"Nothing is sure tomorrow, nothing is sure next year, and nothing is ever sure."

"We retain all our earnings. That's what got us to these figures."

Key Themes

  1. Munger's Passing - First meeting without him
  2. Greg Abel - Officially positioned as successor
  3. $165B Float - Insurance float milestone
  4. Interest Rates - Tailwind from higher rates
  5. Slower Growth - Post-pandemic normalization

Related

This summary captures the key topics from the full 2023 transcript.