Subject: Re: BRK Annual Meeting Observations
I think most would agree with your assessment Texirish. Thanks for sharing your thoughts.

The most memorable takeaways for me were:

Making decisions by committee is not the Berkshire way in the past and it’s not going to be in future. Abel will be the capital allocation boss and he appears to be hard working, intelligent and trustworthy. We are very fortunate to have someone of this quality running a public company.

It’s interesting how each of the personalities are so different but yet all have a common value investing, integrity, work ethic philosophy.

Warren the savant. Pouring over financial reports. Thinking about competitive advantages and their sustainability. Avoiding risks from betting on things he didn’t understand. Independent thinker. Super human patience. Enough aggression to swing hard at the right moment and to concentrate his investments. Trusting of quality people. Generous with people. Honest and trustworthy beyond any human standard. Positive and optimistic. Modest. Wise. A teacher. A nose for avoiding trouble and losses. Simply an outstanding human being and utterly adored be everyone he helped along the way. Still working at 93. Adored and respected by his children. Kudos on a wonderful life.

Charlie, as Warren described yesterday, was incredibly curious about everything. Kind of like the opposite of AI. Real intelligence and knowledge. A sounding board for Warren. Helping him avoid pitfalls, solve problems efficiently and identify opportunities. And perhaps the architect of Berkshire. Now an important institution that plays an important role in the financial system, energy, insurance. An American organisation, that is respected globally, at time when charlatans and self serving speculators abound.

Ajit Jan. The more we get to know him, the more we love him. His skill at running insurance operations is unparalleled it seems. The results over multiple cycles speak for themselves. A very dangerous business that eats mortals for breakfast. Great to hear Ajit talk about who would succeed him if hit by a bus. Telling us he is not planning on retirement anytime soon and as you might expect, in an operation like this, there are others with the insurance gifts. It’s clear Ajit is an independent thinker. No hesitation calmly stating his logical rationale candidly and fearlessly, regardless of who is listening. Similar to Charlie in this regard. Facts and logic matter most.

Todd and Ted. I have listened to interviews with both and read about them. Clearly both gifted stock pickers. Similar to Warren, in the sense they don’t need to work for Berkshire but simply love what they do and being part of something bigger, honourable and special. Different experience and background. Todd now with operations responsibility and keeping on top of stock picking at the weekends. Again, long may they continue to provide value to Berkshire. Will provide invaluable sounding board and sector knowledge, as well as idea generation to Greg Abel. We are extremely fortunate to have gentlemen of this quality working for Berkshire.

Greg Abel. Energy expertise is clearly outstanding. Big CEO skills set. Not someone people will want to disappoint. Gives credit to others. Very smart and strategic, combined with a work ethic that means he knows all the details. Probably a better manager than Buffett. In the trenches leading by example, adding value. Operational talent is perhaps harder to find than capital allocation. Problem solving. Creativity. Dealing with people internal and external. Does he have both operational strengths and capital allocation skills. Of course he does. Made a point of stating yesterday to Warren, that Warren’s capital allocation philosophy will endure. Greg is in charge. He will ensure Berkshire is a good custodian of shareholder capital and will never lower return on asset expectations just to do something. He is not Warren Buffett and may have a smaller circle of competence than Warren Charlie, but given Berkshire’s size, I don’t see this as an issue. Greg’s performance over the next 10 or 15 years will have a direct effect on the value of Berkshire Hathaway. New management is taking over, or essentially already has it seems. Am I happy to entrust a fair amount of my family’s capital with Greg and company? Yes I am. And we still can benefit greatly from Buffett’s experience and magic. But unfortunately there is not much opportunity these days and Warren is slowing down and depending on when opportunity comes again, he unfortunately may not be around to see it. But we’ll see. Maybe Warren’s last chapter will be his best yet.

My other main takeaway from the meeting was the obvious lack of opportunities to deploy capital.
Not only is nothing much being allocated but we are now selling a little. Warren was very careful not to comment on the price of the market, or anything related. My interpretation of what he said and his actions is anything can happen. There is nothing big and worth buying currently. He has not reduced the equity portfolio significantly. We are not necessarily is some kind of super bubble. And that could happen in future years. But Berkshire has significant firepower and minds prepared to use it and perhaps more aggressively than in previous crashes, if that was to happen. But there is just no way of knowing which of the probabilistic outcomes, will actually play out over the coming years. Berkshire’s returns will be modest but we’ll do ok and we will be the last man standing, in any event.

Hold and buy more on any weakness (unlikely) is my recommendation to myself. 30 to 40% of my equity portfolio is about right. 90% is not warranted at current prices and the post untested Buffett Munger era about to unfold.

What a complete joy to be a shareholder of the company, so that it creates enough personal interest, to learn and observe such high class people at their work, if only from a distance.