Go to a fancy London steakhouse, and there will be a chance that you will get served steak from Nebraska. I’ve been to Nebraska many times over the years, and if there’s one thing I can say for certain, a Nebraska steak somehow tastes a lot better in Nebraska than London, maybe it’s the multiple choices of cut of steak which aren’t available in London: I’m not entirely sure of the answer. On that note, I do heartily recommend the bone in fillet at the 801 Chophouse in Omaha, although my appetite prevented me from combining it with a burger (I know, I should’ve have tried the burger). It also has, a curious model train, which circles above you whilst you enjoy your steak. Note to other steakhouses: get a model train.
Like many folks, the reason I’ve been coming to Nebraska is the Berkshire Hathaway shareholder meeting. Whilst it is officially a shareholder meeting, it’s probably closest thing in finance we have to a carnival. I’ve been to many financial conferences over the years, but I’m pretty sure the Berkshire Hathaway event is the only one where I’ve been able to stock up on all manner of “merch” from Sees Candy to t-shirts to cowboy hats – although admittedly I’ve only ever tried on a cowboy hat there, and not actually bought one – I could never work out how to pack it in my luggage.
This weekend was my eighth Berkshire Hathaway meeting. I chatted to fellow attendees at the event, both in the queue to enter the venue and also at the Hilton Omaha, which invariably serves as an unofficial meeting place for the event, and the title of possibly the most expensive hotel in America during the weekend of Berkshire Hathaway (ok, there’s a bit of hyperbole there, but you get the idea).
Whilst I met many first timers, I also met many who had been coming years including a fellow that had been coming on and off for nearly twenty five years, who noted how the event had transformed from a relatively low key event in a hotel ballroom, to what it has become today, held in one of the largest venues in Omaha. I met folks who had come from as a far afield as Argentina (and yes, we discussed Argentinean inflation and what Turnleaf Analytics model is currently saying about it..!), Belgium and from all across the USA. I also met Ted Merz, who I’ve followed for a long time on LinkedIn. He’s building out an interesting business in NLP/text space, and posts some of the most imaginative articles on LinkedIn that I’ve read recently, both about his firm, but more broadly with stories of his father and his career. I definitely recommend you follow him!
So why do people come all this way to Omaha for the Berkshire Hathaway shareholders meeting, year after year? It’s obviously to hear Warren Buffett and in the past his late business partner Charlie Munger, distil decades of experience in financial markets into a myriad of memorable sound bites. It’s rare to hear from someone who has been in markets for 60 years, and rarer still for them to be quite as successful as Buffett and Munger. Whilst the bulk of their returns were made up from the earlier decades of their partnership, it is worth noting that this year Berkshire Hathaway stock has outperformed the S&P500.
In a sense, the approach of Buffett and Munger has been the polar opposite to what I’ve done during my career as a quant and data scientist, trying to examine shorter term anomalies and moves in markets, whether its been in FX or latterly in the sphere of inflation forecasting. That being said, whilst the Berkshire Hathaway approach seems far removed from the world of quant investing as you might get, Buffett’s very methodical approach to understanding companies, for example, through scouring balance sheets is very still of relevance from a quant perspective. The difference of course with a quant is the way you ingest that data, and what you do with it. Whichever approach you use for investing, “data” in whatever form is the key to it.
Greg Abel and Ajit Jain have also begun to feature more prominently in the event, even if the event itself feels familiar, right down to the cans of cherry flavoured Coca Cola, sitting in front of Warren Buffett on stage. The Q&A covered a multitude of different topics, and whilst I can’t cover everything, I’ll attempt to cover the main takeaways from my perspective in the rest of the article.
Stepping down as CEO
The 2025 meeting began with Warren Buffett quipping “I’m Warren Buffett” to introduce himself. The questions raised to Buffett, Abel and Jain spanned an array of topics from current trade tensions, discussions on FX to very specific questions on the various Berkshire Hathaway businesses such as Geico.
The biggest news this year Buffett kept right to the end of the Q&A session. Buffett announced that he was stepping down as CEO of Berkshire Hathaway, after nearly 60 years, noting that “The time has arrived that Greg should be CEO at year end. I would still hang around, but Greg would have the final word. I could be helpful in certain respects.”
He subsequently received a standing ovation. He stressed that he would not be selling his Berkshire Hathaway stock. The question of succession is always a tricky one when it comes to firms associated so closely with one man particularly in the sphere of investing. However, at least in this case, the succession had already been decided, but the timing had not, up until this point.
Trade, macro and the US
It was perhaps unsurprising that the current situation with tariffs would be discussed during the event. Buffett was asked about an article he wrote in 2003 where he discussed the concept of import certificates as a way of tackling trade deficits. Buffett noted that the idea of import certificates were designed to balance trade. “Balanced trade is good the world, the more there is, it’s good”. He noted how the US economy had moved from agriculture to an industrial country. The country did not want to run greater and greater deficits. However, he said that “trade should not be a weapon”. He said that “we should be looking to trade with the rest of the world. We should do what we do best, and they should do what they do best” and added that the “more prosperous the world is, the safer we will feel”.
He was also asked about whether he was still a stronger believer in the tailwind of US, given that investors were questioning US exceptionalism. Buffett replied that “America has been significant and revolutionary since starting, starting as an agricultural economy, but it didn’t always deliver, noting the 19th amendment for women’s votes came in 1920, many years after the founding of the US. (The US is) always in the process of change, luckiest day of my life was when I was born in the US. I was just lucky”. He continued by saying that the US has “gone through all kinds of things, recessions, world wars, the atomic bomb.. I wouldn’t get discouraged”. On the subject of the atomic bomb he was, as in previous years, worried about how they had proliferated, and how this was a threat.
He was also asked about the situation in Japan with CPI above 3% and the likelihood of rate hikes from the BoJ, and whether it would impact his investments in Japan. He skirted the question about whether he agreed with the BoJ’s stance, but he did note that he did want to relax the 10% limit on his holdings in various trading companies. More broadly, he noted that his companies had done well in Japan over the years, such as American Express and Coca Cola.
In addressing the market volatility over the past 30-45 days, he noted it was “really nothing” and it was not a “dramatic bear markets”, recalling how the Dow tumbled during the Great Depression from 240 when to he was born to 41. He had some advice for those investing, saying it is a “terrible place to get involved, if you have the wrong temperament. People have emotions, but you have to check them at the door, when you invest”.
Investment opportunities are scarce
In recent years, Berkshire Hathaway’s cash pile has increased. Buffett was asked his cash pile, with the questioner noting that Berkshire Hathaway owned nearly 5% of the Treasury market, and whether this was a result of derisking or to provide leadership transition. Buffet replied that the problem in the investment business is that “stuff doesn’t come along every day”. Berkshire was running an opportunistic business. He would much rather have conditions developed where Berkshire would have 50bn USD of Treasuries, rather than 335bn USD. Over the years, Berkshire has made money by not being invested all the time. He decried the notion of having some sort of quota for investing suggesting “if I had to invest 50bn USD every year, it would be dumb” and he continued “things get extraordinarily attractive occasionally (but) nobody knows what the markets will do next day, next month etc.” One of the main issues with Berkshire he pointed out was its size: “Size is the enemy of performance at Berkshire”. Indeed, this is a problem that all larger investors face. It is much easier to have a strategy which performs when notionals are small, and don’t move the needle of the market.
Whilst Berkshire was patient to wait for those opportunities, once they came along, Buffett said “sometimes you have to act fast” and that “patience is a combination of patience and a willingness to do something that afternoon if needed”. When those opportunities did come along you “can’t be filled with self-doubt in this business”.
The dollar and debasing currencies
Buffett was asked about the recent sell off in the dollar, and whether this impacted how Berkshire was operating. The “funding situation (in Japan) is so cheap, we’ve attempted to some degree to match the borrowing.” He noted that they have owned securities denominated in foreign currency, but they would do nothing based on quarterly fluctuations. What mattered for Berkshire is where you’d be in 5 years. He did temper that with the comment about the “tendency of government to want to debase the currency. There will be a push towards weaker currencies” and that fiscal policy “is what scares me in the US”.
On the topic of FX, he said that in the past they did do a big currency play, buying 12 currencies (ie. short USD), and Berkshire made several billion dollars from that. He recalled that “Charlie always felt if you pick an area outside of stocks, he could make a lot of money out of being in foreign currency”. Often the necessity to do FX when investors own foreign assets can be seen as a headache. However, in practice, it can be possible to derive alpha if the FX part of a transaction is considered separately.
On the matter of DOGE, he noted that “bureaucracy is something prevalent and contagious in our system. It doesn’t have any checks on it. It scares about the future of the currency. The problem of how you control expenses is one that has never been fully solved. We’re not immune to it.” He continued by commenting that “operating a fiscal deficit is unsustainable” but he didn’t know when that point would occur. The US “still had high inflation, but it’s not become runaway”. He wouldn’t “want the job of trying to correct the revenue vs expenditure”, where the current gap is 7%, in a situation where 3% would be sustainable. He concluded that “this is a problem we bring on ourselves” and if you “picked a way to screw it up, you’d pick the currency”.
General advice from Buffett
Every year, Buffett gets a plethora of questions asking about more general life advice. He was asked about setbacks. Buffett quipped that “you certainly have a setback when you die!” He noted that people “get extraordinarily bad luck and good luck”, and when people do get good luck they tend to attribute more to their actions than luck. More broadly he concluded that “You were born at a good time. Hands down we are lucky now.. Everything in life has been so much better (than historically). Focus on the good in life, bad things can happen. You get some bad breaks. For 94 years I’ve been able to drink whatever I’ve been able to drink. Charlie and I never really exercised much, carefully preserved ourselves.”
He also said it was important to have curiosity and search out good teachers whether they are formal or informal teachers, and he has benefited from many over the years. He attributed a lot more to the individual teachers he had, rather than the institutions themselves.
Conclusion
With the news that Buffett was stepping down after 60 years at the helm of Berkshire Hathaway, the 2025 meeting was notable as a historical event. Let’s see where the future takes Berkshire Hathaway with Greg Abel taking over in the driving seat from Warren Buffett.