Warren Buffett’s Berkshire Hathaway reports a sharp decline in profits

OMAHA, Neb. (AP) — Warren Buffett warned tens of thousands of shareholders who crowded the arena to… Its annual meeting That AI tricks could become “the growth industry of all time.”

Double his warning words of last yearBuffett told the crowd that he recently encountered the downside of artificial intelligence. And it looked and sounded just like him. Someone shot a fake video of Buffett, and it was apparently convincing enough that the so-called “Omaha fortune teller” himself said he could imagine he was tricking him into sending money overseas.

The billionaire investment expert predicted that scammers will seize on the technology, and may do more harm than society can gain.

“As someone who understands nothing about this, it has tremendous potential for good and tremendous potential for harm, and I don’t know how it happens,” he said.

Profits before reflections

The day started early Saturday with Berkshire Hathaway Announcing a sharp decline in profits As the paper value of its investments decreased and it reduced its holdings of Apple. The company reported earnings of $12.7 billion, or $8,825 per Class A share, in the first quarter, down 64% from $35.5 billion, or $24,377 per Class A share a year ago.

But Buffett encourages investors to pay more attention to the operating profits of the group of companies they already own. These shares jumped 39% to $11.222 billion, or $7,796.47 per Class A share, led by the performance of insurance companies.

None of it got in the way of the fun.

Crowds flooded the arena to buy Squishmallows belonging to Buffett and former Vice Chairman Charlie Munger, who died last fall. This event attracts investors from all over the world and is different from any other corporate meeting. Those attending for the first time are driven by the urgency of getting here while the 93-year-old Buffett is still alive.

“It’s one of the best events in the world to learn about investing. Learning from the gods of the industry,” said Akshay Bhansali, who spent the better part of two days traveling from India to Omaha.

Noticeable absence

Devotees come from all over the world to extract wise tidbits from Buffett, who has dubbed the meeting “Woodstock for capitalists.”

But a key element was missing this year: It was the first meeting since Munger He died.

The meeting opened with a tribute video highlighting some of his most famous quotes, including classics like “If people weren’t wrong so often, we wouldn’t be so rich.” The video also featured skits that investors have had with Hollywood stars over the years, including a parody of “Desperate Housewives” in which one woman introduced Munger as her boyfriend and another in which actress Jamie Lee Curtis developed a crush on him.

As the video ended, the arena erupted with a standing ovation honoring Munger, whom Buffett called “the architect of Berkshire Hathaway.”

Buffett said Munger remained curious about the world until the end of his life when he was 99, hosting dinner parties, meeting with people and making Zoom calls on a regular basis.

“Like his hero Ben Franklin, Charlie wanted to understand everything,” Buffett said.

For decades, Munger and Buffett served as a classic comedy duo, with Buffett providing extended setups of Munger’s witty monologues. He once referred to unproven Internet companies as “stupid.”

Together, the pair transformed Berkshire from a struggling textile mill into a massive conglomerate made up of a diverse array of interests, from insurance companies like Geico to the railroad BNSF to several major utilities and a variety of other companies.

Munger often summed up the key to Berkshire’s success as “always trying to be not stupid, rather than trying to be too smart.” He and Buffett were also known for their commitment to businesses they understood well.

“Warren has always done at least 80% of the talking. But Charlie has been a huge letdown,” said Whitney Tilson, a Stansbury research analyst, who was looking forward to his 27th straight meeting.

Next generation leaders

However, Munger’s absence has created space for shareholders to get better acquainted with the two executives who directly oversee Berkshire’s businesses: Ajit Jain, who runs the insurance units; And Abel, who handles everything else and has been named Buffett’s successor. The two shared the main stage with Buffett this year.

The first time Buffett asked Abel a question, he mistakenly said, “Charlie?” Appel ignored the error and delved into the challenges utilities face from the growing danger of wildfires and the reluctance of some regulators to let them earn reasonable profits.

Morningstar analyst Gregory Warren said he thought Appel spoke more on Saturday and allowed shareholders to see some shine. Berkshire executives Talk about it.

Abel provided a new twist on Munger’s classic phrase “I’ve got nothing to add” by often starting his answers on Saturdays with “the only thing I’d like to add.”

“Greg is a rock star,” said Chris Blumstran, president of Semper Augustus Investment Group. “The seat is deep. He won’t have the same humor at the meeting. But I think we all come here to get a reminder every year to be sensible.”

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A look to the future

Buffett made it clear that Abel would be the next CEO of Berkshire, but he said on Saturday that he had changed his mind about how to handle the company’s investment portfolio. He had previously said it would fall to two investment managers who now handle small parts of the portfolio. On Saturday, Buffett agreed to Abel’s participation in the ceremony, as well as oversight of the business and any acquisitions.

“He understands business very well. If you understand business, you understand common stock,” Buffett said. Ultimately, it will be up to the board to decide, but the billionaire said it could come back to haunt them if they try to do it a different way.

Overall, Buffett said Berkshire’s system of having all non-insurance companies report to Abel and insurance companies report to Jain is working well. He himself doesn’t get any calls from managers anymore because they get more guidance from Abel and Jane.

“This place will do very well the next day if something happens to me,” Buffett said.

However, the best applause line of the day was Buffett’s concluding remark: “Not only do I hope you come next year; I hope I come next year.” ___

For more AP coverage of Warren Buffett, see here: https://apnews.com/hub/warren-buffett. For Berkshire Hathaway news, see here: https://apnews.com/hub/berkshire-hathaway-inc. Follow Josh Funk online at https://www.twitter.com/funkwrite And https://www.linkedin.com/in/funkwrite.