Warren Buffett reassures investors over Berkshire Hathaway’s leadership
Omaha, Nebraska –
Billionaire Warren Buffett on Wednesday assured investors that Berkshire Hathaway would be okay with losing its position at the head of the conglomerate.
Buffett said that even after vice chairman Greg Abel took over, Berkshire would still be able to run most of its subsidiaries on its own while looking for other companies to buy with the large cash reserves it always had on hand. He said that he follows the same model of
Buffett said, “The problem with the board is that I’m out of the office and Greg is running it, so they don’t give him an envelope telling him what to do next.”
Buffett said Berkshire was “very lucky” to have Abel ready to take over as CEO. The 92-year-old says he has no plans to retire, but Abel has been named as his successor since Buffett’s partner Charlie Munger let it go at the 2021 annual meeting. It oversees all non-insurance operations of the company.
Buffett and Abel appeared on CNBC Wednesday from Tokyo to check out some of the companies Berkshire has invested in and touted as being headed by the conglomerate Buffett.
Wednesday’s appearance was the first long TV interview Buffett has given since pre-pandemic. He regularly appeared on the Cable Business News Network, answering his three-hour questions at a time several times a year. Buffett and Abel said Wednesday on a range of issues, including the recent bank collapse and whether railroads, including Berkshire’s BNSF railroad, need to improve safety following several recent high-profile derailments. I have answered your question.
Buffett said more banks will go bankrupt over time because some managers keep doing “silly things” to boost short-term profits, but their money is being held by the Federal Deposit Insurance Corporation. Most people don’t have to worry because it’s protected – not by the federal government, but by banks.
Buffett said, “Bank failures are not over, but depositors are not in crisis. Banks will fail, but depositors will not suffer.”
Buffett’s concerns have led Berkshire to sell most of its banking investments in recent years, with the exception of a major stake in Bank of America.
“I don’t like it when people focus too much on the earnings numbers and forget what the basic banking principles are in my opinion,” he said.
A fire in the Norfolk Southern suburb of East Palestine, Ohio, on February 3 prompted evacuations after the release of dangerous chemicals, and increased rail safety after lingering health concerns. Emphasis has been placed.
Buffett said Norfolk Southern “handled badly” and “wasn’t heard” in its initial response to its derailment. He noted that following the recent derailment of his BNSF, the CEO’s girlfriend Katie Farmer was immediately on the plane to respond to the crash. Norfolk Southern CEO Alan Shaw has repeatedly promised to put things right in Eastern Palestine, but after the derailment he was slow to meet with residents and said the railroad was the first community to answer residents’ questions. He could not attend one of the meetings.
Norfolk Southern did not directly respond to Buffett’s comments.
Buffett and Abel said it was impossible to prevent derailments from happening because of all the things it takes to run a railroad in all circumstances, but the industry has generally changed over time. It has become safer with time, and will now improve.
“There are definitely lessons to be learned across the industry and room for improvement,” says Abel.
For the economy in general, Buffett said inflation remains a concern and reports from Berkshire’s business show a slowdown.
But he reiterated a longstanding philosophy that Berkshire does not make investment decisions based on macroeconomic factors.
“For 58 years, we haven’t changed course,” Buffett said. I will continue to buy Treasury bills every Monday.”
Buffett has reconsidered last year’s $4 billion investment in chipmaker Taiwan Semiconductor Circuit.
But Buffett remains one of Apple’s biggest supporters, despite the company’s heavy reliance on Chinese suppliers. That customer loyalty is what makes Apple, Berkshire’s biggest investment, attractive.
Buffett, a notoriously tech-phobic, says he had the chance to play around with one of the latest artificial intelligence tools, ChatGPT, a few months ago thanks to his longtime friendship with Bill Gates. He was impressed after asking ChatGPT to rewrite the song “My Way” in Spanish, but was unsure about the impact of technology.
“I think this is insane, but I don’t know if it’s beneficial,” he said.
One thing Buffett is sure of is that Bitcoin and other cryptocurrencies are a bad idea. He said that people are basically betting on cryptocurrencies that they believe aren’t worth much, but they can’t predict when the speculation driving up their prices will end.
“All my life I’ve seen people do stupid things,” he said.
Besides BNSF, Berkshire owns dozens of businesses, including Geico Insurance, a number of large utilities, and various manufacturing and retail businesses. It also holds over $300 billion in investments, including major stakes in Occidental Petroleum and Coca-Cola.