"Stock God" announces retirement at the end of the year, understanding the key points of Buffett's 2025 shareholders meeting Q&A in one article.

21 2025This is the first contraction in 22 years, but Berkshire's stock performance is still impressive. Since 2025, Berkshire Hathaway Class A shares have risen nearly 19% cumulatively, significantly outperforming the market. This also shows that the market still has confidence in the steady operation under Buffett's leadership.When discussing the global economic outlook, Buffett stated that promoting global prosperity is a long-term task and is the fundamental path to achieving economic stability. He pointed out, "I have always believed that a wealthy and stable world is not only in the interest of all countries, but will also bring more security for future generations." He reminded investors that despite facing a turbulent international environment, Berkshire will continue to adhere to long-termism and not be swayed by short-term market sentiment. At the same time, the company will continue to invest in core business areas such as insurance, railways, and energy to ensure sustainable business growth. Buffett on Cash Reserves Buffett disclosed to investors that the company's record cash reserves are expected to see "action" within the next five years. Although ideal targets have not yet appeared in the market, Buffett remains confident about the future and hinted that deploying the huge funds is only a matter of time. When asked about why Berkshire has held a large amount of cash, Buffett said, "The probability of using this cash for investment tomorrow is low, but it is not unlikely to happen within five years." By the end of the first quarter of 2025, Berkshire's cash and equivalents had exceeded $347 billion, reaching a historical high. There is widespread concern about when this massive cash will be truly invested in the market and unlock its potential value. Buffett explained that investment opportunities often arise unpredictably and disorderly. He said, "One problem of investing is that opportunities do not come in order." He pointed out that the company has been looking for assets that can bring long-term value, but high-quality investment targets are scarce resources that require patient waiting. He added, "As time goes by, the probability of finding good opportunities increases." Buffett has always emphasized that Berkshire's investment philosophy is to "be patient and stick to bottom lines," never rushing for short-term profits. Despite making few investments in recent years, the company remains a "net seller" overall. In 2024, Berkshire sold over $134 billion worth of stocks, especially reducing its two major holdings - Apple and Bank of America. These operations demonstrate the company's conservative approach in the face of market overvaluation, waiting for more attractive entry points. Although there are doubts in the market about Berkshire's huge cash reserves and concerns that underutilized funds may affect returns, Buffett remains calm about it. He believes that truly excellent investment opportunities are worth waiting for, rather than being forced to act due to market pressure. He reiterated at the meeting, "We'd rather not earn temporarily than take risks in areas we don't fully understand or have confidence in." Some analysts suggest that Berkshire's massive cash cushion may have another purpose: preparing for potential turbulence in the company's succession. KBW analyst Meyer Shields said, "Buffett accumulating so much cash may be preparing for a transition in management." Buffett on the U.S. Economy At the 2025 Berkshire Hathaway shareholders meeting, despite market concerns about the outlook for the U.S. economy, Chairman Warren Buffett reiterated his steadfast confidence in the United States. He said that no matter how many challenges the country faces, he always believes that America has unique resilience and opportunities, which is also the fundamental reason he insists on being "overweight in America." Buffett emotionally recalled at the meeting, "I have mentioned that America was originally an agricultural society, and although it made grand promises at the time, they were not executed perfectly. We have always been in a state of change, and we can always find various aspects worth criticizing. But the luckiest day of my life was the day I was born - because I was born in America." Amidst the global economic slowdown, geopolitical tensions, and multiple uncertainties, many investors have expressed concerns about the future direction of the U.S. economy and its global position. However, Buffett responded from a historical perspective, emphasizing that the U.S. has proven its resilience in major crises multiple times. He said, "We have experienced severe economic recessions, world wars, and witnessed the development of atomic bombs, all of which I never imagined when I was born. So, if someone feels discouraged because of current problems, I do not agree with that mindset." Although Buffett has criticized current trade policies at the meeting, pointing out their potential negative impacts, he still sees them as short-term fluctuations that will not shake his long-term confidence in the U.S. market. He emphasized, "We do have many unresolved issues, but that does not mean we have lost the drive or opportunities to move forward." Buffett on the Japanese Market At the 2025 Berkshire Hathaway annual shareholders meeting, Chairman Warren Buffett once again expressed his firm confidence in the Japanese market. He stated that even if the Bank of Japan were to raise interest rates in the future, it would not shake his determination to hold Japanese stocks. This statement undoubtedly injected a boost of confidence into the market, especially in the increasingly complex global financial environment. When asked if he would stop investing in Japan because of potential rate hikes, Buffett said, "We won't even consider selling these stocks for the next 50 years." He pointed out that the performance of the Japanese market has been "extremely outstanding" and mentioned that companies like Apple, American Express, and Coca-Cola have shown very strong business performance in Japan. This confirms that Japan, as the world's third-largest economy, still has a strong consumption potential and a stable market environment. Buffett specifically mentioned that the Japanese companies he has invested in have given him high praise and trust. He said that these companies are not only effective in their businesses but also show high integrity and professionalism in their relationships. He admitted, "They have treated me very well, and this relationship is super long-term." Buffett also pointed out that the business culture and operational methods of Japanese companies are significantly different from those of other countries, but it is this diversity that constitutes the unique charm of the global business landscape. He said, "They have different habits and different business methods - this is the case all over the world - and we have no intention of changing their practices because they are doing very well." When discussing future investment strategies, Buffett reiterated, "We will not sell any stocks.""In the coming decades, this situation will not occur, even longer," he said, adding that Japanese investments "totally align with our investment philosophy" and are an important part of Berkshire's diversified international portfolio.Berkshire Hathaway vice chairman Greg Abel also added that the company's vision for investment in Japan is "to hold for 50 years, even longer." This indicates that Berkshire Hathaway not only sees Japan as a market for short-term profits, but also includes it in its long-term strategic plans, seeking to achieve sustained returns in stability and growth. It is worth mentioning that in recent years, Berkshire Hathaway's interest in the Japanese market has been increasing. Since 2020, the company has acquired a large stake in several Japanese trading companies and has gradually increased its holdings. These investments have not only brought substantial returns to Berkshire Hathaway, but also deepened its influence in the Asian market. Berkshire Hathaway Insurance chief continues to watch AI opportunities At the 2025 Berkshire Hathaway shareholder meeting, Ajit Jain, head of the insurance business, talked about artificial intelligence (AI) technology and said that AI has the potential to completely change the operating model of the insurance industry, including risk assessment, pricing, sales, and claims processing. He openly stated that AI "may become a true game changer" and bring a whole new industry landscape. However, Jain also emphasized that Berkshire Hathaway will not blindly follow the trend. He admitted, "I do believe that people often invest huge amounts of money to chase the next seemingly fashionable thing. We are not particularly good at being the fastest movers or market leaders." He pointed out that Berkshire Hathaway has always adhered to a "cautious" approach and is more inclined to wait for opportunities to mature, fully evaluate potential risks, returns, and the possibility of failure before making strategic decisions. Currently, the application of AI in the insurance industry has already begun, and many insurance companies are actively exploring how to achieve more precise risk control and customer service through AI. However, Jain believes that this field is still in the early stages of development, and it will take time to form a mature business model. He revealed, "Currently, some of our insurance businesses are exploring the use of AI and how to maximize the use of this technology, but we have not yet invested large amounts of money on a large scale in a systematic way." Although Berkshire Hathaway is taking a wait-and-see strategy for now, Jain emphasized that the company always maintains a "ready to act" stance. Once a viable investment opportunity that matches returns and risks is identified, the company will act swiftly. He said, "We will remain highly sensitive, and once the right opportunity arises, we will decisively enter the market." Jain's remarks fully reflect Berkshire Hathaway's practical attitude towards emerging technologies. Unlike many companies rushing to bet on AI, Berkshire Hathaway emphasizes risk management and long-term planning rather than blindly chasing short-term trends. Buffett has repeatedly stated in public that Berkshire Hathaway's investment philosophy is to invest in "understandable businesses," and will only invest on a large scale after fully understanding how emerging technologies will affect core businesses. With the rapid development of AI technology, the insurance industry faces huge opportunities for digital transformation. From using machine learning for precise pricing to improving claims efficiency through automated processes, the application prospects of AI are widely recognized in the industry. However, this process also comes with many challenges, including data privacy protection, algorithm biases, and potential regulatory risks. Jain's remarks provide investors with a clear signal: Berkshire Hathaway does not overlook the potential of AI, but will adhere to its consistent "margin of safety" principle, ensuring that investment decisions are made after a full evaluation of all factors. This cautious strategy not only reflects Berkshire Hathaway's emphasis on innovation, but also demonstrates its stable nature as a global insurance giant. In the future, whether AI can truly revolutionize the insurance industry and whether Berkshire Hathaway will decisively enter at a critical moment are still worth continuous attention. As Jain said, "We will remain vigilant and act swiftly when the time is right." Berkshire Hathaway's first quarter performance under pressure Berkshire Hathaway also released its first quarter 2025 performance report, presenting investors with the company's latest operating performance in a complex market environment. Despite a decline in overall profitability due to investment fluctuations and currency effects in the quarter, its core business performance remained steady, demonstrating Berkshire Hathaway's consistent resilience and long-term strategic vision. From an operational perspective, Berkshire Hathaway's total operating profit for the first quarter of 2025 was $9.641 billion, a decrease of approximately 14% from $11.222 billion in the same period in 2024. The underwriting profit from insurance was $1.336 billion, a significant decrease from $2.598 billion in the same period last year, mainly due to natural disasters. The report mentioned that the company experienced large foreign exchange losses in the first quarter of 2025, about $713 million, while in the same period last year it had foreign exchange gains of $597 million. This comparison shows the direct impact of foreign exchange market fluctuations on performance. However, investment income from insurance experienced growth this quarter, increasing from $2.598 billion in the first quarter of 2024 to $2.893 billion, partially offsetting the decline in underwriting. In addition, Berkshire Hathaway Energy contributed $1.097 billion in profit, significantly higher than $717 million in the same period last year, demonstrating the continued expansion momentum of the energy sector. BNSF Railway recorded a profit of $1.214 billion, higher than $1.143 billion last year. In the manufacturing, service, and retail sectors, total profits were $3.06 billion, basically flat compared to $3.088 billion in the same period last year, showing the company's stability in the consumer and industrial sectors. It is worth noting that profits under the "other" category saw a significant decline, dropping from $1.078 billion in the same period last year to $410 million, mainly due to foreign exchange losses. However, this category also includes interest and dividend income from US Treasury bonds and other investments, reaching $869 million in 2025, far higher than $303 million last year, reflecting the company's strategic adjustments in low-risk asset allocation. The report specifically mentioned that under Generally Accepted Accounting Principles (GAAP), the company must include unrealized gains and losses on equity investments in investment income (loss). Therefore, investment losses in this quarter were approximately $7.4 billion, compared to investment losses of $9.7 billion in the same period last year. Although these figures may not accurately reflect the performance of Berkshire Hathaway, they do provide insights into the company's investment activities.Directly impacting net profit, Berkshire reminds investors that these types of quarterly fluctuations usually have "little significance" and can easily mislead investors who are not familiar with accounting rules. In fact, short-term fluctuations in net profit are difficult to accurately reflect the actual operating conditions of the company, investors should focus more on core operational data.As of March 31, 2025, Berkshire's insurance float reached $173 billion, an increase of $20 billion from the end of 2024, providing a low-cost source of funds for the company's large investment pool. In addition, Berkshire's cash reserves remain at historical highs, providing ample ammunition for potential large investments in the future. In the first quarter of 2025, Berkshire faced pressure in net profit and some business sectors, but its operating fundamentals remained solid, with core businesses such as insurance, energy, and railroads continuing to contribute stable profits. At the same time, the company's ample float and cash reserves ensure that it has strong strategic initiative in the face of future market fluctuations. Faced with external uncertainties, Berkshire delivers a clear signal to investors of "short-term fluctuations do not hinder long-term value" through transparent financial disclosure and prudent investment strategy. This article is reprinted from the WeChat public account "wind", GMTEight Editor: Chen Yufeng.