On May 6, at the shareholders' meeting of Berkshire Hathaway (Berkshire Hathaway), an investment firm owned by Warren Buffett, the company announced its first quarter 2023 results。Data show that the company's total revenue in the first quarter reached 853.$9.3 billion, compared to $708 a year earlier.$4.3 billion, up 20.5%; net profit increased 536% year-on-year to 355.$04 billion, up from 55.$8 billion; investment and derivatives contract gains turnaround to 347.$5.8 billion, a loss of 19.$7.8 billion。

Berkshire's first-quarter net profit surged more than fivefold, earning 347 on investments..$5.8 billion

 

According to the financial report, the company's net profit during the reporting period ushered in a substantial increase, a year-on-year increase of more than five times, becoming the biggest bright spot.。Among them, the investment and derivatives business contributed a lot, not only from loss to profit, but also the largest change in the business.。Data show that the company achieved a total of 347 in the first quarter..$5.8 billion in investment and derivatives gains, compared with a loss of 19.$7.8 billion。

In addition, operating profit, including Berkshire's wholly owned subsidiaries, was 80% in the first quarter..$6.5 billion, up from 71.$600 million up 12.6%, mainly due to a sharp rebound in insurance business。Among them, insurance underwriting profit jumped 445% year-on-year to 9.$1.1 billion, while insurance investment income jumped 68% to 19.$6.9 billion, and its insurer Geico also ended six consecutive quarters of losses, with pre-tax underwriting profit of 7.$03 billion。

 

Notably, Berkshire sold $13.2 billion worth of shares during the reporting period, buying only $2.8 billion of shares and selling a net $10.4 billion in the first quarter.。Not only that, Berkshire also accelerated the pace of share buybacks, data show that during the period the company spent $4.4 billion to buy back its own shares, as well as $2.9 billion to buy back shares of its own companies, the two combined is close to last year's full-year share buybacks.。

Meanwhile, the company's cash reserves have increased by $2 billion since the start of the year to $130.6 billion, the highest level since the end of 2021.。

It is reported that Berkshire Chairman and CEO Warren Buffett (Warren Buffett) and Chief Deputy Director Charles Munger (Charles Munger) jointly believe that the current market valuation is not attractive, the cost of intervention is large, resulting in the company's cash reserves higher than expected, put into use difficulties, so parallel high sell and high repurchase strategy。

In response, Buffett said the market is not at the same pace as it was six months ago, and everyone is preparing for the upcoming economic slowdown this year.。Earlier, Munger also said in an interview that the golden age of investment is over and investors will need to deal with the challenge of low returns on assets.。He said more and more investors are now trying to chase and find flawed companies within the market, and overlaid with the challenges posed by high interest rates, it's hard for the market to get the same returns it used to。

Munger said: "Just when the game is getting more and more difficult, we have more and more people who want to play this game.。"

For now, Berkshire's equity investments are indeed relatively concentrated。Data show that as of March 31, about 77% of the company's equity investments at fair value were concentrated in five companies, namely, American Express ($25 billion), Apple ($151 billion), Bank of America ($29.5 billion), Coca-Cola ($24.8 billion), Chevron ($21.6 billion), perhaps Berkshire's "stock gods" and "stock gods" have not yet found an investment target that can be matched in the short term。

 

Buffett responds to investor concerns Munger says "old-fashioned intelligence" is better than "artificial intelligence"

 

The annual Berkshire Hathaway shareholders' meeting has been the focus of investors' attention over the years, with the investment community known as the "Spring Festival Gala," usually held in the small town of Omaha in early May each year.。People laugh that there are only two opportunities a year to see or hear the "stock god" Buffett's views on the next wave of investment opportunities and stock market conditions: once in a letter to shareholders he wrote for Berkshire Hathaway shareholders, and once at a Berkshire Hathaway shareholder meeting.。

Although this year's shareholders' meeting "unfortunately" collided with the coronation of King Charles of England, it did not stop the crowds who had travelled thousands of miles to make the pilgrimage to Omaha.。In addition, this year may be the last time the 99-year-old Munger will attend a shareholder meeting, and people will want to hear the Omaha prophet's golden words again.。

It is reported that the total number of shareholders' meetings this year or up to 30,000, has reached the pre-epidemic level, many investors from the early morning began to line up。

 

Finally, after the warm-up of Berkshire's first-quarter earnings, the expected shareholder question-and-answer session has finally begun。Obviously also aware of the particularity of the day, in advance to think of the old urchin Buffett after the opening hurriedly joked that Berkshire also has its own "King Charles," that is, Charles Munger, drew applause.。

To get down to business, Buffett first explained Berkshire's quarterly results。He highlighted Berkshire's insurance business, saying that underwriting profit and investment income from the company's insurance business improved significantly year-on-year during the reporting period, but after-tax operating profit from BNSF's rail and energy businesses declined year-on-year.。

Buffett noted that Berkshire's insurance underwriting business has nothing to do with market activity, has more to do with natural disasters such as earthquakes, is not affected by business cycles, and is likely to do better this year than last year。He also said that the company's current investment returns are good, but the "period of incredible growth" in the economy is ending, and that "most" of its companies are expected to report lower earnings and increased uncertainty about the outlook.。

For the recent sensational banking crisis, Buffett said that the crisis is in fact traceable。First Republic Bank, for example, whose 10-K form shows that banks are early to offer huge non-government-backed mortgages at fixed rates and that insiders continue to sell company shares are signs of an impending crisis.。In addition, he praised the creation of the Federal Deposit Insurance Corporation (FDIC), arguing that the security of deposits is a necessary condition for economic performance。But he also noted that even though the FDIC pays 100% insurance on all deposits, people are still worried in all sorts of crazy ways due to the poor performance of politicians, institutions and the media in delivering messages。

Buffett also expressed his views on the punishment mechanism of the banking industry, he believes that the number of banks that manage depositors' assets is now excessive, calling on the banking industry to adhere to traditional values and ethics, and effectively protect the safety of depositors' deposits.。Buffett stresses the need for appropriate punishment mechanisms to curb bankers' misconduct。

Buffett also said Bank of America is the only bank stock he currently holds, but doesn't know what will happen next。Buffett has been aggressively selling his bank shares since 2020, but only for Bank of America。In response, Buffett once replied, "I like Bank of America's CEO Brian Moynihan very much, I just don't want to sell it.。"

On the hot issue of artificial intelligence, Buffett pointed out that although artificial intelligence technology may reshape everything, it is expected that it will not be able to surpass human intelligence.。At the same time, because of the comprehensiveness of the technology, Buffett worries that in the future, humans may not be able to fully control or undo the invention of the technology.。In fact, Buffett has always been more conservative about AI technology, and he has previously said that it is an incredible technological advance from the perspective of demonstrating human capabilities, but is not sure if it is beneficial to humans.。

Munger's attitude towards artificial intelligence is even more stark, saying that he is "confused" by the hype involving artificial intelligence and believes that old fashioned intelligence (old fashioned intelligence) is more effective than artificial intelligence.。

In addition, at the shareholder question-and-answer session, Buffett also "dispelled rumors" about the takeover of Occidental Petroleum.。He noted that investing in Occidental Petroleum is a completely wise decision at this point, and he is very bullish on Occidental's location in the Permian Basin and its numerous high-quality wells。He went on to emphasize that while there are many views that he will buy Occidental, he will not do so, and he greatly appreciates Occidental's management and does not rule out continuing to increase its holdings in the future, but is satisfied with its existing positions。

Since March last year, Buffett's Berkshire Hathaway has been steadily adding to its Western Oil position and now holds 23 of the company's.6% of the shares。In August last year, the company received regulatory approval to acquire up to 50 percent of Occidental Petroleum's common stock.。In addition, according to Berkshire's most recent 13F filing, as of the end of last year, Occidental Petroleum had quickly entered the top 10 of its heavy holdings list, with a stake of $12.7 billion.。Ahead of the shareholder meeting, there are growing rumors that Berkshire will fully acquire Occidental Petroleum。

 

As for its other heavy stock, Apple, Buffett first praised the company, saying that the relationship between Apple and consumers is very close and unparalleled.。Buffett then confessed that the company made some mistakes two years ago, selling some of Apple's stock, calling the decision "stupid" at the time.。

When it comes to Apple, the "stock god" does not forget the "Versailles," he said, Apple has a big advantage, they will continue to buy back their own shares, the value is also rising, we do not need to do anything, the market value of the position will rise.。

According to the disclosure, in May 2016, Berkshire held $1 billion in Apple shares, which had grown to $151 billion by March 2023, or 46% of its $322 billion equity portfolio.。Previously, some investors believed that Apple's stock holdings may have exceeded the "dangerous dividing line" of 35% of Berkshire's portfolio, worrying about its risk diversification.。Buffett responded by saying that Apple is the best company to hold, and that the company's position in Apple is definitely not 35% of the portfolio, and that it may even buy more shares in the future.。

Golden sentences! Buffett says the rich roll over first？Munger questions current diversification philosophy

 

After the main topic, the two investment world legends did not forget to share their investment experience, repeatedly exploding golden sentences。

Buffett said that the opportunity for value investing comes from other people doing "stupid things," and when others make bad decisions, value-focused investors will look for opportunities: "You're given the opportunity for other people to do stupid things, people will do big and stupid things, and the reason they do it is in part because they have easier access to money than when we first started.。"

Munger, on the other hand, teaches the secret to maintaining investment success in a rapidly changing environment: habit returns are reduced.。In addition, he set out his views on the diversification philosophy, saying that diversification has become a standard investment rule that helps reduce risk and create a more resilient portfolio。However, today's investment educators tend to overdo it a bit because it's not easy to find a large number of good opportunities that are easy to spot。

Finally, they also talked about rising stars, sitting on Tesla, Space Exploration Technologies, Sun City, Twitter's former world's richest man Elon Musk (Elon Musk)。Munger believes that Musk would not have achieved what he has now if he had not tried unreasonably extreme targets.。He said: "Musk overestimates himself, but he's talented.。He likes to take on impossible work and do it.。Instead, Warren and I look for simple jobs we can identify.。Buffett said Musk was smart and committed to solving the impossible, which for himself was "torture."。

Apparently, the two weather-beaten old men have seen through the world of mortals and know the truth about the road to simplicity.。