The annual Buffett shareholders meeting was held from May 3rd to 5th Eastern Time in the small town of Omaha, USA. At the meeting, Warren Buffett shared his views and ideas with shareholders.

The following are some of the most popular topics in the market.

Ultra-high cash reserves

On the eve of the shareholder meeting, Berkshire Hathaway, a subsidiary of Buffett, also released its first quarter results.

The report shows that Berkshire Hathaway's revenue increased by 5% in the first quarter, reaching $89.87 billion. Higher than expected $87 billion. The net profit was 12.7 billion US dollars, higher than the market's expected 9.9 billion US dollars, and about one-third of the 35.5 billion US dollars in the same period last year.

Among them, the most noteworthy is the company's massive cash reserves. As of the end of the first quarter, Berkshire Hathaway's cash reserves reached a historic high of $189 billion.

There are many reasons why the company's cash reserves continue to rise.

Firstly, several major utility companies, including Geico Insurance, BNSF, and dozens of other holding companies, continued to generate significant amounts of cash.

Second, because Berkshire Hathaway held many treasury bond, interest income also increased in the context of high interest rates. In the first quarter, the company's interest income reached $1.9 billion, compared to $1.1 billion in the same period last year.The third and most important reason is that Buffett has been "holding his ground" and has not made significant investments.

Buffett said at the conference, "We are willing to spend money, but unless we do something with minimal risk and can make a lot of money, we won't spend money." He also told shareholders that it is expected that cash reserves may reach $200 billion by the end of the second quarter.

Some investors believe that Berkshire Hathaway's holding of such a large amount of dollars indicates that Buffett is currently "bearish" on the stock market.

Bill Smead, Investment Director of Smead Capital Management, said, "Unless he has the opportunity to buy the entire company or there is a 30% or more decline in major markets, he is unlikely to use these funds."

Reduce Apple

On the eve of the shareholder meeting, Berkshire Hathaway, a subsidiary of Buffett, also released its first quarter results.

The report shows that Berkshire Hathaway's revenue increased by 5% in the first quarter, reaching $89.87 billion. Higher than expected $87 billion. The net profit was 12.7 billion US dollars, higher than the market's expected 9.9 billion US dollars, and about one-third of the 35.5 billion US dollars in the same period last year.

Among them, the most noteworthy is the company's massive cash reserves. As of the end of the first quarter, Berkshire Hathaway's cash reserves reached a historic high of $189 billion.

There are many reasons why the company's cash reserves continue to rise.

Firstly, several major utility companies, including Geico Insurance, BNSF, and dozens of other holding companies, continued to generate significant amounts of cash.

Second, because Berkshire Hathaway held many treasury bond, interest income also increased in the context of high interest rates. In the first quarter, the company's interest income reached $1.9 billion, compared to $1.1 billion in the same period last year.

The third and most important reason is that Buffett has been "holding his ground" and has not made significant investments.Buffett said at the conference, "We are willing to spend money, but unless we do something with minimal risk and can make a lot of money, we won't spend money." He also told shareholders that it is expected that cash reserves may reach $200 billion by the end of the second quarter.

Some investors believe that Berkshire Hathaway's holding of such a large amount of dollars indicates that Buffett is currently "bearish" on the stock market.

Bill Smead, Investment Director of Smead Capital Management, said, "Unless he has the opportunity to buy the entire company or there is a 30% or more decline in major markets, he is unlikely to use these funds."

Clear Paramount at a loss

In the latest Berkshire Hathaway report, it was also found that the company sold all its shares in Paramount at a loss.

Buffett stated at the shareholder meeting that he is fully responsible for the decision to clear Paramount. "This is 100% my decision, we have sold everything and lost a lot of money," he saidAs of the end of 2023, Berkshire Hathaway owns approximately 63.3 million Paramount Global B-Class shares.

Like other film companies, Paramount has been working hard to overcome the impact of months long strikes by Hollywood screenwriters and actors last year, weak advertising markets, and declining cable TV subscriptions in the United States, which have eroded the profits of its television business.

However, as audiences gradually abandon traditional television, Paramount is facing unprecedented challenges and is currently undergoing acquisition negotiations.

According to insiders, a special committee of Paramount's board of directors was established to evaluate the acquisition offer for the company. The committee has been negotiating exclusive deals with Skydance Media, but no agreement has been reached yet. Paramount will continue to evaluate bids from other companies.

Concerns about the US fiscal deficit

At the conference, when asked whether he was worried about the rapid rise of the US government debt level, Buffett said that he was worried that the extent of the fiscal deficit exceeded the size of the US treasury bond bond market. And it is highly likely that high tax rates will occur in the near future.

At present, the size of the US treasury bond bond market has reached nearly 27 trillion US dollars. Since the US dollar is the world's leading reserve currency, Buffett said: "My best guess is that the US debt is acceptable for a long time because there are not many options."

Buffett said that although the market focus is on the next steps the Federal Reserve will take to address inflation, fiscal policy may face more problems.

Buffett stated that Federal Reserve Chairman Jay Powell is a very intelligent person, "but he cannot control fiscal policy."

The Congressional Budget Office estimates in its latest long-term budget forecast that the proportion of federal deficit to GDP will increase from 5.5% in fiscal year 2024 to 8.5% in fiscal year 2054. If the tax cuts implemented in 2017 are continued, the US budget deficit is expected to worsen next year.

Buffett predicts that the US government will increase taxes to address the widening fiscal deficit, rather than reducing spending."One day they may decide that they don't want the fiscal deficit to be so large because it would have some important consequences. Therefore, they may not want to reduce spending, they may decide that they will take away a larger proportion of the funds we have, and we will pay," he said.

Still focusing on the US market

At the shareholder meeting, Buffett reiterated that Berkshire Hathaway's investment will still focus on the US market.

Buffett also hinted that he would not make such a big investment overseas as he did in China's BYD and Japan's top five companies before. He said, "I think BYD's investment is quite similar to the promise we made in Japan five years ago, and I think that kind of investment would be very convincing to us... You may not see such a large investment outside of the United States, especially considering the current world economy."

When asked if he would look for opportunities in the Indian market, Buffett said, "Indeed, we are paying attention to India, and I believe there are plenty of opportunities in India. But my question is, do we have an advantage in our understanding of India? Is our investment what India wants us to participate in? For investing in India, perhaps we will see the next management at Berkshire participate in this game."

Buffett's successor

Regarding his successor, Buffett stated that Greg Abel should be responsible for guiding Berkshire's investments after his death. Abel is currently the Vice Chairman of Berkshire Hathaway, having served the company for over 20 years, overseeing its vast non insurance business.

Chris Bloomstran, President of Semper Augustus Investments Group, believes that Abel is an extraordinary leader who will become a "great allocator of capital".

But at the same time, he also said, "There is no second Warren Buffett. But fortunately, they have a great board of directors."