During Berkshire Hathaway’s annual shareholder meeting on Saturday, CEO Warren Buffett shared with investors his insight on some of the most pressing economic issues of the day.
- The shareholder meeting revealed that Berkshire is still doing well, even in a cooling economy. The company is still worth over $700 billion and posted a $35.5 billion profit in the first quarter.
- However, as the market has grown less appealing, Berkshire has struggled to decide where to invest.
- During the shareholder meeting, Buffett addressed concerns about the financial industry, how artificial intelligence (AI) will transform the future of business, and what Americans should look for as other countries back away from the U.S. dollar.
Why it’s news
As one of the most prominent names in investing, Warren Buffett’s opinions about the market are held in high regard. Following the financial turmoil in the banking industry, some have wondered why Buffett has hesitated to intervene.
Berkshire’s annual shareholder meeting attracts thousands of people from around the world to hear the legendary investor pontificate in down-home, folksy way about highly sophisticated economic issues. The two sit on stage and respond to nearly 60 questions from audience members—both live and virtual.
During the meeting, Buffett and business partner Charlie Munger gave some insight into Berkshire’s hesitancy to invest in the banking sector. Both Buffett and Munger were critical of how officials have chosen to handle the Silicon Valley Bank Collapse, yet Buffett says not intervening would have been “catastrophic,” Axios reports.
Buffett touched on the more recent failure of First Republic Bank. He called the firm’s high mortgages for high-end clients a “crazy proposition. You don’t give options like that. That’s what First Republic was doing, and it was in plain sight, and everyone ignored it until it blew up.”
Later in the meeting, Buffett further criticized a perceived lack of accountability in the financial industry, saying, “You have to have … punishment for people that do the wrong things.”
Buffett and Munger also discussed generative AI and its potential effects on the market. So far, the billionaire says he has been impressed by AI’s abilities, but he worries about its unintended consequences.
“It can do all kinds of things, and when something can do all kinds of things, I get a little bit worried because I know we won’t be able to uninvent it,” Mr. Buffett says.
Though Buffett does think AI will change the world, he added that it will not take away every opportunity for investors.
“New things coming along doesn’t take away the opportunities. What gives you the opportunities is other people doing dumb things,” Buffett says.
Buffett later addressed 13-year-old audience member Daphne, who asked, “Are we likely to face a time in the future when the U.S. dollar is no longer the global reserve currency? How is Berkshire prepared for this possibility? And what can we do as American citizens to attempt to shelter ourselves from what’s beginning to look like the beginnings of de-dollarization?”
“Nobody knows how far you can go with the paper currency before it gets out of control,” Buffett says, “If, and particularly if you’re the world’s reserve currency, nobody knows the answer to that And you don’t want to try and pick out the point that does become a problem, because then it’s all over. And I think we should be very careful.”