Thread by @kejca

Warren Buffett & Charlie Munger take the stage at Berkshire Hathaway's 2023 annual shareholder meeting. $BRK.A $BRK.B

Follow along for all of the most important news and comments from the morning session.

I'll be writing more fully about all of this in my newsletter this week.

"The majority of our businesses will report lower earnings this year than last year," Buffett said.

The "incredible period" of business and government stimulus is over.

"It's a different climate than it was six months ago."

"Insurance underwriting does not correlate with business activity ... On a probability basis, we're likely to have better year in underwriting than we had last year." Not affected by the business cycle.

A big hurricane, of course, would change all that.

"Every year, the number of our shares go down."

Class A equivalent shares down from 1.624 million in 2019 to 1.45 million at the end of 2022.

"I can't recall any time in the history of Berkshire that we made an emotional decision."

Buffett says not to be a no-emotion person in all aspects of your life, but it's important to keep emotions in check when making investing and business decisions.

"GEICO's technology needs a lot more work than I thought it did," Ajit Jain says.

The company has made improvements in telematics, but still a work in progress.

Prior-year reserve release and Q1 seasonal tailwind contributed to GEICO's Q1 results.

"At GEICO, Todd Combs was Ajit's choice and my choice," says Buffett.

"Todd is doing a wonderful job at GEICO."

"I am personally skeptical about some of the hype that has gone into artificial intelligence," Munger says. "I think old-fashioned intelligence works pretty well."

No AI can replace Ajit Jain, Buffett adds.

"I know we won't be able to un-invent [AI]."

"My advice to value investors is to get used to making less," Munger says.

Buffett quips that Munger has been saying the same thing to him as long as they've known each other.

"What gives you [investing] opportunities is people doing dumb things."

*** Charlie has started to eat peanut brittle ***

Buffett says that a lot of people might have a lot of money and they're all trying to outsmart each other — but smart investors can avoid that frenzied competition with a long-term and patient mindset.

"This country should be ahead of where it is in terms of [energy] transmission," says Buffett.

Abel: "You can't just wake up one day and solve this problem." BHE at forefront of energy transformation — but still a work in progress and will be a long journey.

"We have a lot of good people who have risen at Berkshire subsidiaries," Munger says. Stability in managerial ranks has helped Berkshire.

Not announcing who will succeed Abel and Jain in their current roles. Final decision will be Greg's.

Questioner, who used to work at Salomon Brothers, thanks Buffett for saving his job back in the 1990s — and then asks what could undermine the USA.

"Net, the United States is a better place to live than it was when I was born by a huge factor."

Partisanship has led to tribalism and that can lead to mobs.

But, if Buffett had his choice of anywhere and any time to be born, it would be in the United States today.

"I think the U.S. is capable of doing remarkable things — and it wouldn't surprise me if we did it again."

Buffett doesn't sound too worried about the company being taken over after he passes and his Class A shares are given away to charities. But it depends on the company's performance under Abel.

Munger says this is "fretting unnecessarily".

Ajit Jain had zero experience with insurance when he first met Buffett, but he understood corporate America.

"If I had the top pick of ten insurance managers in the world, I could take all ten and they could not replace Ajit."

Buffett says investing is not about knowing the future, but understanding businesses.

"Back when I started, other people were going through Playboys and I was going through Moody's [manuals]."

Stream went down during the Apple question, so I'll cover that in my next article on Monday or Tuesday.

"Everything that increases tension between [the USA and China] is stupid, stupid, stupid," says Munger.

"Some leader who promises you too much can get you in a hell of a lot of trouble," says Buffett.

"The world has stumbled through the years post-1945 with a lot of close calls."

Munger calls for each side to respond to the other's stupidity with "reciprocal kindness".

Buffett on $TSM: "I feel better about the capital that we've got deployed in Japan than Taiwan. I wish it weren't so, but that's the reality."

Munger backs Buffett up on the TSMC sale. "He should feel comfortable if he wants to."

New edition of "The Intelligent Investor" coming out?!?

Munger points out that half of Ben Graham's lifetime investing return came from one stock: GEICO.

"Buying one undervalued great company is a great thing — as Berkshire has found out again and again and again."

"Index funds want a world where society doesn't get upset with them because they have all the voting power," says Buffett.

It's in their best interests to back off on exerting voting control before they attract negative attention from the government and public.

Buffett on buybacks: "It can be the dumbest thing you can do and it can be the smartest thing you can do."

It all depends on the current price of the company.

Repurchasing below intrinsic value is a no-brainer. Greg Abel on board with this strategy and he will continue it.

"Greg is inheriting a good business and I think he will make it better," Buffett says.

And, with that, I must bid you adieu.

More on the annual meeting and Q1 earnings on Kingswell this week (and throughout the month). Subscribe at the link in my bio.