Warren Buffett

Greg should become the chief executive officer of the company at year end.

I have no intention, zero intention, of selling one share of Berkshire Hathaway, it'll get given away gradually.

There's no question trade can be an act of war. And I think it's led to bad things. Just the attitudes it's brought out in the United States. I mean, we should be looking to trade with the rest of the world and we should do what we do best and they should do what they do best.

It's really nothing. There's been three times since we acquired Berkshire that Berkshire has gone down 50% in a fairly short period of time, three different times. Nothing was fundamentally wrong with the company at any time, but this is not a huge move.

Tariffs are a hot topic in Omaha, where Berkshire Hathaway's CEO answered investors' questions for more than four hours. The very first question was about President Trump's sweeping new taxes on imports, and Buffett had a strong warning, as broadcast by CNBC.

At age 94, the billionaire investor is one of the most powerful people on Wall Street and beyond. He ended the meeting by announcing that he would be resigning as CEO at the end of the year. Maria Aspin, NPR News, Omaha.

Experience with them. They're an act of war to some degree.

I mean, the tooth fairy doesn't pay a lot. You always have to ask that question. You love that joke.

No, prices will be higher 10 years from now and 20 years from now and 30 years from now.

Technology changes things, all kinds of things, but Washington is Washington. And the problem with politics is that you tend to have to make tiny compromises as you go along.

Trade can be an act of war. And I think it's led to bad things. Just the attitudes it's brought out. In the United States, I mean, we should be looking to trade with the rest of the world and we should do what we do best and they should do what they do best.

I mean, tariffs are actually, we've had a lot of experience with them. They're an act of war to some degree.

I mean, you know, the tooth fairy doesn't pay up.

Trade should not be a weapon. And the United States, the United States, we've won. I mean, we have become an incredibly important country starting from nothing. 250 years ago, there's nothing been anything like it. And it's a big mistake, in my view, when you have 7.5 billion people that don't like you very well, and you've got 300 million that are crowing in some way about how well they've done.

And I don't think it's right, and I don't think it's wise. I do think that the more... The more prosperous the rest of the world becomes, it won't be at our expense, the more prosperous we'll become.

Lacking such assets as athletic excellence, a wonderful voice, medical or legal skills, or for that matter, any special talents, I have had to rely on equities throughout my life. In effect, I have depended on the success of American businesses, and I will continue to do so.

The American process has not always been pretty. Our country has forever had many scoundrels and promoters who seek to take advantage of those who mistakenly trust them with their savings.

But even with such malfeasance, which remains in full force today, and also much deployment of capital that eventually floundered because of brutal competition or disruptive innovation, the savings of Americans have delivered a quantity and quality of output beyond the dreams of any colonist.

From a base of only 4 million people, and despite a brutal internal war early on, pitting one American against another, America changed the world in the blink of a celestial eye.

So thank you, Uncle Sam. Someday your nieces and nephews at Berkshire hope to send you even larger payments than we did in 2024. Spend it wisely. Take care of the many who, for no fault of their own, get the short straws in life. They deserve better. And never forget that we need you to maintain a stable currency, and that result requires both wisdom and vigilance on your part.

My wise and good-looking sister, Birdie, of whom I wrote last year, will be attending the meeting along with two of her daughters, both good-looking as well. Observers all agree that the genes producing this dazzling result flow down only the female side of my family. Sob. Birdie is now 91, and we talk regularly on Sundays using old-fashioned telephones for communications.

Warren Buffett's 2025 Annual Shareholder Letter. Our goal is to communicate with you in a manner that we would wish you to use if our positions were reversed. That is, if you were Berkshire's CEO while I and my family were passive investors, trusting you with our savings.

We cover the joys of old age and discuss such exciting topics as the relative merits of our canes. In my case, the utility is limited to the avoidance of falling flat on my face, but Birdie regularly one-ups me by asserting that she enjoys an additional benefit. When a woman uses a cane, she tells me, men quit hitting on her.

Birdie's explanation is that the male ego is such that little old ladies with canes simply aren't an appropriate target. Presently, I have no data to counter her assertion, but I have suspicions. At the meeting, I can't see much from the stage, and I would appreciate if the attendees would keep an eye on Birdie. Let me know if the cane is really doing the job.

Yetis, you're about to lose one hour of sleep because of daylight savings.

My bet is that she will be surrounded by males. For those of a certain age, the scene will bring back memories of Scarlett O'Hara and her horde of male admirers in Gone with the Wind.

Jack, I think that's it too. I think I'm ready for some shut-eye.

Somewhere in between Warren saying investment thesis and insurance premiums, I've popped two melatonins, Jack.

We want to get to know you.

This approach leads to an annual recitation of both good and bad developments at the many businesses you indirectly own through your Berkshire shares. Mistakes, yes, we make them at Berkshire. Sometimes I've made mistakes in assessing the future economics of a business that I've purchased for Berkshire. And each a case of capital allocation gone wrong.

If you start fooling your shareholders, you will soon believe your own baloney and be fooling yourself as well. Pete Legal, one of a kind. Let me pause to tell you the remarkable story of Pete Legal, a man unknown to most Berkshire shareholders, but one who contributed many billions to their aggregate wealth. Pete died in November, still working at 80.

I first heard of Forest River, the Indiana company Pete founded and managed, on June 21, 2005. On that day, I received a letter from an intermediary detailing relevant data about the company, a recreational vehicle RV manufacturer. The writer said that Pete, the 100% owner of Forest River, specifically wanted to sell the Berkshire. He also told me the price that Pete expected to receive.

Word by word. Line by line. Number by number, the entire corporate annual report of one surprise company.

I liked this no-nonsense approach. I did some checking with RV dealers, liked what I learned, and arranged a June 28th meeting in Omaha. Pete bought along his wife, Sharon, and daughter, Lisa. When we met, Pete assured me that he wanted to keep running the business but would feel more comfortable if he could assure financial security for his family.

Pete next mentioned that he owned some real estate that was leased to Forest River and had not been covered in the June 21 letter. Within a few minutes, we arrived at a price for those assets as I expressed no need for appraisal by Berkshire but would simply accept his valuation.

Every company doesn't have an easy to understand business. And there are very few owners or managers like Pete. And of course, I expect to make my share of mistakes about the businesses Berkshire buys and sometimes Aaron evaluating the sort of person with whom I'm dealing.

But I've also had many pleasant surprises in both the potential of the business as well as the ability and fidelity of the manager. And experience? Our experience is that a single winning decision can make a breathtaking difference over time. Mistakes fade away. Winners can forever blossom.

You could grab some more milk or you could pop a melatonin.

And this is Jack.

Last year's performance in 2024. Berkshire did better than I expected, though 53% of our 189 operating businesses reported a decline in earnings. We were aided by a predictable large gain in investment income as Treasury bill yields improved and we substantially increased our holdings of these highly liquid short-term securities.

We're making business news for your beauty rest.

Our insurance business also derived a major increase in earnings, led by the performance of GEICO. In five years, Todd Combs has reshaped GEICO in a major way, increasing efficiency and bringing underwriting practices up to date. GEICO was a long-held gem that needed major repolishing, and Todd has worked tirelessly in getting the job done.

Though not yet complete, the 2024 improvement was spectacular. In general, property casualty insurance pricing strengthened during 2024, reflecting a major increase in damage from convective storms. Climate change may have been announcing its arrival, However, no monster event occurred during 2024.

Someday, any day, a truly staggering insurance loss will occur, and there's no guarantee there will be only one per annum.

Surprise, surprise. An important American record is smashed 60 years ago. Present management took control of Berkshire. That move was a mistake, my mistake, and one that plagued us for two decades. Charlie, I should emphasize, spotted my obvious error immediately. Though the price I paid for Berkshire looks cheap, its business, a large northern textile operation, was headed for extinction.

The U.S. Treasury, of all places, had already received silent warnings of Berkshire's destiny. In 1965, the company did not pay a dime of income tax, an embarrassment that had generally prevailed at the company for a decade. That sort of economic behavior may be understandable for glamorous startups, but it's a blinking yellow light when it happens at a venerable pillar of American industry.

Berkshire was headed for the ash can. Fast forward 60 years and imagine the surprise at the treasury when that same company, still operating under the name Berkshire Hathaway, paid far more in corporate income tax than the U.S. government had ever received from any company. even the American tech titans that commanded market values in the trillions.

To be precise, Berkshire last year made four payments to the IRS that totaled $26.8 billion. That's about 5% of what all of corporate America paid.

Yetis, today's pod is the best one yet. Because today's pod is the sleepiest one yet. Jack, let's hit our...

In the other hand, we own a small percentage of a dozen or so very large and highly profitable businesses with household names such as Apple, American Express, Coca-Cola, and Moody's. Many of these companies earn very high returns on the net tangible equity required for their operations. At year end, our partial ownership holdings were valued at $272 billion. Understandably,

Really outstanding businesses are very seldom offered in their entirety. But small fractions of these gems can be purchased Monday through Friday on Wall Street, and very occasionally, they sell at bargain prices. We are impartial in our choice of equity vehicles, investing in either variety based upon where we can best apply your and my family's savings. Often, nothing looks compelling.

Very infrequently, we find ourselves knee-deep in opportunities. Greg Abel, the future CEO, has vividly shown his ability to act at such times as did Charlie. With marketable equities, it is easier to change course when I make a mistake. Berkshire's present size, it should be understood, diminishes this valuable option. We can't come and go on a dime.

Sometimes a year or more is required to establish or divest an investment.

In some countries, this reckless practice has become habitual, and in our country's short history, the U.S. has come close to the edge. Fixed coupon bonds provide no protection against runaway currency.

Businesses, as well as individuals with desired talents, however, will usually find a way to cope with monetary instability as long as their goods and services are desired by the country's citizenry. So too with personal skills.

I've been semi-retired for decades.

And then we get to about 1254 in the afternoon, and he says— With that, I should say that I'm getting a section that says five-minute warning, exclamation point, five-minute warning, exclamation point.

Tomorrow we're having a board meeting of Berkshire.

Without any almost notice, he says... The time has arrived where Greg should become the chief executive officer of the company at year end.

Okay, drink your Coke and calm down.

Everyone will please take their seats.

You do not want to ask an investment banker what he thinks the earnings are going to be in five years of something he's trying to sell. He often says, you know, it's the old story. Don't ask the barber whether you need a haircut.

This is my 60th annual meeting. And it's the biggest and I think it'll be the best yet.

I think the time has arrived where Greg should become the chief executive officer of the company at year end.

I would still hang around and conceivably be useful in a few cases, but the final word would be what Greg said.

That's the news hook for the day, follow-up. And thanks for coming.

Everyone will please take their seats.

We think alike on acquisitions. We think alike on capital allocation. I mean, he's a big improvement on me, but don't tell anybody else.