Last weekend, Berkshire Hathaway just had its 2024 Annual Meeting where the Oracle himself, Warren Buffett, gave a report of the company.

3 Key Lessons

#1: Invest in What You Understand:
Buffett reiterated the importance of staying within one's 'circle of competence', a principle that has guided many of Berkshire's investment decisions. He stated, "Understanding the business economics before investing safeguards against potential losses and ensures a much clearer pathway to return on investments."

Top 3 Key Lessons & 7 Investment Takeaways from Berkshire AGM 2024

#2: The Power of Patience:
Emphasizing patience, Buffett shared, "The stock market is designed to transfer money from the Active to the Patient." This lesson underscores the value of disciplined investment strategies and the importance of waiting for the right opportunities rather than reacting to market volatility.

#3: Write Your Own Obituary:
Reflecting on aligning one's actions with personal values, Buffett advised investors to think long-term about their life's achievements and how they wish to be remembered, stating, "It’s a powerful exercise that aligns your actions with your values."

But the most important segment is the Q&A where Buffett answer all the questions from the investors for more than 7 hours.

However, you don’t have to watch the whole 7 hours. (It is here if you want to). Because I have! I will share my top investment takeaways from the AGM.

(1) Berkshire’s operating earnings jumped 39% to $11.222 billion. This year, Berkshire shares have gained 12% vs S&P 500 gains of 8%.

(2) Berkshire Hathaway is currently the 8th largest listed company globally! The largest company below a trillion in market cap!

(3) Berkshire has $182bn in cash and Buffett admitted that it will likely hit $200bn by the next quarter. Buffett said he can’t find anything to buy so he is just doing sharebuyback.

(4) Apple is still the largest holding despite Berkshire selling 15million shares in the last quarter. Berkshire’s total investment in Apple is $135bn which is around 790million shares.

(5) Buffett really likes the investment in Japanese trading houses, but said that investment in other countries will be unlikely.

(6) Buffett has negative opinions of Artificial Intelligence, likening the technology to nuclear weapons in its potential for doing terrible things.

(7) Buffett is looking at investing overseas. He even hinted at Berkshire studying into a possible investment in Canada.

Summary

Apple is still a great business - Buffett even compared Apple to other businesses held by Berkshire and he said that Apple is, by far, the best business of all. Apple is more than a tech company, it is also a luxury brand. The demand for Apple product and services continues to be strong. And the recently announced $110bn sharebuyback will be a huge boost to the share price in the future.

Why did Berkshire sell Apple shares? - My view is that Apple is simply getting too big a position in Berkshire. Even after trimming, it is 40.1%. As a listed company, I do believe there are some governance on position size hence he has to trim. If Buffett thinks Apple is a bad business, I think he will not hesitate to sell them all.

Berkshire is holding lots of cash but YOU should not - While Berkshire cash pile kept increasing, it is not an indicator that he is predicting a market crash. Berkshire total investment is over $360bn so it is still over 67% invested! Does that look like a bearish position to you? I am sure Buffett is keeping his eye peeled for the next opportunity to buy.

Why is Berkshire holding so much cash? - Buffett said it better than anyone could, “There remain only a handful of companies in this country capable of truly moving the needle at Berkshire”. Because of the size of Berkshire, smaller investments such as less than $10bn to just not efficient for them. Buffett can only invest in gigantic businesses in order to deploy the cash pile.

Take Responsibility for Your Own Investment - Buffett candidly admitted the Paramount investment has been sold at a loss. And he took responsibility for it. “It was 100% my decision, and we’ve sold it all and we lost quite a bit of money.” And this is why he is a great investor. So few investors are able to take responsibility and learn the lesson.

In conclusion, Buffett once again gave us a wonderful AGM filled with investment tips and wisdom.