At this year's Berkshire Hathaway annual shareholders' meeting, from investment strategies in Japan to the deployment of massive cash reserves, from challenges in the insurance industry to the potential impact of artificial intelligence (AI), and from succession planning to timeless life advice... we summarize the key points for you. (Background: Coca-Cola's stock price hits a new high against the trend! Can learning from Buffett protect your investments from economic recessions?) (Background information: Buffett holds a lot of US Treasury bonds! Berkshire's holdings exceed $300 billion, 'far surpassing the Federal Reserve,' what is the Oracle of Omaha calculating?) The annual Berkshire Hathaway shareholders' meeting has just concluded. In addition to the 'Oracle of Omaha' Warren Buffett's shocking announcement that he will step down as CEO by the end of this year, to be succeeded by current Vice Chairman Greg Abel, Buffett, along with his chosen successor Greg Abel and Ajit Jain, who oversees insurance operations, shared their diverse views on Japanese investments, cash holdings, challenges in the insurance industry, AI impacts, real estate versus stocks, and more during the hours-long meeting. Below, we summarize the key points for you. Insights on Japanese Investments: The Dilemma of Value Discovery and Scale Buffett first discussed Berkshire's much-watched investments in Japan in recent years. He candidly stated that investments in Japan's five major trading companies (Itochu, Marubeni, Mitsubishi Corporation, Mitsui & Co., and Sumitomo Corporation) perfectly align with Berkshire's investment style: understanding the business, trustworthy management, reasonable valuation, and long-term potential. Buffett even expressed that he hopes these positions can be much larger than the current approximately $20 billion size, "I would rather have $100 billion than $20 billion." The origin of this investment is quite legendary, stemming from Buffett flipping through a thick directory of Japanese companies. He emphasized again that this is a seemingly old-fashioned yet extremely effective treasure hunting game. "The things you can find are truly amazing," Buffett said, "Very few people actually flip through every page, and those who do won’t tell you what they’ve discovered. So you have to do a bit yourself." However, Buffett also pointed out a sweet dilemma faced by Berkshire: scale. "It's a bit unfortunate that Berkshire has become so large," he lamented, "Scale is the enemy of Berkshire's performance, and I don't know of any good way to solve this problem." Even for large corporations like Japan's five major trading companies, the impact of a single investment is relatively limited for Berkshire, which has nearly a trillion dollars in assets. This suggests that achieving excess returns will pose greater challenges for Berkshire in the future. Cash is King? As of the end of the first quarter of 2025, Berkshire's total cash and short-term Treasury holdings reached a record $300 billion. Shareholders naturally care whether such a massive cash reserve is a hedge against the market's high valuations or provides flexibility for successor Abel. Buffett made it clear that holding a large amount of cash is not a deliberate strategy to pave the way for Abel. "I won’t do anything so noble as to not invest myself just to make Greg look better later," he joked. In fact, holding massive cash is a reflection of Berkshire's opportunistic strategy. "We run a very, very, very opportunistic business," Buffett emphasized. "One problem with the investment industry is that things do not appear in an orderly fashion, and they never will." He stated that Berkshire would rather wait for extremely attractive "pitches" to appear than be forced to make mediocre decisions in pursuit of complete investment. "If you tell me I have to invest $50 billion every year until we get down to $50 billion, that would be the dumbest investment approach in the world." Buffett believes that market timing is difficult to predict, and trying to forecast short-term market movements is futile. "No one knows what the market will do tomorrow, next week, or next month." Instead of listening to market noise, it’s better to focus on "flipping through every page" to find undervalued opportunities. He believes that although he does not know when, the market will eventually present attractive investment opportunities again, at which point Berkshire's ample cash will come in handy. "Maybe next week. Maybe five years from now, but not fifty years from now... we will be glad we have cash." The core of this strategy lies in the combination of patience and decisiveness. On one hand, one must patiently wait and not fear missing out on mediocre opportunities; on the other hand, when real large opportunities arise, one must be able to act swiftly. "We made a lot of money because we were willing to act faster than anyone around us," Buffett said. "Sometimes you have to act quickly... if the opportunity comes, do something that afternoon. You don't want to be patient when it comes time to act on meaningful deals." Abel added that while maintaining patience, Berkshire's management team has not been idle, instead using this time to conduct extensive reading and research to prepare thoroughly for the next decisive strike. "Being patient means using it to prepare well." Challenges of the Insurance Empire: Competition, AI, and Autonomous Driving The insurance business is one of Berkshire's core engines, contributing substantial underwriting profits and investable float. Discussions about the insurance industry also took up significant space at the shareholders' meeting. The Glamorous Transformation of GEICO: Ajit provided a detailed overview of GEICO's significant turnaround in recent years. GEICO has caught up with competitors in two key areas: first, achieving "rate and risk matching" through more precise data analysis; second, vigorously developing telematics systems, turning disadvantages into parity and even advantages. Meanwhile, GEICO has undertaken large-scale cost reductions, laying off many employees and significantly improving operational efficiency. These measures have allowed GEICO to achieve extremely low combined ratios for several consecutive quarters, greatly enhancing profitability. Private Equity: In recent years, large private equity firms (such as Blackstone, Apollo, KKR) have flocked to the insurance industry, especially in the life insurance sector, attempting to replicate Berkshire's model of investing using float. Ajit admitted that the entry of these new players, with their higher leverage and more aggressive investment strategies, has made Berkshire less competitive in certain M&A transactions. "We are no longer competitive in this space... in the past three or four years, I believe we have not made a single deal." Ajit pointed out that private equity firms, in a low-interest-rate environment, are allocating insurance assets to riskier investments in pursuit of returns. He warned, "There is always the danger that at some point, regulators may become restless... this could end in tears." Berkshire, based on a prudent assessment of risk and return, chose to avoid these fiercely competitive areas. Buffett added that these imitators often only replicate the model but lack the long-term commitment and fiduciary responsibility that ties their own wealth closely to the company. The Potential and Caution of AI: The impact of artificial intelligence on the insurance industry is another hot topic. Ajit believes that AI will undoubtedly become a "game changer," bringing transformations in risk assessment, pricing, sales, and even claims processing. However, Berkshire has adopted a prudent "wait and see" attitude. "We are not good at being the fastest or the first mover," Ajit stated, adding that Berkshire will make large-scale investments when opportunities become clear and risks manageable. Buffett expressed great trust in Ajit's abilities: "I wouldn't trade everything for the next ten years of AI development for Ajit... if given a choice... or let Ajit make the decision, I would always choose Ajit." The Future of Autonomous Driving: Regarding autonomous driving vehicles...

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