Berkshire Hathaway's annual shareholders meeting in May 2025 is destined to go down in history. The 95-year-old legendary investor and "stock god" Warren Buffett personally confirmed the end of an era - he will officially step down as Berkshire's CEO by the end of this year and hand over the helm of this trillion-dollar investment ship to his already designated successor.
However, in addition to the historic moment of generational change, the message conveyed by Buffett during the hours-long Q&A session, especially his rare and severe warning about the current US fiscal policy and his deep concern about the risk of currency depreciation, has caused a huge shock in the global investment community. This value investment master who has always believed in the long-term prosperity of the United States said that he was "scared" of certain practices in the United States and warned investors: In this era of uncertainty, "please carefully choose a currency that will not depreciate"! This remark not only sounded the alarm for traditional investors, but also formed a subtle echo with the current discussion about emerging assets such as cryptocurrencies as potential anti-inflation tools.
A legend ends
Buffett made it clear at the meeting that the board of directors will officially appoint Greg Abel, 62, the non-insurance vice chairman, to succeed him as CEO before the end of the year. Although Buffett will remain as chairman to provide assistance, the power of daily operations will be completely handed over to Abel. He joked lightheartedly that after leaving office, Abel will have enough room to use Berkshire's huge cash reserves to show his strength.
Abel also publicly responded to questions about future capital allocation strategies at the meeting. He stressed that he would firmly follow the strong values and investment philosophy established by Buffett and his late partner Charlie Munger over the past sixty years, safeguard the company's reputation, and maintain a strong balance sheet. He regards Berkshire's current record cash reserves as a huge strategic asset, and will continue to look for excellent operating companies that can generate large amounts of cash flow for investment, while emphasizing the importance of correctly understanding and managing risks. This statement is intended to stabilize investor confidence and show that Berkshire's core investment philosophy will not change easily due to leadership changes.
As Buffett is about to hand over the baton, Berkshire's balance sheet also presents a striking phenomenon. According to the latest financial report, the company's cash, treasury bills and other short-term investments totaled a staggering $347 billion, once again setting a record. Behind this is Berkshire's tenth consecutive quarter of "selling more than buying" in the stock market. In 2024 alone, the company sold more than $134 billion worth of stocks, mainly reducing its holdings in the two largest stocks in its portfolio-Apple and Bank of America.
Although Buffett praised Apple CEO Tim Cook as the right successor to Steve Jobs and made a lot of money for Berkshire at the meeting, the reduction in holdings shows that he believes that opportunities worth buying have become scarce under the current market valuation. Buffett admitted that it is not easy to find a good buying point, and its probability increases over time, but the process is not linear. He expects that the time to use this huge amount of cash to find excellent investment opportunities will appear "most likely in the next five years."
Buffett seemed quite calm about the recent market fluctuations, saying that what happened in the past 30 to 45 days was really nothing, and pointed out that in the 60 years since he took over Berkshire, the company's stock price has been cut in half three times. Therefore, he said that the recent trend of the US stock market should not be regarded as a huge change, and it is not an extreme bear market or something like that.
Core Warning
While expressing confidence in the long-term resilience of the U.S. economy (he reiterated the "American exceptionalism" that the U.S. has historically solved all the problems it has encountered), Buffett issued an unusually harsh warning about current fiscal policy. He bluntly stated that he was "scared" about U.S. fiscal policy, and his main concern was the government's continued large fiscal deficits and the possible depreciation of the currency (the U.S. dollar) that would result from it. As an investment giant that manages hundreds of billions of dollars in assets, he is extremely sensitive to the risk of erosion of the purchasing power of fiat currency.
In recent years, the US government has adopted extremely loose fiscal and monetary policies to respond to the impact of the epidemic and stimulate the economy, resulting in a sharp expansion of government debt and high fiscal deficits. Although inflation has fallen recently, it is still at a relatively high level. At the same time, the US dollar exchange rate has also faced downward pressure recently after a period of strength, and some market analysts predict that the US dollar may weaken further in the future. Discussions on "de-dollarization" are also increasing around the world.
In this context, holding fixed-income bonds (such as long-term government bonds) does not provide sufficient protection because the value of their coupons will be eroded by inflation and currency depreciation. Therefore, Buffett gave clear investment guidance: avoid holding currencies that may depreciate, and emphasized the importance of "carefully choosing currencies that will not depreciate" when making investment decisions. The subtext of this statement is that investors need to look for assets that can hedge the risk of currency depreciation.
Investor Implications
Buffett's retirement announcement and his stern warning about currency depreciation have far-reaching implications for global investors, especially those individuals and institutions seeking to preserve and increase their wealth in the long term. When the most successful value investors are concerned about the future of fiat currencies, ordinary investors should think more carefully about how to allocate assets to cope with potential risks.
Buffett's remarks have undoubtedly strengthened the market's demand for inflation-resistant assets. Traditionally, gold is seen as the preferred tool for hedging against currency depreciation. Although Buffett himself prefers high-quality corporate equity that can generate continuous cash flow, his emphasis on currency stability has objectively increased the attractiveness of hard assets such as gold.
What’s even more interesting is that Buffett’s concern about the depreciation of fiat currencies is precisely the core argument held by many cryptocurrency (especially Bitcoin) supporters. One of the original intentions of Bitcoin’s design is to combat inflation and value erosion caused by the excessive issuance of currency by centralized institutions through its fixed total upper limit (21 million coins) and decentralized nature.
Although Buffett himself has publicly expressed his disdain for cryptocurrencies such as Bitcoin on many occasions, calling them "rat poison squared" and "having no intrinsic value," his BNSF railway company has piloted the use of Bitcoin to settle cross-border coal trade, and its energy subsidiary Naumann Holtke accepts Ethereum as payment for equipment purchases.
It can be said that Buffett accurately diagnosed the "disease" facing the current financial system (fiscal deficit and currency depreciation risk). Although his "prescription" is to hold shares of high-quality companies and avoid holding weak currencies, supporters of cryptocurrencies believe that "digital gold" like Bitcoin provides a new solution that is independent of the traditional system. The two have a resonance in the understanding of the problem, but have chosen completely different paths in the solution.
It is crucial for investors to understand Buffett's concerns. Whether or not they agree with the value of cryptocurrencies, they need to face up to the long-term depreciation pressure that fiat currencies may face and include assets in their portfolios that can effectively hedge this risk. This may include gold, certain commodities, high-quality multinational company stocks (especially those with pricing power and global operations), or for investors with higher risk tolerance, it may also include a small amount of cryptocurrency allocation after careful research and risk assessment.
Conclusion: Future Challenges
The retirement speech of the stock god may be a "critical illness notice" to the US dollar system. When the traditional investment godfather began to advocate "currency diversification", it indicated that the logic of global asset allocation was undergoing a fundamental change. As Buffett said in his conclusion: "The essence of currency is trust. When this trust gradually disappears in the traditional financial system, capital will naturally look for a new anchor point." For ordinary investors, this may mean the end of an era - the era when people could rest assured just by holding US dollars is quietly ending with the warning of the stock god.
For global investors, how to protect their wealth in an era of potential currency devaluation? Should they stick to traditional value investing and look for "moat" companies favored by Buffett? Or should they embrace hard assets such as gold? Or should they turn their attention to emerging assets such as Bitcoin, which are controversial but regarded by some as "digital Noah's Ark"? This will be a question that every investor must seriously face and answer in the next few years or even decades. Buffett's era is about to pass, but the wisdom and warnings he left behind will continue to echo in the capital market.