By Kostya Etus, CFA®
Chief Investment Officer, Dynamic Asset Management
“Do unto others, I’m not a religious guy, but, I mean, nobody said it any better in a couple thousand years than that.”
– Warren Buffett, 2026 Berkshire Hathaway Annual Shareholder Meeting (May 2, 2026)
Per tradition, I present my fifth annual summary of the Berkshire Hathaway Annual Shareholder Meeting, held in my hometown of Omaha, Nebraska.
We have experienced a few emotional years for Berkshire. First, we had the passing of Warren Buffett’s close friend and partner, Charlie Munger, in 2023, mere months before the 2024 meeting. Last year, Buffett announced he will step down as CEO, naming Greg Abel as his successor. And this year, at 95 years young, Warren did not take the stage, passing the torch to Abel as Berkshire made the legacy transition official and stepped into a new era for the firm.
As expected, the conference didn’t have the same “Woodstock for Capitalists” vibe that it usually does. It was a lot easier to find parking, you didn’t have to wait two hours just to get in, and there wasn’t standing room only in the convention center that holds close to 20,000 people. I never thought I would miss that so much…
The prepared remarks and Q&A were likewise lackluster. You didn’t have the same stories, words of wisdom, and hilarious quips that we were used to from the iconic Buffett and Munger. Although the wise and tenured dynamic duo never really said anything too earth shattering, everyone always held on to every word, oftentimes for the entire duration of the six-hour meeting! It was like listening to your grandpa tell stories; you could do it all day and never notice the time.
But Abel and Ajit Jain, Berkshire’s insurance chief, did their best. They were bolstered by a brief introduction and intermission commentary from Buffett, so I was still Abel to come away with some interesting insights (put intended):
Patience vs. Action
- Greatest Investor Strength
The greatest strength an investor possesses — and what Berkshire attributes all of its investment success to — is patience and discipline when making investment decisions. They currently have a significant asset in their cash position and while everyone is clamoring that it’s too much cash, they remain patient, waiting for the right opportunity. What allows them to do that is a strict policy to follow their investment philosophy and principles which have guided them through the decades. The key is to wait for dislocations in the markets. There are exceptional companies with great management available, but they are overvalued today, meaning the economic prospects versus risks are not worth current prices. In investing, oftentimes the best thing to do is nothing.
- Just Say NO
That said… easier said than done. It’s very difficult to sit back and do nothing. Your job as an investor is to just say NO to everything. But occasionally, a deal hits you like a two-by-four. That’s when you say YES. But often, those deals don’t happen when everyone around you is buying and celebrating; saying NO is a unique and difficult skill to master. The opportunity will likely come out of the blue, it’s impossible to predict and often when you least expect it.
The key is to be ready when an opportunity arises:
• You need to fully understand the business/opportunity. Don’t ever invest in something that you don’t understand.
• Define the economic prospects over the long-term. Remember, Berkshire’s ideal holding period for companies is “forever.”
• Most importantly, identify all the risks. It’s what you don’t think about that does all the damage.
When you’re ready, you will be able to deploy capital quickly and meaningfully without hesitation or regret. That is the beauty of what Berkshire has built and how they have been so successful in creating something lasting.
- The Case of AI
Similar to last year, artificial intelligence was a hot topic. While AI is very fashionable right now, don’t do AI for the sake of doing AI. Instead, practice the art of “narrowing AI,” asking yourself: What are the specific ways I can use it to help be more productive and more efficient in already established tasks?
However, there are several pitfalls to be mindful of. If you ask AI for a specific outcome, and then ask again a half hour later, will you get the same expected outcome? That’s how you get closer to operational excellence and the ability to solve problems more quickly. Additionally, cyber risk is of utmost importance and introduces new risks to all businesses. Lastly, if you think you will be relying on AI to tell you which stock to buy or sell, bad news, that will never happen.
Avoid ABCs
- Arrogance, Bureaucracy, Complacency
Berkshire hates bureaucracy. That has been integral to their long-term growth and success. There are some key rules they follow which reinforce the avoidance of the ABCs: 1) have few decision makers 2) retain employees for a long time, close friends work better together 3) establish compensation plans that are simple and aligned with firm growth (if the company wins, you win) and 4) insulate the team from ups and downs of the marketplace so they can calmly make the best decisions in the best or worst of times. A joke was made during the conference that Berkshire is the only place where a 30-year tenure makes you the new kid on the block.
- Integrity, Values, Culture
Buffett has long preached that the culture and values of a company will outlive any one person. In fact, he’s been talking about it for more than 30 years, when he started being asked about succession planning. Interestingly, he made a parallel comparing Apple’s transition from the legendary Steve Jobs to less-known Tim Cook, and how successful and seamless that was. Perhaps to reinforce the transition from Buffett to Abel.
Ultimately the secret sauce of running a great company is being successful at picking the right people to run and grow the business. Continuity, tenure and maintaining a culture of discipline — this is not only what Warren reinforced within Berkshire, but also what he looked for when buying great businesses.
- Taking Care of Clients
In addition to taking care of your employees, it’s equally important to take care of your clients. If you do these two things, business growth, continuity and culture strength will naturally follow. One example discussed: Geico’s success is attributable less to evaluating price vs. risk or raising new clients (which is where most competitors are focused), but instead through the retention of existing customers — building life-long and even multi-generational supporters.
Another example relates to Berkshire’s utility businesses, referencing that data centers and hyperscalers have tremendous energy needs which provides a unique opportunity. But they can’t supply that power if it comes at the cost of quality of service for existing customers. Never leave your existing, loyal customers behind.
The Golden Rule
- The Newspaper Test
At one point in the conference, they queued up Buffett’s famous speech, testifying before Congress in 1991 on the Salomon Brothers scandal:
“Lose money for the firm and I will be understanding. Lose a shred of reputation for the firm and I will be ruthless.”
This phrase has echoed through the decades to emphasize that reputation is more valuable than profit. Reputation is irreplaceable and must be protected above all else. Buffett has reiterated this principle many times, applying it as a cornerstone of his management style at Berkshire, often urging employees to consider the “newspaper test”: “Would I be comfortable if this action were published on the front page of a local newspaper for my family, friends and neighbors to read?”
- Gambling vs. Investing
The world is full of people offering you things to do or buy. But a lot of these things you may not understand and are simply sold on the hype. Today, the average investor likely understands a much smaller share of the businesses that make up the market. But you don’t have to understand anything to gamble. And it feels like there never has been more people in a gambling mood than there are today.
Warren referenced people buying one-day options, essentially trying to make a quick buck by trying to figure out how to work around the rules instead of putting in the time to understand a legitimate investment. Remember, it’s often best to do nothing, wait for the right company and the right opportunity. The best time to buy is when people stop offering you stuff.
- Best Advice
The last and best advice of the day from Buffett was to live life based on the Golden Rule: Do unto others as you would have them do unto you. This is everything in life. It doesn’t cost you anything. And if everyone behaved that way, the world would be a better place.
While this may be the end of an era for one of the greatest investors that ever lived, the legacy continues. I’m excited for what the future of Berkshire Hathaway has to bring.
As always, thank you Warren, for everything.
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Disclosures
This commentary is provided for informational and educational purposes only. The information, analysis and opinions expressed herein reflect our judgment and opinions as of the date of writing and are subject to change at any time without notice. This is not intended to be used as a general guide to investing, or as a source of any specific recommendation, and it makes no implied or expressed recommendations concerning the manner in which clients’ accounts should or would be handled, as appropriate strategies depend on the client’s specific objectives.
This commentary is not intended to constitute legal, tax, securities or investment advice or a recommended course of action in any given situation. Investors should not assume that investments in any security, asset class, sector, market, or strategy discussed herein will be profitable and no representations are made that clients will be able to achieve a certain level of performance, or avoid loss.
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Photo: Kostya Etus