Warren Buffett's shareholders meeting sends multiple signals: despite reducing holdings in Apple, still appreciative, cash reserves hit a new high

According to the Zhitong Finance APP, at the Berkshire Hathaway annual meeting held in Omaha on Saturday, Warren Buffett praised Apple Inc. (AAPL.US) greatly. Prior to this, he had revealed plans to reduce his stake in Apple Inc.

Berkshire Hathaway's report stated that as of the end of the first quarter, its holdings in Apple Inc. were $135.4 billion, lower than the $174.3 billion at the end of last year. Despite having sold some Apple shares in the previous quarter, this move quickly became one of the main topics of the meeting.

Apple Inc. has been facing a series of unfavorable factors this year, such as a $2 billion antitrust fine, declining sales in the Chinese market, and the cancellation of a decade-long car project. As of the close, the company's stock price has fallen by about 5% this year.

In Omaha, Buffett told thousands of attendees that despite selling stocks, Apple Inc. is "better" than American Express (AXP.US) and Coca-Cola Company (KO.US), both of which are "outstanding" companies owned by Berkshire Hathaway. He mentioned that unless there are significant changes, Apple will still be his largest investment, hinting that tax issues were the motivation for the sale. Buffett added that the iPhone may be one of the greatest products of all time.

This sale also increased Berkshire's cash reserves, which reached a record $189 billion by the end of March. Considering the uncertain prospects of interest rate cuts, persistent high inflation, and geopolitical risks, Buffett stated that he doesn't mind accumulating cash and mentioned that cash could reach $200 billion by the end of this quarter.

Furthermore, the hoarded cash benefited from higher interest rates, earning $1.9 billion in interest income, compared to $1.1 billion in the same period last year.

Berkshire's cash reserves continue to increase in the absence of major transactions. Buffett stated on Saturday that he has recently been unable to find acquisition projects that could "drive" the company's growth. Investors believe this also reflects his view on the stock market.

Bill Smead, Chief Investment Officer of Smead Capital Management, said, "Buffett is hoarding cash, so he is bearish on the stock market. He is unlikely to use these funds unless he has the opportunity to buy an entire company, or there is a major sell-off of 30% or more in the market."

Here are some other important information from Berkshire Hathaway's annual meeting and financial report:

Profit Growth

At the beginning of this year, the U.S. economy maintained strong momentum, and the Berkshire Hathaway Group's various businesses including manufacturers, residential builders, insurance companies, and retailers generated $11.2 billion in operating profit, a 39% increase year-on-year.

In particular, the performance of the insurance business improved, achieving a profit of $2.6 billion, compared to $911 million in the same period last year. Berkshire stated in its financial report that its auto insurance company Geico's pre-tax profit more than doubled to $1.93 billion, reflecting growth in average premiums and a decrease in claimsAfter several quarters of losses, the business turned a profit last year.

Buffett, when talking about Geico, said, "We still have a lot of work to do, but at the same time, the business will not shrink."

Berkshire's railroad division BNSF reported a profit decrease of 8.3% compared to the previous period, which Berkshire attributed to "unfavorable changes in the business mix" and a decrease in fuel surcharge revenue.

Climate, Wildfires

Berkshire's subsidiary PacifiCorp incurred an estimated pre-tax loss of $2.4 billion due to wildfires spreading in Oregon and California. Berkshire stated in its financial report that around $1.7 billion of this amount remains unpaid.

Berkshire mentioned that PacifiCorp faces liability claims from wildfires, with plaintiffs in Oregon and California seeking approximately $7 billion in compensation by the end of the first quarter. At the annual meeting, Buffett's successor and Berkshire's Vice Chairman of non-insurance businesses, Greg Abel, highlighted a $30 billion additional claim proposed last week, describing it as an "incremental claim" to existing lawsuits.

Buffett also expressed his nostalgia for his long-time business partner Charlie Munger at the meeting. Munger passed away in November at the age of 99, casting a shadow over the meeting. A tribute video featuring Munger's famous witty remarks was played at the beginning of the meeting.

Buffett mentioned that both of them "were happy doing anything," citing golf and tennis, but also noted being "happier in failing things because that's when you really have to work hard to get out of trouble."

At one point, Buffett mistakenly referred to Abel as "Charlie" when turning to him and answered a question from a young attendee about what he would do if he had one more day with Munger. Buffett replied that he would spend the day like any other.

Speaking of Munger, Buffett said, "He was always thinking, so not only was he interested in the world at the age of 99, but the world was interested in him."

Successor

The issue of a successor has repeatedly arisen, and Buffett also mentioned his own death several times at the meeting. The billionaire assured Berkshire shareholders that the company's future will be in his control. He said, "When you have people like Greg and Ajit running the business, why would you choose me?" Buffett also mentioned Ajit Jain, Berkshire's Vice Chairman responsible for insurance operations, and praised the company's operational efficiency under his leadership.

Buffett also highlighted leadership changes at Apple, noting the capable leadership of Tim Cook, who succeeded Jobs as CEO.

Ocean Park Investments founder and Chief Investment Officer J. Dennis Jean-Jacques said, "Buffett made it clear that the company's structure is in place.""For shareholders, ensuring the board of directors and management team remain unchanged will become increasingly important. They are all smart people, not afraid to write to the CEO and inform them that things are changing."

Paramount Global

Buffett said that Berkshire also lost money selling its stake in Paramount Global (PARA.US), adding that he takes responsibility for this investment. With audiences shifting from traditional TV to online TV, the company is facing challenges and is currently in acquisition negotiations