00:00First meeting with Greg Abel running the show, Buffett was not slated to speak, but he made
00:05kind of a little bit of an appearance. It was much more of a company focused event, right? So when
00:13Buffett and Munger were there, it was folksy and kind of stories and you're still learning things,
00:19but it was much less about the operations of Berkshire. Greg Abel went into dense detail on
00:26some of the businesses. I could tell right away, I almost felt like he was losing the room a little
00:30bit because people came in there, they were all excited and they want to see, they used to do
00:34movies in the beginning and you'd see Buffett with Jamie Lee Curtis running around. So people I
00:39think might've been expecting some of that and he's diving into what is a combined ratio in the
00:43insurance business and you could almost feel a little bit of the air go out. But for someone
00:48like me, I know what that stuff is, but to hear him really talk about, it was almost like a
00:54company
00:54conference call, uh, which, which would have been great to have on a regular basis.
00:59Yeah. But on a Saturday and in Omaha at what used to be like a festival kind of environment,
01:03um, you're the insurance analyst here at Bloomberg intelligence and Berkshire Hathaway is a collection
01:08of many companies. A big part of that is the insurance business. Just walk us through what
01:13Berkshire's vast insurance business is made up. I know there's Geico. I know there's some
01:18reinsurance companies, but how big a presence is it in Berkshire Hathaway overall?
01:21Yeah, no. So it's, it's about 30% of the earnings. It really drives though. The float
01:26of the business is what Buffett talks about. So, um, so you've got primary insurance, you've
01:32got a Geico, which is auto, and then you've got reinsurance, which they do globally. Um,
01:38Geico is the biggest profit driver of that. And it's been up and down over the past couple
01:42of years. We might've talked about over the years in here, how auto insurance prices went
01:46up and costs went up, uh, and that stuff impacted them dramatically. Geico is looking to significantly
01:51grow now. So you're actually going to see them trade profitability for growth. Uh, but realistically,
01:56they're driving the float, they're driving the investment. So the way Buffett puts it is
02:01if we underwrite at a gain, we're essentially getting that money for free. Uh, and we do have
02:10to pay it out in claims, but we're getting kind of a negative cost, uh, capital to, to kind
02:17of run the rest of the business. So just the mere fact of getting people together
02:21in arena, which nobody else does, you know, once a year. And that was all, or primarily
02:28because of Buffett, the cult of Buffett. Yep. Are we going to be doing that going forward?
02:32Do you think? How do you think that's, that's going to play out?
02:34Yeah. So I don't know if all they, um, Abel said, see you next year. And I think he's going
02:40to be very cognizant to not break the mold of that Buffett has established, at least
02:44in the near term. So I think, um, I think we see it definitely next year. The official
02:50word was that attendance or requests for tickets were down 10%, but it looked significantly more
02:57than that to me in the building there. Uh, the upper bowl was kind of sparse. I remember
03:04maybe it was two years ago or last year. I, I made a mistake getting in there, even though
03:09I was waiting on line all morning, I made a mistake getting in and I was literally, I
03:14could touch the ceiling of the arena and my back was against the wall. So, uh, there's
03:18been times where it's been at capacity, uh, and this, uh, for those people, it's really
03:23the diehards, uh, you know, the Berkshire geeks and the insurance geeks.
03:27Yep. Warren Buffett famously disliked paying dividends. Uh, he prefers buybacks. He thinks
03:32it's a better use of, uh, Berkshire's considerable cash holdings, but he loves companies that
03:37pay dividends. So there's a bit of a divide there. What do we know about how Greg Abel
03:42feels about dividends?
03:43He feels similarly. So, so like I was saying, um, again, I don't think he's going to change
03:48anything much. He did a, he did an interview and right after he became CEO. So he didn't,
03:53by the way, dividends didn't even come up at the meeting. Um, but he did an interview where
03:57he had said, we reevaluated every year and we'll see in a, in the situation where Buffett
04:05is no longer around, no longer chairman. Honestly, I could see them doing a little something.
04:09I mean, it even opens up the investor base. I don't think they even care all that much
04:12about that, but generating so much capital, you mentioned buybacks. I was disappointed
04:17in the buybacks. They also mentioned in March and early March that they started buying back
04:21shares and so great. They probably bought back. Like I was thinking about like several
04:26billion in shares and they've done that in the past. It turned out to be like over 200 million
04:31ish, which obviously is a lot of money, but not a lot of buyback for them. So I was disappointed
04:36to see that considering that their cash is now just under $400 billion. I know. And any 30
04:41seconds left, any sense of change in policy there about putting that kind of cash?
04:45Not really. I mean, so 380 billion ish net of, uh, um, trades that they hadn't finished in
04:51the quarter. A lot of it was talking, uh, Abel and Ajit Jane sat there and they, they did the
04:56first session together. And the biggest theme of that was patience. And Ajit Jane was saying,
05:02people are coming at us with all kinds of opportunities. And he said, once in a blue moon, we get
05:07the
05:07chance to deploy it.
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