Greg Abel, the chief executive officer (CEO) succeeding the "guru of investing," Warren Buffett, 95, in leading Berkshire Hathaway, declared a full-fledged succession of "Buffett-style investing," saying, "If market turmoil comes, we will move in with large-scale buying." The strategy is to hold cash amounting to 590 trillion won and wait for a crisis.
According to CNBC and the Wall Street Journal (WSJ), Abel said at Berkshire's annual shareholders meeting in Omaha, Nebraska, on the 2nd (local time), "We don't know when it will be, but turmoil inevitably comes to the market," adding, "That moment is our opportunity to act." He said, "We already have a list of candidate corporations to buy at reasonable prices."
According to the earnings report Berkshire released that day, as of the end of March, Berkshire held more than $397 billion (about 590 trillion won) in cash-like asset.
On adopting artificial intelligence (AI), Abel took a cautious stance, saying, "We will not do AI for AI's sake." While it is being used in some businesses, such as the railroad subsidiary BNSF, "we apply it only to the extent needed to solve logical problems." He also made it clear he intends to maintain the conglomerate structure. He emphasized, "There are no plans at all to split subsidiaries," adding, "Berkshire is a conglomerate, but a very efficient organization."
This annual shareholders meeting is the first event since Abel took office as CEO. Berkshire's annual meeting had been called the "festival of Omaha," a mecca that drew about 40,000 investors from around the world. But this year, with Buffett not taking the stage as a speaker, some said the event's energy cooled somewhat.
Buffett watched his successor's debut from the audience instead of the stage that day. Referring to CEO Tim Cook, he said, "What would it be like to carry on achievements after Steve Jobs," likening Abel's position to Cook's.
Meanwhile, Buffett leveled sharp criticism at the recent mood in financial markets. In a separate interview with CNBC, he said, "Today's market is like a casino next to a church," noting, "The casino has become far more appealing." In particular, about one-day-to-expiration options trading, he said, "It's gambling, not investing or speculation," adding, "People have never been this consumed by a gambling mentality."
He also drew a line under the current market, saying, "It is not an ideal environment for Berkshire to deploy capital." Asked about the right time to invest, he said, "When no one is answering the phone," reaffirming the long-held philosophy that moments when the market is gripped by fear are precisely the opportunity.