Buffett said he praises Apple despite Berkshire lowering its stake. By Reuters

Written by Jonathan Stempel and Koh Gui Qing

OMAHA, Neb. (Reuters) – Warren Buffett assured Berkshire Hathaway (NYSE:) shareholders on Saturday that the executives expected to succeed him are ready for the job, even as Berkshire reduced its position in the iPhone maker. And he heaped praise on Apple.

At Berkshire’s annual meeting, the legendary investor paid tribute to his late business partner Charlie Munger and said he expects Berkshire’s cash assets, now at a record $189 billion, to continue to grow.

The meeting was the 60th for Buffett, who since 1965 has transformed Berkshire from a failed textile company into an $862 billion behemoth that owns BNSF Railroad, Geico auto insurance, Dairy Queen and dozens of other companies.

Buffett, 93, told shareholders that Vice Chairman Greg Abel and Ajit Jain had proven themselves qualified to lead Berkshire after his departure.

Abel and Jain, who were appointed as Buffett’s successor CEOs in 2021, have directly overseen the operations of Berkshire’s subsidiaries since 2018.

“Why are you only satisfied with me when there are people like Greg and Ajit?” Buffett said. “It went very well.”

He added, “I’m not sure how (Abel) does it, but I can tell you we have the perfect guy.”

Buffett has said he wants Abel, 61, to have final say on capital allocation decisions regarding Berkshire’s publicly traded stock portfolio when he becomes CEO.

Investors have long considered Todd Combs and Ted Weschler, who manage some of Berkshire’s $335.9 billion stock portfolio, leading candidates to manage more or all of it.

The meeting, part of a weekend of meetings that Buffett calls “Woodstock for capitalists,” was Munger’s first since he died in November at age 99. Buffett described his longtime friend and representative, Munger, as “the architect of today’s Berkshire.”

Buffett showed no signs of backing down, telling shareholders, “It’s okay,” but joking that he shouldn’t sign a four-year employment contract.

Decrease Apple stake, increase cash

Ahead of the meeting, Berkshire reported its first quarter results, including a 39% increase in operating profit to $11.2 billion.

Surprisingly, Berkshire reported selling approximately 13% of its Apple stock (NASDAQ:), reducing the stake’s value from $174.3 billion to $135.4 billion. Apple stock fell 11% this quarter.

The sale was the main reason Berkshire’s cash reserves soared. Buffett said cash could rise to $200 billion this quarter, reflecting high stock market valuations and risks posed by geopolitical conflict.

Despite reducing his stake in Apple, Buffett praised the company, calling it a “better business” than two of Berkshire’s oldest and largest investments. american express (NYSE:) and Coca-Cola (NYSE:).

With Apple CEO Tim Cook in the audience, Buffett said the iPhone was “one of the greatest products ever, maybe the greatest product of all time.”

Berkshire invested in Apple in 2016, and Buffett, who usually hates technology, came to view Apple as a consumer goods company with strong pricing power and devoted customers.

Some investors have expressed concern that Apple is taking up too much of Berkshire’s stock portfolio, but Buffett has said Apple will remain his company’s largest stock investment unless something unexpected happens.

Meanwhile, Abel has pledged to fight a lawsuit seeking tens of billions of dollars from Berkshire’s PacifiCorp power unit over the 2020 Oregon wildfires. He described it as a significant challenge and said many of the claims were unfounded.

Shareholders re-elected all 14 Berkshire directors and rejected six shareholder proposals, all of which Buffett opposed.

Shareholders watched a video tribute to Munger at the start of the meeting, including footage of Munger’s birthplace, Omaha in 1924, and footage of Buffett and Munger over the years.

Munger has been a regular on stage with Buffett at conferences, and is best known for his succinct and poignant reflections on Buffett’s thoughts on Berkshire, the economy, Wall Street, and life.

Berkshire’s stock price rose 23% compared to last year. This puts Berkshire up 218% over the past 10 years, compared to the S&P’s 172% gain.

The line formed hours before the meeting.

Before the meeting began, thousands of people lined up in rainy weather to enter the stadium, sometimes hours in advance. When the doors opened at 7 a.m., many people rushed to get the best seats.

There was also a showroom on the weekend where shareholders could purchase merchandise such as Berkshire T-shirts and Squishmallow toys at the Berkshire-owned company’s exhibition.

Serena Lam, 32, an investment manager who traveled with 40 people from Hong Kong, said she arrived at 2:30 a.m.

“I want to meet Warren Buffett.” She said. “I want to know his views on Japanese stocks. I flew more than 25 hours to do this.”

As usual, Buffett interjected comments about Berkshire’s portfolio and thoughts on wealth and life, including his own.

“I love managing money for people who trust me. “It’s a good feeling to be trusted,” he said. “If I’m lucky, it could go on for 6 to 7 years, or it could end tomorrow.”