2019 Berkshire Hathaway Annual Meeting (Full Version)

Thank you, good morning and welcome to Berkshire Hathaway.

For those of you who have come from out of state, welcome to Omaha. The city is delighted to have you here for this event. For those of you who came from outside of the country, welcome to the United States.

So, we've got people here from all over the world. We've got some overflow rooms that are taking care of people, and we will just have a few preliminaries, and then we will move right into the Q&A period. We'll break about noon for about an hour. We'll come back and do more Q&A until about 3:30, then we'll adjourn for a few minutes, and then they will conduct the meeting.

I understand that in the room adjacent, that Charlie has been conducting a little insurgency campaign. I don't know whether you've seen these, but these are the buttons that are available for those of you who keep asking questions about succession, and Charlie wants to answer that question by getting your vote today. So it says this one says, "Maturity, experience, why accept second best, vote for Charlie."

I, however, have appointed the monitors who have collected the votes, so I feel very secure. The first thing I'd like to do, Charlie, is my partner of 60 years, director, and vice chairman. We make the big decisions jointly; it's just that we haven't had any big decisions, so we haven't. We've kept him available for the next big one.

Now, at the formal meeting today, we'll elect 14 directors, and you're looking at two of them. I'd like to introduce the 12 that will be on the ballot at 3:45, and I'm going to proceed alphabetically. If they'll stand, if you withhold your applause because some of them get sensitive if certain people get more applause than others.

If you withhold it till I'm finished, then you can applaud or not as you see fit, having looked at these directors. So we'll start on my left: Greg Abel, who's both a chairman and a director. Greg?

Yeah, oh there we are, right? Okay. And going along alphabetically: Howard Buffett, Steve Burke, Sue Decker, Bill Gates, Sandy Gottisman, Charlotte Geyman, Aj Jane, who is also a vice chairman, Tom Murphy, Ron Olson, Walter Scott, and Merrill Whitmer.

Now you can applaud. [Applause]

Now this morning, we posted on our website the quarterly 10-Q that's required to be filed with the SEC. We published it at seven o'clock Central Time, and we also published an accompanying press release.

These figures, as usual, require some explanation. As we've mentioned in the annual report, the new relevant gap rule, generally accepted accounting principles, require that we mark our securities to market and then report any unrealized gains in our earnings.

You can see I've warned you about the distortions from this sort of thing. You know, the first quarter of 2019 actually was much like the first quarter of 2018, and I hope very much that newspapers do not read headlines saying that we made 21.6 billion in the first quarter this year against the loss of last year.

These bottom line figures are going to be totally capricious, and what I worry about is that not everybody studied accounting in school, or they can be very smart people, but that doesn't mean that they've spent any real time on accounting.

I really regard these bottom line figures, particularly if they're emphasized in the press, as potentially being harmful to our shareholders and really not being helpful. So I encourage you now, and I encourage all the presidents here, to focus on what we call our operating earnings, which were up a bit, and forget about the capital gains or losses in any given period.

Now, they're enormously important over time. We've had substantial capital gains in the future, we have substantial unrealized capital gains at the present time, and we expect to have more capital gains in the future. They are an important part of Berkshire, but they have absolutely no predictive value or analytical value on a quarterly basis or an annual basis.

I just hope that nobody gets misled...