The conversation takes us back to that fateful weekend in 2008, when the biggest names in finance came knocking on Berkshire Hathaway’s door, hat in hand, looking for a lifeline. Buffett recounts what it was like to sit at the center of the storm — and how the panic furiously rippled through markets and the broader economy.

Along the way, he also touches on other topics of interest to readers of this newsletter like not letting macroeconomic conditions dictate your investment decisions and how the nation’s mounting debt must be dealt with sooner or later.

What struck me most is how little Buffett changes. Whether the sun is shining or the sky is falling, his message and demeanor stay the same. Here was a man speaking in the middle of an economic upheaval, one that, by his own admission, was still far from over — and he sounded exactly like he did at the peak of the greatest bull markets.

Calm, patient, and unmoved by the noise around him.

Anyone can look strong and steady when times are good, but real consistency reveals itself under pressure. And I think there is a great deal we can all learn from this.

Note: The only video of this event that I’ve been able to track down covers only Buffett’s conversation with Loomis — and not the audience Q&A that followed. If anyone has that portion of the summit, please send it my way and I’ll add that material to this transcript.

Carol Loomis: Warren, here you are, back by popular demand. Those of you who were here last year, the date that Warren was up here before you was October 2. The financial world had been falling apart for about three weeks [at that point].

Yesterday, the President kind of added an alliterative phrase to it. He said, “We had buyouts. We had bankruptcies. We had bailouts.”

The first big companies to go were Fannie and Freddie. The next weekend, AIG and Lehman looked hard for money and Merrill Lynch was bought by BofA. Lehman went bankrupt a year ago today. Two days later, it was AIG announcing that $85 billion infusion, which has now gone up to a commitment of $180 billion.

You had made your investments in Goldman Sachs and GE by that point. The GE one had just been announced.

There were a lot of things, I think, maybe you couldn’t say at that time about the calls you were getting — so tell us, if you can, what kind of calls you were getting and how much emotion was in them and what were you saying?

Warren Buffett: I was saying, “No.” (Laughs)

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Suddenly, everyone wanted to know what is and how it works — so CEO Luca Ferrari hopped on CNBC last week to explain.

Bending Spoons typically buys digital businesses that already have large, loyal customer bases and rebuilds them from the inside. Their methods, though, tend to rub some people the wrong way — what with sweeping layoffs, subscription price hikes, and codebases re-written by artificial intelligence. Unlike others who run a similar playbook, Bending Spoons holds the companies it acquires basically forever.

Ferrari highlighted Evernote as the template. “We bought the business when it was a little better than break-even,” he said, “but not very profitable. We’ve greatly improved revenue over the subsequent three years and massively expanded margins.”

If the Bending Spoons turnaround machine is so good, why has organic revenue growth (3% in the most recent quarter) been so modest?

“For every new acquisition,” he told CNBC, “we typically greatly improve revenue for the first two to three years. Over the first six quarters after an acquisition closes, on average, we have improved revenue by well over 30%. But that doesn’t mean the organic growth of the acquired businesses will be much higher indefinitely.”

In other words, Bending Spoons can unlock explosive growth in the first few years of ownership — but then the business will settle into whatever returns its market and competitive position naturally allows.

“Anyone who’s looking to invest in Bending Spoons, I would recommend they consider doing so on the belief that we can acquire plenty of companies going forward — and not that our organic growth will be particularly strong,” said Ferrari.

“The overwhelming majority of our growth has been — and we believe will continue to be — from new acquisitions.”

On that front, there’s plenty of road ahead. In its IPO prospectus, Bending Spoons claims to have identified more than 1,000 digital businesses as potential targets. And the company’s recent activity backs that up, with five acquisitions (AOL, Eventbrite, Tractive, Airtable, and Miro) in the last twelve months alone.

Ferrari calls that tempo “toward the higher end of what we generally feel ideal for us — but we [can] do a little bit more if the appropriate opportunity presents itself”.

By putting acquisitions front and center — and, likewise, de-emphasizing organic growth as a metric — Bending Spoons has signaled investors exactly what to watch: the pace, price, and quality of its future deals.

More news and notes from the Berkshire Hathaway orbit…

Nearly eighteen months after Warren Buffett’s surprise retirement announcement, Berkshire Hathaway’s stock price once again hit new all-time highs. Both Class A ($824,765) and Class B shares ($549.96) achieved new record highs yesterday — with each also up close to 10% so far this month.

“The market spent a year pricing Berkshire without Warren Buffett,” Adam Patti of VistaShares told CNBC, “and I think it has finally decided that Greg Abel can, in fact, run it.” In particular, he pointed to Abel’s willingness to put Berkshire’s record cash pile to work with billions in new investments and share repurchases.

“I think Berkshire is on its upswing now,” he continued. “Typically, what we see is Berkshire is a coiled spring. When it comes back, it comes back fast and furious.”

Colonel Sanders defects to Coca-Cola. After nearly forty years as a Pepsi loyalist, KFC just switched sides in the soda wars. By the end of Q1 2027, all of its domestic locations will serve Coke products.

KFC frames the move as a milestone in its “Kentucky Fried Comeback”. In a memo to franchisees, president Catherine Tan-Gillespie called the move “a critical step” in that effort. “A new beverage offering, with a new partner in Coca-Cola, gives us a platform to innovate, meet changing tastes, and give customers more reasons to choose us.”

BNSF Railway and CSX deepened their partnership with a new coast-to-coast premium intermodal train linking Los Angeles and New Jersey. It runs seven days a week and makes the trip in just 100 hours, which shaves 26 hours off the previous interline schedule. Neither railroad will name the service’s anchor client, but all signs point to Amazon — with observers reporting 100+ Amazon containers aboard each day. A BNSF representative told Trains that since its October 5 launch, this service has shifted about 100 daily highway loads from truck to rail.

BNSF also continues to press its case against the Union Pacific x Norfolk Southern merger. Zak Andersen, the railroad’s vice president of communications, carried the same message to shippers in farm country and the Pacific Northwest: this deal, if approved, will leave you with fewer options and higher bills.

On the Agriculture in America podcast, Andersen warned that a combined railroad would control roughly half the market. “When you have that much concentration,” he said, “pricing power follows.”

Turning to Seattle Red 770 AM radio, he argued that the Ports of Seattle and Tacoma would be especially hard hit. His evidence comes from Union Pacific’s own merger application, which projects traffic to Los Angeles growing much faster than traffic to Pacific Northwest ports. “They’re trying to incentivize traffic down to the California ports at the expense of Washington, Seattle, and Tacoma.”

Andersen also dismissed the idea that converting trucks to rail on a combined transcontinental line could ever deliver the volume growth both railroads promise. “Supposedly,” he said, “it’s about converting trucks to rail. We don’t buy that at all.”

“Their growth projections are unrealistic. They’ve actually lost volume since their last big merger and [now] they’re all of a sudden going to grow a lot in three years? We don’t buy it. They’re going to get this on price. You don’t pay for an $85 billion merger on truck conversion in the Midwest.”

Pre-orders for the iPhone Duo opened last Friday and sold out almost immediately. Not just for launch day, but for the rest of the year. Within minutes, the Apple Store showed late January 2027 as the estimated shipping date for every configuration. The $1,999 starting price obviously didn’t slow many people down.

“The pre-order demand for iPhone Duo, our first foldable iPhone, has been nothing short of extraordinary,” Apple told the Financial Times. “We are working hard to get this revolutionary new product into customers’ hands as quickly as possible.”

Apple has reportedly boosted orders for Duo components by 44% as it rushes to deal with the deluge of pre-orders and interest from around the globe.

It would be nice to say this is all about demand, but supply probably played some part, too. Especially considering prior reports of production issues that limited yields. Still, an instant sell-out is never a bad headline for a brand-new (and pricy) product.

NetJets opened a new facility in Las Vegas as part of its landmark collaboration with Signature Aviation. “We invest where our owners want to be,” said president Patrick Gallagher, “and we build experiences worthy of how they travel.”

“Las Vegas’s position as a global destination for premier sporting events, world-class entertainment, and luxury hospitality drives significant surges in owner travel throughout the year.”

The numbers back that up. NetJets flight activity in and out of Vegas grew nearly 45% from 2022 through 2025 — and is up another ~30% since the start of this year.

The new campus spans more than 300,000 square feet and includes a premium private terminal for owners, two hangars, a service hub, and expansive ramp space. NetJets is also working with Signature Aviation on in-progress terminal construction in Dallas, Florida, and Washington, D.C.

I love it when a small detail reveals something important about a person. Mark Tobak, over at Hedge Fund Alpha, connects an anecdote from the recent Wall Street Journal piece on Warren Buffett’s nightly YouTube habit to his “superpower” for seeing the world exponentially — and his appreciation for the power of compounding.

Today, let’s take a closer look at Buffett’s inner scorecard — which he discussed at length during an October 15, 2007, interview with Maclean’s.

“I’ve got an inner scorecard. My dad had one and he was a huge influence on me.”

Warren Buffett has long championed living by an inner scorecard rather than an outer one. Judge your actions according to your own values and ethics — not by the expectations of others or trophies bestowed by the outside world.

Like most advice about inner values, though, this can easily dissolve into fuzzy abstraction: Be authentic. Follow your heart. Blah, blah, blah.

But, as it turns out, Buffett’s inner scorecard is less a principle than a person.

“Basically,” he told Maclean’s, “[my inner scorecard] is being kept according to how I would feel about my dad scoring me … In the end, I want that scorecard to be one that my dad would find acceptable.”

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In an unexpected twist, we learned this week that someone at Berkshire (I’d love to know who) invested $330 million in Bending Spoons, the Milan-based serial acquirer of tech companies, digital apps, and ghosts of the internet past.

Berkshire gets 10 million ordinary shares of as part of a private placement at $33 apiece — roughly 13% below the previous day’s close.

But that’s only part of the story.

The disclosure also revealed that Berkshire had quietly put $600 million into the company during its IPO in July. Add it all up and Berkshire has nearly $1 billion invested in and owns 4% of Bending Spoons.

“For decades now,” said CEO Luca Ferrari, “Berkshire Hathaway has been among the finest and most respected capital allocators in the world and is a longstanding inspiration for Bending Spoons.” When the news broke on Wednesday, the Bending Spoons stock price surged about 40%. A good, old-fashioned Berkshire bounce.

So what, exactly, is Bending Spoons? For those unfamiliar with the company, Bending Spoons hunts for established digital products that have fallen on hard times. It moves in, trims headcount (which might be putting it lightly), tightens operations, and leans hard into subscription monetization.

Bending Spoons might sound very private-equity-like, but it diverges from the playbook in a big way. Namely, it does not look to flip acquired businesses for a quick buck. The company says it has never sold a material business in more than a decade of existence. That’s an approach not unfamiliar to Berkshire.

The brand portfolio reads like a tour of internet nostalgia and everyday utility: AOL, Eventbrite, Evernote, Vimeo, WeTransfer, and many others. Subscriptions made up 93% of sales last year — and both revenue and operating profit continue to grow.

That said, organic sales growth was just 3% in the second quarter, meaning that its debt-fueled acquisitions continue to do the heavy lifting.

Who calls the shots? Bending Spoons uses a dual-class share structure. Ordinary shares, the kind Berkshire is buying, carry one vote a piece. Class A shares, though, get five votes — and all of them belong to the company’s four co-founders: Ferrari, Matteo Danieli, Francesco Patarnello, and Luca Querella. At the time of the IPO, the founders held roughly 83% of the overall voting power.

What about that name? Fans of The Matrix will get it. Ferrari and friends have said that the film’s famous “spoon bending” scene — in which Neo learned that limits are often just a matter of perception — inspired their company’s name. And for an outfit that tries to find value where the wider market sees only decay, the name fits.

Employees, naturally, are called “Spooners”.

More news and notes from the Berkshire Hathaway orbit…

When capital stampedes toward a handful of hot names, everything else gets left behind. That was the message from Li Lu, speaking last week at Columbia University. “If capital is overwhelmingly driven to the top,” he said, “that means the market can easily bifurcate, with a whole bunch of otherwise wonderful businesses trading at very low prices.” Today’s tech-heavy, AI-driven market is a bit like a party where all of the guests have packed themselves into one corner of the room — hanging out with the hyperscalers — leaving the rest of the house relatively empty.

For the patient investor, that emptiness is where the bargains can be found. Li Lu reminded his audience that “wealth, in the end, is really [your] percentage of ownership of global purchasing power”. As such, the key remains “buying great businesses in the most dynamic economies at advantageous prices and waiting long enough for the value to preserve and grow over time”.

BNSF Railway expects a quick decision on the latest lawsuit holding up its Barstow International Gateway project. Environmental groups (including the Sierra Club and the Natural Resources Defense Council) claim that the city of Barstow didn’t properly study how BIG would affect wildlife, plants, and the surrounding landscape.

BNSF’s Lena Kent tells Progressive Railroading that an expedited court review process has already been established. “We expect the matter to be heard this fall,” she said, “and a decision to be issued this year. In the meantime, BNSF continues advancing construction readiness activities and remains on track for a construction start at the end of 2026, subject to the court’s decision.” If it gets the green light, BIG could open for business as soon as 2028 or 2029.

In related news, BNSF was deemed “revenue adequate” in 2025. In layman’s terms, this means that the Berkshire-owned railroad achieved a return on investment better than the cost of capital for the industry as a whole. Last year, that benchmark was set at 9.79% and BNSF breezed through with a 10.91% mark. A welcome turnaround from 2024 when it was judged “inadequate” — but still well behind leader Union Pacific’s industry-leading 17.09% result and even CSX’s 11.4%.

Apple closed above a $5 trillion market cap for the first time on Wednesday. The tech giant had crossed that line several times before in intraday trading, but always slipped back before the bell. It now ranks as the second most valuable company in the world — trailing only Nvidia at $5.33 trillion.

On the sales front, Apple grabbed 22% of the global smartphone market in the third quarter (up from 18% a year ago), even as iPhone shipments slipped amid a broader slowdown. Counterpoint Research attributes the dip to the absence of a base iPhone 18 model, which is rumored to come next spring instead of this fall. It also added that both iPhone 18 Pro models launched stronger than their predecessors, particularly in India and China, while the uber-popular iPhone 17 family keeps rolling along.

Nikkei Asia, though, tells a more cautious story. It reports that Apple has trimmed production orders for the iPhone 18 Pro and Pro Max, with this month’s component orders down at least 15% from the original request. Sources point to rising memory chip costs, which pushed prices up and cooled consumer demand.

Pilot and Tesla opened their first Megacharger locations at travel centers in Ellabell, Georgia, and Tulare, California. A dozen more are currently under construction as the two companies build out a new network to keep electric trucks moving along America’s major freight corridors. Each site will host four to eight stalls using Tesla’s V4 cabinet technology, which delivers up to 1.2 megawatts, enough to charge a Tesla Semi to 60% in about 30 minutes.

“We’re making fleet electrification a more accessible option for long-haul transportation,” said Pilot senior vice president Shannon Sturgil, “and are excited to continue working with Tesla to move at the pace and preference of our customers.”

Coca-Cola may be about to try, once again, to sell Costa Coffee. According to Semafor, the beverage giant is weighing a fresh attempt to unload the British coffee chain after failing to drum up enough interest earlier this year. “At least one strategic acquirer mulled what a deal for Costa would look like,” sources told Semafor, “before passing due to valuation and strategic issues.”

Coke shelled out $5.1 billion for Costa back in 2018, but I don’t think anyone expects it to fetch anything close to that now. Especially after losing nearly £20 million across 2023 and 2024 combined. Costa recently reworked its menu around Gen Z faves like iced drinks and matcha. Time will tell if that’s enough to bring any buyers to the table.

NetJets announced new exclusive-use terminals coming to Dallas Love Field, Washington Dulles, and Rifle Garfield County Airport in Colorado. These will offer more privacy, premium touches like VIP conference rooms and lounges, and on-site service reps to handle every last detail. “As owner demand continues to grow across key business, leisure, and seasonal destinations, NetJets is investing in the infrastructure to deliver an unmatched experience while supporting the service and reliability our owners expect where they fly the most,” said president Patrick Gallagher.

Alphabet plans to spend roughly $200 billion on capital expenditures in 2026 — with the vast majority going toward AI infrastructure — and president Ruth Porat says that number will “increase significantly” next year. “We do see this as an opportunity that extends for quite some time,” she told Fortune’s MPW summit.

Porat isn’t losing any sleep over whether all that concrete, silicon, and electricity will pay off. “It’s illogical to say that we’re in a capacity-constrained position because there’s such strong demand for [AI’s] insight and ability to improve business and government — and yet you can’t drive a return on it.”

The job, as she sees it, is delivering compute efficiently and in a way that creates real value for partners. And, for the time being, that means more and more cap-ex. “You must invest for long-term growth,” said Porat. “By the time you need it, it’s too late.”

Warren Buffett, it turns out, is just like us.

Earlier this week, the Wall Street Journal offered a peek at the 96-year-old’s evening ritual — and his rather eclectic viewing habits. “Warren’s range is broad,” said close friend and bridge partner Sharon Osberg. “It can be the silliest things.”

Oh, like the Uzbek edition of America’s Got Talent, show tune recordings, railroad videos, and even Frank Sinatra performances from nearly a century ago. Buffett also watches clips from favorite movies, like Bill Murray’s Lost in Translation.

(Murray, of course, is a Berkshire shareholder who regularly attends annual meetings.)

Buffett doesn’t leave work entirely behind. He reportedly also enjoys watching Berkshire Hathaway content — and takes pride in how well those videos perform.

Does all this YouTube screen time explain Buffett’s decision to invest in parent company Alphabet? “Nah,” his friends say, “he just really likes watching the clips.”

Lately, Buffett has been binging videos of Charlie Munger speeches — revisiting his late partner’s wisdom one click at a time. This 2017 interview with University of Michigan alumni is specifically mentioned as one that he enjoyed. Which, I should mention, I annotated and transcribed for paid supporters a few years ago.

(Mr. Buffett: If you need a copy, just let me know!)

“You feel the bond between the two of them as he watches Charlie,” said Osberg. “It’s really quite something.”

So the next time you surface from a multi-hour spiral down a YouTube rabbit hole, don’t feel too bad. You’re in excellent company.

More news and notes from the Berkshire Hathaway orbit…

Berkshire can’t quit Lennar. Last week, the conglomerate scooped up another 2.4 million shares of the homebuilder for $192.6 million. Berkshire’s buying had cooled off in the final days of September, but it stepped back on the gas on October 1 and 2. All told, Berkshire now owns ~12.2% of Lennar across both classes of its stock.

Interestingly, there were no purchases on October 5 — even though the price of dropped sharply that day.

A railroad executive’s guide to not getting hacked. BNSF Railway chief information security officer Alex Levy was recently named the inaugural TIME + Commvault CISO of the Year. With October being Cybersecurity Awareness Month, he blogged about the tips and tricks he gives to his own friends and family.

• Use a password manager and NEVER reuse a password. “Password reuse is the single biggest self-inflicted wound in personal security,” said Levy. “One breach anywhere becomes a breach everywhere.”

• Turn on multi-factor authentication and use a passkey whenever possible. This type of cryptographic key lets you log in with your face or fingerprint — and beats a password in every way that counts.

• Fortify your email and phone number first. Think of them as the master keys to your online accounts — because just about everything can be reset through one or the other. “If someone owns your email, they can request password resets across your whole digital life,” said Levy. “If someone owns your phone number, they can intercept the reset codes.”

Adhering to these three basics will shut down most of the ways that ordinary people get burned. But I’d read the whole post and adopt as many of Levy’s recommendations as possible. It was quite an eye-opener for me.

I don’t know how Bloomberg gets these fly-on-the-wall scoops from inside Apple. This week, Mark Gurman delivers direct quotes from an internal speech John Ternus gave to employees about his decision to succeed Tim Cook as the company’s CEO.

The younger executive questioned whether he was up to the challenge. “I’m not you,” Ternus told Cook. “You do so many amazing things.” Cook, in his characteristically deadpan tone, replied: “I know you’re not me.” His point was that Ternus needed to be himself.

In recounting this story to employees, Ternus describes it as a turning point. What Cook said that “has really resonated and stuck with me” is that he spent his time as CEO where he added “the most value for Apple,” Ternus said. “And I need to spend my time where I can add the most value for Apple.”

For Ternus, that means hardware and design. He has already become a regular presence around the industrial design and human interface teams, echoing the way Steve Jobs lavished his attention on them during the Jony Ive era.

Cook worked miracles with the company’s supply chain and operations, but I think many Apple fans are ready for a renewed focus on products and innovation.

HomeServices of America acquired strategy and creative agency 1000WATT after its work on the real estate brokerage’s OnePoint brand platform. OnePoint allows the company’s many brands to present a unified suite of brokerage, mortgage, title, and insurance services to customers. (Delivering that kind of all-in-one experience has been a major focus for HomeServices under CEO Chris Kelly.)

The entire 1000WATT team will come over as part of the deal — with the agency’s co-founders also stepping into major roles at HomeServices. “This acquisition, along with all of the initiatives we’ve launched this year, marks a moment of massive opportunity to truly redefine the real estate experience and offer consumers a solution that balances skilled people with helpful technology,” said Kelly.

Business Wire celebrated its 65th anniversary last week. Founded by Lorry Lokey in 1961, the press release distribution service was bought by Berkshire twenty years ago. “For 65 years, our focus has been helping organizations communicate important business news accurately, reliably, and effectively,” said CEO Geff Scott. “The ways people discover and engage with information have changed dramatically, but the need for trusted news distribution has remained constant.”

As part of the announcement, Business Wire shared a few facts about the business that we don’t usually get from its very brief mentions in Berkshire earnings reports. Business Wire’s current client base includes 55% of Fortune 100 companies and half of both the S&P 500 and NYSE-listed companies.

“I didn’t fully appreciate all of [Warren] Buffett’s virtues at the time he became involved in Salomon,” said Lewis, “but he’s one of a kind and I hope he lives forever.”

Because, if you know the history of these two men circa the Salomon era, “didn’t fully appreciate” might just qualify as the mother of all understatements.

Let’s rewind to 1987 for a minute: Salomon Brothers, one of Wall Street’s most venerable firms, found itself in the crosshairs of takeover artist Ronald Perelman. To fend off his unwanted advances, Salomon sold $700 million of convertible preferred stock — 12% of the entire company — to Berkshire Hathaway, complete with a 9% dividend and a lower-than-expected conversion premium.

Buffett had saved Salomon from being swallowed whole, but some (including Lewis) complained that he extracted unusually generous terms for doing so.

What at first might have looked like a sweetheart deal soon turned into a nightmare. Salomon trader Paul Mozer submitted false bids in Treasury auctions in 1990 and 1991 to skirt the 35% cap on what any single buyer could purchase of an issue. When Mozer finally fessed up, CEO John Gutfreund and president Thomas Strauss inexplicably sat on that information and did nothing. Needless to say, their silence did not endear the firm to regulators when the whole mess eventually came to light.

The Treasury Department initially barred Salomon from bidding in government bond auctions — effectively a death sentence for a bond house. So Buffett again rode to the rescue, took over as interim chairman, and successfully lobbied the Treasury to relent on the worst of Salomon’s punishment.

“Buffett saved us,” former Salomon managing director Eric Rosenfeld told the FT. “There’s no question about that. Without him, Salomon would have gone bankrupt. And no one else could have done what he did.”

Lewis, though, was not nearly so impressed.

In 1992, the Liar’s Poker author wrote a scathing essay for The New Republic about the entire Salomon affair titled “The Temptation of St. Warren”. The gist was that Buffett, after years of condemning Wall Street’s excesses, had compromised his principles and ethics by playing white knight for one of its worst offenders.

Over four pages, Lewis judged Buffett’s actions as “a delicious gap between what the moralist said and what he did” and charged him as having “sold his reputation”. He also accused Buffett of “vanity about his reputation as an investment genius” and, most bizarrely, “a vaguely thuggish if-you’re-so-smart-why-am-I-so-rich routine” aimed at the EMH true believers who dismissed his record as mere luck.

I’m not sure anyone has ever called Buffett “thuggish” before. Even “vaguely” so.

All in all, it’s a fairly maddening article that even Lewis now agrees has not aged well.

He eventually started to come around when, in 2008, he looked back on Buffett’s time at Salomon with a far kinder eye while reviewing The Snowball for The New Republic.

Long ago, after Buffett became entangled with Salomon Brothers, I wrote a long critical article about him for this magazine … The piece dwelled on Buffett’s small hypocrisies and downplayed his virtues.

Even then I thought that his virtues far outweighed his vices1 and felt a bit like the guy who, having grown weary of hearing others drone on about the physical perfection of some supermodel, went to the beach with a camera and snapped a photo of her cellulite.

It takes considerable grace for a writer to admit that he had his thumb on the scale when presenting Buffett’s actions and intentions. So please don’t take anything here as a dunk on Lewis. If anything, I’m happy to see by his recent comments to the FT that his re-evaluation of Buffett’s virtue is now complete.

That said, Lewis raised two points that warrant further discussion…

Why did Warren Buffett get involved with Salomon Brothers in the first place?

It’s a question many Berkshire Hathaway shareholders surely asked themselves when the news first broke. And one that even Carol Loomis, a close friend of Buffett and a longtime financial journalist, grappled with in the pages of Fortune magazine.

It was easy to see why Gutfreund welcomed Warren Buffett, White Knight. It was less easy to see why Buffett wanted to hook up with Salomon, much less trust it with this mint, $700 million — the largest amount he’d ever invested in a single company. Over the years, Buffett had derided investment bankers, deploring their enthusiasm for deals that provided huge fees but were turkeys for their clients.

He has also spoken often of wanting to work only with people he likes. So here he was, handing over mountains of Berkshire’s carefully accumulated and husbanded cash to the high-living, cigar-chomping, corner-cutting crowd [at Salomon] soon to be made infamous in Liar’s Poker.

Salomon was a surprise — to just about everyone — but surprise is not hypocrisy.

To outsiders, it probably looked like Buffett had stepped into a nest of vipers for no good reason. But, to Buffett, he was simply backing someone he trusted and admired.

Most retellings of the Salomon saga skip a crucial detail: Buffett already knew and liked Salomon CEO John Gutfreund. A decade earlier, Gutfreund and Salomon had helped haul GEICO back from the brink of bankruptcy — and, in doing so, earned themselves a place in Buffett’s good books.

See, GEICO was no ordinary company to Buffett.

Business-wise, it was his first love.

But, by the mid-1970s, GEICO was dying. A disastrous stretch of under-reserving, in the teeth of spiraling inflation, had lost the insurer more than $150 million across 1975 and the first half of 1976. The stock crashed from a high of $61 to just $2 a share. GEICO was on life support and few believed new CEO Jack Byrne could revive it.

Near the bottom, Buffett waded back in with a $4 million investment — and, crucially, lent his name to Byrne’s mad scramble to line up reinsurance for the gaping holes in GEICO’s balance sheet. It was touch and go for a while, but a lifeline eventually arrived from Gutfreund and Salomon, who agreed to underwrite a $76 million stock offering that provided the insurer with the capital it desperately needed.

GEICO survived, in no small part thanks to Gutfreund’s faith in Buffett and Byrne. “GEICO’s savior, John Gutfreund, became one of a tiny handful of modern Wall Street figures whom Buffett genuinely admired,” wrote Alice Schroeder in The Snowball.

Buffett is not a man who lets sentiment steer a deal. He would never knowingly put Berkshire’s capital at risk just to help out a friend. But it strains belief (mine, anyway) that this history counted for nothing when it came to saving Salomon.

In Buffett’s eyes, Gutfreund was not just another rapacious Wall Street banker. He was a man who had been in a foxhole with Buffett once before and earned his trust.

Michael Lewis wrote: “One cannot blame [Buffett] for doing whatever is necessary to protect his $700 million, but it is absurd to cast his activity as a moral crusade.”

What Lewis missed, though, was that much more than $700 million was at stake.

It’s easy to forget that Buffett was not just Salomon’s biggest outside investor. He was also a director. And a director owes fiduciary duty to every shareholder. When Buffett took his seat on the board in 1987, his obligations and responsibilities expanded well beyond whatever money Berkshire had at risk.

Salomon’s other shareholders — big and small — were counting on him. So, too, were countless employees who had done nothing wrong and whose livelihoods hung on the firm’s survival. And, of course, Berkshire’s own shareholders, who had entrusted him to make intelligent decisions with (in some cases) their life savings.

On this week’s episode of The Knowledge Project podcast, Ackman shared the aspects of Berkshire that he hopes to emulate with his investment vehicle and the inspiration Buffett’s example provided to his own life and career.

I’m not terribly invested (in any sense of the word) in what happens with Howard Hughes, but did want to highlight a few of Ackman’s more interesting comments.

The engine under Berkshire’s hood. “The driver of the value of Berkshire Hathaway over time is its insurance operation,” said Ackman.

“When Buffett talked about buying Coca-Cola or American Express or other companies, those were assets purchased in the insurance company.”

Which, oddly enough, explains why Berkshire attracts so few imitators.

“It’s not sexy to be in the investment operation of an insurance company,” he said. “I think that’s a large part of the reason why people don’t do this.”

Buffett’s modest $100,000 salary — when he could have commanded (and received) much more — paid off in other ways. “His willingness to ‘work for free’ in effect was a very helpful thing to the ethos around Berkshire,” said Ackman. “It probably made negotiations around compensation for other employees easier.”

When the boss sets the tone on pay, everyone else has a hard time arguing for more.

Host Shane Parrish relayed something Charlie Munger once told him. The most underrated part of Berkshire’s success was that circumstances never forced its hand. Berkshire always had options — and could afford to focus on the long run.

“[Buffett] could take a long-term view,” Ackman agreed. “He wasn’t exposed to the short-term whims of his shareholders.”

He then connected this to the advantage of permanent capital, which allows that kind of long-term mindset in both good times and bad.

“One of the very smart things Buffett did is he decided at a certain age how he wanted to live his life,” said Ackman. “He didn’t want to live a life dealing with constantly raising money — which is what you have to do if you’re in the hedge fund business.”

“In the hedge fund business, when you do really well, institutional allocators take money away from you because you’ve become too big a percentage of their portfolio. [And] when you have a bad period, people take money away from you because you’re having a bad period.” It can be tough to build for the future on such shifting ground.

More news and notes from the Berkshire Hathaway orbit…

Berkshire (still) loves Lennar. Over the final six trading days of September, it added 2.34 million more shares of the homebuilder at an approximate price of $190.3 million. This latest shopping spree pushes Berkshire’s stake in the company up to 11%.

Apple’s new CEO wants the tech giant to move faster. John Ternus reportedly plans to run a tight ship, cutting the layer of middle management that sits between engineers and senior executives and getting new products out the door more quickly — even if that means ditching Apple’s traditional spring and fall release windows.

None of this should come as a shock to anyone who’s worked with him in the past.

Ternus has advocated for a leaner organization for years. While leading hardware engineering, he told employees during an all-hands meeting that Apple should hire fewer people, ask more of its existing engineers, and reduce organizational bloat. During a presentation, he showed a slide charting annual headcount growth and argued that the company should be accomplishing more with fewer employees.

A few more bits of Apple news:

• The iPhone 18 Pro series got off to a roaring start in China. Weekly sales figures (which only included the first three days after the 18 Pro’s release) grew 12% over last year and lifted Apple into the top spot with 33% market share. “Price hikes of over $200 on many Chinese flagship models may have raised the price anchor,” said Counterpoint Research senior analyst Ivan Lam, “strengthening the iPhone’s relative value proposition.”

• iPhone Duo may be facing production problems ahead of its launch later this month. Jiemian News reports that final assembly yields for the foldable were just slightly north of 60% as of a few weeks ago. In other words, roughly four in ten devices rolling off the line don’t make the cut. Expect tight supply early on.

• Apple got socked with $5.7 billion in damages after a federal jury determined that it had infringed (though not willfully) on Taction’s haptics patents. “Apple’s Taptic Engine is fundamentally different from Taction’s technology, which Taction’s own testing of Apple’s products confirmed during trial,” the company told CNBC. “Apple does not use Taction’s technology — and we will appeal.”

BNSF Railway just wrapped up three capital projects that add capacity across its network. In Galesburg, Illinois, the Berkshire-owned railroad added a second parallel lead track at the hump yard — which could result in 250 additional railcars processed each day. Out in Winslow, Arizona, new track lets crews do power modification work on the Southern Transcon without blocking the mainline.

Most interesting are the three new receiving and departure tracks in Memphis, Tennessee. A project that was not originally in BNSF’s annual capital plan. “Volume growth with existing customers and new long-term business opportunities materialized quickly in 2026,” said COO Craig Morehouse, “[so] we adjusted to accommodate our customers’ needs.” Seems like a bullish sign for freight demand.

Imagine a data center with no walls, no power bill, and a sun that never sets. That’s the idea behind Google’s Project Suncatcher, a long-term research moonshot asking whether the next generation of AI infrastructure could live in orbit. Yesterday, that dream got its first real test: a prototype satellite carrying Google’s Tensor Processing Units (TPUs) launched into space aboard a SpaceX Falcon 9 rocket.

There, in low Earth orbit, satellites bask in near-constant sunlight, collecting up to 8x more solar power than a panel on the ground. But space can be a brutal place to run a computer. The prototype will spend the next few months testing how these TPUs handle the violence of launch, punishing radiation, and cooling with no airflow.

NetJets goes big in Texas. Just a few weeks after plans surfaced for an expansion at Dallas Love Field Airport, the world’s largest private jet operator also filed paperwork with the Texas Department of Licensing and Regulation for a new private terminal near Austin-Bergstrom International Airport. The 8,000-square-foot facility will cost an estimated $19.5 million and should be open for business in June 2028.

Tokio Marine may — or may not — be in takeover talks with Australian insurer Suncorp. The Australian reported earlier this week that discussions between the two companies were already serious enough that a delegation of Suncorp executives — led by CFO Jeremy Robson — had traveled to Japan. But, in response to an Australian Securities Exchange query, Suncorp said that it’s not in discussions regarding any potential takeover and that it had not even received an offer. Stay tuned.

According to sales data from Circana, childless adults are now buying more toys than parents with kids. Jazwares president Jeremy Padawer — who himself keeps about 25% of his net worth in collectibles and, notably, lost a $4.5 million Pokemon card collection in the Palisades wildfire — told the New York Post that this shift is no fluke. “Today, the adult collector dominates the market. That’s going to be a thread that we follow further in the future.”

Exhibit A: Squishmallows. The plush line was originally designed with young girls in mind, yet grew into an all-ages, TikTok-fueled obsession that has now sold more than half a billion plushes.

“If you go back 20-25 years ago,” said Padawer, “an adult collecting toys was like The 40-Year-Old Virgin. It was weird. Now, it’s cool to be a collector.”

You can see the evidence in plain sight. On Zoom calls, people proudly arrange toys and collectibles behind them like trophies. And Toys R Us, once a casualty of the changing retail landscape, is staging a comeback with 120 brick-and-mortar stores opening this holiday season. A toy renaissance is here — and adults are leading it.

What follows is Schroeder’s own account of how she came to be entrusted with telling Buffett’s story — and what she hopes readers take away from it. Along the way, she also touches on her relationship with Buffett, the spark that set the book in motion, the all-important subject of risk management, and the psychological toll of writing a biography this definitive and consuming.

And, as ever, Schroeder’s Buffett is nothing like the folksy, uncomplicated caricature that so many people carry around in their heads.

Alice Schroeder: I am so honored to be here.

I am also a little nervous because this is the toughest crowd I’ll probably ever face. I’ve been interrogated by Dennis Kneale on CNBC’s Power Lunch, I’ve testified before a congressional committee, but the home audience in Omaha, Nebraska — of Warren Buffett’s hometown and place of birth — is definitely something else.

What I’d like to do today is just take a few minutes to introduce how I came to write this book, a little bit about the process of writing it and how Warren and I worked together, and then how it affected me and changed my life. And, then, I’ll take questions for a while afterwards.

I was a Wall Street analyst. I came to Wall Street in 1993.

In 1998, after five years on the Street, I had the chance to meet Warren Buffett when his company Berkshire Hathaway bought General Re, which was a stock that I was following. At the time, all the other insurance analysts decided that they would not follow Berkshire Hathaway. It was complicated, it was big, the stock didn’t trade, it didn’t do investment banking business — but I like challenges and Berkshire was a big, complicated, interesting company, so I decided that I would follow the stock.

I was the only analyst who made that decision.

At the time, Warren Buffett read my research. He said he liked the way I think, he liked the way I write, and he called me and asked me to be the only analyst on Wall Street that he would talk to about Berkshire Hathaway.

As a result, over a five year period, I got to know him and his business. I would come out to Omaha about once a year and we would have a meeting for an afternoon. I have raced through the Nebraska Furniture Mart with him, trying to keep up with his pace, which — some of you may know — he’s a very fast walker. I got to go to Borsheims. And then we talked on the phone periodically.

From the very first report that I wrote on Berkshire Hathaway, he called me on the phone after he read it and he said, “You have an unusual mind. This is very insightful. Maybe you should be doing something else.”

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Ordinarily, the title of “emeritus” is reserved for someone who has stepped away from the job. It’s essentially a gold watch in word form.

But nothing about Buffett’s retirement has been ordinary. He has continued to come into the office every day and remained more involved in Berkshire’s portfolio than many would have expected — most notably by initiating and growing the Alphabet position into one of the conglomerate’s biggest.

Will all of that continue as Chairman Emeritus?

You could read the announcement — and Buffett’s short note to shareholders — either way. He writes, “I still have the best job in the world,” which, being in present tense and all, suggests he’s still clocking in at Kiewit Plaza every day. On the other hand, his closing line that “the company is in excellent hands and I look forward to remaining a shareholder alongside you” sounds more like a goodbye.

The Wall Street Journal filled in some — but not all — of the gaps in a profile of new chairman Howard “Howie” Buffett. It says Warren is still “mentally sharp” and “will remain involved in the company”. What “involved” means, though, goes unsaid. After all, that could simply be a reference to his continued presence on the board.

I want to believe that he will still be an ever-present around Berkshire HQ, suggesting new stock purchases and serving as a sounding board to CEO Greg Abel on potential deals (as was the case with the Taylor Morrison acquisition) — so I’m going with that.

Why make the change now? He fell and broke his leg in June and “one person close to him believed the time Buffett spent at home recuperating gave him an opportunity to contemplate the company’s future and the decision about when to step down.”

Chris Bloomstran offered the Journal a different take on Buffett’s motivation. It might be an effort at ending any lingering ambiguity over who’s really calling the shots at Berkshire. Ambiguity that Buffett may have unintentionally fueled with his comments about initiating the Alphabet stock purchases.

“I think Warren wanted to be crystal clear that Greg is making the capital allocation decisions,” he said. “He wanted to just eliminate any confusion about that.”

In his excellent analysis of the situation, flagged a notable detail. Berkshire’s financial filings currently state that the CEO can repurchase shares “after consultation with the Chairman of the Board”. That was all well and good with Warren Buffett in the chairman’s seat, but makes much less sense in the Howard era.

So, when the next 10-Q arrives just over a month from now, I expect that boilerplate to be revised either to reference the Chairman Emeritus or to hand Abel full responsibility and oversight on share repurchases. The board could authorize a fixed-amount buyback program, as many companies do, but that doesn’t feel very Berkshire.

Warren has made it abundantly clear that his son’s role as chairman will be cultural, not operational, in nature. He has even likened Howard to an insurance policy that we all now hold but hope never to need. A backstop against cultural drift and bad actors, but not a decision-maker on the business side.

More news and notes from the Berkshire Hathaway orbit…

Berkshire Hathaway purchased 2.7 million more shares (~$212 million) of Lennar over the past week — and now owns 10% of the homebuilder. The buying started the day after Lennar reported disappointing Q3 2026 earnings. Net income fell from $591 million a year ago to $283.9 million now — a result that CEO Stuart Miller called “below expectations”. New home orders dropped 9% and Lennar also cut its full-year delivery target from 82,000-83,000 homes down to 80,000-81,000.

Earlier this month, Greg Abel told CNBC that the Taylor Morrison acquisition was made with the long run in mind — and I imagine the same thesis applies here. Not a bet on an imminent housing turnaround, but on the long-term survival of the American Dream and the houses that still must be built to make that possible.

“We don’t see any immediate recovery or any type of hockey stick [in housing],” said Abel. “It’s going to be a bumpy ride for a while.”

On last week’s earnings call, Lennar’s Miller made the bull case for his company.

“The fundamental shortage of housing in America has not yet been solved. It has not yet subsided. Demand is real, it is deferred, and it is building. When affordability returns through [lower mortgage] rates, we will be well positioned to capture it with the lowest cost structure, the fastest cycle time, the leanest finished inventory, and the cleanest land basis.” Until then, he admitted, “sometimes [even] the best companies are called on to defy gravity for some period of time”.

GEICO will make its Macy’s Thanksgiving Day Parade debut this year. The Berkshire-owned insurer’s float carries its most iconic characters — GEICO Gecko, Caveman, Caleb the “Hump Day” Camel, and Maxwell the Pig — traveling together on a classic American road trip to celebrate the parade’s 100th edition.

“There’s no bigger stage in America than Macy’s Thanksgiving Day Parade,” said chief marketing officer Arianna Orpello. “It’s the perfect place for the Gecko and some of his favorite friends from the past to meet fans in a whole new way.”

BNSF Railway vice president Jon Gabriel joined Bloomberg’s Talking Transports podcast to discuss how the railroad can grow its bread-and-butter intermodal biz. BNSF already handles more than a million more intermodal loads than its closest competitor — but it’s always hungry for more. “Today,” he said, “railroads handle somewhere between 10-12% of long-haul freight. That number can be considerably higher than that [if] customers convert freight from the highway onto our railroad.”

Gabriel noted that BNSF has been preparing for this moment for years — adding tracks to the Southern Transcon, building large intermodal facilities (with another on the way in Barstow, California), and cultivating a strong relationship with J.B. Hunt. Now, with diesel prices rising, he hopes to usher in an “era of intermodal growth”.

Maine news network WMTW ran a story on how one of Warren Buffett’s self-proclaimed worst deals continues to pay off for the state. In 1993, Buffett bought Dexter Shoe from owners Harold Alfond and Peter Lunder for $433 million, paid entirely in Berkshire stock. Despite the company’s sterling track record and strong management, cheap overseas competition gutted the shoemaker within a few years.

But as Berkshire flourished over the following decades, so too did the value of the stock Alfond and Lunder received. And, with it, they made a lasting impact on the lives of Mainers. The Harold Alfond Foundation funded a $500 college savings account for every child born in the state, while the Lunder family gave generously to the Maine Medical Center and Colby College.

Greg Powell, executive chairman of the Alfond Foundation, said Buffett often told him that the two families’ philanthropy eased the sting of the Dexter loss. “[Warren] would always say something like, ‘Well, I made a mistake in buying Dexter, but it’s good to know something great happened because of it.’”

Howard Buffett tends to keep a pretty low profile, but will soon make one of his first public appearances since being named Berkshire chairman. On September 30, he’s scheduled to speak at Central College in Iowa about his philanthropic efforts in war-torn Ukraine — but maybe we get a few comments on his new role, too.

This month’s transcript will go out to paid supporters early next week. In 2008, shortly after the release of The Snowball, biographer Alice Schroeder did a number of book signings and speeches at bookstores around the country. One such event — held, appropriately enough, in Omaha — was recorded and televised on C-SPAN. In it, Schroeder discusses what inspired her book, her relationship with Warren Buffett, and how some of his habits and traits rubbed off on her in the process.

So, if you’ve been on the fence about upgrading, there is no time like the present.

Dean Courtney Brown joined Graham that day in fielding questions from the students on such still-relevant topics as overheated markets, inflationary fears, and those pesky psychological pitfalls that trip up so many players of the money game.

What makes the extant footage of this lecture so special is that, for the first time, we see Graham’s charisma and gift for teaching. Reading his books, we get the ideas. But watching him in action, we are able to better understand the man. (And don’t sleep on Dean Brown, who offers up some wise commentary of his own.)

My favorite moment comes at the very end — and really hammers home what I hope to accomplish with this newsletter. If I had to boil my thesis down to a single sentence, it would be this: You can outsource your stock-picking, but you can’t outsource your conviction. Index funds and professional money managers can do a lot, but they can’t endure for you through manias, panics, and unending noise.

TV Host: There is no shortage of experts on the market.

As for us, we’re barely able to tell the difference between a bull and a bear — so we sat in on part of a seminar at the graduate school of business at Columbia University. After all, it’s older than the stock exchange. We thought professors familiar with the language of the Street might treat the market with detachment. Dean Courtney Brown and Professor Benjamin Graham were instructing future brokers and customers’ men.

Here is See It Now’s short course in the market.

Courtney Brown: First, let me give a caution — [though] I hardly need give it to a group of informed students such as you. No one knows precisely why the market behaves as it behaves, either in retrospect or in prospect.

The best we can do, as you all know, is express informed judgments — but it is important that those judgments be informed.

We do know that there has been a substantial rise and that rise has been going on for a number of years, particularly since the middle of 1953. And we do know that the rate of that rise has been very rapid — uncomfortably like that of the 1928/29 period. It has resulted in a lot of comparisons being made in the press.

Moreover, the present level of stock prices — as measured by the Dow Jones averages — is about equal to [and], indeed, a little above the peaks of 1929.

A number of explanations have been advanced regarding the stock market rise that suggests it may reflect a return to inflationary conditions. This doesn’t seem to me to be very convincing. First, because there is no evidence of inflation in the behavior of commodity prices — either at the wholesale or at the retail level. And there hasn’t been over the past year and a half. Extraordinary stability in the behavior of those indexes. There is so much surplus capacity around in almost every direction that it is hard to conceive of a strong inflationary trend reasserting itself at this time.

Still another explanation is that the stock market has gone up because there has been a return of that kind of speculative fever that has, from time to time in the past, gripped the country, [like with] the Florida land boom, the 1929 stock boom. They have occurred in history, as you know, all the way back from the tulip speculations in Holland. I suspect there’s a certain element of truth in this one.

However, it doesn’t seem to me that it gives us too much of a concern because there has been no feeding of this fever by the injection of credit.

I think it is important for us to observe that the amount of brokers’ loans — loans made to brokers for the financing of securities of their customers that have been bought on margin — are less than $2 billion at present. In 1929, they were in excess of $8.5 billion and there is now a larger volume of securities on the stock exchange.

Now, gentlemen, Professor Graham will pick up the story at that point.

Benjamin Graham: One of the comparisons that’s interesting is one not between [now and] 1929, which is so long ago, but 1950, which is only a few years ago. It would be very proper to ask why are prices twice as much [now] as they were [then] when the earnings of companies — both in ’54 and probably in 1955 — are less than they were in 1950. That is an extraordinary difference.

The explanation cannot be found in any mathematics, but it has to be found in investor psychology. You can have an extraordinary difference in the price level merely because not only speculators but investors themselves are looking at the situation through rose-colored glasses rather than dark blue glasses.

It may well be true that the underlying psychology of the American people has not changed so much and that what the American people have been waiting for, for many years, has been an excuse for going back to the speculative attitudes which used to characterize them from time to time. Now, if that is so, then the present situation can carry a very large degree of danger to people who are now becoming interested in common stocks for the first time. It would seem, if history counts for anything, that the stock market is much more likely than not to advance to a point of real danger.

Q: You said that stock prices now are not too high, but that you fear they will go higher. Well, then, are you recommending a decline?

Brown: May I defend you on that? (Laughs)

Graham: Yes, go right ahead.

Brown: Those who have watched the security market’s behavior over the years has become more and more impressed with the fact that stocks always go too high on the upside and tend to go too low on the downside. The swings, in other words, are always more dramatic and the amplitude of change is greater than might normally be justified by an analytical appraisal of the values that are represented there.

I think what Professor Graham had to say was that his analysis of a series of underlying values would indicate that the stock prices are just about in line with where they might properly be. However, from experience, that would be the least likely thing to happen — that stocks would just stabilize right here.

Now, if it’s the least likely thing to happen and you have to select a probability between going up further or down further, because of the strong momentum that they have had I think I would be inclined to agree with him that the more probable direction would be towards somewhat higher levels.

Q: Normally, when stockholders believed the stock market was too high, they switched from stocks to cash. Now, many people feel that due to the capital gains tax, they are not free to act. They are, what you might say, locked in. What effect does this have on the stock market in general?

Brown: There’s no question about the fact that it does discourage some sales that might otherwise be made because one selling stocks and trying to replace them would have to replace them at substantially lower prices to come out even after paying the capital gains tax.

However, that’s not the only reason people are reluctant to sell stocks and buy bonds. Stocks are still yielding ~4.5% on the basis of current dividend payments, whereas bonds of prime quality are closer to 3%. Here, again, we find a contrast with the situation in 1929, when stocks were yielding ~3.5% and prime bonds closer to 5%.

Q: In addition to raising margin requirements, should the federal government take other measures to check a speculative boom in the stock market and which method is the better?

Graham: My own opinion would be that the Federal Reserve should first exhaust the possibilities of raising the margin requirements to 100% — and then consider very seriously before they imposed other sanctions.

Brown: If needed.

Q: What is the significance of the broadening public participation in stock purchasing and ownership?

Brown: There are probably two elements there that are important. One, the broadening participation of the public in stock purchases is one measure of the degree of speculative fever that we were talking about before.

However, subject to that being controlled — and I believe that it can be controlled, as Professor Graham indicated — over and above that, there is broad social significance to that, it seems to me. What it, in essential terms, means is that the ownership of American industry is being more widely dispersed among more and more people. This has very favorable repercussions in terms of our political and social life.

Q: Are Wall Street professionals usually more accurate in the short term than in their long-term forecasts? If not, why not?

Graham: Well, we’ve been following that interesting question for a generation or more — and I must say frankly that our studies indicate that you have your choice between tossing coins and taking the consensus of expert opinion. The results are just about the same in each case.

Your question as to why they are not more dependable is a very good one and an interesting one. My own explanation for that is this — that everybody on Wall Street is so smart that their brilliance offsets each other and that whatever they know is already reflected in the level of stock prices, pretty much, and consequently what happens in the future represents what they don’t know.

Q: Would you kindly comment on an item appearing in the newspaper to the effect that while 45% of buying today is on margin, the money borrowed is equal to only 1% of listed stock?

Brown: The amount of trading on the stock exchange is a very small part of the total value of all the securities that are listed thereon. When you say that the total amount of borrowing on margin financed by brokers’ loans is only 1% of the value, it is a reconcilable figure. You can’t reconcile it unless you have the detailed data with you, but it isn’t incompatible in any way.

Graham: I might add a point on that, Dean Brown, and that is that the slow increase in brokers’ loans as compared with 45% marginal trade would indicate that a good deal of the marginal trading is between people who are taking in each other’s washing. That is, the marginal buyers are buying from sellers who were previously on margin. That’s why the rate of growth of brokers’ loans is so much smaller now than it had been in the 1920s, when I think a good deal of the selling had come from long-term owners and really smart people who were selling out to the suckers.

Q: You’re correct in stating that there’s been no inflation in ’54, but there also appear to be several long-term inflationary points in the economy today. Deficit spending is supposed to be continued by the government, the easy money policy is expected to continue, the question of increased union wages, the talk about increased minimum wage, and the talk about a guaranteed wage. All these and, on top of this, the road program of $101 billion which the government just announced. These seem to me to be long-term inflationary things in the U.S. economy.

Brown: That question has a good many angles on it, so perhaps we both better try it. Professor Graham, why don’t you take the first crack?

Graham: Well, I think there are two answers to that in my mind. The first is that, acknowledging that there are inflationary elements in governmental policy as it’s now being carried out, it may be argued that those are just necessary to keep things on an even keel because, without them, we might have some in-built deflationary factors in the way business operates through increased productivity, capacity, and so forth.

Brown: I’ve been impressed with the possibility of labor costs as an inflationary factor, but a rise in wages does not necessarily mean a rise in labor costs. It depends upon the relationship of the rate of change in wages and the rate of change in output per man-hour or productivity.

If wages are related to productivity as, you know, they were in the General Motors contract, there is no necessary inflationary consequence to be anticipated. However, apart from that, it’s entirely possible that if wages go ahead faster than changes in productivity, they could be a seriously inflationary factor.

Q: On the basis of your recent answer with regard to the psychological impact of the present condition of the market on the small investor, do you discount the entire theory of dollar averaging?

Graham: I think there’s no doubt that, accepting your premise, the man who puts the same amount of money in the market year after year for the next twenty years, let’s say, has a great chance of coming out ahead regardless of when he begins and particularly regardless if he should begin now.

You have to allow for the human nature factor that no man can really say definitely just how he’s going to behave over the next ten to twenty years. There is danger that people [who] start with the idea of being systematic investors over the next ten to twenty years may change their attitude as the market fluctuates.

In the first instance, [they] put more money into the market because they become speculators; and, secondly, [they] get disgusted and scared and don’t buy at all later on when prices get low. It’s a psychological danger [for all investors] that fault [lies] not in the stars or in the system, but in ourselves.

In a letter to shareholders appended to the press release announcing this move, Buffett indicated that Greg Abel’s ascension to CEO has worked out so well that it was time to finish the job by ushering in Howard as chairman. “[Greg] has taken hold of the Chief Executive Officer job in every respect,” he wrote. “He has been making the decisions that matter for some time now, and I have not had to think twice about any of them. So the timing is right to complete the transition.”

“Greg runs the company,” he continued, “[and] Howard will guard its culture and values — both worth more than anything on our balance sheet. Think of Howard as a policy the shareholders own and hope never to claim against.”

CNBC’s Becky Quick, a close friend of Buffett’s for two decades now, framed the moment as the long-planned culmination of Berkshire’s succession and added, “I think [Warren] feels really good about where things are right now.”

The Financial Times dropped an oral history of the Salomon Brothers bond-trading scandal — including never-before-published quotes from Warren Buffett himself. Writer Richard Dewey spoke to many of the key players and reconstructed the whole saga from Berkshire Hathaway’s emergence as a white knight in 1987 to help fend off Ronald Perelman’s takeover threat to Paul Mozer’s illegal Treasury auction bids and, finally, Buffett’s desperate scramble to pull the investment bank back from the brink.

“Our name was rat poison,” said Buffett, which pushed him to embrace radical transparency as the firm’s best option. Disclose everything before you’re asked. Hand regulators the ugliest facts before they have to dig for them. Cooperate past the point of comfort. In many ways, Buffett wrote the template for the modern corporate crisis playbook here — and did it purely on gut instinct.

Basically, he just told the truth faster than anyone could accuse him of hiding it.

“Being at Salomon was like flying in a war,” said Buffett. “You wouldn’t want to do it again and there’s a lot of ways it could have turned out much worse, but you’re thankful for the experience.”

Speaking at a Japan Foreign Trade Council press briefing, Itochu chairman Masahiro Okafuji once again mentioned Berkshire’s continued interest in the five trading houses. “Berkshire does not nitpick the trading houses’ activity,” he said. “While Berkshire currently owns about 10% of the trading houses, the company indicated it would not make a fuss even if those stakes were raised to 15%. As a shareholder, that makes Berkshire extremely valuable to us.”

The appeal, according to Okafuji, comes down to fundamentals Berkshire has long prized: durable moats, extensive global networks, and disciplined capital allocation.

Apple must be thrilled with the reaction to iPhone Duo’s unveiling. The “Surprise and Shine” event pulled in 49+ million views on YouTube alone, the Duo dominated internet conversation all week, and influential tech reviewer MKBHD said its fit, feel, and finish “mogs” every foldable Samsung has ever shipped.

(If you don’t speak Gen Z, “mog” is a good thing.)

Bloomberg’s Mark Gurman was even more effusive. “Apple’s iPhone Duo will go down as one of the company’s historic products,” he wrote, “eventually turning foldable phones into the new normal.” Today, foldables account for just ~2% of the global smartphone market, though that will likely change for the better once Duo releases.

This is all very Apple. The company rarely shows up first — it didn’t invent the smartphone, tablet, or smartwatch — but does tend to show up best.

Despite the fact that Gurman writes almost exclusively about Apple these days, he’s certainly no cheerleader. He’s been openly critical of the company’s AI strategy and the Vision Pro headset. So when he compares the Duo’s reveal to the visceral jolt of seeing the iPhone or iPad for the first time, that feels pretty bullish to me.

According to Barron’s math, Precision Castparts — the subsidiary Buffett wrote down and admitted he overpaid for — might now be worth much more than its $37 billion purchase price. I’ve mentioned a few times before that turbine blades — the fiendishly precise, brutally-hard-to-manufacture components PCC specializes in — have suddenly become very hot commodities due to a red-hot aerospace cycle colliding with the AI boom’s insatiable appetite for natural gas turbines to power data centers.

As a result, companies are racing to bypass bottlenecks and runaway prices by building in-house. SpaceX already announced its own push in that direction and, last week, GE Aerospace went one better with the $11.75 billion acquisition of Consolidated Precision Products. A deal Barron’s pegs at 26x next year’s EBITDA.

Apply that same multiple to Precision Castparts and you land around $100 billion on the open market. Nearly triple what Berkshire paid for it a decade ago.

Now, to be fair, none of this really matters. We’re talking about the earnings multiple others would pay for a company that ain’t going anywhere. Berkshire doesn’t flip subsidiaries based on the whims and manias of Mr. Market. PCC will be judged on its underlying business results — which have rapidly improved in recent years — and not something as ephemeral as estimated auction prices.

BNSF Railway CEO Katie Farmer told the crowd at the Intermodal Association of North America EXPO that persistent speculation that her railroad needs to acquire CSX in response to the Union Pacific x Norfolk Southern merger should be seen as proof that said merger is anticompetitive. “People continue to ask me the question: Will we go out and acquire CSX if this merger goes through? Why are people asking me that question? What it tells us is that they recognize that if this consolidation is allowed to go through, it [will] create a competitive dynamic that’s not sustainable.”

She added that it’s better for BNSF (and the railroad industry) to spend billions on growth projects like the Barstow International Gateway rather than on swallowing up one of its Class I rivals.

Kraft Heinz has a lot of fires to put out these days, but none bigger than the one at Oscar Mayer. “If you look at the share losses that we’ve had this year through the first half of the year,” CEO Steve Cahillane said at the Barclays Global Consumer Staples Conference, “60% of them are in Oscar Mayer alone.”

The culprit, as it turns out, was packaging that frequently failed to reseal properly — leading to wasted food, frustrated customers, and a slow bleed of shelf space that the company is now scrambling to win back. Kraft Heinz rolled out redesigned packaging last month, which seems to be working. Albeit slowly. “The declines have lessened,” said Cahillane. “You have to get to ‘not as bad’ before you get to good.”

Oscar Mayer could also use a new image in our increasingly health-conscious world. “Oscar absolutely has the right to go [in a healthier direction],” he said. “Making [it] less perceivably processed is not going to hurt the brand. It’s going to help the brand.”

And, finally, a few odds and ends to finish the week…

• HomeServices of America released new research showing that 87% of recent homebuyers want a consolidated real estate experience, as opposed to being fragmented across a half-dozen different companies that barely talk to each other. “As the only residential real estate enterprise in North America that supports consumers from their first home search, through mortgage, title, homeowner’s insurance, and loan servicing, it’s clear that we bring a unique value proposition to the industry,” said CEO Chris Kelly.

• Vance Bell is back as Shaw Industries CEO after the sudden departure of Tim Baucom. Bell originally succeeded co-founder Bob Shaw in 2006, handed the company over to Baucom five years ago, and now steps out of the chairman’s seat for a second stint atop the flooring giant. “Shaw has a strong position in the market,” he said, “and significant opportunities ahead.”

• Mark Tobak over at Hedge Fund Alpha uses the words of Buffett, Munger, and even poet Dorothy Parker to make the case that index funds — an enduring bet on business writ large — are the wisest choice for most investors, since individual companies will always rise and fall due to the brutal nature of capitalism.

He grew up in China. Became a student leader in the democracy movement. Stood in Tiananmen Square when the tanks rolled in. Fled the country as the CCP crushed the protests and started a new life in America with no money and no home to go back to.

“I didn’t know anybody,” he said, “and I didn’t have a penny to my name.”

Two years later, a classmate at Columbia Business School — who understood the young refugee’s financial struggles — told him about a speaker coming to campus who supposedly knew how to make money. Li Lu agreed to tag along. In large part because he heard the word “buffet” and assumed the lecture came with a free meal.

“To my dismay,” he later told the Graham & Doddsville newsletter, “there was no lunch. There was just a guy with the name Buffett.”

Empty stomach aside, that day changed the entire trajectory of Li Lu’s life. Buffett’s words hit him like “a punch in my eyes” and he was, forever after, in love with value investing. Fast-forwarding a bit, he graduated and went on to found Himalaya Capital, earned Charlie Munger’s trust so completely that the legendary investor handed over a chunk of his own family’s fortune for Li Lu to manage, and was (for many years) even considered the odds-on favorite to one day run Berkshire Hathaway’s stock portfolio.

Li Lu shared this story — and many other thoughts and opinions — in a 2013 interview with the Graham & Doddsville newsletter (published by students in the Value Investing Program at Columbia Business School) and, for my money, it remains one of the best windows into the mind of this fascinating man.

Here are some things I learned from a recent re-read of this interview…

“The most important thing in our business,” said Li Lu, “is intellectual honesty.” What he means by that is to know what you know, know what you don’t know, know what you don’t have to know, while also understanding there is much you don’t know that you don’t know. A Rumsfeld-ian framework for rational thinking.

Know — and embrace — thyself. The money game is often one of self-discovery and the best investors magnify their particular idiosyncrasies and habits to gain a sizable edge over everyone else. “Do what you love to do,” said Li Lu, “so you just naturally do it and think about it all the time. You can accumulate a huge advantage if it comes naturally to you like this. The ones who really figure out their own style and stick to it and let their natural temperament take over will have a huge advantage.”

Your edge is not so much raw intelligence as it is the compounding effect of genuine fascination. If you’re thinking about a business model in the shower, or mentally sketching out a company’s competitive moat while walking the dog, you’re not exactly “working”. (At least in the sense most people mean it.) But you are banking thousands of unpaid hours of pattern recognition and knowledge accumulation that someone grinding unhappily through spreadsheets will never catch up to. As pithily put it, “You can’t compete with people having more fun than you.”

Get comfortable doing nothing. “I want to really find the best company at the best price, run by the best people, and available to me at the time I am looking,” said Li Lu. “Those don’t necessarily always meet — and it’s okay.”

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A day that left almost no home, office, or heart untouched across America.

Two weeks after the towers fell, Warren Buffett wrote to the many managers of Berkshire Hathaway’s subsidiaries, trying to make sense of what would come next.

Every time I read this memo, I’m struck by Buffett’s mention of the psychological side of risk management. Most discussions of catastrophe risk in insurance focus almost entirely on the financial machinery like reserves and capital ratios. But, here, Buffett directly links psychological preparation as a key component to survival.

It means leadership doesn’t blink when “the big one” finally arrives — as it inevitably will — and won’t dismantle decades of sound strategy the moment the ink turns red.

When Buffett says Berkshire is financially and psychologically prepared for super-cats and the monster losses that come with them, he’s telling the world that Berkshire’s long-term, rational mindset is every bit as impregnable as its fortress balance sheet.

“You do the managing and I’ll do the worrying” might be my favorite distillation of Berkshire’s management philosophy. Buffett runs the conglomerate with almost no corporate overhead or centralized control. Operating managers receive real autonomy to run their businesses in whatever manner they see fit.

What Buffett keeps for himself, though, is something heavier: risk oversight and the fiduciary responsibility that comes along with that. He is, in effect, Berkshire’s designated worrier — willingly absorbing the anxiety of a crisis so that his managers can keep their heads down and do their jobs. Buffett handles the scary stuff.

Alice Schroeder, author of The Snowball, once mentioned that Buffett had (in some ways) seen this tragedy coming. Six months before the attacks, he asked the leaders of National Indemnity and General Re to size up their insurance exposure to the World Trade Center. And, when the numbers came back, he told them to reduce it ASAP.

Ajit Jain at National Indemnity listened. The head of Gen Re did not. And, as a result, Berkshire got socked with a $2+ billion property loss.

Buffett didn’t “predict” 9/11 in the sense of foreseeing the particulars of that fateful day. But he recognized signs of trouble: the site had already been attacked once before, insurance exposure was dangerously concentrated there, and — in his own words — the world is generally not a safe place.

While he was undoubtedly less-than-impressed with Gen Re’s inaction, Buffett publicly shouldered the blame himself. “Why, you might ask, didn’t I recognize the [risks] before September 11?” he asked in that year’s letter to shareholders. “The answer, sadly, is that I did — but I didn’t convert thought into action. I violated the Noah rule: Predicting rain doesn’t count; building arks does.”

More news and notes from the Berkshire Hathaway orbit…

Apple unveiled the iPhone Duo — a foldable phone that opens and closes like a passport — at its “Surprise and Shine” event on Wednesday. In the company’s own framing, this represents the most radical redesign of its flagship product since the original iPhone debuted — and redefined smartphones — nearly two decades ago.

The Duo itself has been engineered to minimize (if not eliminate) any visible crease on the screen when unfolded. And, this being Apple and all, it does not come cheap. The iPhone Duo starts at $1,999 — a full $800 above the new base iPhone 18 Pro.

In his preview of the “Surprise and Shine” event, Mark Gurman of Bloomberg noted that it was no coincidence that John Ternus took over as CEO just days before such a momentous slate of product announcements. Ternus, formerly senior vice president of hardware engineering, led the development of the Duo and other future releases still working their way through Apple’s pipeline — so Tim Cook wanted him to be the one who showed them off to the world. Hence Cook’s September 1 retirement date.

Speaking of Apple, I was honored to be quoted in this Business Insider piece about Tim Cook and Warren Buffett’s similarly active approaches to retirement. We all know the story with Buffett. He still comes into Berkshire Hathaway HQ every day, spearheads major investments like Alphabet/Google, and speaks with CEO Greg Abel regularly. Cook may not remain that hands-on at Apple, but his $47 million pay packet as chairman is not the compensation of a man quietly fading into the background.

I keep coming back to something Buffett said earlier this year: “Somehow, [Cook] gets along with everybody in the world.” The former Apple CEO built relationships across politics, regulatory agencies, and the tech giant’s global supply chain over the past fifteen years — which will undoubtedly prove useful in the future. If I had to guess, he will continue to be a diplomat of sorts for Apple both at home and abroad. Which should allow John Ternus to devote his full attention to creating killer products.

On the latest episode of Fortune’s “Titans and Disruptors” podcast, General Motors CEO Mary Barra credited Warren Buffett with shaping how she leads. “He gave me just phenomenal advice,” she said. “I will be forever grateful for the time he gave me, the leadership wisdom he shared with me, and also the support through some pretty dicey times.” On one memorable occasion, Buffett asked Barra if there was anything she would do differently if GM were a private company, free from the relentless churn of quarterly earnings reports and calls with analysts.

“I stopped and I’m like, ‘No, I don’t think I would,’” she said. “Great!” replied Buffett. “I don’t want you running the company for the quarter. I want you running it for the long term. That’s how you’re really going to create value.”

NetJets plans a new 100,000-plus-square-foot campus at Dallas Love Field airport. According to the Dallas Morning News, the Berkshire-owned private aviation company recently filed paperwork with the Texas Department of Licensing and Regulation for the $35-70 million project, which will unfold in three phases:

1. Demolition of six existing hangars and a terminal building to clear ground

2. Construction of a sleek 14,000-square-foot private terminal for NetJets clientele

3. An 80,000-square-foot aircraft maintenance hangar

If all goes to plan, NetJets aims to have the whole thing done by May 2028.

Chevron CFO Eimear Bonner talked Venezuela at the Barclays Energy-Power Conference this week. The oil major will more than double the number of drilling rigs in the country over the next five years — and, crucially, on unusually friendly terms. Any disputes will go to international arbitration, a not-unimportant detail considering Venezuela’s history of seizing and nationalizing foreign assets.

Chevron’s new acreage also sits right next to its existing operations, so any expansion will not require costly investment in new infrastructure. Once the rig count doubles, the company expects to reach a plateau level of 600,000 to 700,000 barrels per day — and to sustain that level for five to ten years. “This is an enormous resource base,” said Bonner, “[with] a total cost less than $20 a barrel [and] lots of run room.” She summed up the arrangement as a “win-win-win” for Venezuela, Chevron, and the United States.

The Berkshire CEO also carved out twenty minutes to hop on CNBC and discuss his trip to Japan as well as other timely matters on shareholders’ minds. And, once again, we saw that Abel is all business — with an impressive command of both the granular mechanics of the conglomerate and the larger economic currents of the moment.

In this interview, he touched on such topics as Berkshire’s growing bet on Japan, the recent Alphabet investment, the AI-fueled (and controversial) data center buildout, his working relationship with Warren Buffett, what the Taylor Morrison acquisition says about the future of the housing market, and much more.

The full interview is well worth a watch, but (in the interest of time) I’ve collected nearly forty of Abel’s most memorable lines and comments down below.

On his relationship with Warren Buffett…

(1) “Warren turned 96 on Sunday. Before I left to come to Tokyo, [I] stopped in and had a great celebration with Warren [and] his family and friends. We had a very nice afternoon.”

(2) “Warren absolutely loves the Japanese companies we’re invested in. I could tell it wasn’t easy for Warren that off I went to Tokyo [without him].”

(3) “We have a great working relationship. We discuss a variety of things on a regular basis. It’s very much a dialogue we’ve always had. We love talking business. We love talking about what we’re seeing across our portfolio.”

On Berkshire Hathaway’s investment in the Japanese trading houses…

(4) “It’s really, one, a long-term investment that we intend to hold for many decades. And, secondly, we’ve been building really strong relationships with each of the companies and looking at other opportunities here in Japan and, for that matter, abroad.”

(5) “Those are just exceptional discussions that, each visit, we continue to build on the prior discussions and look at incremental opportunities.”

(6) “[Our investments in the sogo shosha] go back to six years ago. We actually announced it [on] Warren’s 90th birthday. It was announced in Japan that we had acquired just over 5%. It was really a long-term proposition that we saw as a long-term holding.”

(7) “Three years later, we were here in Tokyo and we met with each of the companies. That was part of building the relationship because we were very pleased with the underlying investment. At that point in time, our investment percentage had clicked over 7% and the businesses were performing well. They were managing their capital well, purchasing shares back in, increasing their dividends, and their overall performance continued to improve.”

(8) “We [asked], ‘Could we go over 10%?’ Up to that point, we had always highlighted we would stay below 10% and only exceed it if the five trading companies agreed to [it]. Upon receiving their approval, we went above 10%. It’s really a long-term investment that we intend to hold for many decades.”

On Japanese interest rates hitting a three-decade high…

(9) “Not a single one of the trading companies raised [higher interest rates] as a fundamental challenge right now. They’re still relatively modest when you think about it. I think the 10-year just hit a 30-year high. It went right to 3%.”

(10) “We have a debt portfolio in yen that pretty much reflects the cost basis of our investments [in Japan]. The remaining life on that debt is a little more than five years. We still have a significant carry — the difference between the dividend and the interest we’re paying.”

(11) “We envision still raising debt, as appropriate, in yen.”

(12) “At the same time, we do see the underlying companies’ earnings performance growing. We see an increase in dividends [as being] likely over the coming years and continued share repurchases. Yes, there’s an incremental cost [with higher interest rates], but we do see nice increases in the underlying returning capital they’re delivering back to shareholders.”

On Tokio Marine…

(13) “Right before our annual meeting, we announced the transaction with Tokio Marine. It’s an exceptional opportunity because they are a great partner. We were absolutely thrilled to be able to reach an agreement with them, where we have 2.5% of the quota share of their book — what they’re underwriting; a 2.5% interest in the company; and a strategic partnership.”

(14) “That strategic partnership is very broad and either of us can bring [M&A] ideas back and forth to each other. There’s no obligation to act on it. But if it were to make sense — both for Tokio Marine and for ourselves — we’d love to pursue a transaction with them.”

On visiting International Metalworking Companies (IMC) unit Tungaloy…

(15) “Upon arriving, I was able to go visit Tungaloy. It’s one of our operating units based in Japan. It’s part of IMC, a company that makes tool bits. [I] spent the afternoon up in Fukushima with our team there. It’s really an amazing story.”

(16) “We acquired it back in 2008 and, over that period of time, really built a business from scratch. It came out of Toshiba, but [was] a relatively small company.”

(17) “Here’s a company that has just under $240 million of sales in Japan and an incremental $400 million internationally. [It’s] a very small group just doing remarkable things.”

On Berkshire’s ~$35 billion investment in Alphabet/Google…

(18) “Warren initiated that probably close to fifteen months ago. He initiated the initial purchases in Alphabet. We continued — or he continued — a variety of purchases.”

(19) “In late May, I received a call on a Sunday morning to see if we wanted to participate in their upcoming equity offering. No terms or amount were set. I said, well, I’d get back to them right away. I called Warren and I said we had a significant opportunity to continue to invest in Google with a significant block. They hadn’t set the size, but recommended that we consider $10 billion or more. Warren and I discussed the size. I recommended a 6.5% discount and we were comfortable with that. We went back to them and highlighted that we would be interested in a block on those terms — and then ultimately consummated the transaction.”

(20) “We all are seeing and feeling the impact of AI. We knew it was going to have a significant impact on America and businesses. We have a lot of visibility from within our companies as to how we’re using AI [and] what type of benefits it’s delivering — so that brought incremental interest. We saw Google as a significant player [in this].”

(21) “There’s a lot more to Google than [that] and why we like it — but those were the fundamental reasons as to why we took a serious look at Google and now have a significant investment in it.”

On Berkshire Hathaway Energy and AI data centers…

(22) “I’ve always had a strong view that energy would be the constraint [for data centers].”

(23) “We can produce the energy. It’s [more a question of] how long it would take to get the sites prepared and being in a position [where] they could serve the data centers.”

(24) “We still see [data centers] as a significant opportunity for Berkshire Hathaway Energy.”

(25) “If you look at Iowa, where we have a number of data centers, approximately 8% of our load came from data centers [last year]. We see incremental load coming on — both customers demanding it and what we can serve.”

(26) “We’ve really operated [with] some pretty basic principles right from the get-go — and we’ve shared that with each of the hyperscalers, our states, our governors, and our regulators. We are interested in serving these hyperscalers:

• One, if there was no impact to the rates of our other customers. And, in fact, we’ve pretty much taken the approach that there has to be a net benefit to our customers.

• The communities have to understand the impact on water. That has become much more manageable as they address that and use the technologies that are available to minimize water use.

• Lastly, the communities have to be open to having the data center in their community. We very much believe that you have to be a welcomed member of the community. Now, that’s a decision the data center has to make — but we can encourage them to seriously evaluate the reaction from the communities.”

(27) “There is a lot more pushback [to data centers] in the communities across the U.S.”

(28) “We have not had any specific site rejected to date. We’re continuing to move forward on the various sites we have under construction. Our sites would be the energy infrastructure — not the data center site — but it has to be done on the terms and conditions I just highlighted.”

(29) “The narrative around [data centers] is so critical — and it continues to evolve. It really did start from the impact on rates and [the question of] were you impacting other customers? You can see they’ve moved on from that narrative. I would say the water narrative is very strong coming from the data centers and how they minimize the use.”

(30) “There’s a very strong narrative — at least in Iowa, where it’s still a strong farming community — when we see both the energy infrastructure and a data center put in place in an individual county or community [and] the tax relief, specifically on property taxes and also revenues that come into the county to support other services, schools, police, and fire. It’s very, very substantial. That equally has to be part of the narrative, to make sure people recognize the benefits that come with that type of development.”

On Taylor Morrison and Berkshire’s homebuilding ambitions…

(31) “We don’t see any type of immediate recovery or any type of hockey stick [in housing]. We did see, from Berkshire’s perspective, that it’s going to be a bumpy ride for a while.”

(32) “It was an important part of the discussions with Taylor Morrison — and the discussions I had with Sheryl [Palmer] — that when we looked at housing, specifically in North America, we were taking a very long-term view that the American dream will continue to exist.”

(33) “We’ve got a great leader in Sheryl, [who] brings great optimism. But, as we discuss it, we don’t envision a quick recovery there. But we do see an industry that we definitely want to be invested in — and we are invested in — for the long term.”

(34) “Five [or] ten years from now, [Taylor Morrison] will be a very strong asset for Berkshire.”

(35) “We are combining some of our operations from Clayton Homes. We had fifteen site builders over in Clayton Homes [and] they’re now joining the Taylor Morrison team.”

On the economy…

(36) “If you look across our businesses and our results through the second quarter, [it’s] very strong in our larger businesses — including our manufacturing businesses.”

(37) “You can see there’s still strong demand, but I think you do feel there’s a consumer who is still clearly feeling the pain and struggling and having to stretch a lot further with their dollar. I think that does exist. There’s no question when we look at the underlying results.”

(38) “But, at the same time, the fundamentals around the economy — at least from what we’re seeing through the second quarter — remain very, very strong.”

And, while there, he joined CNBC’s Squawk Box early Wednesday morning to discuss such matters as the recent Alphabet investment, the U.S. housing market, Berkshire Hathaway Energy’s measured approach to the AI data center gold rush, and Warren Buffett’s enduring influence on the conglomerate’s decision-making.

Abel covered a lot of ground in the twenty-minute interview, so (for now) let’s zero in on two particular moments that really stood out to me.

Abel confirmed that Buffett first pulled the trigger on Alphabet/Google shares “close to fifteen months ago”. That seems to point to purchases starting in July 2025, since the investment didn’t show up until Berkshire’s Q3 filing from that year, when the stock traded in the $180-190 range.

He also explained how the $10 billion private placement in June came about. Abel received a phone call on a Sunday morning a few months ago about participating in Alphabet’s AI-induced equity offering. He then dialed up Buffett and ran the offer by him — and they agreed to $10 billion at a 6.5% discount from then-current prices.

As for why Alphabet, Abel proved every bit as tight-lipped as his predecessor when asked about specific Berkshire stock holdings. But he did offer a high-level glimpse at how Berkshire thinks about artificial intelligence more broadly.

“We have a lot of visibility from within our companies as to how we’re using AI, what type of benefits it’s delivering, so that brought incremental interest [in AI],” he said. “We saw Google as a significant player.”

“There’s a lot more to Google than [that] and why we like it, but [that’s] why we took a serious look at Google and now have a significant investment in it.”

Berkshire Hathaway Energy will be happy to help power the AI data center boom, but strictly on its own terms. Abel called the surge in data center power demand “a significant opportunity” for BHE — but also laid out three non-negotiable conditions.

(1) Existing customers shall not be harmed with higher prices. “We’ve pretty much taken the approach that there has to be a net benefit to our customers,” he said.

(2) The community must understand the impact on water. “That has become much more manageable as [the hyperscalers] address that and use the technologies available to minimize water use.”

(3) The community must actually want the data center there. “We very much believe that you have to be a welcomed member of the community,” said Abel. “That’s a decision the data center has to make, but we can encourage them to seriously evaluate the reaction from the community.”

Much more from Abel’s interview will be coming your way early next week.

More news and notes from the Berkshire Hathaway orbit…

Berkshire Hathaway’s appetite for the Japanese trading houses has not abated. “Our goal is to continue to increase our ownership [of them],” Greg Abel told Nikkei Asia. “Next month, if I’m in Omaha and we’re watching things and we decide we’d like to have a little bit more of each company, we would do that.”

That comes as welcome news to Itochu CEO Masahiro Okafuji. “Because Berkshire is a stable shareholder,” he said, “we are not pressed for detailed explanations about our performance in the short term. That gives us peace of mind.”

When Warren Buffett started buying the sogo shosha six years ago, he did more than just add a handful of new names to Berkshire’s portfolio. He conferred a stamp of approval on these companies that changed how the rest of the world saw them. “After the investment from Buffett, overseas investors became very interested in trading companies,” said Itochu president Keita Ishii. “Domestic investors also began buying [the] stocks, raising their valuation. Market perception became more positive.”

This week, Nikkei Asia checked in with executives at the trading houses about what — if anything — they’ve learned since being backed by Berkshire.

• “Berkshire doesn’t look at things in the short term,” said Itochu’s Ishii. “For example, the U.S. real estate market is currently weak, but Berkshire is targeting it. It has a long-term perspective, believing that interest rates will eventually fall — and the next housing purchase cycle will inevitably arrive.”

• Sumitomo CEO Shingo Ueno appreciates Berkshire’s trademark hands-off style. “I’ve spoken with their top leaders multiple times,” he said, “but they’ve never asked me to change anything. When I explain our strategy, they say we should keep doing what we’re doing. They understand Sumitomo’s strategy.”

• “Warren Buffett often compares investing to baseball,” said Marubeni president Masayuki Omoto, “saying the good thing about investing is that you don’t have to swing the bat needlessly. You only need to hit the right pitches. We take inspiration from his emphasis on investments with a high batting average.”

• Mitsubishi CEO Katsuya Nakanishi, meanwhile, took a cue from Buffett on the importance of communication. “I have placed greater emphasis on how we interact with shareholders and have increased dialogue with investors,” he said. “We’ll improve information disclosure and the clarity of our explanations.”

• “We can call [Berkshire’s] leaders and talk to them when needed,” said Mitsui CEO Kenichi Hori, “and we’re very grateful for that. We’ve learned how important it is to have good access like that between top executives [of business partners], especially in a global context.”

Happy trails, Tim Cook. After fifteen years atop Apple, he stepped aside this week and handed the reins over to John Ternus. But, in classically Cook fashion, he cleared his successor’s plate of potentially controversial moves on his way out the door.

“Cook spent his final stretch as CEO taking on the unpopular decisions that John Ternus would probably rather not inherit on day one,” said CNBC’s MacKenzie Sigalos. “[He] announced layoffs that scale back parts of the Siri AI team and cut deeply into software engineering here in Silicon Valley — and, [also], raised prices across parts of its Services business, including Apple TV.”

“Cook isn’t really going anywhere,” added Sigalos. “As executive chairman, he can keep doing the messier work that he’s become especially good at — trade and supply chain diplomacy — while Ternus has the air cover to focus on products and become the face of what could be Apple’s biggest hardware cycle in over a decade.”

Chevron doubles down on Venezuela. The oil major will aim for roughly 600,000 barrels a day there within five years — up from 290,000 today — thanks to a $7 billion investment in two newly-assigned oilfields in the could-be-prolific Orinoco Belt.

Turning those fields into productive assets will take plenty of time and capital, but Chevron is happy to play the long game. It already operates multiple joint ventures with Venezuela’s state oil company PdVSA and remains the only major U.S. oiler active in the country. Exxon Mobil and ConocoPhillips, by contrast, are still fighting nearly two decades later for restitution on assets nationalized out from under them.

CEO Mike Wirth told CNBC that improving conditions in the South American nation have “taken this from not being very competitive within our set of alternatives to something that’s very competitive versus our options around the world — which is why we’re willing to commit significant capital and grow [there] the way we are”.

And, finally, please enjoy this video of Warren Buffett opening a fortune cookie. Sara Blakely, founder of Spanx, posted this on social media over the weekend in celebration of Buffett’s 96th birthday.

Dressed in what has quickly become his signature retirement look — purple V-neck sweater over white shirt — Buffett cracked open the cookie and received a pretty apt fortune: “Your happiness shines like the sun.”

“That’s very true,” he agreed.

And he didn’t come alone — with both vice chairman Charlie Munger and director Bill Gates hopping in front of the cameras to share their thoughts, as well.

The three men not only discussed that weekend’s headlines, but also fielded questions from college students via livestream and from the general public via social media.

This interview came at an interesting time. Buffett had only recently made his controversial decision to abstain — rather than vote against — Coca-Cola’s executive pay package. Russia-Ukraine tensions also loomed large. And unpopular cost-cutting moves at Heinz were branded by one shareholder as “un-Buffett-like”.

A couple of notes: I condensed and summarized some questions to keep the spotlight on Buffett’s answers. I also omitted a few of Gates’s responses that were not relevant to Berkshire.

Liz Claman: I’ve never seen crowds like the crowds that I saw — and I’ve been coming to this meeting for nine years. Do you have a final tally on the numbers?

Warren Buffett: We can’t really get a count because they come and go and all that, but we know we were up many thousands above the previous record. It certainly wasn’t less than 38,000 [and] probably wasn’t more than 40,000, but it was an all-time record.

Claman: It could very well be 38,000-39,000.

Buffett: Yeah, or 40,000 even.

Claman: When the doors open at CenturyLink Center and people start flooding in, it’s just amazing to me. It’s like you’re a rock star. I know that analogy has been made, but let it go to your head a little bit.

Buffett: They’re coming to see Charlie. (Laughs)

Claman: You’re sort of in the center of it and, yet, you probably don’t feel it. We had cameras on the floor and you can see the crowds descending upon you [when] you start walking through that floor. What is that like?

Buffett: Well, I’m having a good time. I know some of the people who are around. They’re Berkshire shareholders and they’re happy and they’ve come from a long way in many cases. We sent tickets to fifty or so countries this year — aside from every state in the union — so it’s fun. We have a good time.

Claman: But they bear down [on you]. Do you ever get nervous?

Buffett: No. It’s a friendly crowd.

I do bring along an extra suit in case anybody throws a pie. (Laughs)

Claman: I was amazed. Dairy Queen, See’s Candies, all kinds of things. Does it ever change? How do you plan that?

Buffett: We want to add companies from year to year. We’re sort of maxed out — that exhibition floor is almost 200,000 square feet, but we may have to figure [out] a way to get a few more feet somehow. But you mentioned Dilly Bars [from DQ]. I think we had 12,000 of them and I think they were gone.

Claman: [CEO] John Gainor told me 15,000.

Buffett: 15,000. Okay.

Claman: I just don’t see guys like Goldman Sachs’s Lloyd Blankfein or Kazuo Hirai of Sony doing this.

Buffett: Well, I might get Lloyd [to do this]. I don’t think he’ll pass on money, but maybe we can get him into the act.

Claman: You are the one who actually makes money. Do you have some final numbers on things like the Nebraska Furniture Mart?

Buffett: The Nebraska Furniture Mart will do something over $40 million in the week surrounding the meeting, which is more than most stores do in a year.

Claman: Speaking of the Nebraska Furniture Mart, you’re going to be opening a huge one [in Texas] in 2015. The minute I hit the ground here, the rumor that I heard was you might have the annual shareholders meeting in Dallas next year. You said no during the meeting, [but] what if the venue was larger [and] the hotels less expensive and more affordable for shareholders. Would you consider doing it in Dallas for at least one year?

Buffett: I really won’t. It is true that, physically, Dallas could handle it better than Omaha, but we’ll find a way to hold it in Omaha. I can’t leave Omaha behind.

Claman: From moving the meeting to moving the headquarters… You are from Omaha. You absolutely love Omaha. You would never leave. But the next guy who takes over may want to live somewhere else like Iowa.

Buffett: He better be prepared to be haunted by me every night. I’ll come back and make his nighttimes miserable. (Laughs)

Claman: Will it be required that your successor live in Omaha?

Buffett: I think the probabilities are almost 100%.

Claman: Are there any circumstances where you would consider a Pfizer-type deal of incorporating overseas — for example, in the U.K. — where you could get a better tax rate since it would be better for shareholders?

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The result — Buffett & Munger Unscripted — does for the Berkshire AGMs what Lawrence Cunningham’s The Essays of Warren Buffett did for Buffett’s shareholder letters. Together, they form a Buffett anthology of sorts that will keep the Oracle’s (and Charlie’s) words alive for generations to come.

Morris recently sat down with the Masters in Business podcast to discuss what he learned from such a comprehensive deep dive into Buffett and Munger’s minds.

Below are a few highlights from the hour-long conversation…

✨ Buffett and Munger spent their lives assiduously avoiding stupidity, while still swinging hard when the odds tilted in their favor. Never overly reckless or reticent when making investment decisions, just relentlessly rational.

What mistakes are you looking to avoid is a great place for starting to figure out where you’re trying to go. That’s what they have done their entire career. It’s funny how that mindset of ‘don’t be stupid’ can still be connected to really big swings at points in time. That seems like an aggressive act and kind of a risky thing, but I think when you actually pair them together, they can work well.

It’s very easy to get overconfident in your abilities and to make mistakes — particularly when you start doing things with options or leverage — that are truly devastating. If you just avoid those things, it’s much easier to at minimum stay in the game and to get to a decent place is [not] overly difficult.

✨ Morris called Buffett’s bet on Apple “one of the great investments of all time”. Largely because he recognized this was less of a technology story than a bulletproof consumer brand that customers loved.

Warren spoke about how, at the Nebraska Furniture Mart, people come in and buy a TV and they’re looking at the number of pixels, the quality of the screen, they’re comparing the prices, etc. [But] when it comes to an iPhone versus an Android, it doesn’t matter if an Android phone is 60% cheaper — some people were absolutely going to buy the iPhone no matter what.

✨ Buffett and Munger don’t play the money game like everyone else.

Everybody knows that Berkshire owns Coca-Cola [stock], but I think the part sometimes people don’t know is that Warren started buying it in ‘88 or ‘89 [and] bought his last share in ‘94. And he hasn’t bought or sold a single share since then.

At a point in time, it was more than 30% of Berkshire’s equity portfolio. It’s not like it was 2% of their portfolio that they’re not touching. It was a hugely important position — and he hasn’t touched it in more than thirty years.

When someone is really good at investing — like they are — and they do something like that and you look around and see nobody else is really acting in this way, it’s something that stands out and is noteworthy.

✨ The changing of the guard atop Berkshire might pull the annual meeting back to its business-focused roots.

In the early days, the questions [at annual meetings] were really focused on Berkshire and investing. As time went on, they became a lot more about life advice and other things that, while still interesting, are not really Berkshire-specific.

When he got to things like GEICO and telematics or BNSF where their results were lagging some of the other Class I rails, I think Warren had a tendency to not want to point fingers at the managers and wouldn’t really talk specifically about the issues there. Which, for the people who are kind of diehard Berkshire shareholders, we want to hear those things.

Greg [Abel] took those questions head-on, which was really refreshing to hear.

More news and notes from the Berkshire Hathaway orbit…

Warren Buffett celebrates his 96th birthday on Sunday. Many happy returns of the day for the Oracle — which will hopefully be full of bridge and Blizzards!

To mark the occasion, this month’s transcript for paid supporters will be a rare-ish Buffett (and friends) television interview from the mid-2010s. Look for it on Monday morning. If you’ve been on the fence about upgrading, there’s no time like the present.

It really is the Wild West out there. BNSF Railway has been dealing with a rash of railcar robberies in recent months — and the latest one featured an unfortunate Berkshire Hathaway-related twist. Thieves made off with $123,000 worth of Brooks running shoes. But, thankfully, the shoes’ time on the run was short-lived.

After a BNSF train made an emergency stop in a remote stretch of the San Bernardino County high desert, the crew noticed three vehicles lurking suspiciously nearby and alerted local authorities. Barstow sheriff’s deputies responded and found two of these vehicles — stuffed to the gills with stolen Brooks products — abandoned in the desert.

BNSF confirmed that this merchandise had been pulled straight off the raided boxcar.

iPhone 17 remained the world’s best-selling smartphone in the second quarter. According to Counterpoint Research’s sales tracker, the base iPhone 17 model topped the list with 6% of global smartphone unit sales. iPhone 17 Pro Max and iPhone 17 Pro rounded out the top three. It was an all-Apple podium.

Looking ahead, the highly-anticipated foldable iPhone is expected to be unveiled next month at Apple’s “Surprise and Shine” event. And Mark Gurman of Bloomberg — who sometimes seems like he has a direct line into Cupertino — shared positive early buzz about the device from people who have already gotten hands-on time with it. “[They] like how it fits in a pocket, the feel and durability of the advanced hinge mechanism, and the new iPad-like app layouts that take advantage of the largest internal display.”

The Financial Times didn’t pull any punches in its retrospective of the Vicki Hollub era at Occidental Petroleum. And Berkshire’s involvement with the oil giant was not spared the rod, either. FT calculated that Berkshire’s total investment in Oxy — from the financing of the Anadarko acquisition to Buffett’s subsequent common stock purchases — produced an internal rate of return of ~7.3% over the past seven years.

“You can say clearly that capital would have been better invested in Apple,” investor Bill Stone told the paper. “You can’t call it anything but disappointing.”

Christopher Bloomstran was equally blunt, branding the investment “mediocre” — but stopped short of writing it off altogether. “It has not been a home run yet,” he said. “[Oxy] overpaid for Anadarko, contributing to the performance of the common [stock]. But the preferred has been a very good investment [for Berkshire].”

Berkshire’s strategic partnership with Tokio Marine was done, in part, to free up capital for the Japanese insurer to acquire other international companies. And it may already have something in its crosshairs. The Financial Times, building on reporting from The Australian last month, names Suncorp as the most likely target. Tokio Marine quietly vetted the Australian insurer, along with others like Insurance Australia Group and Canada’s Intact Financial Corporation, over the past few months.

“The plan is for the two groups to make sizable acquisitions together,” says FT, “that use Berkshire’s balance sheet alongside Tokio Marine’s operational expertise and its record in identifying takeover targets.” Stay tuned.

The new Kraft Heinz x Disney alliance has already started rolling out at the parks. At the recent D23 fan convention, Kraft Heinz representatives said that the company’s top priority is to get condiment dispensers installed throughout Disneyland and Walt Disney World as fast as possible. Mission accomplished on that front.

Buffett has long praised Coca-Cola for its ability to always be front and center in the places where people are happiest — like the Disney Parks, the Olympics, etc.

And, soon enough, the brand itself becomes inseparable from those warm, fuzzy emotions and memories. Hopefully, similar things will happen for Kraft Heinz as it settles into its new life at The Happiest Place on Earth.

And here’s the thing about that chapter: it might be one of the best on-ramps into how Buffett actually thinks about money and markets that has ever been written.

Charlie Munger, in his own inimitable way, once described Train as “a gifted writer with moderate insights into the investment process”.

Which, oddly enough, is exactly why this chapter works so well. When a gifted writer focuses his instrument on one of the greatest capital allocators to ever walk this earth, that’s when the magic happens.

Case in point: Buffett’s brilliance and Train’s way with words produce passages like this, describing a walk the two men once took through the streets of Omaha.

I doubt if there exists in Omaha an important building or business with whose economic history Warren Buffett is not familiar. It is curious to walk around the downtown area with him and hear him rattle off the financial characteristics of every building and business he passes.

Some of these buildings are brick, others stone; some are turn-of-the-century Main Street, and others neo-Corbusier. I’m not sure, though, that Buffett actually sees their designs or remembers the colors. He seems to look through the walls into the financial dynamics: the ground lease foundation, the equity pillars, the mortgage roof, and the preferred stock buttresses supporting not a dome but the subordinated convertible debenture. Where the passerby contemplates a mural in the entrance of an office building, Buffett’s inner eye, one feels, sees projected onto the wall the highlights of the original prospectus.

This is not wordsmithing for wordsmithing’s sake — but, rather, a pretty insightful encapsulation of how Buffett’s mind actually works. That ability to filter out the noise and the aesthetics that distract others, to peer beneath (as if with x-ray vision) at the underlying business fundamentals of every company he meets.

Here are some of the other things I learned from a recent re-read of this chapter…

Warren Buffett’s investment process can appear maddeningly simple. He asks himself what he would pay to own the entire company outright — and then checks that number against what the market happens to be charging for it today.

Too many investors work backwards. They start with the price and reverse-engineer a story to justify it. Buffett won’t even let the price into the room until said business has already been appraised on its own terms.

This leads to lots and lots of no’s.

By the time a stock’s price enters the conversation, Buffett’s filter has already done a lot of the heavy lifting. Insisting on a business that’s both good and understandable knocks out nearly everything on the table before price even gets considered. And then price narrows down the list further still.

What’s left, most of the time, is nothing at all — and Buffett is perfectly fine with that. Inaction is not a failure of the process, but a sign that it’s working as intended.

But when a wonderful business does go on sale, Buffett never nibbles. He walks straight up to the pie counter and cuts himself a very large slice. He doesn’t care what gloomy headline caused the markdown. If the business itself is still performing up to snuff, a falling stock price is just noise — not a reason to talk yourself out of making a smart decision.

This only works because Buffett has internalized a level of patience that most people simply can’t stomach. He’s never trying to time an exit. He doesn’t worry about liquidity the way a trader does — because he never planned on selling tomorrow or next week or (hopefully) ever. When you don’t need a fast way out, it doesn’t much matter what the market thinks of you on any given day.

Diversification might be a wise policy for most investors, but Buffett prefers to run a very concentrated portfolio. He rejects what he calls the “Noah’s Ark approach” to investing — buying two of everything until you’ve built a zoo instead of a portfolio. If you’ve truly found a wonderful business, limiting yourself to just a sliver of it in order to “stay diversified” feels more like a self-imposed tax on your best idea.

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Clayton Properties Group’s site-built builders will now roll up into Taylor Morrison, as Berkshire moves to cleanly separate its manufactured home operations from its more traditional site-built business. McCarty noted that no final decision has been made about whether the newly-absorbed CPG builders will officially rebrand under the Taylor Morrison name or continue under their own.

“We have been spending a lot of time since the announcement researching all their brands and running some tests and surveys around overall brand health,” she said. “We’re not going to make any [brand] decisions in haste.” Some of the smaller names could be quickly tucked into the Taylor Morrison brand, while builders with decades of local goodwill and hard-won reputations might continue to fly their own flags.

Berkshire is going Hollywood. Amazon MGM Studios and Jazwares are teaming up to bring toy sensation Squishmallows to the big screen. The studio has tapped producer Beau Flynn (Moana, Hello Kitty) to shepherd the silky-smooth, kawaii plush universe into a full-blown tentpole feature. According to Variety, Amazon MGM is swinging for the fences on this one, aiming for a global, four-quadrant (appeals to all four major moviegoer demographic groups: males under 25, males over 25, females under 25, and females over 25) event film, rather than a quick cash-in on a fad.

No word yet on whether the film will be animated, live action, or a hybrid of the two. But whichever direction the studio takes, the commercial upside is enormous. During the pandemic, Squishmallows became a cultural juggernaut (and billion-dollar brand) that still dominates TikTok and now sells two toys every second. Jazwares landed at Berkshire almost by accident, arriving as part of the Alleghany acquisition in 2022.

In the latest AM Best ranking of the world’s largest reinsurers, Lloyd’s pipped Berkshire to the top spot in the non-IFRS-17 category. (IFRS-17 is an international accounting framework for insurers, but Berkshire and some others use alternatives like GAAP.) Berkshire had topped the list a year ago, but lost out this time due to foreign currency fluctuations and the conglomerate’s underwriting discipline. Gross premiums declined 7.9% as Ajit Jain and crew walked away from property-catastrophe deals and other business that no longer cleared Berkshire’s risk/return bar.

In a softening reinsurance market — like we see now — Berkshire refuses to chase volume at any price. Instead, it scales back, remains disciplined, and patiently waits for conditions to improve. Even if that means dropping on an AM Best list or two.

As Tim Cook closes in on retirement, the outgoing Apple CEO remains just as understated as ever. Speaking with CBS Mornings from Apple’s new Advanced Manufacturing Center in Houston, Texas, where Mac minis are slated to roll off the line as soon as this fall, he looked back at his tenure atop the tech giant. But not without deflecting the spotlight one last time. “In my view,” he said, “your legacy is described by others, not yourself. I hope that people say I was a good and decent man. If they say that at the end of the day, I [will] feel like I’ve achieved something.”

Off camera, Cook told CBS reporter Jo Ling Kent that Apple will continue to be his primary focus even after stepping back into the role of executive chairman. Sounds a bit like the Warren Buffett approach to retirement at Berkshire. Passing the torch to the next generation, but staying heavily involved behind the scenes.

A federal appeals court upheld the $1-billion-plus antitrust settlement stemming from the Sitzer-Burnett case against real estate brokerages — including Berkshire’s HomeServices of America. The settlement was originally struck in 2024, but some objectors pushed to have it thrown out as inadequate. HomeServices’s share comes to $250 million, payable over four years, and CEO Chris Kelly was quick to call the “additional certainty” provided by the settlement a win for his brokerage. (HomeServices has already made payments in escrow of $130 million to date.)

That said, don’t entirely file this case under closed. The plaintiffs could yet take their fight to the U.S. Supreme Court, though whether it would be granted certiorari or not is questionable, and Berkshire Hathaway Energy (parent of HomeServices) still faces a proposed class action lawsuit tied to the Sitzer-Burnett situation.

Still, on net, a good day for HomeServices.

American Express just ran the table on customer satisfaction. For the seventh consecutive year, American Express claimed the top spot in the J.D. Power U.S. Credit Card Satisfaction Study — extending its remarkable run to sixteen total wins since the study began two decades ago. And, really, this one wasn’t even close. J.D. Power surveyed thousands of cardholders across seven key categories of overall satisfaction — and AmEx finished first in each and every one of them.

“Being ranked number one in customer satisfaction for seven years running is a powerful reflection of the value and service we deliver every day,” said group president Howard Grosfield. “We never stop raising the bar for our Card Members.”

Two other Berkshire subsidiaries won plaudits this week, as well.

• Taylor Morrison was named to the “Best Companies to Work For” list by U.S. News & World Report for the fourth year running. “I’ve always believed that when we put our people first, strong business results follow,” said CEO Sheryl Palmer, “and that philosophy guides our celebrated company culture.”

• Meanwhile, Dairy Queen landed at #6 on Entrepreneur’s “Fastest-Growing Franchises” list on the strength of its international expansion. “Being recognized by Entrepreneur as a fastest growing international franchise is an honor that reflects the strength of our global business,” said int’l COO Nicolas Boudet.

DQ’s international secret? Enthusiastically embracing local tastes and flavors. It doesn’t export the same menu everywhere — but customizes ingredients and recipes for each particular market’s preferences. “Our soft serve stays consistent around the world, but many of the flavors become localized,” R&D vice president Jane Friedrich told the Twin Cities Business Show. “In Thailand, for example, we offer a seasonal Mango Sticky Rice Blizzard inspired by one of the country’s most popular desserts.”

It’s a high-wire act that DQ has learned to walk gracefully — and nowhere is the balance trickier to find than at home. In the United States, innovation and nostalgia constantly tug customers in opposite directions. “Sometimes, consumers want their favorites back,” she said. “Other times, they’re looking for something completely new. The key is understanding which moment you’re in. People trust Dairy Queen. They know what to expect when they come here. That gives us room to innovate, but we’re never going to launch something that doesn’t test well. We spend a tremendous amount of time making sure every product delivers on the promise of the concept.”

Warren Buffett may be the most biographied businessman alive. Some run many hundreds of pages, chronicling every deal, every dollar, every decade in exhaustive detail. (And, believe me, I’m here for all of that and more.)

But one of my favorite treatments of Buffett is also one of the shortest: a single chapter from The Money Masters by John Train. A no-nonsense distillation of the essential lessons and teachings that shaped his storied career — written before Buffett achieved worldwide celebrity. Sometimes, brevity is the sharpest lens.

A comprehensive summary of what I learned re-reading this chapter will go out to paid supporters early next week. So, if you’ve been on the fence about upgrading, now might just be the perfect time.

This one was especially anticipated (at least by me) because, for the first time in three-and-a-half years, Berkshire had been a net buyer of stocks in the quarter.

As it turned out, the vast majority of said buying came on Alphabet stock — with Berkshire also adding minor amounts to a few existing positions and welcoming one old friend back into the fold. But what these moves may have lacked in surprise was more than made up for in significance. Warren Buffett, who initiated the Alphabet stake last year, is not going quietly into the night, but instead doubling down on what could be the final major investment conviction of his storied career.

Here’s a sentence that still seems hard to believe: Two of Berkshire Hathaway’s top three stock holdings are technology companies.

In the second quarter, Berkshire piled on more than 48 million additional shares of Alphabet, catapulting the search giant past Coca-Cola into the #3 spot in Berkshire’s portfolio. Where else but Berkshire can you build a $36.6 billion position (current market value) from scratch in under a year?

We already knew Buffett and co. scooped up $10 billion of Alphabet via private placement in June — but that turned out to only be part of the story. Berkshire also nabbed another ~20 million shares on the open market at a cost of $7 billion or so.

Add it all up and Alphabet accounted for $17 billion of the $23.5 billion that Berkshire spent on new stock purchases in the second quarter.

And they might not be finished yet. Like most hyperscalers, Alphabet’s stock has been a bit of a rollercoaster lately — spending plenty of time below the prices paid in that private placement ($351.81 per A share and $348.20 per B share). For all we know, they could still be buying more as we speak.

Either way, Alphabet is now an absolute cornerstone of the Berkshire portfolio.

Speaking with CNBC last month, Buffett made his confidence in Alphabet clear.

“I think it is more likely to be a winner based on their record than probably 95% of what gets merchandised through Wall Street,” he told Becky Quick.

This is not the same capital-light compounding machine it once was, but Buffett nevertheless still sees outperformance as the base case. And while Alphabet’s AI-related capital expenditures are absolutely staggering — and polarizing among shareholders and the market at large — the business itself is humming right along.

I mean, it’s hard to argue with their Q2 results. Overall revenue grew 24% to $119.8 billion, Search revenue up 17%, Cloud revenue soared 82% (with a jaw-dropping $514 billion backlog), the Gemini app now has 950 million monthly users, and on and on.

That’s the real story. Alphabet’s edge was never one person, one team, or one product cycle. It’s the infrastructure, a brand so dominant it became a verb, the custom silicon, the distribution, and the fact that Alphabet owns its models from top to bottom.

Like Berkshire itself — or the Japanese trading houses Buffett loves so much — Alphabet has so many layers and moving parts that it can be hard to wrap your head around all of it at once. (Or at least that’s what I tell myself so I don’t feel stupid.) Search continues to print cash. Cloud is scaling rapidly. Gemini has cracked the top tier of AI models while running on Alphabet’s own tensor chips. Not to mention speculative side bets like Waymo robotaxis, 14% ownership of Anthropic, or its $77 billion stake in SpaceX.

But Berkshire — and Buffett — are not blind to the risks. “The real question with Google and all of its competitors now is they’re all laying out hundreds of billions [on capital expenditures],” Buffett told CNBC. “That’s real money. That’s the game they’re playing now.”

Alphabet, for its part, plans to spend $195-205 billion on cap-ex this year alone — with management already admitting that 2027 will go meaningfully higher. Those are just really, really big numbers. I don’t know what else to say.

I don’t have a crystal ball for how any of this will shake out, but both Alphabet and Berkshire obviously believe the eventual returns will justify the outlay. Alphabet isn’t just spending its own cash pile, but continually raising outside capital — and shelving share repurchases for the time being — to divert all resources into AI infrastructure.

Berkshire, meanwhile, has spent decades proving that cash doesn’t burn a hole in its pockets. Sitting patiently by, through plenty of criticism, waiting for the right pitch to cross the plate. It beggars belief that Buffett would suddenly abandon that discipline on what may be the final major investment of his career. Or that Greg Abel would start off his tenure as CEO — and steward of the most closely watched stock portfolio on the planet — by taking excessive risk.

None of this guarantees the Alphabet investment will pay off. But the people making it have, in my eyes, earned the benefit of the doubt.

Okay, enough about Alphabet. Berkshire also added another $1.6 billion to Delta Air Lines and topped up its Macy’s and New York Times holdings.

I had also wondered if Berkshire might dump its other homebuilding stocks in light of the Taylor Morrison acquisition — in the same way that BNSF’s arrival heralded the sale of the conglomerate’s other railroad stocks. Nope. Wrong again. Instead, Berkshire increased its Lennar position, adding nearly 30% to the Class A shares and 25% to the Class B, and brought D.R. Horton back in from the cold.

Even so, these homebuilder stock holdings (including NVR) are among the smallest in Berkshire’s entire portfolio. The new investment is just ~$500,000. (A fortune to me, something smaller than a rounding error to Berkshire.) To put that in perspective, the next smallest position is Jefferies Financial Group at $24 million.

The D.R. Horton situation is, frankly, a little odd. And about as un-Berkshire-like as it gets. The company first bought shares in the second quarter of 2023, then fully exited two quarters later. It reopened the position in the first quarter of 2025, began selling almost immediately, and was out again by the third quarter. And, now, it’s back again. Maybe the third time really is the charm.

Berkshire has now sold Bank of America stock for eight straight quarters. After this latest 5.9% cut, the holding stands at 483.4 million shares — less than half its peak of more than one billion shares two years ago. was not the only financial name on the chopping block: Capital One and Ally Financial also got trimmed.

There were also modest reductions in Nucor and Kroger, along with DaVita — though that last one is the result of a Share Repurchase Agreement between the two companies rather than any change in Berkshire’s opinion of the business.

Perhaps the least surprising move was the complete exit from Constellation Brands. Berkshire had already unloaded almost all of that stake in the first quarter, so this was mostly just a matter of mopping up what remained.

And, finally, this little nugget, courtesy of the Wall Street Journal, suggests that one or two Todd Combs investments may have survived last quarter’s cull after all.

Berkshire liquidated most of the roughly 15 positions during the first quarter that were managed by Todd Combs, Buffett told the Wall Street Journal in May. Buffett added that it is possible the conglomerate retained some of Combs’s stocks, and it is unclear whether Berkshire ended June with any of those holdings.