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?

Read more

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.

Read more

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.

Set aside the $10 billion private placement with Alphabet — revealed to the public back in June — and we still have $13+ billion in purchases unaccounted for.

Reading financial filings might not be everyone’s idea of a fun Friday night, but these are the sacrifices I’m willing to make for this newsletter. 😜

In other above-the-fold Berkshire news, CEO Greg Abel will travel to Japan next month to meet face-to-face with his counterparts at Mitsubishi, Mitsui, Marubeni, Itochu, and Sumitomo. (Berkshire owns ~10% of each of these trading houses.)

More news and notes from the Berkshire Hathaway orbit…

AM Best boosted the outlook for Berkshire Hathaway’s GUARD Insurance Companies from negative to stable. A well-deserved vote of confidence in the unit’s “operational turnaround” under a new management team, crediting the corrective measures put in place since its underwriting problems first surfaced a few years ago. GUARD’s underwriting results had sharply deteriorated in 2023-24 due to mispriced risk across many of its lines, forcing Berkshire to step in and set things right.

GUARD exited its homeowners operations entirely and tightened underwriting guidelines in all areas of the business. Those changes — plus a significant capital infusion from National Indemnity — convinced AM Best that the worst is over.

Berkshire’s 10-Q told us that Brooks Running’s revenue and earnings increased in the second quarter — but, happily, the footwear company itself filled in the details. Brooks posted 14% revenue growth in the first half of the year — with strength across every region. Sales climbed 9% in the Americas, 39% in EMEA (Europe, Middle East, and Africa), and 10% in the Asia-Pacific. CEO Dan Sheridan called it a “broad growth story” for the company, as runners continue to pay up for premium shoes and apparel.

Brooks also retained its position as the #1 brand in U.S. specialty retail footwear for the sixth straight month. Long may that continue.

Occidental Petroleum CFO Sunil Mathew laid out the company’s capital game-plan for the rest of the decade: pay down debt and then pay back Berkshire. “Our immediate cash flow priority remains to reduce principal debt to $10 billion,” he said on last week’s earnings call. “After we achieve the $10 billion principal debt milestone, our focus will be to further reduce net debt. We will balance additional debt reduction with building cash ahead of the preferred equity redemption in August 2029.”

“Share repurchases will remain opportunistic,” added Mathew. “Any continuous share buyback program will be a lower priority until the redemption of the preferred.”

Occidental can begin voluntarily redeeming the remaining $8.5 billion of preferreds in August 2029, which will move Greg Abel and company one step closer to decision day. Berkshire still holds warrants for 83.9 million shares of at $59.59 a piece that are exercisable until one year after the preferreds are fully redeemed.

Apple still owns the premium smartphone game — even if its crown sits a little looser these days. New data from Counterpoint Research shows that the tech giant controlled 65% of the global premium smartphone market (devices priced $600 and up) through the first half of this year — up from 63% a year ago. The iPhone 17 lineup, particularly the base model, powered a 9% jump in Apple’s premium revenue.

This segment, though, has grown more competitive in recent years. Apple’s premium share is still well below the 74% it commanded in 2022, as it faces renewed pressure in China from local rivals like Huawei, Xiaomi, and others.

Coca-Cola just broke ground on a $650 million expansion of a Fairlife plant in Michigan, doubling down on a brand that already pulls in about $4 billion a year. “The [245,000-square-foot buildout] will allow us to bring in an additional four million pounds of milk from Michigan dairy suppliers each day,” said CEO Becca Kerr, “and significantly increase capacity and availability of Fairlife products.” It’s also nearing completion of a separate production facility in upstate New York.

And, c’mon, Fairlife needed a little good news.

This milestone comes just a few weeks after a ransomware attack knocked out the company’s entire U.S. production capacity for ten-plus days in mid-July. Coke later noted that its subsidiary’s misfortune “has not had, and is not reasonably likely to have, a material impact on the company’s financial condition or results of operations”.

In honor of America’s 250th birthday, Bank of America will put big money behind our nation’s next chapter. This week, the bank unveiled a $250 billion Critical Infrastructure Finance Initiative — and aims to mobilize and deploy the full amount by (appropriately enough) July 4, 2027. Financial activity (including lending, investing, capital markets, etc.) should move fast across three fronts shaping the modern American economy: digital infrastructure for data centers and semiconductors, energy systems spanning renewables to grid storage, and core infrastructure covering transportation, water, and critical minerals.

“This initiative reflects our confidence in the country’s future and the investments that will shape it,” said co-president Jim DeMare. “The infrastructure that powers our economy, strengthens our energy security, and secures our technological leadership will drive growth, create jobs, and define America’s next chapter.”

BNSF Railway rolled out expanded intermodal service between two of the Southwest’s fastest-growing freight markets. It not only trims the trip between Phoenix and Dallas-Fort Worth to just over three days from train departure to cargo availability, but also runs six days a week to match surging demand in both metros. Shippers bracing for peak season — and already squeezed by trucking costs — now have an attractive alternative that doesn’t sacrifice speed or reliability.

Last week, I kicked off the newsletter with Ribbit Capital founder Micky Malka’s story about meeting Charlie Munger, including the Berkshire vice-chairman’s advice on the “power of time”. Turns out I wasn’t the only one thinking along those same lines of compounding, time, and patience — as Mark Tobak tackled several similar ideas over at Hedge Fund Alpha. Give it a read.

Shortly before this issue went to press, Berkshire dropped two new filings:

• CFO Charles “Chuck” Chang purchased two Class A shares ($1.5 million total) through a limited liability corporation controlled by him and his spouse.

• General counsel Michael O’Sullivan added 488 Class B shares ($250,000) to his living trust. He bought a similar amount of Berkshire stock back in May after the Q1 report, so perhaps this will be a regular post-earnings occurrence.

Check back on Monday for a full review of Berkshire’s Q2 investment activity!

He not only started putting the conglomerate’s record cash hoard to use, but also showed early proof that his managerial chops will pay dividends with the subsidiaries.

Abel often cites “operational excellence” as a mantra of sorts for his tenure as CEO. And, with only one or two notable exceptions, it seems like the message is taking root across the sprawling business empire he inherited.

All in all, Berkshire’s Q2 2026 performance makes for pretty happy reading.

Berkshire Hathaway closed the second quarter with $364.7 billion in cash.

That’s still a jaw-dropping number, but actually represents a 4% decline from the previous quarter. In fact, this snaps a four-year streak of quarter-over-quarter cash growth. (And, notably, this figure does not capture the $6.8 billion paid in cash for Taylor Morrison, since that deal did not officially close until late July.)

It does include, though, $4.5 billion of share repurchases. That comes in on the lower end of estimates, but there is good news for those of us hoping to see bigger buybacks. The pace of repurchases accelerated throughout the second quarter (even as the price paid per share increased) and carried over steadily into July.

According to my back-of-the-napkin math — which, let’s be honest, is shaky at even the best of times — Berkshire snapped up 4,553 more of its own Class A equivalents (perhaps $3.5 billion?) during the first four weeks of the new quarter alone.

Net seller no more.

For the first time in fourteen(!) quarters, Berkshire bought more stock ($23.5 billion) than it sold ($3.7 billion) in the second quarter. A decisive swing back toward offense after years of trimming its equity book.

Even if you set aside the $10 billion private placement with Alphabet — the one piece of the puzzle we already know about — Berkshire still would have ranked as a clear net buyer for the quarter as a whole. Thankfully, we don’t have to wait long for the full story: Berkshire’s 13-F should drop on Friday afternoon.

The conglomerate’s stock portfolio finished the quarter valued at $323.8 billion and remains every bit as concentrated as ever. The top five holdings — Apple, American Express, Alphabet, Coca-Cola, and Bank of America — now account for 66% of the entire portfolio, up five points from the previous quarter. No matter who is calling the shots, Berkshire has never been afraid to lean way into its highest-conviction ideas, rather than spreading capital thinly across dozens and dozens of names.

Operating earnings have long been Warren Buffett and Charlie Munger’s preferred metric for measuring Berkshire’s actual business performance.

It cuts through the noise of unrealized gains and losses to reveal what the subsidiaries did — or did not — accomplish in a given quarter. And Q2 2026 is a good example of why this distinction matters. Berkshire’s net earnings more than doubled to $25.7 billion, but that surge owes far more to the unrealized swings of its aforementioned massive stock portfolio than to underlying business performance. Berkshire calls these fluctuations “usually meaningless” and recommends that shareholders focus instead on operating earnings as the truest measure of performance.

In the second quarter, Berkshire reported $12.98 billion in operating earnings, good for a 16.3% gain. But, before moving on, there’s still the whole foreign currency issue to address. (FX swings, which the company doesn’t really control, can distort the picture of core business performance.) If you strip out these gyrations — removing this quarter’s $326 million “gain” and the $877 million “loss” in 2025 — the year-over-year operating earnings increase narrows to 5.2%. Which is still a solid result.

Insurance underwriting earnings declined 13.1%, though the blame for that lies squarely with GEICO. That being said, all three of Berkshire’s insurance segments remained profitable in the second quarter — with gains from BH Primary and BH Reinsurance Groups partially mitigating the GEICO slide.

• The auto insurer’s pre-tax underwriting earnings tumbled 45.4% from $1.82 billion a year ago to $994 million this quarter. The deterioration came from both directions at once. Claims frequencies and severities increased on the loss side, while expenses jumped 27.3% on higher commissions and advertising spend as GEICO works to reignite policy growth. Even so, it still managed a very decent 91.2% combined ratio (and earned nearly a billion dollars) for the quarter.

• BH Primary and BH Reinsurance both benefited from an absence of significant catastrophe events so far this year (unlike the SoCal wildfires in 2025). Each was also able to reduce its ultimate loss estimates for prior accident years’ claims — which is a jargon-y way of saying that Berkshire’s conservative and disciplined approach once again turned out to be more than enough to cover actual losses.

• The new Tokio Marine strategic partnership is already making an impact. BH Reinsurance’s premiums written rose by $204 million in the second quarter, though that was entirely attributable to National Indemnity assuming $483 million of Tokio Marine’s non-life premiums over a ten-year term. If not for that, reinsurance property/casualty premiums would have declined by 5.6%.

• Float now stands at roughly $177.5 billion, up $1.1 billion since year-end. And, since overall underwriting was profitable, the cost of that float is negative, meaning Berkshire gets paid to hold — and put to work — other people’s money.

BNSF Railway kept chugging right along.

The Berkshire-owned railroad’s revenue rose an impressive 14.6% in the second quarter, as it moved 6.5% more traffic (particularly consumer products and agricultural/energy) and average revenue per car/unit increased 7.6%. Unfortunately, due to fuel expenses, BNSF’s operating costs went one better and jumped 15.6%.

All told, BNSF’s net earnings increased 6.3% to $1.6 billion.

But there’s still a long way to go. BNSF’s operating ratio (65.4%) continues to trail Union Pacific’s (59.2%) by a pretty wide margin.

Berkshire Hathaway Energy earnings soared 26.9% up to $891 million.

This growth came primarily from U.S. utilities and natural gas pipelines, which each posted 30+% gains in net earnings. That more than offset any weakness in other energy businesses (in particular, Northern Powergrid) and the real estate brokerage.

No discussion of BHE would be complete without an update on PacifiCorp’s ongoing legal saga. The utility notched an important win at the Oregon Court of Appeals in April, when the wildfire litigation in the James case was remanded to the circuit court after judges determined the original jury had been given incorrect and prejudicial instructions. It was a welcome sigh of relief for the beleaguered subsidiary, but the story is far from finished. The James plaintiffs appealed to the Oregon Supreme Court which has agreed to hear oral arguments on November 3, 2026.

The enormous MSR (Manufacturing, Service and Retail) segment also delivered big numbers. Overall, net earnings increased 24.1% to $4.5 billion. And growth was strong across the board, with M’s pre-tax earnings up 26.8% and S&R up a similar 23.5%.

• Industrial products fired on (almost) all cylinders. Precision Castparts notched $3.1 billion of revenue on higher aerospace and industrial gas turbine sales, as pre-tax earnings rocketed up 34.2%. Lubrizol had its earnings jump 23.4%. Marmon’s 4.9% revenue increase mostly came down to Acme Brick joining the crew earlier this year. IMC grew earnings an eye-popping 71%, though management warned that rising raw material costs might weigh on results in the back half of the year. OxyChem contributed $1.4 billion in revenue and $149 million in pre-tax earnings.

• Building products told a more uneven story. Clayton Homes, the segment’s bellwether, posted 2.8% revenue growth to $3.4 billion, with home sales up 1.7% and financial services up 9.5% on higher loan balances and interest rates. But earnings slipped 3.5% to $468 million due to softer homebuilding profitability.

  • The other building products businesses recorded a 16.6% gain in pre-tax earnings, though that number flatters the underlying reality. Without this quarter’s one-time tariff refunds, earnings would have declined 8.8%.

• Brooks and Jazwares paced consumer products with both revenue and earnings gains. Duracell also had higher earnings, but that was primarily due to domestic manufacturing tax credits — not business improvement. Sales declined at Fruit of the Loom and Forest River.

• The service group racked up 20+% gains in both revenue and earnings. TTI, aviation services (NetJets and FlightSafety), and IPS all enjoyed double-digit revenue growth. The 10-Q did note that some of TTI’s sales may have been pulled forward due to worries about future price increases and supply chain issues.

• McLane suffered declines in both revenue (-3.8%) and earnings (-1.7%).

• At Berkshire Hathaway Automotive — which accounts for roughly 70% of the retailing group’s revenue — sales edged up 0.5% in the second quarter and pre-tax earnings an even better 5.1% on strong service contract operations. The rest of the retail businesses faced sluggish customer demand as earnings slipped 2.8%.

• Pilot showed some much-appreciated signs of life with 143.7% higher earnings.

He has devoted numerous episodes to Warren Buffett and Charlie Munger, but my favorite moments come when noteworthy guests freely admit just how deeply these two men — and Berkshire Hathaway — shaped them.

And, for some, that influence goes all the way back to childhood.

“I bought my first share of Berkshire when I was 13 years old in Venezuela,” Ribbit Capital founder Micky Malka recently told Senra. “It was November of 1987. I had read a few articles in Fortune about [Buffett] and I loved the brands he had in his portfolio. I didn’t know anything about float or insurance. I was not very familiar with that line of the business.”

Malka took his Bar Mitzvah money and convinced his grandfather to loan him the rest — with interest — to buy a single share. An opportunity only made possible because the previous month’s Black Monday crash knocked Berkshire’s (and many other) stock prices way down.

From there, Buffett’s annual letters became Malka’s real education. “If you read them carefully enough,” he said, “you know that the pattern repeats. What you learn is not the decisions he makes, it’s how in any environment he repeats the same decision-making process. That’s the most important thing that you get from [those letters].”

“It doesn’t matter if you were in the 1970s when there was high inflation in America compared to the standard [level] or in the era of zero interest rates. It didn’t matter what was the macroeconomic conditions of the world. He used the same pattern every single time to define how to think about money. It’s the discipline that he built. He just was amazing at canceling [out] noise and focusing on the things that matter most.”

Malka also shared an incredible story about the time he broke bread with Munger.

I sat with Charlie Munger once after an annual meeting at the Happy Hollow Golf Club where Warren had this thing afterwards. I [still] only had one stock of Berkshire — I was probably 24 years old or 25 — and I’m sitting and he says, “Is this seat taken?”

I said, “No, come on, sit here Charlie,” and we started to talk.

In that room was everybody. Bill Gates was there. All these big CEOs of all these companies. And I was like the youngest guy [there] by an order of magnitude.

He looks at me and says, “You must be very wealthy to be here.”

I said, “Actually, no, I only own one share.”

He said, “You don’t get it. You are the wealthiest guy in the room.”

I said, “You’re wrong, Charlie.”

“No, no, you are.”

“Why?”

“You have the power of time. All of us here are in our last chapter. You’re just starting your time. You will compound for the next seventy years of your life. So never forget the rule I’m about to tell you: You only need to get rich once.”

And, then, that was it.

He said, “Now, I’m going to eat,” and he just sat down and ate. 🤣

What a scene.

Charlie drops life-changing wisdom and then is like, “Show’s over, kid. I’m hungry.”

More news and notes from the Berkshire Hathaway orbit…

It’s that time again: Berkshire Hathaway will report Q2 2026 earnings bright and early tomorrow morning at 8 a.m. ET. There will, no doubt, be much to discuss — but my first stop will be the share repurchase page to see how aggressively Greg Abel fired back up the ol’ buyback machine. A back-of-the-envelope estimate from Barron’s puts this quarter’s repurchases as high as $11 billion. Even the lower end of the range — around $5 billion — would still dwarf the $235 million spent in the first quarter.

On July 31, Berkshire Hathaway sold 182,980 shares of DaVita for $36.5 million. While the filing does not explicitly mention the Share Repurchase Agreement between the two companies, this sale almost certainly stems from it. Per the terms of that arrangement, Berkshire promised to keep its ownership percentage under 45.0% of the dialysis provider’s outstanding shares. DaVita bought back 2.2 million shares of its own stock in the second quarter (plus another ~200,000 in July), necessitating this latest trim. Berkshire’s stake now rests at a carefully calibrated 44.98%.

Robert Hagstrom plugged his new 25th anniversary edition of The Warren Buffett Portfolio on last week’s episode of The 100-Year Thinkers podcast. And shared that the book was originally born out of his bewilderment at how often investors invoke Buffett’s philosophy without actually practicing it. “I would watch CNBC or the Financial News Network,” he said, “and somebody would say, ‘I like to buy great companies with great economics run by shareholder-oriented managers [and] we basically try to buy them for less than they’re worth.’ I’m thinking, well, that’s pretty cool. That’s the Warren Buffett way. And then you look at their portfolio and they would have 100+ stocks and the turnover ratio was 100%. Wait a minute, you’re talking the talk — how Warren thinks about buying stocks — but you’re not walking the walk. That was the motivation to write The Warren Buffett Portfolio.”

BNSF Railway appeared to have cleared the final regulatory hurdle for its $4 billion Barstow International Gateway — only to now face renewed legal challenges from environmental groups. In a lawsuit filed in San Bernardino County Superior Court, the coalition argued that California’s two-year environmental review, which BNSF already passed, was fatally flawed and must be redone. A puzzling objection, given that environmental benefits are among this project’s chief selling points. Allowing BNSF to load intermodal containers directly onto rail cars at the West Coast ports will eliminate millions of truck trips each year — and, with them, up to 75% of potential emissions. “None of this is good enough for the environmental groups,” says industry outlet Trains, “[who] seem happy to let the perfect be the enemy of the good. BNSF’s massive investment should be cheered, not held up in courts due to environmental regulations that, despite recent streamlining, remain overly cumbersome.”

Kraft Heinz sees “green shoots” as it accelerates turnaround plans. The company raised its net sales outlook for the full year and committed another $100 million to its North American revival efforts, bringing total spending in this area to $700 million. “Let me be clear,” said CEO Steve Cahillane, “we are increasing investments from a position of strength. Not because what we are doing is not working, but precisely because it is — and we intend to build on that momentum.” The new $100 million will go entirely toward rebuilding a marketing machine previously gutted by 3G Capital.

• Worth noting: Kraft Heinz’s net sales “raise” is really just a smaller decline than originally expected. It now forecasts full-year sales to fall 0.5-2%, as opposed to the initial guidance for a 1.5-3.5% drop. “Nobody’s doing a victory lap here,” Cahillane told CNBC. “We still declined 1.3% in the [second] quarter. That’s a lot better than we’ve been doing, but we need to do better.”

Check back on Monday for a full review of Berkshire’s Q2 results!

Just two days after Taylor Morrison shareholders overwhelmingly voiced their approval, Berkshire completed its $8.5 billion acquisition of the homebuilder.

Taylor Morrison’s full brand lineup — including resort lifestyle line Esplanade and build-to-rent Yardly — will now be integrated with Berkshire’s existing site-built arm, Clayton Properties Group. Together, the two operations closed nearly 23,000 homes last year, making the combined platform the fourth-largest homebuilder in America.

“This best-in-class homebuilder will lead our vision for a unified site-built homebuilding operation,” said Berkshire CEO Greg Abel.

Sheryl Palmer, who stays on to run Taylor Morrison, called the deal “transformative” and heralded it as “unlike anything [else] in the industry”.

Speaking on CNBC, she described the acquisition as a chance to step off the industry’s treadmill of short-term pressures. “First of all, we [now] get to focus on the long game,” said Palmer, “because this is a cyclical business that we operate in. We are ecstatic to build on the scale of this combined homebuilding platform.”

“Now, our ability to acquire land in today’s market at very disciplined prices and invest through these more unique times, I think provides a unique opportunity. Honestly, that patient capital is one of the things that Berkshire provides that I’m so excited about. We can focus on three, five, ten years out from today.”

Palmer also sees the deal as validation of Taylor Morrison’s time-tested approach. “Berkshire buys companies because they believe in them and want them to continue [doing] what they do so well,” she told Bloomberg Television. “This is homebuilding history. We’re joining one of the most reputable companies in the world — a company that’s going to back us fully. What’s central for [Berkshire] is that homeownership remains [integral] to the American dream.”

In homebuilding, she noted, scale matters. A lot. “[But] it’s not just big for big’s sake. It’s big so that we can provide a quality product at the right price to fulfill more Americans’ homeownership dreams. Ideally, we would love to see [the combined Berkshire site-built platform] as a top-three builder in every market we compete in.”

More news and notes from the Berkshire Hathaway orbit…

After “better-than-expected performance” so far this year, American Express raised its revenue growth guidance for the full year. CEO Stephen Squeri told shareholders that he plans to plow that upside right back into the business. “We can either drop the over-performance to the bottom line and buy back more shares,” he said, “or we can invest to grow the business further through the wide range of attractive growth opportunities we have across our business. We have chosen the latter because, in the long run, it is the one that creates the most value for our shareholders.”

• This reinvestment encompasses everything from technology to acquisitions — like the pending purchase of TheFork — to continued card-portfolio expansion. “There is no shortage of technology investments or enhancements” left to make, added Squeri.

• A few more interesting details from AmEx’s earnings report and call: (1) the Platinum portfolio is on fire, now ranking as the company’s fastest-growing U.S. consumer business; (2) over 70% of new accounts this year came from fee-based products, part of a deliberate tilt toward higher-value cardholders; (3) that focus on high-credit-quality customers has kept delinquency rates steady in a 1.2-1.3% band for three straight years; and (4) AI has cut engineering cycle times by 30-40% and reduced the need to backfill customer service and travel agent roles, allowing headcount to shrink through attrition rather than layoffs.

Coca-Cola also enjoyed a strong second quarter, with global unit case volume increasing by 5% amid broader gains in revenue and earnings per share. A result new CEO Henrique Braun credited, at least in part, to sponsoring a certain summer soccer tournament. “We had, during the World Cup, a great opportunity for us to shine our brands,” he told CNBC. “We’re very pleased with the way that we showed up in the World Cup.”

• Even the mid-match hydration breaks — maligned by some fans as a flimsy excuse for more TV commercials — seemed to pay off. Sales of Powerade, which sponsored the breaks, jumped 8% in the second quarter.

Earlier this week, Apple briefly crossed the $5 trillion market cap line for the first time — becoming only the second company ever to do so — before slipping back under before the close. The Cupertino-based tech giant also recently leapfrogged Nvidia to reclaim its place as the world’s most valuable company. (This may or may not still be true by the time you’re reading this, as Apple’s stock price took a hit last evening due to disappointing revenue guidance for next quarter.)

After Union Pacific and Norfolk Southern filed new information with regulators in defense of their proposed merger, BNSF Railway CEO Katie Farmer fired back. “Despite UP and NS’s fourth attempt to submit a complete application,” she said in a statement, “the bottom line remains the same. UP and NS have not changed the core of their proposal that fails to demonstrate how combining two major railroads into a single carrier would preserve — much less enhance — competition as required by the Surface Transportation Board’s merger rules.”

• Farmer didn’t stop there, framing the deal as a threat to the broader economy rather than just a competitive dispute between rival railroads. “This would be an anti-competitive transaction between two financially healthy companies that will reduce competitive options and raise rates on rail customers, result in higher prices for consumers, and thus do great harm to the American economy and broader supply chain.” The STB is expected to issue its ruling sometime in 2027.

According to the Wall Street Journal, United approached Delta last year about merging airlines. United CEO Scott Kirby reportedly called his Delta counterpart Ed Bastian to quietly float the idea. Delta mulled it over, but talks stalled before ever gaining any real momentum. Both airlines lean hard into premium travelers over budget-conscious flyers — and, together, captured more than 90% of the industry’s profits last year. Any deal, though, would almost certainly draw antitrust scrutiny.

Buffett’s appearance came courtesy of former BNSF Railway CEO Matt Rose, a longtime supporter of The Gatehouse. This is a very interesting interview — one that I had never seen before — that delves into different areas (like streaming, real estate, and more) than the typical Buffett Q&A session. Enjoy!

A couple of quick notes: I condensed and summarized some of Becky’s questions to keep the spotlight on Buffett’s answers. I also omitted a brief discussion of the Gates Foundation near the end, since that is no longer relevant to Buffett and Berkshire watchers.

Becky Quick: You called the BNSF Railway acquisition a huge bet on the future of the American economy — and that bet paid off in a big way. In fact, this year in the annual report you wrote about BNSF as one of the towering redwoods in the grove that is Berkshire Hathaway. Looking back on nine years, what can you say about what has happened since?

Warren Buffett: It is the tallest redwood in the Berkshire forest. It was a seminal time for Berkshire, in either the last days of October or the early days of November of 2009, [when] Matt [Rose] and I talked at a small hotel in Fort Worth. Our directors are going to meet there in the fall — it will be the tenth anniversary [of the BNSF deal]. I’ve had so much good luck in Texas, but nothing rivals the BNSF acquisition.

One thing you may find interesting [is] I had a talk with Matt, I guess it was the Monday following the Friday I was out here with him. We more or less had the deal and then I called our lawyers and I said, “You fellows can bill me for all the hours you want between now and Sunday at noon. And after that, you’re working for nothing.”

We compressed that deal into a one-week period or so that otherwise probably would have taken months if I hadn’t made that restriction. Those of you who have dealt on corporate deals will understand why I stuck that in. (Laughs)

Matt is retiring next month. What are you going to do without him?

He has left us a great, great railroad. It is the towering redwood at Berkshire and we’re going to take good care of what he has built for us. I think I described it as being a bet on the country and a 100-year asset. It’s more than a 100-year asset, but I thought that would probably be as long as I would be around. I didn’t want to speak beyond my tenure. (Laughs)

It is so fundamental. It moves more than 15% of the ton miles in terms of inter-city traffic in the United States. It’s important not only to Berkshire, [but] it really is important to the country. And it has been treated by Matt like it was important to the country. He realizes that it has a significance that goes well beyond that of virtually any businesses in making sure that this country works the way we want it to work.

Warren, you’ve been fascinated with the railroads since you were a kid.

Right.

Now, you look at it as something much more than just a fun toy. You watch this as something that’s a real way of measuring the economy. You talk all the time about the car-rail loads. What are you seeing right now when you look at that statistic and what does that tell you about the economy?

It’s distorted in the last week or two by the floods in the Midwest — and we move a lot of coal — but there are twenty-odd categories that the railroad industry reports on for all the railroads. Winter is always a little bit of a tricky thing, but I would say that it looks like it’s slowing down. I don’t mean it has reversed in course or anything, but it does seem [that way] from all of [our] businesses, but especially including railroad statistics because they come so fast and they cover such a broad spectrum.

It gets distorted by whether people are hurrying up the Pacific trade because they’re worried about tariffs and all of that sort of thing — but I would say it does look like the pace of increase in the economy has slowed down. I would call it somewhere close to noticeably, but I wouldn’t go beyond that.

Have you seen it broadly or are there a couple of areas where you see more weakness?

There are these twenty-odd categories, like autos and aggregates [and] grain. Almost all of those categories throughout last year were trending strong. And I would say, just looking at those figures — but also looking at a good many other figures I see on a weekly basis — it looks like things have slowed down. You always have the weather factor. That’s the way I would bet looking at what I see today.

That doesn’t change anything we do. If there was a flashing red light, if there was a blaring red light, we would keep investing the same way we do.

Just look at the railroad in terms of what the situation was in the fall of 2009. It looked like the end of the world and it turned out that that was the low quarter, the third quarter. You really want to bet on America. [We] listened to that magnificent rendition a few minutes ago. God has blessed America.

I don’t want to get too wonky on this, but the yield curve — when you look at the ten-year versus the three-month — has inverted. This is a pretty important recession signal. It has signaled every recession that we’ve seen in the last fifty years and it has only given an incorrect signal once. This is the first time it has inverted since 2007. Do you see a recession on the horizon?

I just hope I see a lot of recessions. I hope I live long enough! (Laughs)

I don’t know how many recessions I’ve lived through. I was born on August 30, 1930, and the Dow was a little over 250. By the time I got out of college, there was only one or two days after my birth that it had been that high. I don’t know whether I’ve lived through eight recessions or six recessions or you name it, but that’s part of the capitalistic system.

We will have them — and it won’t change anything Berkshire invests in. It may offer us more opportunities, in marketable securities or businesses.

If we see a good business and everybody in the world is bearish and that [yield curve] inversion has gone to a hundred basis points or something like that, we’re going to buy it. And we will buy it enthusiastically.

You’ve talked an awful lot in the past about how high yields act as gravity on stock prices — so if you’re seeing really low yields that, inversely, could mean that stocks should trade a lot higher. What do you think of that?

Read more

This month’s transcript for paid supporters comes from a lesser-known Buffett Q&A where he opens up on some of his investments that rarely get much airtime. Plus, a smattering of topics of perennial interest to investors like interest rates, IPOs, etc.

Here is a sneak peek at Buffett’s response when asked — for probably the thousandth time in his life — whether he saw a recession looming on the horizon.

I just hope I see a lot of recessions. I hope I live long enough! (Laughs)

I don’t know how many recessions I’ve lived through. I was born on August 30, 1930, and the Dow was a little over 250. By the time I got out of college, there were only one or two days after my birth that it had been that high. I don’t know whether I’ve lived through eight recessions or six recessions or you name it, but that’s [just] part of the capitalistic system.

We will have them — and it won’t change anything Berkshire invests in. It may offer us more opportunities, in marketable securities or businesses. If we see a business [we like] — [even if] that [yield curve] inversion has gone to a hundred basis points, we’re going to buy it. And we will buy it enthusiastically.

The full transcript will go out to paid subscribers early next week. If you’ve been on the fence about upgrading, there’s no time like the present.

More news and notes from the Berkshire Hathaway orbit…

Berkshire Hathaway’s $8.5 billion acquisition of Taylor Morrison cleared an important hurdle this week. On Wednesday, the Arizona-based homebuilder held a special meeting to vote on the deal — and shareholders overwhelmingly signaled their support for joining Berkshire with ~97% of all votes cast in favor of the move.

Brooks just earned some of the best marketing that money can’t buy. Last weekend, Scottish runner Josh Kerr shattered the world record for the mile, one of track and field’s longest-standing records, running it in 3:42.66 at the London Diamond League. And did so wearing a custom speed suit and race spike (shoes) made in partnership with sponsor Brooks. The whole campaign was dubbed “Project 222” — a nod to the 222 seconds needed to break the record. Kudos to Josh and Brooks!

Alphabet posted double-digit revenue growth for the twelfth straight quarter. “Our AI investments are redefining what’s possible across every part of our business,” said CEO Sundar Pichai. “Q2 was an amazing quarter, with Alphabet revenues growing 24% year-over-year [to $119.8 billion] and Google Cloud revenues accelerating to 82% growth, driven by demand for AI infrastructure and AI solutions.”

• The tech conglomerate’s Q2 capital expenditures hit a record $44.9 billion, with 60% spent on technical infrastructure and 40% on data centers and networking equipment. Alphabet now forecasts cap-ex for the full year to reach $195-205 billion, up from previous guidance for $180-190 billion. And *gulp* Google execs expect that number to climb even higher next year.

Coca-Cola’s $3 billion Fairlife dairy brand has been forced to suspend all U.S. production after a recent ransomware attack. Hackers accessed a portion of Fairlife’s systems, including those related to production, which led to operations being taken offline indefinitely. “Product quality and safety have not been impacted,” said Coke. The ransomware group Anubis has since claimed responsibility and threatened a data leak if not paid. (Fairlife’s Canadian operations are not affected by this odd situation.)

Kraft Heinz and The Walt Disney Company inked a long-term strategic alliance to bring fan-favorite food brands like Heinz, Philadelphia, and Kraft Mac & Cheese to the Disney Parks. Notably, Heinz will become the exclusive condiment supplier across Disneyland, Walt Disney World, and the Disney Cruise Lines — echoing the kind of built-in visibility that Coca-Cola has long enjoyed as Disney’s official soft drink partner. KHC can also now use Disney characters on select retail products.

• For Kraft Heinz president Nicolas Amaya — who followed CEO Steve Cahillane over from Kellogg — it’s time to dream big. “That’s what marketing is about today,” he told the Wall Street Journal. “It’s about creating experiences that are memorable.” Translation: expect condiments to get a serious glow-up, starting with lightsaber-shaped ketchup dispensers in Star Wars: Galaxy’s Edge.

American Express is once again the safest name in plastic, notching its 19th consecutive year with the lowest U.S. fraud rate among major card networks. The secret weapon behind its fraud-fighting success? A steady, aggressive bet on technology. The company’s adaptive machine-learning models can flag a fraudulent purchase within milliseconds of a swipe. And its proprietary generative AI system has now doubled the number of fraud cases resolved on the spot.

• “Fraud is constantly evolving,” said executive vice president Amber Gupta, “and so are we. For years, American Express has been at the forefront of applying AI and machine learning to fraud prevention — and we continue to build on those capabilities today, investing in the technology and talent needed to stay ahead.”

Part of what makes following Berkshire so much fun is randomly stumbling onto pieces of the empire that you’d never even heard about before. This week’s example: AM Best reaffirmed the excellent financial strength and credit ratings on two obscure Berkshire-owned insurers, Old United Casualty Company (OUC) and Old United Life Insurance Company (OUL). OUC writes vehicle service contracts for auto dealerships owned by Berkshire Hathaway Automotive — with ~90% of written premiums coming from Kansas alone. AM Best praised its “track record of stable and strong operating performance” and “consistently profitable underwriting results”.

• OUL is the smaller, quieter sibling. It sells credit life and credit accident/health insurance — essentially, insurance coverage that pays off a loan if the borrower suffers death or disability. That business is, admittedly, fading as consumer preferences shift away from these products and more towards vehicle service contracts. OUC and OUL might make up only a small, unglamorous corner of the trillion-dollar conglomerate, but are also a reminder that Berkshire’s insurance operations aren’t just GEICO and reinsurance giants. There’s an entire layer of niche, hyper-local insurers quietly chipping in behind the scenes.

Shortly before this issue went to press, Berkshire subsidiary CORT Business Services announced the acquisition of Dwellworks Living. “By combining Dwellworks Living’s expertise in temporary living with CORT’s resources, scale, and long-standing leadership in mobility-related services, the combined organization will be positioned to deliver even greater value to clients and partners worldwide,” read the press release. The deal is expected to close at the end of this month.

Buffett welcomed Becky Quick and crew back to Omaha last week for a wide-ranging, nearly hour-long conversation. The official occasion was his annual donation to four family foundations — and the conspicuous absence of the Gates Foundation from the recipients list — but he also proved characteristically candid on a much broader range of topics that Berkshire Hathaway shareholders will surely want to hear.

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

On Berkshire Hathaway’s ~$30 billion investment in Alphabet/Google…

(1) “I initiated [our Alphabet investment]. I normally wouldn’t give you an answer on something like that, but I am not doing anything that [Greg Abel] doesn’t approve of. He’s not doing anything I don’t approve of. We talk all the time — every day — but he is the decider.”

(2) “We are always making the choice between whether we will buy marketable securities or a company [in whole]. We look at them the same way.”

(3) “The real question with Google and all of its competitors now, they’re all laying out hundreds of billions. That’s real money. That kind of money wasn’t even put in the railroad business, in terms of developing it. That’s the game they’re playing now. They weren’t playing that game with computer software.”

(4) “I made a mistake [not investing in Google when it was an asset-light company].”

(5) “I think [Google] is more likely to be a winner based on the record than probably 95% of what gets merchandised through Wall Street.”

(6) “I would say that I don’t like [Google] as well as at least four or five other businesses that we own.”

(7) “[The hyperscalers] are now playing a game they don’t want to play.”

On Greg Abel succeeding him atop Berkshire Hathaway…

(8) “Berkshire, that’s my painting. And I like the painting. I like the people associated with it. It’s been refined over time. I have added an apple over here [to it].”

• An excellent bit of wordplay from the Oracle here.

(9) “I don’t know of ten people in the United States who I would trust to hand [Berkshire] over to. I don’t know of five people — and I know a lot of people. I have a very high standard in terms of what I’m looking for in that person. And, clearly, we have found him with Greg Abel. That becomes more evident by the day.”

(10) “The only question is [Greg] is not immortal, either. You always have this mortality question and nobody gets away from it. People can be in marvelous health — or seem like it — [and then suddenly die]. There’s an enormous variation from being lucky to not being lucky.”

(11) “That’s the bet I make with Greg. I do not have a list of ten [possible replacements]. I don’t have ten kids, either. I don’t even have a list of three.”

(12) “I have got directors that I trust to be imbued with the concept of Berkshire Hathaway — and they would like to keep it going. So I’ve got the right group that’s the intermediary in making that choice. But things don’t always work out perfectly in the world.”

(13) “I’m losing marbles at this point. (Laughs) I accumulated marbles for a longer time than I deserved. That’s just a matter of luck. I have seen so many managers of our companies that [lost their marbles]. I think I have mentioned it in a few annual reports or annual meetings — we had guys cutting out paper dolls and their assistants [were] covering for them.”

(14) “I feel 100% [confident in Greg Abel]. I’ve seen him in a lot of situations. I felt that way with Charlie. I felt that way with Tom Murphy. But, you know, nobody expects you to pick out 25 husbands and have them all work out. Just finding one is pretty tough.”

On intelligent investing…

(15) “The important thing is to buy a good business and to buy it on the right terms and to get the right person to run it. When I say a very good business, I mean something that you can expect to earn high returns on capital over a long period of time.”

(16) “I can put huge amounts of money in government bonds and get $20-30-40 billion a year in terms of payments from them. So a good business is one that earns a lot more — and has prospects of continuing to earn a lot more — than the returns on essentially risk-less investments, which you could define as Treasuries.”

(17) “The trick in investing is to find businesses that are going to earn high returns on capital for an extended period of time. That’s what happened with Berkshire. A long period of time gets to be very important because those doubles later on are of very big numbers.”

(18) “Charlie Munger, my partner for many decades, just pounded the idea that it wasn’t a good business just because it was doing sexy things.”

(19) “I can’t recall a report on Wall Street that really gets into the internal rates of return that a business is actually earning. What’s more important than what a business is earning? But they ask all these questions about what will happen next quarter. It’s just ridiculous.”

(20) “If you have a wonderful business, you are going to be subject to attacks. It’s not a question of whether it was wonderful yesterday. The question is how long is it going to be wonderful?”

(21) “Wall Street thrives on convincing you that if you listen to them, they’ve got something that nobody else has. Which can’t be true. It’s ridiculous.”

On Apple, Tim Cook’s retirement, and the tech giant’s lawsuit against OpenAI…

(22) “There was no move [Apple] could make to replace Tim that I would have liked. (Laughs) If you’ve got Stradivarius playing the violin for you, don’t spend the next 300 years looking for another one. You have got one already.”

(23) “I know more about Apple than I knew many years ago. But, on the other hand, if you’re Apple, you have got very, very smart people all over the world shooting [at you] and trying to figure out how to make sure that Apple’s future isn’t as bright as in the past.”

(24) “Most companies would love to try to steal trade secrets. They wouldn’t love getting caught. But if you really could dig deep into the hearts of managers, they’d like to steal secrets. Wouldn’t you, if you had a business and you were struggling along and the guy next door was making money?”

On the speculative nature of today’s stock market…

(25) “There are times when opportunities are just thrown at you so fast [that] it’s unbelievable. And then there are other times when you’re very, very lucky if you find one thing in a couple of years.”

(26) “It’s tough to find values when everybody is preferring gambling.”

(27) “People’s enthusiasm for gambling is enormous.”

(28) “Since humans love to gamble so much, there’s more money in cultivating gamblers than there is in cultivating investors. If somebody bought Berkshire [stock] 40-50 years ago, a guy would have made one commission. And he should have spent the rest of his time telling the client, ‘Don’t do anything with it!’ And that’s just not the way [it goes]. We can’t expect that of humans. But, every now and then, you do find people that behave far better than other people.”

(29) “From the standpoint of the state, [legalized gambling] is sort of disgusting. The state needs money for all kinds of things — roads, schools, you name it — and they have found that they can clip people who are buying nothing but hope.”

On Coca-Cola’s $20 billion tax battle with the IRS…

(30) “I’ve got a dog in that fight, so… (Laughs) That’s why we have courts. Paying the extra money won’t break Coca-Cola any more than anything I can think of would break Berkshire. I mean, look, all I do is think about the downside. The upside will take care of itself.”

On management…

(31) “You either have happy customers or you don’t have [any] customers over time. And the customers are not dumb. Wall Street can be very dumb.”

(32) “Henry Ford owned the car business for 20-25 years and he brutally integrated like you cannot believe. He drove costs down. He got the cost of the Model T down, I think, to $285. He was always decreasing prices while increasing wages. He also was a little nuts in some ways — and that did him in finally when he converted over the Model A and General Motors just came racing by. My friend Charlie Munger thought that General Motors was going to be the dominant company. Who could imagine attacking their dealer fleet and everything they had going for them? [But] you’ve always got somebody shooting at you.”

(33) “I had a half-interest in a Sinclair filling station at 30th and Redick in Omaha when I was in my early twenties. I had been to business school and knew all these things. The guy next door had the Phillips station and was pumping 30,000 gallons a month. We were pumping 15,000 gallons a month. I said, ‘We’re going to wipe this guy off the face of the earth.’ And, a couple years later, we were selling 15,000 and he was selling 30,000 — and we gave up. I think he’s still operating. People are playing for keeps in business.”

On luck and gratitude…

(34) “Out of eight billion people, I may be one of the ten luckiest in the world. I’ve been lucky and healthy to get to 95. I’ve been lucky in that the field that intrigued me and where I had some natural ability, happened to be one that paid off in a way like nothing [else].”

(35) “Fortunately, I got exposed to what I liked to do very early on. That was just an accident. If my father had been a plumber, I would not have had the same advantage I had.”

(36) “America has been a wonderful place to invest money. The Dow Industrials, when I bought my first stock, had just crossed 100. Now, it’s 52,000 or something — and you have got dividends in between. The village idiot could have made it from that point forward, so I have been in the right game.”

On Federal Reserve chairman Kevin Warsh…

(37) “I think he was a good choice.”

(38) “I admire him for taking on the job. I think he will do the best he can at achieving the job he was assigned to do — which is 2% inflation while maintaining maximum employment.”

(39) “He knows he can’t be perfect at it. Just like I knew I couldn’t be perfect at taking people’s money and earning super returns on it. But my guess is that people were right in realizing that I cared about what happened to their money — and I would say that Warsh cares about the country.”

On Bill Gates & The Gates Foundation…

(40) “I have read [Bill’s] remarks to Congress given under oath and I read the cross-examination. And, while it’s distasteful, while he made mistakes, I [have] made mistakes in hiring all kinds of people or choosing friends and then finding out later that, one way or another, they weren’t what I thought they were.”

(41) “I have had situations where I made mistakes about people — or people may have felt they made mistakes about me — but life goes on.”

(42) “No one bats 1.000 in the business of choosing people.”

(43) “[Bill] came by almost three weeks ago — I lose track of time — and we spent three hours talking together.”

(44) “I don’t know whether I have done dumber things [than Bill’s association with Jeffrey Epstein], but I have done many dumb things in life. All I have to do is look at our portfolio. I mean, at least four out of five of the decisions I have made have not been anything out of the ordinary.”

On philanthropy…

(45) “My idea and conviction was that I would compound money at a better rate than society generally and that [my first wife] Susie would give it away better than 99.9% of the people who were giving it away. She would get involved personally with the gifts. I like to do things wholesale and she liked to do things retail.”

(46) “I admired [my dad] more than anybody in the world, but it still didn’t mean that I joined his church or did anything identically. And he encouraged that view. He would quote Emerson to me, where Emerson said something to the effect that the force in you is new in nature. You’re one of a kind. Find out what that one is. I found it very young, [but] my kids did not. They behaved like most kids. They flirted with a lot of different ideas. But I feel 100% now about what I have seen them do [that they are ready to give away my money].”

(47) “I tell the three children that it’s their responsibility to get it done well. You may find this hard to believe, but it’s true — I have never looked at their Form 990s, which they file. I’m not judging each action as it takes place because you take actions where you think there’s only a 10% or 20% probability of success. It’s not like investing.”

(48) “The money was important in terms of what it could actually do for other people. It wasn’t important for what it could do for me. I have not denied myself anything in life.”

(49) “I felt the most important threat to mankind was the nuclear bomb. I had sort of grandiose plans in my mind about how I could change the probabilities of that happening — and I finally came to the conclusion, after decades, that I could not have a hundredth or a thousandth of one percent chance of succeeding in that.”

(50) “You can’t mandate [philanthropy]. It isn’t philanthropy if you mandate it. But most people are a combination of lots of good instincts and lots of not-so-good instincts. Including me. If you do things that appeal to their better instincts, they respond. Sometimes.”

Notably, for the first time in two decades, the Gates Foundation was not a recipient — and will remain on the outside looking in as Buffett permanently redirects his charitable gifts to four family foundations administered by his children.

The bigger headline, though, is that he plans to accelerate the pace of giving dramatically — aiming to dispose of all of his Berkshire shares within the next eight years. “Of course,” Buffett wrote in the accompanying press release, “mortality is unpredictable, but my remaining shares will be donated to the four foundations one way or the other by December 31, 2034.”

He now owns 188,290 Class A shares and 1,162 Class B shares, which works out to 29.7% of the aggregate voting power and 13.2% of the economic interest of Berkshire.

During the interview with CNBC, he touched on many topics — including his decision to drop the Gates Foundation, his unwavering support for Greg Abel as Berkshire’s chief executive, the gambling mood of the modern stock market, and even his thoughts on new Federal Reserve chairman Kevin Warsh.

But, to me, the major story is that Buffett admitted he was the one who “initiated” Berkshire’s sizable investment in Alphabet (or Google).

Back when Berkshire first purchased shares of the tech conglomerate in Q3 2025, I hoped that it was Buffett if only because it meant he had found one last big swing before riding off into retirement — and that it would close the circle on his earlier laments about having “missed out” on Google.

He was quick to add, though, that he doesn’t do anything that Abel doesn’t sign off on — meaning that his successor approves of the Google position, too. Which is a good thing considering it’s valued at more than $32 billion and ranks behind only Apple, American Express, and (sometimes) Coca-Cola in Berkshire’s stock portfolio.

“I think [Google] is more likely to be a winner based on the record than probably 95% of what gets merchandised through Wall Street,” said Buffett. “[But] I don’t like it as well as at least four or five other businesses that we own.”

Earlier in the interview, Buffett noted that he looks at big portfolio holdings (like Apple) the same as owned subsidiaries like BNSF Railway or BHE. And, when you group them all together, Google clocks in at either the fifth- or sixth-largest. I think that’s what he’s referring to in the above quote.

Basically, if he liked Google more than the businesses above it, he would buy more shares and it would already be higher up on the list.

“The real question with Google and all of its competitors now is they are all laying out hundreds of billions [on capital expenditures],” said Buffett.

“That’s real money. That kind of money wasn’t even put into the railroad business, in terms of developing it. That’s the game they are playing now. They weren’t playing that game with computer software.”

A complete overview of Buffett’s latest interview will be coming your way on Monday.

More news and notes from the Berkshire Hathaway orbit…

Get well soon, Warren! Becky Quick also revealed that Buffett, who turns 96 next month, broke his leg a few weeks ago. He had surgery to fix the issue and is already back on his feet (albeit with some assistance while walking).

• “He does say that he has been really lucky in that he hasn’t broken a leg in his life until now,” said Quick. “And that while he has a lot to be thankful for, he’s no longer thankful for the fact that he has never broken his leg.” 🤣

Over on X, Bill noticed that Buffett’s charitable disclosure filing signals that Berkshire ramped up share repurchases in a big way since the end of Q1 2026. His calculations show that Berkshire’s outstanding share count has dropped by 0.8%, which puts the pace of current repurchases “at a level not seen since 2021”.

The National Transportation Safety Board released its preliminary report on the NetJets crash that killed one person last month. The Cessna Citation Latitude was forced into an emergency landing on a Texas highway after electrical and fuel system problems developed mid-flight. In the process, the plane struck several light poles, hit a moving vehicle, and rolled onto its side on a highway overpass.

• NetJets CEO Adam Johnson emailed customers after the report’s release. “NetJets has maintained one of the strongest safety records in the history of aviation,” he wrote. “The crew involved in this event responded to an extraordinarily complex and unprecedented series of circumstances with professionalism, discipline, and dedication to passenger safety.” Johnson added that this marked the first time one of its Latitude aircraft had experienced “cascading DC and AC generator failures and a corresponding fuel-line failure” after more than 7.2 million engine hours flown. In response, NetJets will now require enhanced inspections on generators and fuel-line sensors across its entire fleet.

Taylor Morrison was named to TIME’s list of “America’s Best Companies” — coming in at #356 and earning the distinction of highest-ranked homebuilder. “Being recognized as the top homebuilder on TIME’s inaugural ranking — a ranking that celebrates the characteristics defining what responsible, future-ready businesses should be — is an incredible honor,” said CEO Sheryl Palmer. “This list celebrates brands leading with innovation, accountability, and sustainable growth — all key pillars that guide Taylor Morrison into our exciting future ahead.”

• Plenty of Berkshire-related companies made the list, with both Apple and Alphabet cracking the top ten (and American Express not far behind them). But I must take issue with any ranking of America’s best companies that puts Berkshire itself at #701. Color me very skeptical.

According to the IDC market research firm, Apple posted another strong quarter in China despite a wider slowdown in that country’s smartphone market. Q2 2026 smartphone shipments fell 4.3% in China — the fifth straight quarter of decline — but Apple and Huawei managed to defy the trend. iPhone shipments grew 24.4% year over year, lifting Apple into second place in overall market share at 18.1%.

• In other Apple news, the tech giant sued OpenAI and io — the hardware design startup co-founded by Jony Ive and other Apple employees — for allegedly stealing trade secrets. OpenAI acquired io last year in a $6.5 billion deal.

The battle over the Union Pacific x Norfolk Southern merger continues to rage. Union Pacific executive vice president Kenny Rocker recently accused BNSF Railway and CPKC of threatening their customers not to support the proposed merger. Both railroads immediately — and strenuously — disputed the claim. “The allegation runs contrary to BNSF’s culture and values,” spokesman Zak Anderson told Trains. “It’s disappointing to see UP continue their baseless claims and rhetoric to distract from the central question before them — how consolidating 50% of all U.S. rail freight in one company enhances competition and doesn’t raise affordability issues for rail customers and the American consumer.”

• This might be a case of projection on UP’s part. Just a few weeks ago, Wisconsin senator Tammy Baldwin mentioned in a congressional hearing that rail customers had called her office complaining that Union Pacific was threatening retaliation against anyone who opposed the merger.

And, finally, a couple must-reads for the weekend…

• The Wall Street Journal dives into the current frenzy for turbines — from both airlines and hyperscalers — and how only a few companies make the parts to build them. Happily, Berkshire-owned Precision Castparts is one of them.

• Charlie Munger earned the nickname “The Abominable No-Man” for a reason. Hedge Fund Alpha shows the many ways we can embrace the “Power of No!”

“We joke that Himalaya is an academic institution where Li Lu is the professor, I’m the teaching assistant, and the analysts are the students,” said chief operating officer and managing director Jing (Gene) Chang.

But, today, we get to be the students.

A reader kindly sent me the transcript of a recent conversation between Jing Chang and prominent Chinese economist Guan Qingyou, in which the Himalaya executive discusses value investing, market psychology, intellectual honesty, and much more.

I’ve collected forty of Chang’s best comments from the interview below.

(Note: As far as I know, this conversation was never translated into English — so I had to lean heavily on translation software here. I also slightly cleaned up some of the wording to make it more readable and understandable, but without changing the meaning of Chang’s comments. The result is probably more stilted than hearing him speak in his native language, but I think I managed to capture his main message in a clear way for us English readers.)

For a quick background on Chang himself, he was born in China and came to the United States in 1990. He met Li Lu as a student at Columbia Business School in the mid-nineties and now works side by side with his friend at Himalaya, where Chang also ranks as the longest-serving employee (other than Li Lu himself). He was involved in translating and publishing Poor Charlie’s Almanack in China and even helped start a value investing course at Peking University in 2015.

(1) “If we do things as objectively and rationally as possible in the little things in life, it can also help us to remain objective and rational in major investment decisions. I think the two are one. If we don’t have the spirit of objectivity and rationality in our daily life, how can we guarantee that we will suddenly be objective and rational when making major decisions?”

(2) “For value investors, the role of the stock market is only to tell us a ‘price’. It cannot tell us what the ‘value’ of the company is.”

(3) “The core principle of value investment [is that] we must have a margin of safety. It will help us screen out the vast majority of companies that do not meet our standards. The targets left behind will be much safer to invest in — and the probability of failure, especially the possibility of permanent damage to principal, will be much smaller.”

(4) “If there is enough margin of safety, we don’t have to worry about the short-term fluctuations of the market at all.”

(5) “Of course, when the market fluctuates significantly, it will challenge the underlying logic of our understanding of the company. Was my past judgment right? Is this judgment sustainable and reliable? Am I sure that the company will be able to survive this fluctuation? If we can be sure of this, we definitely don’t need to sell. Instead, we can hold it for a long time — and even increase our position when the stock price falls — because we can see the future of the company clearly and reliably enough.”

(6) “Most ordinary investors are trend trackers. They will follow the trend and buy what the market says. And if the market weakens, they will leave quickly. Even professional investors often can’t pull themselves [free from] the mood of the market.”

Read more

People who build great things should reap great rewards.

What makes the American experiment remarkable is that those same rewards are available to the rest of us, too.

The founders wrote that all men are created equal — not that all men would end up equal. The American Dream was never a promise of guaranteed outcomes, but one of opportunity. The chance to build a good life from any starting point and to strive for something better through your own honest effort.

And nowhere is that opportunity more real than in the stock market — where anyone, not just the people who build the future, can own a piece of it.

I often come back to the iPhone. When Apple CEO Steve Jobs walked onstage and held up that original device, it felt like the entire world took notice. Anyone watching that day who sensed that this small slab of glass and aluminum was about to change everything could have gotten in on the action with a few clicks on their computer.

(Or, if that’s too speculative for you, you could have been like Warren Buffett and waited nearly a decade after the iPhone reveal to jump in. And still made a killing.)

That’s the beauty of public markets. Millions of ordinary people — anyone, really — can own a sliver of the companies reshaping the world. You don’t need the talent to build the product. You don’t need the vision to imagine what others can’t. You just need the judgment to spot something real, the conviction to back it with your own money, and the patience to let the magic of compounding do its thing.

Not every stock is Apple, obviously. But you don’t need to pick Apple — or any individual company — to do well owning American business broadly.

And, happily, almost every barrier standing between you and said ownership has fallen away in recent years. Not that long ago, you needed a stockbroker, a steep account minimum, round lots of 100 shares, and fees that ate into your returns before the snowball could even start rolling. Today, fractional shares make investing possible with a single dollar — and commissions have all but disappeared.

The door is wide open for anyone willing to walk through it.

More news and notes from the Berkshire Hathaway orbit…

J2 Labs, a Boca Raton-based family office, took a page out of Warren Buffett’s book. Literally. It has begun running an advertisement in the South Florida Sun Sentinel very closely modeled on Buffett’s own 1986 invitation for owners to sell their businesses to Berkshire Hathaway. A clever bit of financial-world nostalgia marketing, paired with a bet that authenticity and simplicity can still cut through the noise of the AI era.

BNSF Railway is turning last year’s safety milestones into the new normal. After posting the safest year in company history in 2025, the Berkshire-owned railroad has gotten off to an even better start this year. Through mid-June, BNSF’s injury frequency ratio (-28%), rail equipment incidents (-12%), and total injuries (-31%) are all down big year-over-year. “We’ve led the industry for the last decade in fewest train incidents,” said communications director Kendall Kirkham Sloan. “We’ve maintained our status as a safety leader because it’s non-negotiable for us, embedded into our culture, and a main ingredient to maintaining our unmatched service.”

If you’ve caught any World Cup coverage this summer, you’ve likely spotted Bank of America signs and branding around the pitch. The Charlotte-based bank, still a top-five holding in Berkshire’s portfolio despite recent trims, became FIFA’s first-ever banking sponsor in a deal reportedly worth many tens of millions (possible even up as high as $100 million). CEO Brian Moynihan tells the Boston Globe this has been money well spent, calling the tournament’s economic ripple effect both real and welcome. “Our goal, as this came to the United States, was we could work with FIFA to bring soccer to the local markets,” he said. “We feel very good about what we’ve seen so far.”

Sirius XM CEO Jennifer Witz, speaking from the Allen & Co. conference in Sun Valley, told CNBC that the satellite radio service’s turnaround is taking hold. “We reset the strategy in late 2024,” she said. “We have three core priorities — and we are delivering against each one of those. We are improving the subscriber experience at Sirius XM and the overall economics by focusing on our core in-car audiences. On the ad side of the business, we continue to build that and grow our business — especially with our new YouTube partnership. We’re now reaching 255 million listeners across the U.S. and Canada. And, then, we’re driving efficiencies across the company and that’s helping drive profitability and, ultimately, for [improved] cash flow generation.”

Berkshire’s Richline Group — a metals and jewelry manufacturer — promoted two executives into newly-created roles to better bring the company’s various businesses under unified corporate management. Arien Gessner steps into the role of chief revenue officer and Moss Makhoulian becomes senior vice president of supply chain and operations. “I am pleased to announce these two promotions in support of our longer-term strategy,” said Richline CEO Dave Meleski. “These expanded roles speak to the confidence we have in them as we plan for the future of our company.”

And, to finish off the week, a word from Warren Buffett on how the liquidity and real-time pricing of stock markets can eat away at an investor’s discipline. (This was filmed in February 2020, shortly before the Covid-19 pandemic.)

A fitting backdrop to ring in America’s 250th birthday from our 50th state.

This promises to be a special holiday weekend for many — but none more so than for Berkshire Hathaway CEO Greg Abel. The Alberta native, who has long called the American heartland home, became a U.S. citizen last month.

And did so in quintessentially American fashion.

Abel was sworn in via a naturalization ceremony held at an Iowa Cubs minor league baseball game, where he also threw out the first pitch. True to his low-key style, there wasn’t a word about him running one of the world’s most-valuable companies.

Though Abel did rock a pretty sweet American flag belt to mark the occasion.

Warren Buffett teased the news of his successor’s impending citizenship at the AGM — and now it’s official. “It means something to him to become an American citizen,” Buffett told CNBC, holding that feeling up as part of the “special sauce” that makes this country so successful. Glad to have Greg on board in time for the 250th!

More news and notes from the Berkshire Hathaway orbit…

The Wall Street Journal reports that Warren Buffett will delay his traditional mid-year donation to the Gates Foundation until an investigation into its ties to the late Jeffrey Epstein plays out. The review, conducted by the law firm WilmerHale, should be complete sometime this summer. Buffett said back in March that he hasn’t spoken to Bill Gates since the Epstein Files were released — a timeline Gates himself confirmed last month in testimony before the House Oversight Committee.

• The article also noted that while Gates was not formally barred from the Berkshire AGM this year, he was told he couldn’t sit on the floor with other VIPs like Apple CEO Tim Cook. In the end, he chose not to attend.

Taylor Morrison released a proxy statement to shareholders — and laid out the entire timeline of its acquisition by Berkshire. It all started when an unnamed homebuilder offered $71 a share for TM late last year. That offer spurred the company to shop itself around, approaching six other (somewhat) interested parties — none of whom bit. Goldman Sachs then connected CEO Sheryl Palmer with Abel in April, given Berkshire’s long history in homebuilding. The pair met in-person three times in May before agreeing to $72.50 a share (which was also the 52-week high closing price).

• An interesting wrinkle: It wasn’t until May 30 — one day before the deal was publicly announced — that Abel told Palmer he wanted her to stay on as CEO.

Nick Sleep and Qais Zakaria made almost all of their money at Nomad Investment Partnership from just three investments: Amazon, Costco, and Berkshire Hathaway. Richer, Wiser, Happier author William Green recently shared an excerpt from an unpublished interview with Sleep that captures the logic behind this unusually concentrated approach. “What we got right was we knew we weren’t very good on lots of things,” said Sleep, “so it made sense to us only to have a few shares, because those were the only things we ever understood and we ever really knew.”

Stripe co-founder John Collison echoed his friend Charlie Munger’s philosophy on the value of multidisciplinary education on a recent episode of the TBPN podcast. And, specifically, he urged students to pursue double majors and learn the big ideas from different disciplines to set them apart as AI reshapes the job market. “Charlie talked about the importance of being multidisciplinary,” said Collison. “He thinks getting a functional understanding of many disciplines is not that hard. You can just go read the books now or you can talk to your AI about it. I think multidisciplinary thinkers are going to do incredibly well.”

Dairy Queen is heading back to Puerto Rico — with plans to open twenty restaurants across the island over the next decade. The first will open in San Juan in early 2027. “We are pleased to add Puerto Rico as a market for DQ restaurants,” said international COO Nicolas Boudet. “This new deal expands our established footprint in the Caribbean, Central America, and Mexico.”

Last year, Berkshire created the BH Jewelry Group to house subsidiaries Helzberg Diamonds and Ben Bridge Jeweler. And, now, we might be seeing the first bits of synergy arising from this arrangement. The Ben Bridge location at Pearlridge Center in Hawaii will reportedly switch to sister brand Helzberg at the end of this month.

Barron’s notes that two of Berkshire investment manager Ted Weschler’s most significant stock picks crushed the market in 1H 2026. Davita has gained 105.1% so far this year, while Sirius XM clocks in at a still-mighty-impressive 48.7%.

In the final week of June, Berkshire once again topped up its stakes in two of the Japanese trading houses. According to filings, the conglomerate now owns 10.83% of Mitsui and 10.32% of Marubeni. This comes after similar additions to Mitsubishi and Sumitomo back in May. Presumably, then, we might see something pop up with Itochu in the next month or two.

Becky Quick: First of all, thank you for having us here at what is the first meeting of the new Berkshire. The first time in sixty years that it has a new CEO who’s heading up this meeting. What is this like for you, this first time out?

Greg Abel: Thank you for being here. We’re so excited to be here in Omaha. It is a great tradition. And, yes, [it’s] the first time in sixty years [without Warren Buffett]. Fortunately, Warren will be a part of it — and we’re excited by that.

We have our owners here. And these couple days — and especially on Saturday — it’s owners’ day. It’s their day. Warren brought this amazing commitment to Berkshire and deep understanding — and I want them to know that remains. That there’s a team, myself included, that are absolutely committed and have a deep understanding of Berkshire and we bring that same passion every day.

What’s going to be different at the meeting this year?

There is some evolution that, hopefully, our owners/shareholders enjoy.

One of the things we’ll be doing is introducing some other managers — and that was very purposeful. When you walk around here and [see] all these businesses, we have exceptional leadership in the businesses and we very much operate it with this ownership mentality. It’s their businesses.

What we want is to, on stage, let all the owners, all the shareholders, those watching CNBC, start to see the depth of management in Berkshire.

How did you pick the managers [that will be on stage]? I understand Adam because he’s obviously in this new management role.1 Katie Farmer is going to be on stage, too. What made you get to those people that you will be bringing up [on stage]?

It started with the thought that, on the insurance side, we have Ajit [Jain]. But, someday, we will add in an insurance manager [on stage] and things like that. The idea was, if you think of insurance, there is no one better than Ajit — and the world needs to hear him and see him. But, equally, we have a deep team now. And that’s something I’ve been so excited by.

When Warren made the announcement last May, as we all know, the first thing he did was pull together the senior leaders on the insurance side. It was a small meeting in Omaha — Warren, I, Ajit, and, say, five other of the senior leaders in insurance.

Warren was very open about, “Okay, this is our new team.” I was the first to say that I’ve [still] got a lot to understand and learn. I had some knowledge on it from spending a lot of time with Ajit and being on certain boards, but that was really exciting to see the depth of that team. It felt really good to know who was behind Ajit.2

Read more